<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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;</p>

<p>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.</p>

<p>The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.</p>

<p>Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.</p>

<p>"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.</p>

<p>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.</p>

<p>A major focus of the design has been the public domain.</p>

<p>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.</p>

<p>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.</p>

<p data-end="239" data-start="66">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.</p>

<p data-end="442" data-start="241">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.</p>

<p data-end="661" data-start="444">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.</p>

<p data-end="909" data-start="663">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.</p>

<p><em>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></em></p>

<p data-end="1339" data-start="1019">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.</p>

<p data-end="1339" data-start="1019">[smartcode_project:default project_id=30959 project_image_fid=292863]</p>

<p data-end="1398" data-start="1341">It has since quietly assembled its next wave of projects.</p>

<p data-end="1805" data-start="1400">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.</p>

<p data-end="1805" data-start="1400">[smartcode_project:default project_id=152095 project_image_fid=373685]</p>

<p data-end="1991" data-start="1807">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.</p>

<p data-end="2303" data-is-last-node="" data-is-only-node="" data-start="1993">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.</p>

<p><em>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></em></p>

<p><em>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></em><br />
&nbsp;</p>

<p>&nbsp;</p>

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<p>&nbsp;</p>


Joel Robinson

First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

<p data-end="492" data-start="327">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.</p>

<p data-end="843" data-start="497">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.</p>

<p data-end="1109" data-start="848">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.</p>

<p data-end="1109" data-start="848">[smartcode_project:default project_id=152022 project_image_fid=375528]</p>

<p>Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.</p>

<p>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.</p>

<p>"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.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375531]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375524]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375530]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.</p>

<p>"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=152022]</p>


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

<p>Not all apartment amenities are immediately visible.</p>

<p>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.</p>

<p>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.</p>

<p>Online shopping has been one of the biggest drivers of that shift.</p>

<p>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.</p>

<p>For apartment residents, however, receiving those deliveries isn't always straightforward.</p>

<p>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.</p>

<p>Australia Post's Parcel Locker network is one response to that shift.</p>

<p><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></p>

<p>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.</p>

<p>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.</p>

<p>That growing presence reflects a broader change in how apartment buildings are being planned.</p>

<p>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.</p>

<p>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.</p>

<p>For buyers comparing apartments, these everyday details are becoming part of the decision-making process.</p>

<p>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.</p>


Parcel delivery is joining the apartment amenity checklist

<p data-end="471" data-start="164">Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.</p>

<p data-end="777" data-start="473">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.</p>

<p data-end="976" data-start="779">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.</p>

<p data-end="1119" data-start="978"><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.</p>

<p data-end="1399" data-start="1121">"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.</p>

<p data-end="1399" data-start="1121">"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."</p>

<p data-end="1605" data-start="1401">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.</p>

<p data-end="1852" data-start="1607">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.</p>

<p data-end="1852" data-start="1607"><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" /></p>

<p data-end="2031" data-start="1854">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.</p>

<p data-end="2299" data-start="2033">"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.</p>

<p data-end="2588" data-start="2301">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.</p>

<p data-end="4143" data-start="3991">Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.</p>

<p data-end="593" data-start="417">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.</p>

<p data-end="789" data-start="598">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.</p>

<p data-end="1053" data-start="794">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.</p>

<p data-end="4143" data-start="3991"><em>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></em></p>

<p data-end="4143" data-start="3991"><em>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></em></p>


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

<p>Seasoned Victorian apartment developer <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a> has logged more than $400 million in sales in its luxury apartment project Palmera Residences at Northcliffe on the Gold Coast.&nbsp;</p>

<p>Central Equity Director Karl Kutner said the sales result reflected a combination of location, product quality and delivery certainty with the project already under construction by building powerhouse Multiplex.&nbsp;</p>

<p>"Surpassing $400 million in sales since launch is a significant milestone and an outstanding endorsement of <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera Residences</a>,” he said.&nbsp;</p>

