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

Foreign Investment

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The South Australian Weatherill government has reversed its position on foreign ­investor taxes.
It intends to raise more revenue by increasing a proposed levy on foreign buyers.
The reframing of the budget comes after Premier Jay Weatherill conceded the state bank tax was “dead” following its rejection by parliament.
State Treasurer Tom Koutsantonis responded by increasing the proposed “foreign investor surcharge” from 4% to 7% to raise an extra $36.6 million over four years.
It will recoup well short of the estimated $417 million the bank levy had been expected to raise, The Australian noted.
Foreign investor taxes on residential transactions in NSW are set at 8%, Victoria at 7%, Western Australia at 4% and Queensland at 3%, with an extra 1.5% levy for absentee foreign owners.
Koutsantonis last year said such a measure was an eastern states revenue grab driven by “a little bit of xenophobia”.
“It is also a recognition there are a lot of people in Southeast Asia and India who are fleeing … and they want to invest in other economies and bring their capital to Australia,” he said at the time.
“I am never going to say that I don’t want a type of investment because ‘I don’t speak your language’ … I think that’s appalling.’’
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South Australia ignores their own xenophobia concerns to raise tax on foreigner property purchases

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Purchases by foreign buyers do not, on the whole, reduce the supply of dwellings available to local residents, according to the RBA.
"In fact they may actually contribute to expansion of the housing stock," according to Jonathan Kearns the bank's head of Financial Stability.
He said foreign buyers in Australia for work or study would have been renting if they did not purchase.
"Other foreign buyers rent the property as an investment and so contribute to the rental stock.
"Also, there are some new developments that only proceed because they get high pre-sales from foreign buyers," he said in a speech to the Aus-China Property Developers, Investors &amp; Financiers.
<a href="https://www.rba.gov.au/speeches/2017/sp-so-2017-11-20" target="_blank">The speech</a> noted purchases by foreign buyers have received considerable focus in recent years.
However he did acknowledge foreign buyers of residential property could amplify cycles or transmit foreign shocks. 
"Non-residents purchasing Australian real estate as an investment may choose between different countries based on expected returns, which can increase the correlation of the Australian market with other countries. 
"Changes in economic and regulatory conditions in foreign buyers' home countries can also be transmitted to their demand for Australian property. 
"But if purchases of residential property by foreign buyers mainly depend on conditions in their home country, their participation could actually have a moderating impact on the Australian housing cycle."
Kearns noted non-residents are able to purchase newly constructed dwellings in Australia, while temporary residents, such as those in Australia for work or study, are able to purchase an existing dwelling for their primary residence.
"It has been hard to get a firm estimate of how large these purchases are, but drawing on a range of sources, it seems that, nationally, purchases by foreign buyers are equivalent to around 10-15 per cent of new construction, or about 5 per cent of total housing sales," he noted.
"The share of new construction purchases is highest in Melbourne and Sydney.
"It is also higher for apartments, but it is still only perhaps around one-quarter of newly built apartments.
"Many foreign buyers come from China, seemingly around three-quarters."
He noted purchases of new properties by foreign buyers have eased over the past year, reportedly because of stricter enforcement of Chinese capital controls and tighter access to finance for foreign buyers.
Kearns concluded the strength of the Australian property market, and the participation by foreign buyers, had enticed some foreign developers to Australia for specific projects, "but overall they remain a small part of the market."
Foreign banks also have a very small role in residential property lending in Australia, he added.
 
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Foreign buyers do not reduce residential dwelling supply: RBA's Jonathan Kearns

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The Foreign Ownership of Land Register released by the State Government has revealed overseas Chinese buyers purchased over 7600 land parcels over the past 12 months, totalling $1.47 billion, up from $463 million in 2013/14.
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It is the first time China has topped the list, taking over from the United Kingdom as the most prolific buyer of Queensland land.
China’s investment in Queensland totals nearly $1 billion more than any other country in the world over the same time period.
The total amount of foreign investment in Queensland land has risen from $1.6 billion in 2013/14 to over $4.2 billion last year.
The Foreign Ownership of Land Register released by the State Government reveals the United Kingdom maintained its position as the premier buyer of Queensland land when it comes to size.
UK owners purchased 2.2 million hectares over the year, ahead of the Netherlands with 1.9 million hectare and China with 1.6 million hectare.
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Chinese buy 7600 properties last year in Queensland 

