<p>Toorak's dress circle St Georges Road, home to some of the city's priciest homes, is set for a rare new apartment development.</p>

<p>Blood Diamond Group, an entity tied to Tina Brandi, wife of David Brandi who has been a prolific bidder on The Block over the years, has filed plans for an ultra-exclusive development across an amalgamated 3,662 sqm site at <a href="https://www.apartments.com.au/new-apartments/104-106-st-georges-road-toorak-vic-3142">104 and 106 St Georges Road</a>.</p>

<p>The proposal would replace two existing homes on the riverfront site with a five-level apartment building cascading down the steeply sloping land toward the Yarra River. Designed by Charles Wright Architects, the development has been carefully shaped around the site’s topography and river environs, with the upper levels stepping back to reduce visual bulk from both St Georges Road and the Yarra corridor.</p>

<p>Planning documents describe the proposal as “a site layout and building typology that is consistent with the emerging character of the area and which provides exceptional amenity for future residents without compromising that of neighbouring properties.”&nbsp;</p>

<p><img alt="First look: Blood Diamond Group unveils riverfront apartment plans for Toorak Pavilion" data-entity-type="file" data-entity-uuid="ea19a17e-7528-4fa8-b727-05f2f7c025e5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Toorak%20pavilion%20a_0.png?VersionId=rZ2IjdoUL_UrRl1sZ4wZHnQXbYUaEmUQ" /></p>

<p>The scheme comprises 12 apartments, including 10 three-bedroom residences, one one-bedroom apartment, and a substantial split-level five-bedroom penthouse. A 624 sqm communal rooftop terrace will crown the building, while three undercroft levels embedded into the hillside will accommodate apartments and basement parking.</p>

<p>The design leverages the site’s dramatic northern outlook across the Yarra River, with living areas and balconies oriented toward the water. A central atrium running the full height of the building is intended to draw natural light deep into the residences and improve internal amenity.</p>

<p>Landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo Design &amp; Landscape</a> will play a major role in softening the built form, particularly along the river edge where significant setbacks have been introduced. The proposal includes a minimum 30-metre setback from the Yarra River boundary, preserving a substantial landscaped buffer between the development and the waterway.</p>

<p>While a mature English Oak near the front of the site is proposed for removal, the plans retain a large English Elm closer to the riverfront, alongside other established vegetation in the lower section of the property.</p>

<p><img alt="First look: Blood Diamond Group unveils riverfront apartment plans for Toorak Pavilion" data-entity-type="file" data-entity-uuid="ed3bf19b-5bc7-482f-bde7-41f709a13c3a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Toorak%20pavilion%20b.png?VersionId=SG_kBGu4rOaSPY8FtVcmPJfSCrstuOfg" /></p>

<p>Architecturally, the building adopts strong horizontal forms with expansive glazing and curved balcony edges facing the river. Planning documents note the upper levels “adopt a receding form” to ensure the building responds appropriately to the Yarra River environs overlay controls.&nbsp;</p>

<p>The surrounding streetscape is characterised by large contemporary homes embedded into the hillside, many presenting as modest one or two-storey forms to the street before expanding toward the river frontage below. The planning report notes this established pattern heavily influenced the massing strategy for Toorak Pavilion.&nbsp;</p>

<p>Until the recent sale of the landmark Clendon Road mansion Coonac for around $130 million, St Georges Road held the state's most expensive home, the $80,000,088 derelict "Ghost House" mansion that was bought by crypto king Ed Craven.&nbsp;</p>

<p>Blair House, also on St Georges Road, sold for $74.5 million in 2022.</p>


Joel Robinson

First look: Toorak Pavilions slated for dress circle St Georges Road

<p data-end="205" data-start="54">Six months after a development site on Kangaroo Point’s Shafston Avenue sold for $6.55 million, plans have been lodged for a 23-storey apartment tower.</p>

<p data-end="443" data-start="207">A company named JMT Mega Capital, understood to be interstate investors when the 1,222 sqm double block traded late last year through Patona Property, is proposing an 84-apartment development in place of the existing low-rise buildings.</p>

<p data-end="694" data-start="445">The slender tower at <a href="https://www.apartments.com.au/new-apartments/212-220-shafston-avenue-east-brisbane-qld-4169">212–220 Shafston Avenue</a>, overlooking the Brisbane River, has been designed by <a href="https://www.apartments.com.au/architects/aplus-design-group">Aplus Design Group</a>. It will comprise a mix of one-, two- and three-bedroom apartments above six basement levels, topped by rooftop resident amenities.</p>

<p><img alt="First look: 23-storey Kangaroo Point tower planned for Shafston Avenue riverfront precinct" data-entity-type="file" data-entity-uuid="7e17ba9e-553e-42ef-92b6-22081671521a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium_3.png?VersionId=hlVUf99vrOjUs.vhQs0qV0DhOncUy9T8" /></p>

<p>The development has been designed as a vertically articulated tower with recessed balconies, curved façades and planted edges intended to soften its scale within the evolving Shafston Avenue skyline. In the submitted Urban Design Report, Aplus Design Group said the tower had been “shaped with a slender vertical expression, articulated façades, recessed balcony zones, integrated planting and a clearly defined podium relationship, helping to reduce perceived bulk and create a more elegant contribution to the Shafston Avenue streetscape and broader Kangaroo Point skyline.”</p>

<p>The scheme comprises 84 apartments, including 25 one-bedroom units, 34 two-bedroom apartments and 25 three-bedroom residences. A total of 104 car spaces are proposed across six basement levels, including resident, visitor and accessible parking.</p>