<p>"We believe one of the key reasons for this strong result is the confidence purchasers have in knowing the project is under construction with Multiplex. Buyers are increasingly looking for certainty. They want to know that the project they commit to today will be delivered by an experienced team with a proven track record."&nbsp;</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365782]</p>

<p>Kutner said it was clear there was still high demand for luxury projects that offered certainty of delivery.&nbsp;</p>

<p>“We are in a market where many residential developments have faced delays due to rising construction costs, labour shortages and financing challenges,” said Kutner.&nbsp;</p>

<p>"But having construction underway has provided our buyers with resounding confidence backed by more than 40 years of development delivery by Central Equity combined with construction by one of Australia's most respected construction companies."&nbsp;</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365785]</p>

<p>Central Equity is one of Australia's most experienced privately-owned property developers. Over more than four decades, the company has delivered in excess of 85 residential developments including 10,000 apartments and many thousands of stand alone homes.&nbsp;</p>

<p>Located on Garfield Terrace at Northcliffe, between Surfers Paradise and Broadbeach, Palmera Residences occupies one of the Gold Coast's most sought after beachside locations. The development has been designed to appeal to owner occupiers seeking premium residences that combine generous living spaces and resort style amenities.&nbsp;</p>

<p>Palmera Residences will feature an exceptional collection of resort style amenities, including two swimming pools: a generously sized family pool with safe shallow zones for relaxed recreation, and a 20 metre lap pool positioned to maximise all day sunlight.&nbsp;</p>

<p>Residents will also enjoy exclusive access to wellness and recreational facilities including a magnesium pool, sauna, yoga studio, expansive fitted gymnasium, resident lounge, outdoor BBQ’s&nbsp;and indoor and outdoor dining areas, together with a dedicated concierge and luxurious hotel inspired entrance foyer.&nbsp;</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365767]</p>

<p>A unique feature at Palmera Residences has been designed to enhance the Gold Coast lifestyle which includes both indoor and outdoor gymnasium facilities, together with thoughtfully designed indoor and outdoor dining and entertaining areas. A corner café has also been incorporated to provide residents with a destination for their everyday needs.&nbsp;</p>

<p>Kutner said buyer demand had been broad based with purchasers attracted from interstate as well as throughout South East Queensland.&nbsp;</p>

<p>"We're seeing strong interest from owner occupiers, lifestyle buyers and people relocating to the Gold Coast. Many purchasers have been searching for a premium beachside residence where quality, design and delivery are equally important."&nbsp;</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>Kutner said the sales milestone was an important achievement, but the focus remained firmly on delivering an exceptional development.&nbsp;</p>

<p>"While reaching $400 million in sales is an important milestone, our priority remains delivering a project that exceeds purchaser expectations,” he said.&nbsp;</p>

<p>"Palmera Residences has been designed to become one of the Gold Coast's landmark residential addresses, and we look forward to welcoming our purchasers to their new homes."&nbsp;</p>

<p>There are a limited number of residences remaining in selected configurations with pricing from $2,950,000 to $8,950,000. Palmera Residences is also crowned by expansive penthouses with wrap around views.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


Construction certainty and strong buyer demand drive major sales result for luxury Gold Coast development