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One-third of commercial property deals in the first half of 2017 involved offshore money, according to latest figures from commercial real estate firm CBRE.
However, there was a decline in the volume of transactions as prices increase, prompting a standstill between owners and would-be buyers.
Australia was the top destination for cross-border capital in CBRE's latest survey on investor intentions.
Commercial property deals – across the hotel, office, industrial and retail property sectors – were at $10.8 billion in the first half of the year, compared to a year earlier when total sales were $15.6 billion. 
"Foreign investment still accounted for approximately one-third of all activity in Australia's commercial property sector, with demand for assets remaining strong given the higher yields and strong fundamentals demonstrated by the Sydney and Melbourne markets," CBRE research chief Stephen McNabb was quoted as saying by The Australian Financial Review.
About $2 billion Asian capital was directly invested into the local commercial real estate market in the first half, CBRE figures showed, a fall of 25 per cent from a year earlier.
But it fell less slowly than the overall drop, with transaction volumes down by 37 per cent.
The fall in investment activity was due to a lack of available stock rather than a decline in buyer interest, said McNabb.
Outlining the preference for Australian assets, he said in April a Hong Kong investor bought the Australian Securities Exchange headquarters at 20 Bridge Street in Sydney for a record yield – below 4.5 per cent – for more than $330 million
In June, Singapore's Keppel REIT outlaid $348 million to take a half stake in a new police headquarters in the Melbourne CBD.
He said Asian appetite was holding up into the second half as well, with Mirvac selling a half stake in a landmark Collins Street office development in Melbourne to Singapore's Suntec REIT for $414 million.
"At this stage of the yield cycle, which is nearing its peak in Australia's major markets, and with a reasonable immediate outlook for rent growth, there isn't a compelling reason to sell assets," McNabb said.
"From an investment perspective, assets remain eagerly sought after and this is evident in further yield compression across all assets classes nationally in the first half of 2017."
Around $US45.2 billion of Asian outbound capital was directly invested into global property in the first six months of 2017, up 98.4 per cent on the $US22.8 billion in the first half of 2016.
However, a slowdown in Chinese investment offshore is expected as the government there restricts the flow of outbound capital.
 
 
 
 
 
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Foreigners net one-third of commercial property deals in first half of 2017: CBRE

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The Housing Industry Association's recent Stamp Duty Watch report claims foreign investors now pay nearly $100,000 in taxes to buy a Sydney unit, almost four times as much as local buyers.
Shane Garrett, HIA Senior Economist said the average stamp duty bill in Australia paid by resident owner occupiers is also up by 16.4 percent over the year to $20,725, even though dwelling prices increased by just 10.5 percent.
Shane Garrett, HIA Senior Economist said recent changes to stamp duty in NSW mean that foreign investors now pay almost $100,000 in transaction taxes to acquire a standard apartment in Sydney – almost four times as much as local buyers.
“Foreign investors are a vital component of rental supply in cities like Sydney and Melbourne," he said.
"With rental market conditions now so tight in Australia’s two biggest cities, should we really be placing more and more barriers in the way of new supply. 
“On the owner occupier side, stamp duty drains family coffers of $107 each and every month over a 30- year mortgage term.
“For owner occupiers, the typical stamp duty bill now amounts to $20,725 – an increase of some 16.4 percent on a year ago.
“Shelling out so much in stamp duty drains the household piggy bank of vital funds for their home deposit. Families are then forced to take out larger mortgages and incur heavier mortgage insurance premiums."
<a href="https://www.propertyobserver.com.au/images/2017/08/04/Screen%20Shot%202017-08-04%20at%2011.13.27%20AM.png" target="_blank">Click to enlarge</a>
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Foreign investors slugged with taxes on Sydney apartment sales

