<p data-end="256" data-start="0"><a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.</p>

<p data-end="446" data-start="258">The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.</p>

<p data-end="645" data-is-last-node="" data-is-only-node="" data-start="448">Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.</p>

<p><img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.</p>

<p>The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.</p>

<p>The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”</p>

<p data-end="626" data-start="350">Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.</p>

<p data-end="928" data-start="628">“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”</p>

<p data-end="1147" data-start="930">Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.</p>

<p data-end="1510" data-start="1149">“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”</p>

<p data-end="1510" data-start="1149"><img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" /></p>

<p>&nbsp;</p>

<p>The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.</p>

<p>Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.</p>

<p>The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.</p>

<p>The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.</p>

<section data-scroll-anchor="false" data-testid="conversation-turn-4" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" dir="auto">
<p data-end="305" data-is-last-node="" data-is-only-node="" data-start="0">The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.</p>
</section>


Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

<p style="text-align:start">The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;</p>

<p>The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.</p>

<p>The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.</p>

<p>Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.</p>

<p>The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.</p>

<p>As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.</p>

<p><img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" /></p>

<p>The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.</p>

<p>An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;</p>

<p>The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.</p>

<p>The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;</p>

<p>It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.</p>

<p>Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.</p>

<p>“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.</p>

<p>“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;</p>

<p>Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.</p>

<p>“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.</p>

<p>“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”</p>


Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

<p>Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.</p>

<p>A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.</p>

<p>Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.</p>

<p>“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.</p>

<p>Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.</p>

<p>“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.</p>

<p>The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.</p>

<p>It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.</p>

<p>The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.</p>

<p>One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.</p>

<p>Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.</p>

<p>The developer is also exploring the potential for additional affordable housing outcomes.</p>

<p>Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.</p>

<p>Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.</p>

<p>Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.</p>

<p>“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”</p>

<p>Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.</p>

<p>Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.</p>

<p>Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.</p>


400 new homes planned for Adelaide's former West End Brewery site

<p>Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.</p>

<p>The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.</p>

<p>Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.</p>

<p><img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" /></p>

<p>“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.</p>

<p>The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”</p>

<p>The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.</p>

<p><img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" /></p>

<p>The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.</p>

<p>According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.</p>

<p>“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.</p>

<p>A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.</p>

<p>Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.</p>

<p><img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" /></p>

<p>All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.</p>

<p>The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.</p>


Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

<p>Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.</p>

<p>The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.</p>

<p>Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.</p>

<p><img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" /></p>

<p>Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.</p>

<p>The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.</p>

<p>"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.</p>

<p>The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.</p>

<p>The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.</p>

<p><img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" /></p>

<p>Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.</p>

<p>Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.</p>


First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

Dwelling Construction

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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>
<div> </div>
<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>
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<div> </div>
<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>
<div> </div>
<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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<div><a href="/images/2016/08/16/A3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/08/16/A3.jpg" alt=""></div>
<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>
<div> </div>
<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>
<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>
<div> </div>
<div class="separator"><a href="/images/2016/08/16/A3-1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/16/A3-1.jpg" alt=""></div>
<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>
<div class="separator"> </div>
<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>
<div class="separator"> </div>
<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>
<div class="separator"> </div>
<div class="separator"><a href="/images/2016/08/16/A2.jpg" target="_blank">Click to enlarge</a></div>
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<div class="separator"> </div>
<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>
<div> </div>
<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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<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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pwargent-M4siyDbqQY