<p>Residents will have access to rooftop communal open space and shared amenities, while the development also incorporates deep planting zones and subtropical landscaping throughout the podium and tower levels. The project includes 35 per cent communal space coverage across the site and a 17.5 per cent deep soil zone allocation to support urban greening outcomes.</p>

<p>The application exceeds the mapped building height under the Kangaroo Point Peninsula Neighbourhood Plan and is being assessed under Brisbane City Council’s impact assessment pathway. The design team argues the additional height is supported by the site’s strategic inner-city location, existing high-density zoning, and proximity to transport and employment hubs.</p>

<p>“The design has been developed to make better use of a well-serviced urban site within an established high-density residential setting, while improving the street presentation and overall quality of the public realm interface,” the report states.</p>

<p><img alt="First look: 23-storey Kangaroo Point tower planned for Shafston Avenue riverfront precinct" data-entity-type="file" data-entity-uuid="1ab44b1e-ff45-4bf3-8da8-8aa0cd79db33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_10.png?VersionId=tSxeGekZOqj1e9g3PEn_yFoC3taKDp3U" /></p>

<p>The proposal adds to a growing pipeline of apartment developments reshaping Kangaroo Point ahead of the 2032 Brisbane Olympic Games, with demand continuing to strengthen for new housing supply in well-connected inner-city precincts.</p>

<p>Mosaic has nearly sold out its under-construction <a href="https://www.apartments.com.au/new-apartments/the-bedford-by-mosaic-16-30-prospect-street-kangaroo-point-qld-4169">The Bedford by Mosaic</a>&nbsp;and <a href="https://www.apartments.com.au/new-apartments/the-carter-by-mosaic-77-linton-street-kangaroo-point-qld-4169">The Carter</a>,&nbsp;while Pikos recently completed <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye Residences</a> nearby. Pikos is also delivering <a href="https://www.apartments.com.au/new-apartments/gaia-kangaroo-point-108-lambert-street-kangaroo-point-qld-4169">Gaia</a>, over 230 three- and four-bedroom apartments on Lambert Street.</p>


First look: 23-storey Kangaroo Point apartment tower planned for Shafston Avenue riverfront precinct

<p>A new 25-storey apartment tower proposed for Mercer Street would push Geelong’s western gateway skyline higher, with Morphy Birrell Property Group lodging plans for a project directly beside one of the city’s most significant heritage streetscapes.</p>

<p>The <a href="https://www.apartments.com.au/architects/fk-australia">FK</a>-designed development at <a href="https://www.apartments.com.au/new-apartments/65-67-mercer-street-geelong-vic-3220">65-67 Mercer Street</a> has now been referred to Victoria’s Planning Minister. The site sits opposite the Geelong rail corridor and immediately south of the heritage-listed St Peter and Paul’s Catholic Church and Ashby Hall precinct.</p>

<p>Rather than compete with the neighbouring ecclesiastical buildings, the proposal adopts a sculpted podium intended to reference the materiality and scale of the heritage context. Planning documents note the design draws cues from the “dark stone brick” church and surrounding masonry buildings, while the tower above transitions into a softer, curved form oriented toward Corio Bay and the Geelong waterfront.</p>

<p><img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="b797d10c-d4a6-47af-b8df-1aeaa3b382be" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/public%20square.png?VersionId=QGIpcz1x1hKB6lQLl2iobyHqb6PS2Ztc" /></p>

<p>The development forms “Stage 5” of Morphy Birrell Property Group’s broader Mercer Street precinct strategy, following the completion of the 21-storey Miramar tower on Cavendish Street and several additional approved redevelopment stages nearby. Planning consultants Ratio said the proposal “represents an exemplary development outcome” aligned with the strategic ambitions for Central Geelong’s continued urban renewal.</p>

<p>The mixed-use project would replace an existing low-rise commercial building and surface parking area on the 3,320 sqm corner site. FK’s urban context report describes the proposal as a residential development comprising apartments, resident amenities, commercial space, and integrated landscaping positioned to maximise bay views and northern sunlight access.</p>

<p>Renders show a deeply articulated tower with curved balconies stepping above a lower masonry podium that frames a landscaped forecourt facing Mercer Street. The design intentionally preserves sightlines toward the adjacent church buildings, with the podium scaled to reinforce the heritage edge before the tower recedes upward.</p>

<p><img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="2bdca91e-66f7-4ac7-8baa-2f93bd5b564e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/geelong%20site.png?VersionId=QOhbino4ZgzKYw5dW3QE14E.2yq.Sv87" /></p>

<p>The planning report highlights the site’s strategic location within 400 metres of key Geelong destinations including Cunningham Pier, the Geelong Station precinct, Deakin University, and the convention centre. Bus services run directly along Mercer Street, while the Corio Bay foreshore sits around 100 metres north of the site.</p>

<p>The proposal arrives amid accelerating redevelopment across central Geelong, where planning policy continues to encourage higher-density housing close to transport infrastructure and the waterfront. Mercer Street in particular has emerged as a focal point for taller apartment development due to its proximity to Geelong Station, the bay, and major civic infrastructure.</p>


Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct

<p>Development giant&nbsp;<a href="https://www.apartments.com.au/developers/hamton">Hamton</a> and joint venture partner Hostplus have revealed the next residential stage of their $3 billion Moonee Valley Park masterplan, lodging plans for 512 more apartments within the precinct on surplus racecourse land at 110 Wilson Street, Moonee Ponds.</p>