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Queensland's state government has decided to tax foreign landowners with a 1.5 percent absentee land tax surcharge on land worth more than $350,000, following NSW and Victoria's moves to levy more taxes on foreigners.
The absentee land tax surcharge comes on top of the 3 percent transfer duty surcharge, which was introduced in 2016.
The new levy is expected to generate revenue of $20 million a year from 2017-18. 
Queensland Treasurer Curtis Pitt was quoted as saying by The Courier Mail that the “surcharge ensures that absentee owners of land are making a fair contribution and it has no direct impact on Queenslanders.”
Earlier this month, New South Wales announced it would double its foreign investors stamp duty surcharge to 8 percent as part of premier Gladys Berejiklian’s moves to address housing affordability ahead of the budget. 
And Victoria announced it would impose a tax on homeowners who leave their properties vacant in a bid to make housing more affordable in and around Melbourne
Victoria's Vacant Residential Property Tax will be levied at 1 percent, multiplied by the capital improved value of the taxable property. 
In May's Federal Budget, the Australian government also announced a new tax on any vacant properties owned by foreigners in a bid to improve housing affordability.
The new charge is expected to bring in $16.3 million over the forward estimates being monitored by the Australian Tax Office.
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Queensland to slug foreigners with absentee land tax surcharge

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The least understood, worst reported and most unfairly treated issue in residential real estate is foreign investment.
The degree to which a patchwork of half-truths, empty rhetoric and outright lies has come to be accepted by almost everyone as truth is quite startling.
All forms of investment in real estate have become demonized amid the increasingly hysterical “debate” about housing affordability, but especially foreign investment. 
Politicians’ handling of the affordability issue has been taken directly from the Yes Minister playbook. The iconic British comedy series has provided the scripts for federal and state politicians seeking a convenient scapegoat for the affordability issue – someone they can attack to give the appearance they care, without costing votes. 
Overseas investors are the perfect target because they are seen as filthy rich foreign bastards, so everyone dislikes them or at least envies them, and they don’t vote in Australian elections.
After two long and pointless federal parliamentary inquiries into housing affordability, the Federal Government decided to blame it all on foreign investors. This provided lots of opportunities for sabre-ratting and righteous speech-making, followed by a big clampdown on foreign buyers who break the rules. 
State Governments seized the opportunity to not only blame foreign investors for high prices but also to extract still more revenue from the property investment sector by slapping extra taxes and other imposts on the dastardly foreigners. Media, of course, has lapped it up.
So thoroughly have foreign buyers been demonized that a recent public opinion survey found that most people blame foreign investors for rising property prices. Even in Perth, where house prices have been falling for four years, half of respondents claim foreigners are forcing their house prices to rise. That pretty much says it all.
The anecdotal evidence suggests that anyone who has bid at an auction in Sydney and Melbourne in recent years, and been out-gunned by someone of Asian appearance, has gone away complaining about foreign investors. They could be third generation Australians for all they know.
The NSW Government, which is more to blame for poor housing affordability than any other entity or group of individuals, has seized the opportunity to exploit the unpopularity of foreign investors by slugging them with further taxes, while claiming – rather remarkably - that it won’t affect the level of foreign buying in Sydney.
If that’s what they believe, then what’s the point of doing it? It’s a rhetorical questions – the answer, of course, is that it’s all about revenue-raising.
The mounting imposts on offshore buyers will deter them and that will cause high-rise projects to be cancelled, thereby reducing supply - one of the factors needed to improve affordability.
The craziest thing about the whole sorry issue is that foreign investors are such a small part of the overall buying market. The research indicates that offshore buyers account for less than 10 percent of residential sales. We’re being asked to believe that this tiny minority is somehow driving prices up everywhere, overpowering the more than 90 percent of buyers who are Australians. Are we really that weak and puny?
It’s likely suggesting that a Japanese sevens team with two players in the bin could defeat a 15-man Wallabies outfit.
Yet 54 percent of South Australians think foreigners are the greatest factor in forcing up property prices, even though prices have hardly moved in Adelaide; and 56 percent of Queenslanders have the same attitude, despite the absence of boom conditions in Brisbane.
Of course, it all depends how the survey is framed – also well-documented in the scripts of Yes Minister. Strange that this recent survey had little to say about negative gearing, another hugely-popular scapegoat. Seven out of 10 nationwide blame foreigners.
It shows, once again, how opinion surveys do little more than reflect the prevailing media view. Politicians and media keep telling the public that foreign buyers are forcing up prices - so that’s what most people think. It’s not as if the average citizen goes out and conducts their own research. They just believe what they read.
The proof that foreign buyers are unfairly blamed is this: both federal and state governments, as well as lenders, have been clamping down on foreign investment for the past two years. New taxes and charges have made it incredibly expensive for them to buy our real estate, while those who are deemed to have done the wrong thing have been forced to sell back the properties they acquired.
The level of foreign investment is falling significantly. But prices have continued to rise in Sydney and Melbourne.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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terryryder-YECXbqmri2

