<p>National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.</p>

<p>The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.</p>

<p>Multiplex has been appointed the builder, and construction is now underway.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365784]</p>

<p>Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.</p>

<p>Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.</p>

<p>“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.</p>

<p>He said NAB’s early support was instrumental in helping establish the company’s development model.</p>

<p>“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.</p>

<p>“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.</p>

<p>Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.</p>

<p>Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.</p>

<p>Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.</p>

<p>The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365768]</p>

<p>Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more internation and domestic flights.</p>

<p>Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.</p>

<p>Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


Joel Robinson

NAB funds $1 billion Surfers Paradise apartment development, Palmera

<p>Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.</p>

<p>The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.</p>

<p>The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.</p>

<p data-end="792" data-start="529"><img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" /></p>

<p data-end="1040" data-start="794">According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”</p>

<p>The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.</p>

<p>The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.</p>

<p>Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.</p>

<p>“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.</p>

<p>The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.</p>

<p>The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" /></p>

<p>The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.</p>

<p>While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.</p>

<p>“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.</p>

<p>According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.</p>

<p>“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.</p>

<p>“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”</p>

<p>The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.</p>

<p>Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.</p>

<p>&nbsp;</p>

<p>The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" /></p>

<p>St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.</p>

<p>Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.</p>

<p>The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.</p>

<p>More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.</p>


First look: Aqualand joins St Leonards apartment party

<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
<p data-end="577" data-start="264">The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.</p>

<p data-end="577" data-start="264">The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.</p>

<p data-end="577" data-start="264"><img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" /></p>

<p><em>Interior view from the Northern Building Penthouse overlooking the park</em></p>

<p>&nbsp;</p>

<p data-end="1070" data-start="809">The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.</p>

<p data-end="1246" data-start="1072">Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.</p>

<p data-end="1483" data-start="1248">Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.</p>

<p data-end="1854" data-start="1485">Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”</p>

<p data-end="2059" data-start="1856">The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”</p>

<p data-end="2318" data-start="2061">The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.</p>

<p data-end="2486" data-start="2320">Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.</p>

<p data-end="2486" data-start="2320"><img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" /><em>Interior View of the Heritage Building Apartment</em></p>

<p data-end="2814" data-start="2488">The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.</p>

<p data-end="3188" data-start="2816">&nbsp;</p>

<p data-end="3625" data-start="3404">The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.</p>

<p data-end="4003" data-start="3627">The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.</p>

<p data-end="4149" data-start="4005">Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.</p>

<p data-end="4488" data-start="4151">The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.</p>

<p data-end="4609" data-start="4490">The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.</p>

<p data-end="4894" data-start="4611">“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.</p>

<p data-end="5090" data-start="4896">The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.</p>

<p data-end="5090" data-start="4896"><img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" /></p>

<p data-end="5304" data-start="5092">The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.</p>

<p data-end="5498" data-start="5306">Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.</p>

<p data-end="6154" data-is-last-node="" data-is-only-node="" data-start="5806">In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”</p>

<p>Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.</p>

<p>The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.</p>

<p>It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.</p>
</section>


First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

<p>The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.</p>

<p>Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.</p>

<p>The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.</p>

<p>The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.</p>

<p>Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.</p>

<p>The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.</p>

<p>The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.</p>

<p>Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.</p>

<p>Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.</p>

<p data-end="345" data-start="110">The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.</p>

<p data-end="689" data-start="347">Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.</p>

<p data-end="689" data-start="347">Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.</p>


Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

<p>Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.</p>

<p>The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.</p>

<p>The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.</p>

<p>The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" /></p>

<p>SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.</p>

<p>“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.</p>

<p>The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.</p>

<p>“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" /></p>

<p>The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.</p>

<p>Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.</p>

<p>The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.</p>

<p>COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" /></p>

<p>“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.</p>

<p>The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.</p>

<p>The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.</p>

<p>Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a></em></p>


First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

House Prices

<html><body>
<p><span>The combination of strong supply and weak population growth means that the housing market has a period of adjustment ahead of it, Macquarie Reseach has forecast.</span></p>
<p><span>It says there are three key paths for adjustment to normalise price to income ratios and supply and demand -  lower house prices, a decline in new dwelling supply (construction) and a cut in interest rates.</span></p>
<p><span>Their overall outlook incorporates all three of these factors, though not to the same degree.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.35.41%20AM.png" target="_blank"><span style="font-size: 12.16px; line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="font-size: 12.16px; line-height: 1.3em;"><img src="https://www.urban.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.35.41%20AM.png" alt=""></span></p>
<p> </p>
<p><span>"Lower prices boost affordability, sustaining house price to income ratios as per dwelling incomes decline,' the Macquarie report advised.</span></p>
<p><span>"Reductions in dwelling supply stem the decline in the persons per household ratio, pushing up household incomes.</span></p>
<p><span>"And interest rates support nominal house price values."</span></p>
<p><span>It noted an important distinction about the cycle over the period ahead is that it does not occur against a backdrop of favourable tailwinds.</span></p>
<p><span>"Previous housing construction cycles have been associated with some combination of a credit tailwind (rising debt to income ratio), fiscal expansion/tax cuts, participation boost, or major income boost within the economy (price phase of the mining boom).</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.38.20%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.38.20%20AM.png" alt="" width="1230" height="643"></p>
<p><span>"Through previous cycles, policymakers have managed to avoid large negative house price adjustments – with subsequent destructive effects on household, business and bank balance sheets – and instead used policy to support existing prices, with long, slow adjustments occurring over a number of years.</span></p>
<p><span>"For example, in real terms, Sydney house prices peaked in 1Q89, but took almost a decade to exceed that level. The nominal price adjustment was minimal, and was recovered 2 years later. But in real terms, the ABS measure of Sydney house did not better the 1Q89 level until 2Q98 (figure 26 and 27).</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.40.59%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.40.59%20AM.png" alt="" width="1558" height="740"></p>
<p><span style="line-height: 1.3em;">"We expect a measured 7.5% peak to trough decline in house prices over 2016 and into 2017, with a recovery commencing in 2H17," was the headline takeout of the report.</span></p>
<p><span>It especially noted Australia’s population growth has slowed and was on track to slow further over the coming quarters.</span></p>
<p><span>It concluded while the population growth was still positive, but not as strong as it used to be, that it was not strong enough to justify the major surge in housing supply that will hit the market over the course of 2016.</span></p>
<p><span>"Slower population growth adds to the adjustment challenge within the housing market over 2016 as the upswing in supply converges with the impacts of macro prudential policy tools and curbs on foreign investors.</span></p>
<p><span>"Building approvals and housing commencements, at 200k+ are running well ahead of estimates underlying demand, which we peg at 170-180k once current, and prospective, population growth rates are incorporated.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>"Supply has undershot demand for several years.</span></p>
<p><span>"Whilst Australia’s population growth has slowed to a 9-year low, and is on track to moderate further, residential dwelling supply is reaching all new records.</span></p>
<p><span>"Building approvals are currently running at an annual pace of 225k, and commencements are following through.</span></p>
<p><span>"Both are at new records (figures 8 &amp; 9 below).</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.48.11%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="https://www.urban.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.48.11%20AM.png" alt=""></span></p>
<p><span>"The full impact on dwelling supply is yet to be felt in the physical market.</span></p>
<p><span>"Completions have risen substantially, but they lag commencements, and there is a record 180k dwellings currently under construction (figure 10 above).</span></p>
<p><span>"Subsequent pent up demand has been calibrated into prices, through increases in persons, employment, and income per household.</span></p>
<p><span>"Unleashing that pent up demand will also have price effects – it will require an improvement in affordability.</span></p>
<p><span style="line-height: 1.3em;">"Improving affordability requires either lower house prices, lower interest rates, or stronger household income growth.</span></p>
<p><span>"In the absence of robust wage and income growth in the economy, achieving the latter will be more difficult the longer that strong dwelling supply persists."</span></p>
<p><span>Macquarie expect a retrenchment in housing commencements through 2016 and into 2017, concentrated in the high density apartment segment.</span></p>
<p><span>"This is likely to be accompanied by weaker dwelling prices, as the market struggles to absorb the currently bulging supply pipeline.</span></p>
<p><span>"Depending on the speed of adjustment, lower rates may be needed to support demand and prices. </span></p>
<p><span>"We remain of the view that further monetary policy easing is likely from the RBA. </span></p>
<p><span>"Our base case is that this is delivered in November, alongside downgraded forecasts for growth and inflation.</span></p>
<p><span>"We have maintained the view for some time that the risks lie with additional easing in 2016.</span></p>
<p><span>"How swiftly the currency falls to a level sufficient to catalyse the transition from mining to non-mining growth is a key driver of the outlook for rates in 2016.</span></p>
<p><span>"An earlier, or more rapid, housing construction adjustment – which we expect to accelerate from 2H16 – could mean more cuts will be needed."</span></p>
<p><span style="font-size: 12.16px; line-height: 1.3em;"><a href="https://www.propertyobserver.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.42.32%20AM.png" target="_blank" style="line-height: 1.3em;">Click to enlarge</a></span></p>
<p><img src="https://www.urban.com.au/images/2015/10/13/Screen%20Shot%202015-10-13%20at%2010.42.32%20AM.png" alt=""></p>
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jchancellor-FAypfDUnLy

