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

Joel Robinson

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

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

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

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

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

Economic Development

<h2>What&rsquo;s the outlook for the Australian property markets for 2021 and beyond?</h2>

This is a common question people are asking now that our real estate markets are up and running again after virtual auctions and sight unseen purchases took place in 2020.

News from the biggest banks and Australian economic experts are predicting house price growth across almost every segment of the market.

Those I spoke to, and who have released forecasts of their own, are predicting property price growth of 12 per cent per cent - 20 per cent per cent across Australia this year. They expect the trend will almost certainly continue until the end of 2022.

Historically low-interest rates and FOMO (fear of missing out) have driven dwelling prices to record new highs &ndash; but we&rsquo;ve only recently surpassed previous 2017 peaks, which means double-digit price growth is on the horizon for many areas around Australia in 2021.

AMP Capital&#39;s Shane Oliver in particular said, &quot;the forces that have driven average Australian capital city property prices well above trend and well above price-to-income ratios seen in comparable countries over the last two decades may be at, or close to, having finally run their course.&quot;

We&rsquo;ve taken a look at a handful of the state capital property markets, how they&rsquo;ve performed since COVID hit, and what is being forecast to the end of 2021.

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Melbourne Forecast

While Melbourne property prices suffered because of its extended lockdown which severely impacted market activity in 2020, commencing in late October the Melbourne property market has rebounded strongly and is likely to deliver double digit price growth over the next 12 months.

Apartment prices were up just 0.4 per cent in July, contributing to a growth of 1.9 per cent for the quarter and 6.1 per cent in the year to date. The median apartment price in Melbourne is now $612,711.

Dwelling values overall, have increased 11.1 per cent in the past seven months, carried primarily by house price growth of 13.3 per cent in that period.

Property of every type remains in high demand across regional Victoria, especially those with easy access to the capital city with units seeing price growth of 15.7 per cent since January.

Overall, experts forecast property prices will rise roughly 16 per cent by 2021&#39;s end.

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Sydney Forecast

Extremely strong demand for property in Sydney&rsquo;s inner and middle-ring suburbs has led to Sydney house prices seeing double digit price growth, apartments however have taken longer to bounce back from covid.

Apartment prices are up 5.1 per cent over the quarter to be up 10 per cent in the year to date. Of that growth, 1.6 per cent happened in July with similar showings in February and March. Sydney&rsquo;s median unit value is now just over $810,000.

Interestingly enough it is Regional NSW that is seeing the strongest growth in the apartment sector with values shooting up 7 per cent this quarter to be up 14.5 per cent in the year to date.&nbsp;

It is worth noting that the greatest increase in property prices across NSW are seen in the priciest properties and this holds true in both the house and unit markets.

Overall, experts forecast property prices will rise roughly 19 per cent by 2021&#39;s end.

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Brisbane Forecast

Brisbane&rsquo;s house prices remained resilient over 2020 when other markets were impacted by the economic impact of COVID-19.

Now, moving forward, the Sunshine State will shine with strong demand for homes, particularly in lifestyle areas, likely to deliver double digit capital growth over the next 12 months.

Brisbane apartment values have increased 2.7 per cent over the quarter, in line with 6.2 per cent in the year to date.&nbsp;

Median apartment values have hit a high of $419,143.

Several of the economists I spoke to including Terry Ryder and Westpac&#39;s Bill Evans tipped housing prices to surge 20 per cent between 2022 and 2023.&nbsp;

Hotspotting&#39;s Terry Ryder clarified that 89 per cent of suburbs across Brisbane are seeing price growth and was tipping it to become Australia&#39;s property leader in the coming months and years.

It&rsquo;s also worth keeping in mind the Brisbane 2032 Olympics which will positively impact property values now and in the future.

Overall, experts forecast property prices will rise roughly 16 per cent by 2021&#39;s end.

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Canberra Forecast

Canberra&rsquo;s property market has been described by many as a &ldquo;quiet achiever&rdquo; with dwelling values reaching a new peak after growing 14.2 per cent over the last year.

Considering a large percentage of Canberra&#39;s population is employed by the government or industries supporting the public sector, Canberra&rsquo;s property market has not really felt the effects of the coronavirus recession like other capital cities did.