Level of foreign investment is falling significantly as foreigners are demonized: Terry Ryder

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The majority of respondents to a new survey believe foreign investors are the greatest factor pushing up house prices.
The survey of 1006 Australians conducted on behalf of non-bank lender State Custodians Home Loans, found 69% of those aged 50 plus believe so, 54% of Gen X, and 49% of Gen Y.
Some 60% of respondents in New South Wales considered foreign investment as the greatest factor in pushing up house prices, 63% in Victoria, 50% in WA, 54% in SA and 56% in Queensland. 
Out of survey, 32% believe current low interest rates are merely encouraging more cashed up buyers into the market, driving up prices even further.
Joanna Pretty, general manager of State Custodians, said the collective impact of so many forces at work is what’s really contributing to the housing affordability crisis, rather than any one thing in particular.
“It’s the perfect storm of numerous factors coming together which is shaping the market we are experiencing today,” she said.
“The budget changes will go some way to help regarding foreign investment levels, but then the other factors still exist. There is still a lot of work to be done regarding affordability in general.”
"Other major concerns relate to population issues.
"Some 42% of people believe that over population in major cities is pushing up demand.
Another 28% also feel there’s not enough overall housing stock on offer for the amount of people looking, the survey found.
“It is definitely tough to buy in metro areas these days in the larger cities, especially if you’re struggling to make ends meet on your current wage," said Pretty.
“There is currently a lot of competition with limited stock.
"Plus, the deposit requirements are significant, even if you’re an expert saver. 
“Unfortunately buying your ‘forever home’ right off the bat is not always a feasible or quick option like it has been in the past.
"People who are competing for limited stock need to be open to suggestions on how to move forward.
“Look at different types of investing options. For example, if you don’t want to move from your neighbourhood, consider renting there and buy an investment property elsewhere. Make sure you’re constantly scouring real estate sites and be on good terms with local agents so they can alert you early on if something in your price range pops up.
“Also seek out advice from lending experts about areas you are interested in and how much you can borrow. Make sure your finances are sorted out prior to your search starting so you can truly understand your limit.”
Other factors Australians feel are increasing house prices are negative gearing incentives for property investors (41%), and high costs like stamp duty and capital gains tax putting homeowners off selling and buying, thereby limiting homes for sale (35%).
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Survey finds majority believe foreign investors the greatest factor for house price rises

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Foreign investors will pay higher surcharges when buying residential real estate in New South Wales following new measures to combat housing affordability to be introduced by the State Government.
From July 1 2017 stamp duty surchage for new purchases by foreign investors will rise from four percent to eight percent.
The surcharge on land tax will rise from 0.75 percent to two percent and foreign developers will be exempt from the increased surcharges.
Investors of any kind will no longer be able to delay paying stamp duty on off-the-plan properties for 12 months.
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Foreign investors in NSW to lose out under stamp duty changes

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<img src="https://counter.theconversation.edu.au/content/77959/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Sydneysiders are concerned that foreign investors, and particularly Chinese real estate investors, are pushing up housing prices, according to survey findings published this month. 
A majority believed foreign investors should not be allowed to buy residential real estate in Sydney.
The federal budget was the government’s latest attempt at navigating a policy solution that supports its pro-foreign investment position while responding to public concern about housing affordability in Australian cities.
China’s government is also searching for a policy solution to restrict the large amount of capital that’s flowing out of the country. But the Chinese crackdown “doesn’t appear to be working”.
We surveyed almost 900 Sydneysiders to investigate their views on foreign real estate investment. The effectiveness of government regulations on foreign investment and investors was a major concern for respondents.
Views on government regulations
The survey obtained the views of people aged over 18 living in the Greater Sydney region. They were asked about housing affordability, foreign investment, the drivers of Sydney housing prices, and perceptions of Chinese investors specifically.
Support for the government’s regulation of foreign investment in housing was weak. Only 17% of respondents thought it was effective.
<a href="https://www.propertyobserver.com.au/images/2017/05/30/Screen%20Shot%202017-05-31%20at%209.10.10%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/30/Screen%20Shot%202017-05-31%20at%209.10.10%20AM.png" alt="">
 