November rate cut - and 7.5% house price drop starting in 2016: Macquarie Research

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<p><span>Melbourne's residential prestige property market above $2 million is running hot in Balwyn, Balwyn North and Canterbury, according to Herron Todd White.</span></p>
<p><span>Herron Todd White's October Month in Review noted school zones, interest rates and overseas investment and 'affluenza' as key drivers of the local property market.</span></p>
<p><span>"Median house prices in Balwyn have risen 33% in the past five years due to high demand from foreign investors and also the desire to be in the popular Balwyn High School zone," it read.</span></p>
<p><span>"The future of house prices in Balwyn appears to be unsustainable. Limited supply has resulted in overpriced housing and foreign investment will be curbed in the future, which could cause the market to stall. </span></p>
<p><span>"In the foreseeable future, the Balwyn, Balwyn North and Canterbury prestige residential markets however look likely to remain heated for the next 12 months." </span></p>
<p>Notable sales include:</p>
<ul>
<li><span>$2.2 million will secure a 4-bedroom, 2-bathroom, 2-car property in Balwyn, Balwyn North and Canterbury on about 700 square metres (for example, 15 Stanley Grove Canterbury) </span></li>
<li><span>Vacant land sold for $2.65 million in Balwyn in March 2015 (3 Henley Street) </span></li>
<li><span>An incomplete property sold for $2.95 million (112 Yarrabat, Avenue) </span></li>
<li><span>$3 million will secure a 5-bedroom, 4-bathroom, 2- to 3-car property in Balwyn on circa 800 square metres (for example, 40 Moody Street, Balwyn North) </span></li>
<li><span>$4 million plus will secure large residential allotments with improvements comprising 5-bedrooms, 3-bathrooms, 2- to 3-car space accommodation on an allotment of over 1,000 square metres (for example, 19 Monomeath Avenue, Canterbury sold for $9.226 million). </span></li>
<li><span>6 Wills Street, Balwyn sold in May 2015 for $3.16 million. It previously sold in September 2014 for $2.23 million. This is a growth of $930,000 in only eight months. What makes this sale even more notable is the fact that the property isn’t even located in the Balwyn High School zone (zoned to Kew High School).</span></li>
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mick.cee-iDmgDDAmu8

Affluenza a driver in Melbourne's prestige property market 

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<p>The Australian Residential Market September 2015 report from Propell has found l<span style="line-height: 1.3em;">and subdivisions are adversely affected by new lending criteria, r</span><span style="line-height: 1.3em;">ental vacancy rates are increasing in most cities and f</span><span style="line-height: 1.3em;">oreign investment in housing will strengthen due to lower AUD.</span></p>
<p><span style="line-height: 1.3em;">It noted 2016 may witness a combination of slowing economic growth and rising interest rates, bringing the threat of a recession if </span><span style="line-height: 1.3em;">non-mining sectors do not respond sufficiently to a lower exchange rate.</span></p>
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<p><span>"In 2016, the RBA may find itself in the position of having to start increasing the cash rate, suggesting that we are now at, or close to, the bottom of the cycle," the report said.</span></p>
<p><span>"The long term outlook is for rates to start increasing. As far as property investors are concerned, there has already been a de facto increase, as banks stop discounting investment home loans and start requiring more equity."</span></p>
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<p><a href="/images/2015/10/07/Screen%20Shot%202015-10-07%20at%2010.28.46%20PM.png" target="_blank">Click to enlarge</a></p>
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Long term outlook to increase interest rates: Propell