Due primarily to the ongoing apartment developments popping up across Canberra, like those from Geocon, unit values are up 1.3 per cent this month, making up a large chunk of the 2.8 per cent price growth this quarter. Apartment prices are up 6.5 per cent in the year to date.&nbsp;

Median apartment prices are currently $520,900.

Moving forward, the Canberra property market will continue to enjoy solid but slower property price growth, due primarily to slow population growth.

Overall, experts forecast property prices will rise roughly 17 per cent by 2021&#39;s end.

[smartcode_project:default project_id=29898 project_image_fid=169807]

Perth Forecast

Perth&rsquo;s long-awaited recovery was interrupted midway by COVID-19 but now Perth&rsquo;s housing market is back on a recovery trajectory, with home values posting a 7.5 per cent increase in the year to date.

Perth continues to be the most affordable capital city for houses in the country and this along with a record-low mortgage rate, improving economic conditions and government incentives has set it up for strong price growth this year.

This has also seen strong benefits for the apartment market which has been neck and neck with houses and even outperformed them this quarter, seeing 2.3 per cent growth compared to 1.5 per cent. Units were up 0.6 per cent for July, while houses saw growth of 0.3 per cent.

Apartment values are up 6.8 per cent since January achieving a median price of $404,257.

Overall, experts forecast property prices will rise roughly 19 per cent by 2021&#39;s end.

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<h2>How does my property impact the economy?</h2>

Real estate affects the economy because it makes up a large portion of individual and business wealth across economic sectors.

When real estate prices rise, wealth increases, so individuals and businesses are more likely to borrow and spend.

This can be seen in recent times with the average Australian savings account decreasing ~$7,000 from May to April as prices start to spike, however this can also be largely attributed to a reducing fear of COVID-19

When your home rises in value it increases the overall value of the economy. When real estate prices rise, wealth increases, so individuals and businesses are more likely to borrow and spend.

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<h2>What&rsquo;s causing the rise in home prices?</h2>

The primary factor causing the current boom in home prices are the continuing low mortgage rates and low interest rates.&nbsp;

Plus with Australia&rsquo;s excellent response to Covid 19 transmission seeing business reopening well and an increasing optimism for the economy there is much less fear around COVID-19.

With fewer homes for sale and first time home buyers and owner occupiers (those buying a property to live in it) dominating the market, they are currently the ones driving up property prices the most.&nbsp;

However as incentives like those from the HomeBuilder Grant and First Home Buyer Grant taper off it is expected that we will see a massive uptick in investor spending on property as they compete with owner occupiers and first home buyers over the super competitive interest rates.

It is predicted that Investors will drive the market well into 2022 and perhaps even 2023 depending on other conditions that influence interest rates like the cash rate.

[smartcode_project:default project_id=4136 project_image_fid=89831]

<h2>How does the Cash Rate influence the Interest Rates on my loan?</h2>

You often hear about it in the news, the monthly changes in the Cash Rate, but what is the cash rate and how does it affect you?

In essence the Cash Rate which the RBA meets on to decide once a month (currently 0.15 per cent) changes how much money banks can lend to you.

So when the cash rate is extremely low - close to zero - as it is currently, banks can and are encouraged to offer lower interest rates.&nbsp;

That means when the Cash Rate is low, Variable and Lock-In Interest Rates are low so your mortgage is cheaper!&nbsp;

This can save you hundreds to thousands of dollars a year depending on the value of your home.&nbsp;

With all that covered, every expert I talked to predicts that the cash rate will not decrease any time in the next 2 years and most experts expect the cash rate to increase in 2023 or later.

However three of the Big 4 banks have already started hiking interest rates across the range with Westpac the only one yet to start showing upward movement. It&#39;s a sign of the times with a number of other banking and loan institutions also increasing interest rates across a wide range of home loans.

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<h2>How does the government affect property prices?</h2>

Legislation is also a factor that can have a sizable impact on property demand and prices.

Tax credits, deductions, and subsidies are some of the ways the government can boost demand for real estate for as long as they are in place.

Some recent examples of this include the HomeBuilder Grant and the First Home Buyers Grant.

Being aware of current government incentives can help you determine changes in supply and demand and who and what will be affecting property prices.

An example of something to look out for is the percentage of properties purchased by FHB&#39;s (First Home Buyers) soaring to record highs recently. Although this still remains the case, it wont forever and certainly is not predicted to last into 2022.