<p>The proposed development, dubbed&nbsp;<a href="https://www.apartments.com.au/new-apartments/trackside-house-110-wilson-street-moonee-ponds-vic-3039">Trackside Gardens</a>&nbsp;in the planning application, follows the <a href="https://www.apartments.com.au/news/vic/first-look-exclusive-hamton-and-hostplus-reveal-sixth-stage-of-moonee-valley-park-masterplan">recent unveiling of the sixth-stage Cox Place Precinct</a> and continues the long-running transformation of the Moonee Valley Racecourse into one of Melbourne’s largest urban renewal projects.</p>

<p>Positioned on the north-eastern edge of the racecourse adjacent to CityLink, Trackside Gardens will comprise three residential buildings rising between 61.8 metres and 86.4 metres within a heavily landscaped precinct shaped by Hamton’s Nature Based Cities framework.</p>

<p>The project forms part of the broader Moonee Valley Park redevelopment being delivered by Hamton, Hostplus and the Moonee Valley Racing Club, which is reshaping the 40-hectare racecourse site into a mixed-use neighbourhood with housing, retail, commercial space, hotels, parkland and community infrastructure.</p>

<p>Trackside Gardens sits separately to the recently proposed Cox Place Precinct, a five-building stage comprising around 1,100 residences, two build-to-rent buildings, two build-to-sell towers, retail, office space, and a hotel overlooking the racetrack. Together, the projects continue to accelerate housing delivery across the precinct.</p>

<p><img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="5fc1941e-52d3-41c6-abc4-0f13fe8ae5ea" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/DA%20Edits%20%281%29.png?VersionId=7qwRHq5dcvXWNot2hNOgoQhN2GIWudNK" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/dko-architecture">DKO Architecture</a> with landscape architecture by Tract, Trackside Gardens has been conceived as a botanical-style residential precinct prioritising canopy planting, communal green space, and vertical landscaping.</p>

<p>“The architectural vision for the proposed development centres around buildings in a botanical park setting that champions the important role of nature,” the planning submission states.</p>

<p>“The proposal incorporates principles of biophilic design, with landscape and environmentally sustainable development influencing the ultimate design response of the buildings and prioritising the ground plane to ensure a high amenity for both occupants and visitors.”&nbsp;</p>

<p>Trackside Gardens will deliver 512 apartments across the three buildings, alongside 518 basement car spaces and 523 bicycle spaces. Around 20 per cent affordable housing is proposed across the broader North East Precinct, equating to around 158 dwellings.&nbsp;</p>

<p>The affordable housing component will be concentrated within the Wilson East building, while the remaining apartments are expected to be delivered as build-to-sell residences.</p>

<p>Trackside Gardens has been designed around Hamton’s Nature Based Cities initiative, founded by Executive Chair Paul Hameister OAM in partnership with the University of Melbourne, Urbis, Ark Resources and Tract. The initiative promotes integrating higher-density urban development with significant biodiversity, tree canopy and landscape outcomes.</p>

<p><img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="89353449-7b3c-42fd-8fd8-8bf64a5ef80f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_4.png?VersionId=X8jRt0P2L7fIWjLhfX6gPknXToXIBeLj" /></p>

<p>A comprehensive landscape strategy would introduce deep soil planting, vertical greening, communal gardens, and new pedestrian links throughout the site.</p>

<p>Planning documents state the development is targeting a 5 Star Green Star Buildings rating, a 7.5-star average NatHERS rating, and “Exemplary” Nature Based Cities certification.&nbsp;</p>

<p>The proposal joins an expanding pipeline of approved and proposed buildings within Moonee Valley Park, including the recently launched Eveline apartments and the approved Grandstand North and South towers.</p>

<p>Hamton has increasingly focused on precinct-scale, nature-led communities across Melbourne’s middle-ring suburbs, with projects spanning Hawthorn, Kew, and Moonee Ponds.</p>


Hampton unveils Trackside Gardens, latest stage of $3 billion Moonee Valley Park masterplan

<p>The Paul Gedoun-led <a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Group</a> has achieved another milestone in its $1 billion transformation of Rainbow Bay on the southern Gold Coast with the completion of the company’s third project in four years, the $160 million <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a> residences.</p>

<p>Delivered by <a href="https://www.apartments.com.au/builders/hutchinson-builders">Hutchinson Builders</a> and designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker Architects</a>, Esprit buyers have now moved into the 94 apartments across two interconnected buildings at 217-227 Boundary Street.</p>

<p>The successful settlement of Esprit marks another astounding chapter in the S&amp;S story, which launched its highly successful Flow apartments three years ago and created its own ultra-luxury branded fingerprint on an area craving new luxury residences.</p>

<p>Most early purchasers have secured gains of well over $1 million since the project launched in 2021.&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=172129]</p>

<p>S&amp;S Projects Founding Director Paul Gedoun said the completion of Esprit reflects sustained demand for premium apartments in tightly held coastal locations.&nbsp;<br />
&nbsp;&nbsp; &nbsp;<br />
“Esprit has attracted buyers seeking a combination of quality design, considered amenity and a location that is becoming increasingly difficult to replicate,” said Gedoun.</p>

<p>“We identified some years ago that Rainbow Bay is a unique market where supply of luxury residences is limited, and we see the settlements in Esprit further underpinning this thinking - that for both owner-occupiers and investors.”&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=172174]</p>

<p>A key feature of the development is ‘Club Esprit’, a 1,000sqm residents-only rooftop level combining wellness and recreation, believed to be a first for the Gold Coast, and which is fast becoming a signature of the S&amp;S brand.</p>