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<p><span style="line-height: 1.3em;">The valuation firm Herron Todd White has issued its latest</span><span style="line-height: 1.3em;"> property clock for houses - a simple broad brush means to suggest where property markets are - and what direction prices are moving in.</span></p>
<p>The valuation firm has included capital and regional cities on the October property clock for house price direction.</p>
<p>Melbourne has joined Sydney houses at the peak of the cycle.</p>
<p><a href="/images/2015/10/07/Screen%20Shot%202015-10-07%20at%209.50.31%20AM.png" target="_blank">Click here</a> to enlarge.</p>
<p><em>For more information, <a href="https://www.htw.com.au/" target="_blank">click here</a>.</em></p>
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Melbourne joins Sydney houses at peak pricing on October HTW property clock

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<div>The ABS released its Residential Property Price Indexes to June 2015 last week. </div>
<div> </div>
<div>As you can see in the first chart below, over the dozen years since September 2003 on average established capital city houses (+89%) have outperformed attached dwellings (+73%).</div>
<div> </div>
<div><a href="/images/2015/09/28/RPI1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/09/28/RPI1.jpg" alt=""></div>
<div> </div>
<div>
<div class="separator">Since the full ABS indices only track back to Q3 2003, Sydney will naturally appear to be a moderate performer on this index, since the harbour city's preceding boom peaked on this data series almost immediately thereafter in Q4 2003.</div>
<div class="separator"> </div>
<div class="separator">The strongest performing cities through the mining boom were Darwin - by a huge margin - and Perth. </div>
<div class="separator"> </div>
<div class="separator">A number of cities in resources regions also performed strongly through the mining construction boom, although that particular dream has turned on a dime into an illiquid nightmare for many owners of property in mining towns.</div>
<div class="separator"> </div>
<div class="separator"><a href="/images/2015/09/28/RPI2.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2015/09/28/RPI2.jpg" alt=""></div>
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<div>
<strong><span style="text-decoration: underline;">Houses</span></strong><br><br>Looking in the second chart below at established houses only since Q3 2002, Sydney has been playing some serious catch-up over the past three years.</div>
<div> </div>
<div>Melbourne has also had a solid run, while there have been some steady gains of late for Brisbane, Adelaide and Hobart.<br><br>The most interesting point of note is how the long run data since 2002 seems to imply a convergence of the results for all eight of the respective capital cities.</div>
<div> </div>
<div><a href="/images/2015/09/28/RPI3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/09/28/RPI3.jpg" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Attached dwellings</span></strong><br><br><span>Meanwhile the attached dwellings only index below reveals a similar pattern, although on average it records a slightly less dramatic incline through the present cycle to date, but less impressive growth in a number of cheaper cities where demand for apartment dwelling is less robust.</span><br><br><span>Note that the ABS data for attached dwellings only runs back to Q3 2003 which partly accounts for the lower growth over the full history of the data.</span>
</div>
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<div><a href="/images/2015/09/28/Attached%20dwellings.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/09/28/Attached%20dwellings.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>Of course while these figures are useful indicators they are based upon averages and can mask any number of sub-trends.<br><br><strong><span style="text-decoration: underline;">Suburbs</span></strong>
</div>
<div> </div>
<div>The same holds true for long run analysis of median prices at the suburb level, where miniscule sample sizes can skew results materially.<br><br>There has also been the small matter of a once-in-a-century mining boom combined with a one-off structural shift to lower interest rates to take account of.<br><br>As as a result those "top 100 best performing suburbs" lists almost invariably include a number of remote suburbs that few people have heard of where median house prices are around $150,000.<br><br>Since $150,000 is more or less the cost of building a house today, it follows that the real appreciation in land values has actually been weak, and the strong "growth" results are just as likely to be quirk of sampling.<br><br>The <a href="https://petewargent.blogspot.co.uk/2014/10/long-run-uk-house-prices" target="_blank">house I grew up in</a> is a great example, having apparently achieved incredible compounding capital "growth" of an amazing 9 per cent per annum for fully 35 years!<br><br>Thing is, you take off the cost of the extension, the replacement of the dodgy carport with a garage, and various upgrades to the interior, and the capital growth in real terms has been zero percent.<br><br>Cheaper properties can sometimes come with other associated problems - such as tenancy or vacancy risk - while any unfortunately substantial repair cost (e.g. for the roof) can wipe away years of returns at a stroke due to the lower base cost of the asset.<br><br>Moreover suburb median prices are by and large a waste of time - the only statistics that really tell you anything worthwhile when it comes to real estate are like-for-like sales. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Long run residential prices: Pete Wargent