What’s the outlook for the Australian property markets for 2021 and beyond?

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Economic Guide: Forecasting property prices and what affects property in 2021, 2022 and beyond

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EXPERT OBSERVER
The Reserve Bank has released its November Statement on Monetary Policy and a major interest is always in any revisions to its output, employment and inflation forecasts.
In that regard, we were a little surprised that the forecast for growth in 2019 remained at 3 ¼ per cent. That is because in the Governor’s Decision Statement following the November Board meeting, he noted “the forecast for economic growth in 2018 and 2019 have been revised up a little."
The central scenario is for GDP growth to average around 3 ½ per cent over these two years”. That seemed to point to an upward revision for the 2019 forecast but instead it remains 3 ¼ per cent.
However, there is some recognition of stronger growth in the second half of 2019 since growth through to June 2020 has been revised up from 3 to 3 ¼ per cent.
It is true however, that growth in 2018 has been revised up to 3 ½ per cent from 3 ¼ per cent, although that largely reflects a higher starting point given that the previous estimate of growth to June 2018 was lifted from 3 per cent to 3.4% actual.
The forecast for 2019, nevertheless, is significantly higher than Westpac’s forecast of 2.7%.
This can largely be explained by an assessment by the RBA that there will be no marked reduction in residential construction activity in 2019 and limited reduction in 2020. Secondly, the assumption is that household consumption growth will be sustained at around the current 3 per cent pace over the forecast period.
With regards to the residential construction cycle, the assumption is that the fall in building approvals, which is already apparent and the information the RBA has received from its liaison contacts in the industry that off-the-plan sales have slowed significantly, will not significantly impact activity until beyond 2020.
This seems to overlook evidence of a clear slowdown in non high-rise approvals, the likelihood of an increase in abandonments of approvals which are already in the system, and evidence, which the RBA notes, that “lot sales for new detached housing have also declined sharply in Sydney and Melbourne since late 2017”.
Instead we assess that all of these forces point to a more significant reduction in dwelling construction in 2019 and 2020 than the RBA is expecting.
The view around consumption growth being sustained at 3 per cent looks courageous. It relies on ongoing growth in employment despite a clear slowing through 2018, the elusive pick-up in wages growth, and only a relatively small wealth effect that might be related to the ongoing falls in house prices and associated household wealth. We would expect that with the savings rate down at around 4 per cent, this wealth effect is likely to be more significant.
There has also been an increase in the forecast for underlying inflation for the year to December 2019 from 2 per cent in the August SoMP to 2 ¼ per cent. With the recent September quarter inflation report confirming that underlying inflation is running at 1 ¾ per cent, this forecast lift of ½ per cent in underlying inflation looks to be optimistic.
The justification behind this increase is around expected faster wages growth and a larger reduction in the output gap due to the above trend growth in 2018 and 2019.
The history of underlying inflation indicates that a ½ per cent jump over the course of one year seems optimistic given the correction in housing that is underway.
The RBA’s analysis of the prospects for wages growth is tentative. In fact, it points out that “wage outcomes from enterprise bargaining agreements are likely to remain a drag on overall wages growth” and also points to its liaison work which notes that “there is still spare capacity in the labour market”.
Appropriately, the SoMP spends some time referring to international evidence which indicates that Australia’s unemployment rate could fall well below historical estimates of the NAIRU “before there is a material increase in wages growth”.
This evidence refers to globalisation, technological change, and changes in relative bargaining power. Other major risks to this inflation forecast relate to ongoing competitive forces in the retail sector and “a risk of further declines in administered prices” due to government initiatives to reduce cost of living pressures.
As was indicated in the Governor’s Decision Statement, the forecast for the unemployment rate has been lowered. However, this appears to be a cautious ‘mark-to-market’ exercise.
In August, the forecast was for the unemployment rate to fall from 5 ½ per cent in December 2018 to 5 per cent by December 2020.
The new forecast is for the unemployment rate to fall from 5 per cent in December 2018 (recognising the most recent employment report) to 4 ¾ per cent in December 2020.
The discussion around the risks of a lower NAIRU would suggest only a very limited prospect of resurgent wage pressures should the unemployment rate only fall by a ¼ per cent in two years.
It is difficult for a central bank to acknowledge political risks but with a Federal election certain to be called in 2019, the uncertainty/ confidence factor associated with such an event might also have been incorporated in the forecasts.
But their assumption around employment growth, income growth and business investment seems to indicate no effect taken into account – both construction activity and machinery and equipment investment are expected to be boosted.
Conclusion
On face value, the stronger growth and higher inflation forecasts might imply that the RBA is closer to raising rates than we have expected. That may well be the case from their perspective. But if the economy evolves as we expect with a slowdown in consumer spending, a contraction in residential investment, and softer confidence partly linked to global uncertainty, the RBA’s growth and inflation forecasts are unlikely to be achieved.
Of course, it will take some time for these developments to be apparent and based on the Governor’s comment “the Board does not see a strong case to adjust the cash rate in the near-term”, we have ample time for the outlook to evolve without a surprise policy adjustment based on these forecasts.
Westpac confirms its view that the cash rate will remain on hold through 2018, 2019 and 2020.  
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA wrong to rely on small wealth effect given ongoing falls in house prices: Bill Evans

