<p><a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.</p>

<p>A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.</p>

<p>Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360965]</p>

<p>“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.</p>

<p>From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.</p>

<p>The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360981]</p>

<p>Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.</p>

<p>A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.</p>

<p>Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360966]</p>

<p>Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.</p>

<p>“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.</p>

<p>Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360969]</p>

<p>Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.</p>

<p data-end="8307" data-start="8063">The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.</p>

<p data-end="8543" data-start="8312">“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”</p>

<p data-end="8915" data-start="8548">The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.</p>

<p>The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.</p>

<p>[smartcode_project_cta:default project_id=149670]</p>


Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

<p>A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.</p>

<p>The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.</p>

<p>Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.</p>

<p>The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.</p>

<p>The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.</p>

<p><img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" /></p>

<p>Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.</p>

<p>Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.</p>

<p>The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."</p>

<p>The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.</p>

<p><img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" /></p>

<p>Campbelltown has been starved of new residential developments in the last decade.</p>

<p>The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.</p>


First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

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<p>A 60-apartment building nine storeys tall would be a rarity almost anywhere along this stretch of Moreton Bay, but that's exactly what's been lodged for a modest Deception Bay street better known for its single-storey weatherboard homes.</p>

<p><a href="https://www.apartments.com.au/developers/sherlock-construction-homes">Sherlock Construction Homes</a> is seeking to push Deception Bay’s emerging medium-density housing profile higher, lodging plans for a nine-storey apartment building near the suburb’s shopping centre and foreshore.</p>

<p>Dubbed Grosvenor Apartments, the proposal at 14-20 Grosvenor Terrace would replace two detached homes with a new building designed by&nbsp;<a href="https://www.apartments.com.au/architects/mode">Mode Design</a>&nbsp;which would&nbsp;reach nearly 30 metres, well above the site’s mapped 21-metre building height.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="86c21a25-5a97-4ca7-a361-80757137ea5b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20da%20front.png?VersionId=aXIujfvEhH33sLHOEjHFv9Ii6qxSvAF4" /></p>

<p>The apartment mix is weighted toward larger homes, with 14 three-bedroom apartments, 31 two-bedroom apartments and 15 one-bedroom apartments. Six apartment types are spread across the floors, ranging from 66 sqm one-bedroom units through to three-bedroom apartments of 116 sqm, most with private balconies or terraces.</p>

<p>Levels one through seven follow a consistent layout of six to eight apartments per floor arranged around a central lift and stair core, with the top floor, level eight, trading one apartment for a landscaped community breakout space rather than repeating the standard layout below.</p>

<p>Ground floor is dedicated to arrival and services, with a lobby, mailroom and manager's office, alongside 91 car spaces.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="b098bde0-5fe1-4e6c-9601-e5446612e5fc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20podium.png?VersionId=A0hfENMNxSxkfh9Jl6D4WJ9XIraeOukA" /></p>

<p>Mode Design's brief describes a "serene coastal-inspired design blending soft curves, natural textures and light-filled spaces to reflect the relaxed Deception Bay lifestyle."&nbsp;</p>

<p>The material palette leans on white and grey render, timber-look aluminium screening and stacked-brick-look finishes, with hanging greenery and vine planting proposed across balcony edges and ground-level walls.&nbsp;</p>

<p>Balconies feature asymmetrical geometries intended to vary the building's rhythm rather than repeat a single module up the tower, while lush planting is concentrated over the entry and level one balconies to soften the building's base.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="c05c5693-3e00-42d0-b075-55c36094f4db" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20da%201.png?VersionId=cMKJgBsBaaVCd2dA5O22SOT38OT_.BPA" /></p>

<p>The design evolved following an April 2025 prelodgement meeting with council. At that stage, the project was conceived as a seven-storey building containing 45 apartments. The subsequently lodged scheme increases the development to nine storeys and 60 apartments while introducing one-bedroom residences to the mix.</p>

<p>Zone Planning argues the additional scale reflects the site's position within an area earmarked for increased residential intensity. The planning report points to the North Lakes-Redcliffe-Moreton Bay Rail corridor strategy, which identifies Deception Bay as a district-level activity centre and supports greater housing choice within urban neighbourhoods.</p>

<p>Market Square Deception Bay, Deception Bay Sports Centre, Deception Bay State School, public transport, community facilities and the Moreton Bay foreshore are all identified within approximately one kilometre of the site, while the property falls within a 400-metre walking catchment of Market Square.</p>

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


First look at MAYD's North Kirra mixed-use precinct

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<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

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> </div>
<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>
</div>
<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>
<div> </div>
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<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>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>
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<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>
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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>
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<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>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>
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<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>
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<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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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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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<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>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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