<p>Positioned to capture views across Snapper Rocks, Rainbow Bay and the Tweed River, the rooftop includes a 25-metre lap pool, gym, yoga lawn, sauna and steam facilities, ice bath, private dining spaces, outdoor cinema and landscaped areas for residents.&nbsp;</p>

<p><a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a> Director Jayde Pezet, who led the sales campaign for Esprit and S&amp;S’s Flow and Awaken apartments, said the project’s performance reflects both the strength of the product and the depth of demand for premium apartments on the southern Gold Coast.&nbsp;</p>

<p>“In some cases, we’ve seen values double since launch, which is a clear reflection of how tightly held Rainbow Bay has become and the level of demand for well-executed projects in this market,” said Pezet.&nbsp;</p>

<p>“Buyers recognised early what S&amp;S Projects was delivering here, and that conviction has been rewarded as the project has progressed towards completion.”&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=214819]</p>

<p>Esprit offers a mix of two- three and four-bedroom apartments and sits within walking distance of the beachfront, cafés and local amenities, reinforcing its appeal as both a lifestyle and investment destination.</p>

<p>The project is the third completed by S&amp;S Projects in Rainbow Bay, following Flow Residences and Awaken Residences, which together have contributed to the suburb’s emergence as one of the Gold Coast’s most sought-after coastal pockets. &nbsp;</p>

<p>S&amp;S Projects is continuing its investment in the area with Radia, a $215 million development currently under construction.&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=172175]</p>

<p>Gedoun said the completion of Esprit signals continued confidence in the southern Gold Coast market.&nbsp;</p>

<p>“We’ve seen strong interest in well-located, high-quality apartments, particularly in areas where future development opportunities are limited."</p>

<p>“That’s been a key factor in the performance of Esprit and the broader Rainbow Bay market”.</p>

<p>[smartcode_project_cta:default project_id=102921]</p>


Owners move in as Esprit completes at Rainbow Bay

Dwelling Construction

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<div>One of the most notable aspects of this building approvals boom has been that it has been focussed on the building of high density housing to an unprecedented extent.</div>
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<div>If you want capital growth from property then I suggest that you should be wary of high rise stock since proportionately far too much of it is has been approved.</div>
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<div>Approvals in most instances do now seem to be pulling back, but the approvals pipeline has seen 4+ storey dwellings pushed through this cycle to date in unprecedented volumes.</div>
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<div>In August the number of approvals pulled back in Victoria from 1,766 to as the new <a href="https://petewargent.blogspot.co.uk/2015/09/building-approvals-boom-passes-peak" target="_blank">levy</a> takes effect, but the 12mMA trendline tells its own story...</div>
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<div><span>In Queensland the number of 4+ storey dwelling approvals at 895 in August was well below the extraordinarily high volumes approved in 7 of the preceding 9 months, and the trendline peak now seems to be in...</span></div>
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<div><span>Being home to the largest capital city, New South Wales has typically approved the greatest number of high rise apartments, although here too approvals fell from an elevated 3,431 to 1,887 in August...</span></div>
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<div>Overall it seems that the great flood of approvals of high rise apartments is now easing as developers take note of the looming oversupply.</div>
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<div>The problem with the highest density tower blocks for investors is simply that there is no inherent scarcity value. </div>
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<div>Pass.</div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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The high rise apartment glut: Pete Wargent

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<p><span>The Australian Bureau of Statistics (ABS) released building approvals data for July 2015 earlier this week. According to the data there were 19,298 dwelling approvals over the month which represents an increase of 4.2% over the month and a year-on-year rise of 13.4%. Monthly dwelling approvals reached a record high of 20,260 approvals in March 2015 and the July 2015 result represents the fifth largest monthly number of dwelling approvals on record.</span></p>
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<p>Over the month there were more unit approvals than house approvals. In fact it was only the seventh time on record that there were more units approved over the month than houses, five of which have happened in 2015. Although unit approvals outnumbered house approvals over the month it is important to note that they tend to be much more volatile than house approvals and are ultimately less likely to be built than houses (approximately 85% of all unit approvals proceed through to a completion historically). Although this is the case, particularly for larger unit development, the economic benefit is extended over a longer period because they take much longer to complete.</p>
<p>In July 2015 there were 9,479 houses and 9,819 unit approvals over the month. House approvals fell by -2.6% in July and were -2.1% lower year-on-year.  Meanwhile, unit approvals increased by 11.7% in July (following a fall of -13.3% in June) and were 33.8% higher year-on-year.  On an annual basis there has been a record high 224,121 approvals to July 2015. To put the recent ramp-up in approvals into perspective, three years ago there were just 148,449 approvals over the year.</p>
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<p><span>As the number of approvals has increased, the greatest rise has occurred across the multi-unit segment. Over the past 12 months a record high 48.3% of all approvals were for units. If you look just at the capital city markets 55.7% of all dwelling approvals were for units.  </span></p>
<p><span>The rise in unit approvals is reflective of changing lifestyle patterns with more and more people preferring to live closer to the city centre and along transport spines where most of these units are located. It also shows that developers are enjoying a level of confidence by seeking approvals for a record high number of units.  </span></p>
<p><span>Another factor contributing to the rise in higher density dwelling approvals is changes in town planning policies where governments are aiming to maximise existing transport infrastructure by allowing higher densities along existing and planned transport corridors and mixed use precincts.</span></p>
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<p>If we look at the types of units that are being approved it is interesting to note the sharp rise in high-rise approvals, that is units in a block of four or more storeys.  Over the past 12 months, a record high 63.4% of all unit approvals were within high-rise projects while a record low 26.2% of approvals were terrace and townhouses and a record low 4.9% of approvals were for units in a one or two storey block. Again, these figures just go to show the heightened level of developer confidence particularly when you consider the relative level of risk associated with high rise development.</p>
<p>The number of dwelling approvals remains high albeit it is slightly lower than recent record highs. Strength in the approvals figures are becoming increasingly reliant on the multi-unit sector which tend to be much more volatile than house approvals. With many banks, credit unions and building societies tightening their lending criteria it will be interesting to see over the coming months if this flows into approvals and causes developer confidence to wane.</p>
<p>No matter what happens with approvals over the coming months and years there is a strong pipeline of new construction, much of which is high-rise and will extend out over a number of years.  Furthermore, with population growth slowing we should see a better relationship between housing supply and housing demand.  This is already being seen by the fact that capital city rental rates are increasing at an historic low rate currently.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.</em></p>
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Rise in unit approvals drives rebound: Cameron Kusher