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<img src="https://counter.theconversation.edu.au/content/63322/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Various cities in Australia have developed creative economy policies with the aim of diversifying their economy.
These policies are about attracting and retaining entrepreneurs and firms from the creative industries sector, such as the music and fashion industries.
Creative economy policies were often based on the cluster concept developed by Michael Porter in the 1990s. This was the case for the creative city strategy in Brisbane and also for the more recent music industry policy in Melbourne.
Brisbane has been very active in this area. The objective was to be less dependent on natural resources in the future.
Planning initiatives such the Kelvin Grove Village are examples of economic development strategies based on the cluster concept that translated into planned projects. But positive steps are being taken to provide affordable spaces for creative workers.
Recent research on the video game industry in Australia has shown that new technologies have greatly influenced the production of games. The industry functions as a “networked community” and not strictly as spatially bounded clusters. The use of new platforms such as the internet enables small companies to produce games from remote areas.
<h2>Industry structures are changing</h2>
The composition of the industry has changed significantly since 2006-07, with the closure of several development studios that focused on console games, such as Krome Studios. A variety of platforms – Unity 3d, mobile phones etc – is now available to game developers.
With the shift from console games to mobile phone games, the industry has changed dramatically. The nature of the demand has changed too: consumers of video games are now looking for a quick and fast experience.
Disparity Games, operating from Noosa on the Sunshine Coast, is an example of these new successful companies located outside the main cluster. The people behind Disparity Games are two video game developers working from home in an idyllic environment. The map below shows the location of video game firms in Queensland, with some of those companies operating from the Gold Coast and the Sunshine Coast.
In an interview with the author, one of the game developers explained why they decided to move their company to Noosa:
"After the collapse of large studios we decided to go indie. With the smaller indie companies, everyone is more supportive. We have meet-ups on marketing, technical issues, game testing. We are exchanging knowledge at those events, [so] we don’t need to be based in the city anymore to be part of the community."
<h2>New technologies enable new ways of working</h2>
These studios have demonstrated that self-publishing is a viable business model in Australia. Independent developers can now bypass traditional international publishers.
New technologies have thus had the effect of reducing the size of video game companies and increasing their number. This is verified in Queensland, which has become specialised in developing mobile phone games.
New technologies such as the National Broadband Network (NBN) have changed the way video game developers produce games and where they produce them. With the NBN, a small video game company can literally produce a game from anywhere.
If they already have the professional connections, developers can work on the same game with different experts located in different cities. Face-to-face interactions are important, but this does not mean anymore that video game developers need to be located in the city at all times.
In that sense, creative economy policies should think about flexible ways to accommodate creative workers in the city. The opening of co-working spaces in South Bank or the River City labs are good examples in Brisbane.
This research shows it is time to go beyond the cluster type of economic development policies to attract and retain creative workers and firms in cities like Brisbane.
Instead of planning creative neighbourhoods or districts, which are often not affordable for start-up companies, policies should aim for flexible solutions such as co-working spaces. Those are more adapted to an era in which new technologies are to a certain extent changing the geography of creative industries based on technological innovation such as the video game industry.
Sebastien Darchen is lecturer in Planning, The University of Queensland and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/sebastien-darchen-6781" target="_blank">here</a>.
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