Sydney's construction pipeline: Pete Wargent

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<p>The supply of new stock for sale is one of the most important factors in how property markets will perform.</p>
<p>Every one of Sydney's 850 suburbs, even every street has its own momentum. Too many or too few makes for interesting times.</p>
<p>There are of course distinct established housing and off-the-plan markets, that sometimes interconnect. Auction and private treaty markets too.</p>
<p>The Saturday auction market sets the commentary agenda because the latest results are published weekly in the Sunday Telegraph.</p>
<p>Last weekend's preliminary CoreLogic result of 80 percent represented the strongest clearance rate for Sydney so far this year, and a big increase from the prior low 70s percent weekend result.</p>
<p>What was especially interesting was the result was higher than the same time last year when the then 76 percent clearance rate came as the market was coming off the boil. </p>
<p>The strength in the Sydney market has seen week-on-week results over 70 percent ever since the last week in April.</p>
<p>Sydney’s result were especially driven recently by North Sydney and Hornsby (95 percent), the Ryde district (94 percent) and the Northern Beaches (92 percent).</p>
<p>Depending on your location or property type, the factors that drive supply and demand can be varied and not just local. The media coverage the property market receives, whether positive or negative, strongly influences buyer and seller confidence.</p>
<p>The wider factors that influence markets include interest rates, regulatory and lender policies for investors and overseas purchasers, infrastructure and even currency fluctuations.</p>
<p>Clearance rates suggest demand is still strong, however the valuers Herron Todd White suggested this week the decrease in auction numbers has masked the slowing demand.</p>
<p>As the winter months are generally quieter and now the election campaign is behind us, HTW anticipate Sydney should see an increase in market activity.</p>
<p>There are currently around 19,000 properties for sale across Sydney, according to CoreLogic, which is up 4 percent on the same time last winter. But much of the stock has been on the market for many months, with just the 5600 new listings some 27 percent down on fresh listings at the same time last year.</p>
<p>Fewer newly advertised properties being added to the market, according to Tim Lawless at CoreLogic, suggests that vendors are not quite as confident as they were a year ago. Or it could be that after four years of price growth, the supply chain of vendors wanting to sell has been exhausted.</p>
<p>Hobart is an interesting example of low supply at the moment. Its stock levels sit at 1800 properties for sale - which is 33 percent down on the same time last year. And CoreLogic not surprisingly had Hobart sitting just behind Sydney when it came to price growth this year for houses, up 10.9 percent in Sydney and 9.7 percent in Hobart.</p>
<p>By contrast Perth's stock levels sits at 22,000, which is up 15 percent on the same time last year. CoreLogic says Perth prices are down around 5 percent so far this year. Perth, which has about 700,000 households, has more listings than Sydney which has around 1.7 million households. Brisbane also has more for sale than Sydney. Both Perth and Brisbane sit among the capitals where prices are falling.</p>
<p>Earlier this year the RBA Governor Glenn Stevens tipped the Sydney and Melbourne home prices “to take a bit of a breather for a while”.</p>
<p>Any further auction clearance rate at 80 percent would be troubling, but hopefully spring stock ought reduce the recent market heat.</p>
<p><em>This article was first published in the Saturday Daily Telegraph.</em></p>
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jchancellor-FAypfDUnLy

Auction success stems from slim stock

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<div id="post-body-3241568079110976919" class="post-body entry-content">
<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>
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<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><span style="line-height: 1.3em;">New dwelling approvals for February are up from January according to the ABS, with new home building approvals up by 3.1 percent.</span></p>
<p><span style="line-height: 1.3em;">Senior Housing Industry Association economist Shane Garrett said the monthly lift in approvals activity during February is welcome but it seems increasingly likely that approvals peaked late last year and that the volume of new home building activity is set to ease as 2016 progresses.</span></p>
<p><span style="line-height: 1.3em;">“Our latest forecasts indicate that the about 200,000 new dwelling starts will take place during 2016, a reduction of 9.2 percent from last year," he said.</span></p>
<p><span style="line-height: 1.3em;">"This would still represent a very high level of output by historic standards. However, the risk remains that new home building output will fall below the levels required to meet long term demand. The onus remains on policy makers to tackle this problem, and confront issues like planning delays, land supply shortfalls and heavily inefficient taxes like conveyance stamp duty. </span></p>
<p>"During February 2016, new home building approvals rose by 3.1 percent. <span style="line-height: 1.3em;">This comprised a 1.0 percent decline in detached house approvals but the more volatile multi-unit segment achieved growth of some 7.7 percent in approvals during the month. Over the year to February, new dwelling approvals totalled 232,194. The flow of data over recent months indicates that approvals may have hit their high point in the year to October 2015, with a record 239,250 approvals registered over that 12 month period."</span></p>
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<p> </p>
<p>During February 2016, total seasonally adjusted new home building approvals saw the largest increase in Tasmania (+24.5 percent) with growth also occurring in New South Wales (+14.3 percent) and Queensland (+9.5 percent). Approvals declined in Victoria (-12.8 percent), South Australia (-10.9 percent) and Western Australia (-7.6 percent). In trend terms, approvals saw a 9.2 percent <span style="line-height: 1.3em;">decline in the Northern Territory but rose by 5.0 percent in the Australian Capital Territory.</span></p>
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po-LsXgBTHBmX

February boost for new dwelling approvals: HIA

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<p><span>Recent figures from the Housing Industry Association note a dip in dwelling starts in 2016 across all states with NSW down 4 percent, Victoria down 13.1 percent and Queensland down 1.8 percent.</span></p>
<p><span>The HIA's latest housing forecasts for February shows dwelling starts down 9.2 percent nationally.</span></p>
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Dip in dwelling starts in 2016 across all states: HIA