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<div>Total construction work done declined by a further 1.9 percent in the June 2016 quarter to $47.8 billion, to be 7.9 percent lower over the year. </div>
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<div>The result was driven by another 5.1 percent decline in engineering construction in the quarter - largely mining related - to leave this component down by 24.9 percent year-on-year.</div>
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<div>The building boom, on the other hand, continues apace. </div>
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<div>Although there has been a solid increase in alterations and additions (major renovations) lately, record building activity through this cycle has been overwhelmingly been driven by "other residential" building, specifically units, apartments, and townhouses.  </div>
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<div><strong><span style="text-decoration: underline;">Mining cliff now 4 years old</span></strong></div>
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<div>Next month it will be fully four years since the so-termed "mining cliff" began. </div>
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<div>Interestingly engineering construction work done increased in the June 2016 quarter in Queensland, where most of the retracement has already taken place, while activity has actually trended up strongly in New South Wales and Victoria over the past year. </div>
<div> </div>
<div>I've long been warning that Western Australia would have to take its medicine sooner or later, and the reality check kicked in this quarter, with engineering construction crashing down to be some 48 per cent lower than one year ago. </div>
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<div>These figures confirm what has no doubt been obvious on the ground for some time - that the local economy is doing it tough as it passes through this painful slowdown period.</div>
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<div>Engineering construction work done has also fallen substantially in the Northern Territory over the last six quarters, including by a further 28 per cent over the past year, with only the massive Ichthys LNG project is holding this result aloft.</div>
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<div class="separator">The good news is that the decline in engineering construction is now thought to be around 80 percent complete, meaning that sooner or later this will stop being such a drag on the economy. </div>
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<div class="separator">In fact, in New South Wales, Victoria, and now Queensland, it already has. </div>
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<div class="separator"><strong><span style="text-decoration: underline;">Record building boom continues</span></strong></div>
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<div class="separator">The building boom and its associated multiplier effect has largely benefited the largest capital cities.</div>
<p><a href="/images/2016/08/25/A4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/25/A4.jpg" alt=""></p>
<div>New house building, while still increasing steadily in Victoria, Queensland, and South Australia, appears to have peaked for this cycle nationally.</div>
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<div>On the other hand the value of construction work done on attached dwellings was still tracking at record levels in the June quarter. </div>
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<strong><span style="text-decoration: underline;">The wrap</span></strong><br><br>Residential building activity was still running at full pelt through the second quarter of the year, pushing up building costs in cities such as Sydney.<br><br>The Housing Industry Association (HIA) announced today that it believes that new home building will now decline for the next three years, with annual commencements falling from a peak of over 232,500 dwellings to 166,500 in 2018/19, with some downside risks to the forecast.</div>
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<div>The good news is that engineering construction will have already stopped falling significantly over the next 18 months.<br><br>Ichthys aside, most of the project-driven declines have now washed through the figures outside Western Australia.<br><br>Analysts expect to see moderate GDP growth in the second quarter of calendar year 2016 with net exports not making much of a contribution this time around.<br><br>On balance, though, the planned hand-off has been pulled off very well, with Australia now getting close to the bottom of its mining cliff.<br><br>Although resources regions have felt the pain, the largest capital cities have by and large pulled through relatively unscathed. </div>
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<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Record building boom continues: Pete Wargent

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<h3 class="post-title entry-title"> </h3>
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<div>Australia's GDP increased to $1.67 trillion in financial year 2016, measured in seasonally adjusted Chain Volume Measures terms, now tracking at just above $420 billion per quarter.</div>
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<div>Following on from yesterday's post, a quick look here at industry gross value added (GVA).</div>
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<div>Having accounted for just over 5 per cent of industry GVA three decades ago, mining's share has swelled to 8.9 percent as export volumes begin to ramp up.</div>
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<div>Finance and insurance also now accounts for 8.9 per cent of industry GVA, up from just 4.9 per cent in 1986.</div>
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<div>You can click on the chart to expand it (or use the touch screen, if you have one of those, of course).</div>
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<div><a href="/images/2016/09/28/GVA.jpg" target="_blank">Click to enlarge</a></div>
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<div>On the other hand, manufacturing is shrinking as a share of the pie, declining from a share of 11.1 percent at the beginning of this chart to just 5.8 percent in 2016.</div>
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<div><strong><span style="text-decoration: underline;">Construction wind-down</span></strong></div>
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<div>The latest figures show that the contribution of construction to GDP has remained solid at 7.6 per cent, tracking at around $32 billion per quarter.</div>
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<div>A decade ago construction was contributing only $13 to $14 billion per quarter. </div>
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<div>This suggests that the planned 'hand-off' from resources to residential construction was generally a success between 2012 and 2016. </div>
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<div>However, this does also mean that as residential construction eventually winds down there will be quite a hole in domestic demand to be plugged by something other than rising mining export volumes.</div>
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<div>Given the respective skill-sets of all those construction workers, tradies, and project managers, the answer should be: infrastructure and non-residential construction, as I looked at in a bit more detail here. </div>
<div> </div>
<div>Indeed, the unprecedented stamp duty windfall from Sydney's property boom is already funding a range of infrastructure projects in Sydney and New South Wales. </div>
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<div>But what about the gaping gulf left behind in the resources regions? </div>
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<div>Troubling, and this may be leading to an exodus of regional workers. </div>
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<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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When construction winds down: Pete Wargent