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<div>The ABS will soon release its latest dwelling prices data for Q2 2015, which is always an interesting series to analyse.</div>
<div> </div>
<div>Market forecasts are calling for a +2.4% gain on a national basis, with Sydney driving most of the gains.</div>
<div> </div>
<div>Westpac is looking for an even more bullish +4% which would take annual price growth all the way up to +9.1%.</div>
<div> </div>
<div>The data series also provides some interesting data on dwelling supply. </div>
<div> </div>
<div>Of course, the ABS series lags somewhat, but it is worth noting that CoreLogic RP Data's Daily Home Value Index is no longer a sea of green, with prices now down for the quarter and for the year in both Adelaide and Perth.</div>
<div> </div>
<div><a href="/images/2015/09/22/RPD.jpg" target="_blank">Click to enlarge</a></div>
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<div><img src="/images/2015/09/22/RPD.jpg" alt=""></div>
<div> </div>
<div><span>Home values are also declining in Darwin.</span></div>
<div><span> </span></div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Dwelling prices update due: Pete Wargent

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<p><span>New dwelling prices are rising again in China, just about..</span></p>
<p><a href="/images/2015/09/21/3tr-chinapm-small.gif" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/09/21/3tr-chinapm-small.gif" alt=""></span></p>
<p> </p>
<div>The Chinese economy - and industrial production in particular - has clearly been slowing, with "official" GDP growth set to fall below 7 per cent.</div>
<div> </div>
<div>There is some sign of an upturn in credit growth. </div>
<div> </div>
<div><a href="/images/2015/09/21/3bl-chinacr-small.gif" target="_blank">Click to enlarge</a></div>
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<div><img src="/images/2015/09/21/3bl-chinacr-small.gif" alt=""></div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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New dwelling prices rising in China: Pete Wargent

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<p><span>Momentum in the economy is stretching across the non-mining </span>economy beyond the dwelling sector, according to National Australia Bank group chief economist Alan Oster.</p>
<p>In the latest Bigger Picture – A Global &amp; Australian Economic Perspective report he said household consumption growth is expected to remain below trend and is reliant on a decline in the household savings ratio which is vulnerable at present to weak consumer confidence.</p>
<p><span>"Against that, there is increasing evidence that growth momentum is broadening across the non-mining economy – not limited to the dwelling sector – in response to the lower AUD and interest rates, with improvement particularly evident in services sectors," he said.</span></p>
<p><span style="line-height: 1.3em;">"Residential markets remain strong, with dwelling prices continuing to grow more than 10% over the year to August. </span></p>
<p><span style="line-height: 1.3em;">"Surprisingly, dwelling investment surprisingly fell by 1.9% in Q2 despite strength in building approvals and a very elevated stock of residential projects in the construction pipeline. While this did follow growth of over 6% in each of the two preceding quarters, this weakness is likely only temporary given record levels of work to be done. "</span></p>
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Dwelling prices grow more than 10% for year to August: NAB

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<p><span>Dwelling values across Adelaide fell over the three months to July, according to the August <span>CoreLogic RP Data Housing Market and Economic Review.</span></span></p>
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<p>The median house price for Adelaide is $425,000. Unit median prices are $342,000.</p>
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Adelaide dwelling values in three-month fall: CoreLogic RP Data