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<div class="page" title="Page 1">The three months up to October recorded the fastest pace of growth in apartment construction in ten years, according to the latest construction performance index released by the Housing Industry Association in conjunction with the Ai Group.</div>
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<span style="line-height: 1.3em;"><span style="line-height: 1.3em;">The Ai Group/HIA Australian Performance of Construction Index found </span></span><span style="line-height: 1.3em;">house building activity weakened in October, and fell into the negative for the first time in five months. </span>
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<p><span>HIA economist Harley Dale said the October data reinforces the important role that residential construction is playing in driving broader economic activity.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>"The strong findings for apartments are consistent with the considerable pipeline of activity, while the overall trajectory for detached houses signals healthy construction in 2015/16, albeit off the cyclical peak of last year," he said.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>"That is, however, a sharp monthly decline in the house building sub-index and some reversal will hopefully come through in November. There are signs emerging of a broadening strength to the construction industry – the results for the commercial and engineering construction sectors are encouraging.” </span></p>
<p><span>Ai Group Head of Policy Peter Burn said commercial construction has edged closer to expansion.</span></p>
<p><span>"In contrast, house building slipped into negative territory and engineering construction remained in contraction," he said.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>"The higher level of activity in the apartment sub-sector was sufficient to extend the overall construction sector expansion into a third month. </span></p>
<p><span>"Expectations of further growth in the months ahead will be encouraged by the higher levels of new orders recorded for the apartment, engineering and commercial construction sub-sectors. This is a further sign of the long-awaited broadening of the base of economic growth.” </span></p>
<p><span>The report said construction activity sub-index contracted slightly in October (down 1.2 points to 49.5) after two months of expansion, but new orders (up 1.1 points to 53.5) and employment (up 2.3 points to 54.9) both expanded for a third month. Supplier deliveries dipped slightly into negative territory (down 2.5 points to 49.6).</span></p>
<p><span>Apartment building activity  increased up 9.2 points to 72.4. House building contracted for the first time in five months, falling sharply from September’s 11-month high (down 9.8 points to 47.0).</span></p>
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mick.cee-iDmgDDAmu8