Palmera Residences fly out the door as sales pass $400 million

Residential Building

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<div id="post-body-3241568079110976919" class="post-body entry-content">
<div>Australia's construction boom hit "peak apartments" in the March 2016 quarter the latest Building Activity data from the ABS showed, with developers now beginning to crunch their way through the record number of dwellings approved but not yet commenced. </div>
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<div>Total quarterly commencements accordingly rose to a record high of 59,684.<br><br>Attached dwelling commencements - townhouses, units, and apartments - were up by 21 per cent from the first quarter of calendar year 2015, leading to just shy of 230,000 dwellings commenced in the year to March 2016, also a record.<br><br><div class="separator"><a href="/images/2016/07/18/A1-1.jpg" target="_blank">Click to enlarge</a></div>
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<br>As you can see in the chart above, annual house commencements have already passed their peak for this cycle, with Sydney in particular constructing fewer detached dwellings through the cycle as the harbour city becomes more dense - building up, not out - while on the other hand Melbourne continues its heroic sprawl.  </div>
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<div class="post-body entry-content">
<img src="/images/2016/07/18/A6.jpg" alt=""><br><br><div>Annual attached dwelling commencements are now at their highest ever level.</div>
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<img src="/images/2016/07/18/A5.jpg" alt=""><br><br><div><strong><span style="text-decoration: underline;">Completions slower to come online</span></strong></div>
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<div>The curious aspect of this cycle is that with so many of the commencements being multi-unit developments, the supply has been considerably slower to come online.<br><br>Why? Because on average it's much faster to build a house on a shovel-ready block of greenfield land (perhaps only a few months) than it is to deliver a block of apartments on a brownfield site, which could chew up a period of several years from approval to completion. <br><br>The outcome of this is an epic supply bottleneck.<br><br><strong><span style="text-decoration: underline;">Bottleneck!</span></strong><br><br>There are now more dwellings stuck in the "under construction" phase than we have ever witnessed before: a thunderous total of 218,262 dwellings, more than 150,000 of which are attached dwellings.<br><br>If you can see a lot of cranes on the city horizon, this is why!<br><br>
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<div>A record 74,530 of the dwelling units under construction are located in New South Wales (including more than 56,000 attached dwellings), 67,748 are in Victoria (nearly 48,000 of which are attached dwellings), and 39,816 are in Queensland (more than 31,000 of which are attached dwellings, an eye-popping ratio).<br><br>In other words, lots and lots of apartment projects are underway but not yet finished.</div>
<div> </div>
<div>Indeed, completions have been so slow to come online that actual dwelling completions have declined for the past four quarters on the bounce, from 49,733 in the first quarter of last calendar year to just 45,619 in the first quarter of this year.</div>
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<br><div>This huge lag between record approvals and completion helps to explain why super-strong population growth in the two most populous capital cities has to date continued to outpace and absorb dwelling supply. </div>
<div> </div>
<div>Annual attached dwelling completions in NSW (22,400) and VIC (23,000) not only remain below previous peaks, but are also tracking way behind the romping pace of state population growth of 106,000 and 109,000 per annum respectively.</div>
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<br><div>
<em>The Australian</em> recently reported an estimated year's oversupply of dwelling based upon an assumption of 47,000 net additions to the dwelling stock per quarter. </div>
<div> </div>
<div>Yet reported vacancy rates in Sydney and Melbourne - even if the figures are arguably incomplete - have actually declined, the slowdown in rental price growth as much reflective of the number of <em>investors</em> in the market through this cycle as the number of physical dwellings.<br><br>Because the record high volume of units and apartments under construction are slower to come online than houses, the assumptions reported by <em>The Australian</em> have been over-egged when compared to the number of actual completions by some 85,000 dwellings. </div>
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<div class="separator"> </div>
<div class="separator">Moreover these assumptions overlook that up to 25,000 commencements per annum simply replace existing stock, as pointed out by the good Prof. Philips of the ANU.</div>
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<div class="separator">The picture is complicated somewhat further by the addition of granny flats which are not well captured by the data, but after accounting for demolitions the new supply has so far had a relatively muted impact in Sydney and Melbourne.</div>
<div class="separator"> </div>
<div>What has transpired to date is localised bursts of oversupply, not nothing too dramatic at the macro level.</div>
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<div class="separator"><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div class="separator">There are more than 150,000 units, townhouses, and apartments now under construction in Australia, easily the highest figure on record, so construction activity will remain at or close to full capacity for some time yet. </div>
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<div class="separator">Attached dwellings can take a long period of time to complete, so to date at least the impact of new supply hasn't been all that great. </div>
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<div class="separator">But what is Australia going to do with all these new high-rise dwellings during a period when its post mining-boom economy isn't supporting such high levels of immigration? </div>
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<div class="separator">Mr. Turnbull does have a plan. And like most of Australia's cunning plans these days, it involves tapping demand from China. </div>
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<div class="separator">It's only been a fortnight since the new "streamlined" student visa rules kicked in, but early anecdotal indications suggest that the plan might just be working. </div>
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<div class="separator"><a href="/images/2016/07/18/VISAS.jpg" target="_blank">Click to enlarge</a></div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Making sense of Australia's super-duper construction boom: Pete Wargent