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<p>An increase in population and income are two demand influencers on high dwelling rents and prices, according to the directors of Real Estate Research and Teaching for the UNSW Business School.</p>
<p>According to Nigel Stapledon's<span style="line-height: 1.3em;"> submission to the House of Representatives Standing Committee on Economics inquiry into Home Ownership, the rise in house prices it is not only happening in Australia, but all over the world. This is due to low interest across the world.</span></p>
<p><span style="line-height: 1.3em;">"In the period 1993-2003, population grew at a 1.1% annual pace, in the period 2003-13, it averaged 1.6%. At the margin, that extra 0.5% per annum is a very significant difference. This surge in population also changed expectations about future population growth, which in turn influenced expectations about future rent growth. If buyers expect the future rate of rent growth to be higher, that justifies higher prices." </span></p>
<p><span style="line-height: 1.3em;">It is his belief that foreign buyers add to the pressure on prices, but the effect in the long term is not permanent.</span></p>
<p>"The broader point is that Australia is a major beneficiary of its open door to foreign capital. In the long term, Australia’s reputation as a secure, transparent place to invest is a positive. Apart from anything it lowers the cost of capital for governments, business and individuals. If we start imposing controls to help manage perceived short term problems, that will put that reputation at risk."</p>
<p>Taxation policy is not as important as the demand factors mentioned before. Nigel Stapledon says that a more efficient tax system is desirable but is not what affects housing.</p>
<p>"The real debate on the question of housing affordability is on the question of supply. There are a number of angles to this. </p>
<p><span>"</span>In economics, the margin is what matters. On the demand side, an increase in population growth rate from 1.1% to 1.6% per annum in the period 2003–13 caused rents to rise substantially. </p>
<p>"Allowing for age composition effects, potential household formation lifted from 1.4% to 1.8%. That small marginal change mattered a lot. Because supply lagged in its response, most of the initial action was in higher rents, which worked to subdue demand (more young adults - potential new households – for example stayed at their parents’ home). </p>
<p>"In period 2003-13, the stock of dwellings in Australia grew by an average 1.6% per annum – only slightly slower than potential household formation but the cumulative effect matters. With a lag, complicated by some big intervening events e.g. GFC (Global Financial Crisis), we are now seeing supply respond in a more substantial way. </p>
<p>"In 2014 new completions increased the dwelling stock by 1.8%, and in 2015 and 2016 the pipeline of starts tells us that rate of growth will be running at a 2.0% pace. Bearing in mind that population growth has now slowed to a 1.4% pace (household formation below 1.6%), then clearly the demand-supply equation is shifting towards buyers/renters. The evidence of that is the deceleration in rent growth evident in 2014. It is the indicator to watch in 2015. </p>
<p>"But imagine if the stock were to increase by more like 3% (double the normal) in 2015. That order of magnitude increase in supply would require lower rents/prices to encourage more households (those young adults staying at home) back into the market. Otherwise, there would be a lot of vacant new dwellings. </p>
<p>"As the city’s population grows, if the green zone is unchanged, what urban economic theory tells us is that when the constraint becomes binding that the increase in demand will cause the price of land to rise. In response, buyers will choose smaller amounts of land consistent with the policy-makers’ desire for increased density. </p>
<p>"While less land is used, which partially offsets the higher price per unit of land, it is only a partial offset and the price of housing rises. For the pre-existing stock of houses, the price rises and their owners (owner-occupiers and landlords) enjoy a capital gain. </p>
<p>"The binding constraint will lead to pressure for some relaxation. To the extent that policy-makers relent and rezone some of the greenbelt land, the owners of that land will achieve significant capital gains. This leads to significant resources going into lobbying and a propensity for corruption. </p>
<p>"The second policy option is to impose a development tax. This lifts the price of land and in response we again see smaller lots and increased density. If the tax is set at the right level, the same degree of increased density can be achieved as with quantitative controls. </p>
<p>"One advantage of the development tax is that the development tax captures the capital gain which would be earned by owners of greenbelt land which is rezoned. A second advantage is that it keeps the market for land competitive. </p>
<p>"I would note that constraints on higher density building in inner urban areas will also constrain supply and lead to higher rents/prices across the urban area. There are many such restrictions. For example the recent decision in NSW to impose a minimum size on apartments of 35 square metres will add to the cost of housing. </p>
<p>"The cost of commuting (both in dollars and in time) is the most significant influence on the cost of land within cities. The higher are commuting costs from the urban fringe, the more valuable is living in the inner urban areas where commuting costs are low. </p>
<p>"As a city grows, there is a need to add to the transport capacity (wider roads, more rail lines). If governments fail to expand the transport infrastructure, congestion rises and lifts commuter costs. </p>
<p>"There is strong advocacy for public/social housing, which represents less than 3% of the housing stock, to be a much bigger part of the market. At its peak in 1971, public housing represented closer to 6% of total housing stock. </p>
<p>"There is a place for public housing but do young Australians see it as the answer to their future housing needs. I suspect they all aspire to something better. It is seen as a safety net. </p>
<p>"Aspirations aside, public housing is heavily subsidised. And as the cost of housing rises in a city, so too does the cost of subsidising public housing. It follow that policies which make the cost of private housing lower also lowers the cost to the taxpayer of providing any given amount of public housing."</p>
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