Source: Public Perceptions of Foreign and Chinese Real Estate Investment: Intercultural Relations in Global Sydney
Almost 56 percent of participants believed foreign investors should not be allowed to buy residential real estate in Sydney. Only 18 percent believed this should be permitted.
More than 63 percent of participants disagreed that the “government should encourage more foreign investment in greater Sydney’s housing market”. Only 12 percent of participants agreed with this.
These views stand in stark contrast to the government’s geopolitical support for foreign investment in Australia.
Views on foreign investors
There is little fine-grained data about the impacts of foreign capital and investors on specific neighbourhoods and developments in Australian cities. Therefore, we did not set out to compare public attitudes against the limited empirical evidence on the effects of foreign real estate investment in Sydney.
What’s significant about the survey results is that Sydneysiders have strong views on foreign investment, despite the absence of reliable evidence. Participants’ concerns about foreign investors and investment were consistent with their concerns about the government’s foreign investment rules.
Around 63 percent of Sydneysiders identified the Chinese as the heavyweights of foreign investment. This is likely to be accurate, given the concentration of Chinese investment in Sydney and Melbourne.
When presented with the statement “I welcome Chinese foreign investors buying properties in my suburb”, more than 48 percent of participants disagreed.
Other studies, however, have shown the potential for public confusion between domestic Australian-Chinese and international Chinese buyers.
Views on the drivers of housing prices
Respondents were asked to choose up to three drivers of house prices based on their understanding of Sydney’s housing market. By far the most commonly nominated driver of house prices (64 percent of respondents) was foreign investors buying housing.
<a href="https://www.propertyobserver.com.au/images/2017/05/30/Screen%20Shot%202017-05-31%20at%209.11.43%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/30/Screen%20Shot%202017-05-31%20at%209.11.43%20AM.png" alt="">
Source: Public perceptions of foreign and Chinese real estate investment: intercultural relations in Global Sydney 
Roughly one in three survey participants saw low interest rates (37 percent of respondents) and domestic home owners (32 percent) and investors (32 percent) as the drivers of higher housing prices. Local housing analysts generally agree with this.
But more than three in four participants (78 percent) agreed with the statement:
Foreign investment is driving up housing prices in greater Sydney.
When framed inversely, as “Foreign investment has no impact or very small impact on greater Sydney’s housing market”, more than two-thirds of participants (68 percent) disagreed with the statement.
Only 6 percent of our participants disagreed that foreign investment was increasing real estate prices. Around 11 percent agreed that foreign investment had no or minimal impact.
Views on housing supply and affordability
We expected people to report that foreign people and capital are driving up housing prices and making it more difficult for Australians to compete in the housing market. But we were surprised by the findings about Sydneysiders’ views on foreign capital and housing supply.
A strong message from the real estate and property development industries is that foreign investment increases housing supply, which in turn puts downward pressure on prices.
Politicians and lobby groups argue this will help improve housing affordability in major Australian cities. But many housing analysts argue that this supply solution does not stack up for purchases made by either foreign or domestic investors.
It seems that Sydneysiders don’t accept the real estate industry message about foreign investors increasing housing supply, and therefore helping to ease housing affordability pressures.
When asked if “Foreign investment can help increase housing supply in greater Sydney”, 48% of participants disagreed with the statement. Another 25% “neither disagreed or agreed”.
An unresolved policy dilemma
The government’s dilemma is how to manage foreign investment alongside an increasing housing affordability problem in major Australian cities.
This month’s federal budget included a crackdown on foreign investors, but the government still supports foreign real estate investment.
Our survey results support other studies that suggest this pro-foreign investment stance must be accompanied by strategies to protect intercultural community relations. This must happen alongside efforts to improve housing affordability.
 
<a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank"></a>
<a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank">Dallas Rogers</a> is Senior Lecturer, Faculty of Architecture, Design and Planning, University of Sydney.
<a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank"></a>
<a href="https://theconversation.com/profiles/alexandra-wong-378393" target="_blank">Alexandra Wong </a>is Engaged Research Fellow, Institute for Culture and Society, Western Sydney University. <a href="https://theconversation.com/profiles/jacqueline-nelson-134741" target="_blank">Jacqueline Nelson</a> is Chancellor's Postdoctoral Research Fellow, University of Technology Sydney.
<a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank"></a>
All are authors for The Conversation.
<a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank"> </a>
 
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