Apartment construction driving October building growth

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<p><span style="line-height: 1.3em;">GUEST OBSERVER</span></p>
<p><span style="line-height: 1.3em;">If there's one thing which really irks me most about property markets it's the long list of headline-chasing commentators who, each time they come public with a property opinion piece, do little more than demonstrate their limited knowledge on the complexities of property markets.</span></p>
<p><span>The recent Macquarie Wealth Management Aussie Macro Outlook report is a classic example. Citing a pending property oversupply and a slowdown in population growth, the report said “in terms of the price phase of the adjustment, we expect a measured 7.5% peak-to-trough decline in house prices over 2016 and into 2017, with a recovery commencing in 2H17”.</span></p>
<p><span>A day later, AMP couldn’t resist the urge to go one better with forecasts of a slide in property values of up to 10%.</span></p>
<p><span>Extraordinary jibberish by them both!</span></p>
<p><span>As if referring to one massive country that contains 550 different local government jurisdictions in eight states and territories as one big market isn’t laughable enough; to then try to predict a specific value that ‘the market’ will decline by is ridiculous. Why 7.5 or 10%? Why not 2% or 15%?</span></p>
<p><span>Unlike share markets, property markets do not have an ‘All Ords Index’. It’s not as if an investor can sink $10,000 of their savings in to a ‘Property Index’ that constitutes the cumulative value of properties within Australia’s biggest cities.</span></p>
<p><span>The problem with the likes of banks and economists is that many of their utterings are gross generalisations and are based on the premise that we do have a ‘Property Index’. Too often they make a diagnosis as a 'general practioner' which is often even less accurate than their monthly interest rate forecasting and only creates unhealthy drama in the lives of others. It’s irresponsible. These general practioners should stick to general economic commentary and leave the property economic commentary to the specialists.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>Exactly which ‘market’ are these general practioners referring to with their 7.5 to 10% decline in property values anyway? Is Doctor Macquarie referring to the Perth and Darwin markets which, at the very start of this year, Propertyology forecast would [and now are] declining. Is Doctor AMP referring to Adelaide, Brisbane, Canberra and Hobart which completely missed the boom and property values today are much the same as they were six years ago? My guess is that ‘Australia’ really means ‘Sydney and Melbourne’ and that they’ve probably given little thought to the remaining 61% of the country. Or, perhaps I missed the memo which referred to their exclusion from that co-called ‘Property Index’.</span></p>
<p><span>It would take real research to forecast the outlook of the hundreds of regional markets across the country where a significant eight million Australians elect to live and some exciting investment potential exists. This is one of the many limitations of general practitioners.</span></p>
<p><span>Whilst Australia’s population growth rate has eased, a growth rate to the year ending March 2015 of 1.4% is only marginally lower than the 1.5% national average over the last ten years. If Doctor Macquarie’s property market forecasting is based on the gross generalisation that ‘Australia’ actually means ‘Sydney and Melbourne’ as we suspect, they obviously haven’t looked at the facts close enough; the latest available capital city population data shows that Sydney’s growth rate of 1.8% is above its 1.5% annual average and Melbourne’s 2.3% population growth is also above its 2% average. ‘Oops’, I hear them utter. </span></p>
<p><span>Many commentators [not Propertyology, mind you] are describing Brisbane as the number one place to invest in at the moment, yet its population growth of 1.7% is significantly below its ten-year average annual growth rate of 2.2%.</span></p>
<p><span>A specialist, as opposed to a general practioner, knows that the complex nature of property markets is much deeper than running the ruler over a few population figures; here’s plenty of research with substance to back this up.</span></p>
<p><span>Propertyology forecasts Melbourne to be Australia’s best performing capital city property market in 2016. It’s not a location that we’ll be investing in though. The property asset class requires a longer focus and our concerns with Melbourne’s economic profile were well documented earlier this year and nothing has changed. Dark clouds loom for Melbourne from 2017 onwards.</span></p>
<p><span>In regards to dwelling supply, those who have been listening will know that over the last couple of years Propertyology has warned that national building approval volumes are at all-time record levels. At a national level, over the two years ending July 2015 there were 416,141 new dwellings approved which equates to a 34% increase on the 310,797 for the two years ending July 2012.</span></p>
<p><span>The devil is always in the detail though. On a state-by-state basis, the biggest increases in building approvals have occurred in New South Wales (+63%), Western Australia (+55%), and Queensland (+45%). Victoria has consistently high building approval volumes for the last five years. On the other hand, supply has been better controlled in South Australia (+10%), Tasmania (-1%), and Canberra (- 21%). The wide range of results from supply data is just as prominent across regional cities.</span></p>
<p><span>‘Oops’, again.</span></p>
<p><span>Rounding out the trifecta of these gross generalisations are claims from general practioners that household incomes haven’t grown enough to sustain the increases in property prices over the last couple of years. Which of the 9.6 million Australian households would these generalisers be referring to? If they are going to generalise about wages showing a nominal increase over the last five years surely it’s relevant to at least factor in the 2.5% reduction in the cash rate which equates to an extra $11,250 in the household budget (based on a $450,000 home loan). In most of Australia, housing affordability has actually improved.</span></p>
<p><span>How many oops’s are we up to now?</span></p>
<p><span>Employment prospects in this country are much healthier than many scribes have given credit. Yes, the national unemployment rate has increased a bit but so has our population. Australia actually created 342,700 new jobs over the two years ending August 2015 but I don’t recall ever seeing that as a lead news story. Imagine what this (once) great country could achieve with less glass-half-empty people occupying the tabloids.</span></p>
<p><span>Another thing that the general practioners probably don’t realise is the unprecedented pipeline of infrastructure projects throughout the country which, pending greater cooperation from all levels of government, actually has the potential to supercharge Australia’s economy.</span></p>
<p><span>Affordability is definitely an issue for Australia’s most expensive city to live in, Sydney; that’s nothing new though. While a significant amount of new supply will hit Sydney’s market during the next couple of years, Propertyology’s research suggests that Sydney’s economy will remain very healthy for some years and property prices are likely to have a prolonged flat period. That’s one of the main reasons why Propertyology resisted the temptation to help clients invest in our biggest city.</span></p>
<p><span>Increased supply and a significant spike in investor home loans over the last two years is likely to result in property rents in Australia’s three biggest cities easing throughout 2016 and 2017.</span></p>
<p><span>Brisbane, Adelaide and Hobart will experience price growth next year while Perth and Darwin are likely to fall further and remain in a property trough for at least another year.</span></p>
<p><span>With 411 separate regional local governments throughout Australia there will always be mixed fortunes amongst the forgotten 35% of Australia’s population. The money trail which Propertyology is following is directly linked to the Asian Century; locations which we have identified for solid property market performance over the medium term have economies which contain a mix of agriculture, tourism, premium manufacturing, education, and health.</span></p>
<p><span>If these markets decline in value by 7.5 to 10% I guess the general practioners will be able to shout from the rooftops that there is such a things as a ‘Property Index’. I’ve put my money where my mouth is though and I can assure you that, before doing so, I did a lot more than look at very broad population and construction numbers.</span></p>
<p><em> </em></p>
<p><em>Simon Pressley is Managing Director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, REIA Hall of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent.</em></p>
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spressley-sBoeMhannA

Melbourne to be Australia’s best performing capital city property market in 2016: Propertyology's Simon Pressley

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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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