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<div>EXPERT OBSERVER</div>
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<div>Less than a month ago, one report suggested Australia might have the 'world's worst management' of the virus, and yet now it has transpired that our results are among the very best in the world, alongside New Zealand. </div>
<div>
<br>Whether that's by luck or by judgement - or most likely a bit of both - may only be known in the fullness of time.</div>
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<div>As to how this is impacting real estate searches, there are three main factors to bear in mind.</div>
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<div>Firstly, there are now record low mortgage rates for new borrowers, from just over 2 per cent, and these look set to persist for<em> at least </em>three years. </div>
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<div>Secondly, there's now some potential return for a return of the cobweb effect we saw before the election last year, which may kill new supply, at least in tightly held or blue chip areas. </div>
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<br>Dwelling starts look set to slump to around a 70-year low, and while plenty of aged listings remain on the market, quality new listings are now rather thin.</div>
<div> </div>
<div>For example, Real Estate reported that there was just one new apartment listing in Coogee over the course of a week, which is exasperating for anyone wanting for take advantage of the slowdown.</div>
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<div>And thirdly - a point I've alluded to previously - while Canada, the US, and many developed European and Asian countries have grappled with the spread of the virus, the two countries which are emerging with enhanced reputations as the most desirable to live appear to be New Zealand and Australia. </div>
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<div class="separator"><img src="https://1.bp.blogspot.com/-FCrTsrhS1A8/XqeB4-FGTkI/AAAAAAAA1a0/FNk2h5mGer4YoMzTOD_POJsFl6E9LiKcgCNcBGAsYHQ/s640/BB.jpg" width="640" height="448" data-original-height="517" data-original-width="738"></div>
<p><br><span>A 'Lucky Country' indeed.</span></p>
<p><span><strong>PETE WARGENT</strong><em> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></span></p>
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Dwelling starts look set to slump to new low: Pete Wargent

Significant slowdown in dwelling commencements this quarter: Cameron Kusher

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<div>After years of under-building from about 2005 forth in Sydney, between July 2012 and April 2016 a vastly improved 163,500 dwelling approvals have been recorded for the Greater Sydney region (inclusive of the Central Coast and the Blue Mountains) and the Illawarra.</div>
<div> </div>
<div>As Australia's densest capital city, Sydney approvals today are mostly of the attached or dwelling multi-unit type. </div>
<p><a href="/images/2016/08/16/A1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/16/A1.jpg" alt=""> </p>
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<div>There has been report after report concerned with the record number of units and apartments under construction.</div>
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<div>Yet to date vacancy rates have barely budged at the city level, and apartment rents have kept rising.<br><br><strong><span style="text-decoration: underline;">Bottleneck</span></strong>
</div>
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<div>The reason for this - and indeed the reason that so many dwellings are under construction - as I've looked at previously <a href="https://petewargent.blogspot.co.uk/2016/07/making-sense-of-australias-super-duper" target="_blank">here</a>, is that multi-unit dwellings generally take considerably longer to proceed from approval, to commencement, and then to completion (perhaps up to several years from start to finish) than detached houses on greenfield sites, at typically just a matter of months. </div>
<div>As a result, over the year to April 2016, after accounting for demolitions there were just 11,937 net detached dwelling completions, and 18,370 multi-unit dwellings. </div>
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<div>Not only has this rate of net completions after accounting for demolitions not been making up for the years of under-building, it has barely even been keeping pace with <em><strong>current</strong></em> annual Greater Sydney population growth of an estimated 83,500 per annum.<br><br>This is particularly so given that so many small apartments are being built, typically housing only two persons (not to mention those apartments left vacant by offshore investors), contributing to a mismatch of supply increasingly characterised by a surfeit of high rise apartment stock.<br><br>It's worth noting that this completions data doesn't easily capture the addition of granny flats, but the point still stands - completions in Sydney just haven't been that high...to date.</div>
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<p> </p>
<div>From July 2012 to April 2016, after accounting for demolitions, there were net dwelling completions of only 101,300, just 62 percent of the number of dwelling approvals over the same time period. </div>
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<div>The population of Greater Sydney increased by somewhere in the region of 307,000 heads over that time, so it's a little wonder that population growth has been absorbing new supply.</div>
<div> </div>
<div>This dynamic is finally about to change, though, as the record pipeline of new apartments under construction begins to come online, although the industry being stretched to full capacity will inevitably see construction costs rising henceforth. </div>
<div><strong><span style="text-decoration: underline;">Local Government Authorities (LGAs)</span></strong></div>
<div> </div>
<div>At the LGA level we can see that up to April 2016 there have been few regions that have really been hammering out unduly high net dwelling completions. </div>
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<div>However, looking at the LGA dwelling approvals figures split out by financial year helps to identify the areas at risk of emerging oversupply (as well as certain upmarket localities such as Manly, Mosman, and Woollahra, where the total stock of dwellings has remained all but fixed).<br><br>
</div>
<div>The City of Sydney LGA covers a large central area of 25 square kilometres and comprises a great many hugely popular suburbs, and in that context its 13,700 approvals from July 2012 represent relatively slim pickings. </div>
<div> </div>
<div>However, the volume of dwelling approvals - especially for apartments - in certain other areas is abnormally high in historical terms, in turn suggesting an elevated level of risk: Blacktown, Parramatta, the Hills District, Liverpool, and to some extent Camden and Ryde.<br><br>The Canada Bay approvals figures don't really capture the volume of building that has already taken place at Wentworth Point and some surrounding suburbs.</div>
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<p><br><strong><span style="text-decoration: underline;">Case study: Parra</span></strong></p>
<div class="separator">I don't quite have the space here (read: can't be bothered) to discuss apartment supply in detail across every Sydney LGA, but a quick look at the Parramatta data is instructive. </div>
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<div class="separator">Parramatta has seen several years of abnormally high apartment approvals figures, yet until relatively recently net dwelling completions had not lifted too dramatically.</div>
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<div class="separator">This rapidly changed in September 2015 as a slew of new projects began to come onstream, and there is plenty more to come in the pipeline, with yet another 3,339 multi-unit dwellings approved over the 12 months to April 2016. Wow-wee!</div>
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<div>I took a drive around Parramatta a fortnight or so ago, and the amount of building still underway is really quite eye-popping. </div>
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<div>This may result in valuation challenges at settlement for off-the-plan apartment purchases, rising vacancy rates, declining rents, and widespread instances of weak capital growth over the coming years (by which, of course, I mean negative).</div>
<div>
<br><em>Caveat emptor!</em><br><br>Regular readers may recall I spent a joy-filled afternoon driving around looking at a number of apartment construction hotspots recently, and I wrote a bit about it.<br><br>
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<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Sydney's construction pipeline: Pete Wargent

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<div>Australia's construction boom hit "peak apartments" in the March 2016 quarter the latest Building Activity data from the ABS showed, with developers now beginning to crunch their way through the record number of dwellings approved but not yet commenced. </div>
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<div>Total quarterly commencements accordingly rose to a record high of 59,684.<br><br>Attached dwelling commencements - townhouses, units, and apartments - were up by 21 per cent from the first quarter of calendar year 2015, leading to just shy of 230,000 dwellings commenced in the year to March 2016, also a record.<br><br><div class="separator"><a href="/images/2016/07/18/A1-1.jpg" target="_blank">Click to enlarge</a></div>
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<br>As you can see in the chart above, annual house commencements have already passed their peak for this cycle, with Sydney in particular constructing fewer detached dwellings through the cycle as the harbour city becomes more dense - building up, not out - while on the other hand Melbourne continues its heroic sprawl.  </div>
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<img src="/images/2016/07/18/A6.jpg" alt=""><br><br><div>Annual attached dwelling commencements are now at their highest ever level.</div>
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<img src="/images/2016/07/18/A5.jpg" alt=""><br><br><div><strong><span style="text-decoration: underline;">Completions slower to come online</span></strong></div>
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<div>The curious aspect of this cycle is that with so many of the commencements being multi-unit developments, the supply has been considerably slower to come online.<br><br>Why? Because on average it's much faster to build a house on a shovel-ready block of greenfield land (perhaps only a few months) than it is to deliver a block of apartments on a brownfield site, which could chew up a period of several years from approval to completion. <br><br>The outcome of this is an epic supply bottleneck.<br><br><strong><span style="text-decoration: underline;">Bottleneck!</span></strong><br><br>There are now more dwellings stuck in the "under construction" phase than we have ever witnessed before: a thunderous total of 218,262 dwellings, more than 150,000 of which are attached dwellings.<br><br>If you can see a lot of cranes on the city horizon, this is why!<br><br>
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<div>A record 74,530 of the dwelling units under construction are located in New South Wales (including more than 56,000 attached dwellings), 67,748 are in Victoria (nearly 48,000 of which are attached dwellings), and 39,816 are in Queensland (more than 31,000 of which are attached dwellings, an eye-popping ratio).<br><br>In other words, lots and lots of apartment projects are underway but not yet finished.</div>
<div> </div>
<div>Indeed, completions have been so slow to come online that actual dwelling completions have declined for the past four quarters on the bounce, from 49,733 in the first quarter of last calendar year to just 45,619 in the first quarter of this year.</div>
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<br><div>This huge lag between record approvals and completion helps to explain why super-strong population growth in the two most populous capital cities has to date continued to outpace and absorb dwelling supply. </div>
<div> </div>
<div>Annual attached dwelling completions in NSW (22,400) and VIC (23,000) not only remain below previous peaks, but are also tracking way behind the romping pace of state population growth of 106,000 and 109,000 per annum respectively.</div>
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<br><div>
<em>The Australian</em> recently reported an estimated year's oversupply of dwelling based upon an assumption of 47,000 net additions to the dwelling stock per quarter. </div>
<div> </div>
<div>Yet reported vacancy rates in Sydney and Melbourne - even if the figures are arguably incomplete - have actually declined, the slowdown in rental price growth as much reflective of the number of <em>investors</em> in the market through this cycle as the number of physical dwellings.<br><br>Because the record high volume of units and apartments under construction are slower to come online than houses, the assumptions reported by <em>The Australian</em> have been over-egged when compared to the number of actual completions by some 85,000 dwellings. </div>
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<div class="separator">Moreover these assumptions overlook that up to 25,000 commencements per annum simply replace existing stock, as pointed out by the good Prof. Philips of the ANU.</div>
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<div class="separator">The picture is complicated somewhat further by the addition of granny flats which are not well captured by the data, but after accounting for demolitions the new supply has so far had a relatively muted impact in Sydney and Melbourne.</div>
<div class="separator"> </div>
<div>What has transpired to date is localised bursts of oversupply, not nothing too dramatic at the macro level.</div>
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<div class="separator"><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div class="separator"> </div>
<div class="separator">There are more than 150,000 units, townhouses, and apartments now under construction in Australia, easily the highest figure on record, so construction activity will remain at or close to full capacity for some time yet. </div>
<div class="separator"> </div>
<div class="separator">Attached dwellings can take a long period of time to complete, so to date at least the impact of new supply hasn't been all that great. </div>
<div class="separator"> </div>
<div class="separator">But what is Australia going to do with all these new high-rise dwellings during a period when its post mining-boom economy isn't supporting such high levels of immigration? </div>
<div class="separator"> </div>
<div class="separator">Mr. Turnbull does have a plan. And like most of Australia's cunning plans these days, it involves tapping demand from China. </div>
<div class="separator"> </div>
<div class="separator">It's only been a fortnight since the new "streamlined" student visa rules kicked in, but early anecdotal indications suggest that the plan might just be working. </div>
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<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Making sense of Australia's super-duper construction boom: Pete Wargent

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<p>EXPERT OBSERVER</p>
<p>An extraordinary amount of construction work has occurred in Australia over the past five years. In fact work done in both NSW and Victoria soared by over 40 per cent from 2014 to 2019. But now work flows are adjusting to more balanced supply-demand metrics.</p>
<p>Residential work peaked around 18 months ago and is now down 15 per cent from the highs.</p>
<p>Commercial work hit record highs in the September quarter but eased in the December quarter. Still, on the work yet to be done, commercial work will test record highs in the next year while residential work softens – at least for the next six months. Bushfire reconstruction work will slowly pick up over 2020.</p>
<p>Construction-dependent firms won’t be short of work in 2020, but businesses may have to travel a bit further to tap into the opportunities. The good news is that price pressures are well contained. In fact building costs (residential and commercial) are rising at the slowest annual pace in around seven years.</p>
<p>The data hasn’t been updated since mid-January, but the latest reading showed $144 billion of construction work still to be completed. Engineering work totals $74 billion with around $38 billion of residential work and a record $32 billion of commercial work.</p>
<p><strong>What do the figures show?</strong><br><em>Construction work done – December quarter</em></p>
<p>Construction work done fell by 3.0 per cent in the December quarter – the fifth fall in six quarters. The value of construction work done is down by 7.4 per cent on a year ago.</p>
<p>Public sector construction work rose by 0.7 per cent in the quarter after a 3.6 per cent lift in the September quarter.</p>
<p>Private sector activity fell by 4.2 per cent in the December quarter – the fourth successive quarterly fall.</p>
<p>Construction work fell across six states and territories in the December quarter: NSW (down 4.6 per cent); Victoria (down 2.8 per cent); Queensland (down 3.4 per cent); South Australia (down 5.4 per cent); Western Australia (down 2.9 per cent); Tasmania (down 6.6 per cent); Northern Territory (up 0.6 per cent); ACT (up 1.5 per cent).</p>
<p>Engineering work fell by 1.5 per cent in the December quarter – the sixth straight decline. Work done is down by 8.0 per cent over the year.</p>
<p>Commercial (non-residential) building fell by 3.4 per cent in the December quarter after rising 7.5 per cent in the September quarter. Work done is up 3.3 per cent on the year.</p>
<p>Residential building fell by 4.6 per cent in the December quarter – the sixth straight decline. Work done is down 12.8 per cent over the year – the biggest annual fall in 18 years.</p>
<p>Alterations &amp; additions fell by 1.3 per cent in the quarter to be down by 5.8 per cent over the year. And new residential work fell by 5.1 per cent over the quarter and by 13.7 per cent over the year to December</p>
<p>Construction costs rose by 0.2 per cent in the December quarter, with building costs up 0.1 per cent and engineering costs up by 0.3 per cent.</p>
<p>Over the year, construction costs rose by 1.2 per cent (slowest pace in three years) with building costs up 0.7 per cent (slowest pace in seven years) and engineering costs up by 1.9 per cent (slowest in 2½ years).</p>
<p><strong>Bushfires</strong></p>
<p>The ABS noted: “Bushfires resulted in minor disruption to data collection activities during the December 2019 quarter in New South Wales, Victoria and the Australian Capital Territory. Quality assurance undertaken by the ABS confirmed that these disruptions did not result in any impacts to Construction activity statistics. Whilst it is expected that bushfire rebuilding and recovery activity will have some impact on future Construction activity estimates this activity is not yet present in the December estimates.”</p>
<p><strong>What are the implications for interest rates and investors?</strong></p>
<p>There is still plenty of construction work to go around. In fact some firms like Monadelphous continue to highlight the difficulty in attracting and retaining good skilled workers for engineering projects.</p>
<p>In terms of the outlook for home building, the Housing Industry Association said “We estimate the industry commenced construction on 174,770 homes in 2019, and we are forecasting for activity to rise only marginally (by 0.6 per cent) in 2020.”</p>
<p>The fall in residential work in the December quarter means that dwelling investment will be drag on economic growth in the December quarter. We will get another piece of the ‘GDP puzzle’ tomorrow with business investment data. The data will likely show an easing of building/construction investment by Aussie businesses.</p>
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