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<p><span>Confidence in the residential building sector will be boosted by the Government’s announcement that it has out ruled out any change to the current negative gearing arrangements in the forthcoming May Budget, Wilhelm Harnisch from the Master Builders said. </span></p>
<p><span>“The retention of negative gearing provisions for new and established homes is a long held policy by Master Builders and therefore Master Builders strongly backs today’s announcement,” he said. </span></p>
<p><span>“The Prime Minister’s announcement means $8 billion of investment each year spent on renovation of private rental properties will continue and thereby boost economic growth and jobs for tradies,” Wilhelm Harnisch said. </span></p>
<p><span>“Negative gearing underpins investment, largely by mums and dads, in private rental properties and plays a critical role by supplementing the shortage in public and social housing rental stock where there is a waiting list estimated to be around 200,000 households,” he said. </span></p>
<p><span>“Master Builders in strongly backing today’s announcement is now looking to the major parties for sound policies that will tackle the structural barriers to housing affordability which is to increase the supply of new housing.</span></p>
<p><span>"Master Builders has called for national competition policy payments to state governments and local councils to implement targeted and permanent removal of the current unnecessary blockages that delay the supply of new housing and inflate the cost of new housing,” Wilhelm Harnisch said. </span></p>
<p><span>“This is one of the key housing affordability reforms that Master Builders will be calling on both parties to deliver on for the next term of government,” Wilhelm Harnisch said. </span></p>
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MBA backs Coalition housing policy on negative gearing

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<p>Once again we see a fast backtrack by many commentators who predicted a strong easing of real estate prices for the March quarter of 2016.</p>
<p>Then again there are those (like myself) who predicted an about-turn in property prices which is precisely what has happened. For the last four years the December quarter has been the worst performing quarter which can be simply put down to human fatigue.</p>
<p>For those who read the property markets wrong they then seamlessly move to Plan B – the debt debate and yes, Australia’s housing market does have a $1.45 trillion debt blister.</p>
<p>This debate is then marinated with housing affordability, which I must admit has everyone confused given the apparent lack of care or interest. Sydney and Melbourne, and Brisbane to a lesser extent, are flooding the markets with new developments, although in the majority of instances these properties are sold direct to non – resident Australians, so how does that work?</p>
<p>Take Sydney for instance – in the 1980’s the average house price ratio to median yearly household income was 3.0. In 2005 this ratio increased in Sydney to 8.5 and in 2015 it climbed to a staggering 12.2. I can’t see this breaking the back of house prices but I do see plenty of trouble ahead for the Sydney apartment market which has approximately another 22,000 new apartments in the investment pipeline over the next 24 months.</p>
<p>This is the market that requires closer examination and should not be confused with the family house market as the two are distinctly opposite.</p>
<p>We also need to look under the bonnet of the Australian economy to see what is driving it more particularly GDP. Sydney is way ahead of the pack with a 23.3 percent share overall Sydney has outperformed the rest of Australia for the last three years. Next in GDP is Melbourne with 17.7 percent, then Brisbane at 9.6 percent, Perth at 9.5 percent and then Adelaide at 4.6 percent.</p>
<p>If you look at the Green Square development (currently under construction) located between Alexandria and Moore Park in South Sydney – this development will deliver 27,276 apartments so they would be hoping that 60 percent are going to owner occupiers, as if! It is more like 80 per cent to property investors this will send rents in that area spiraling down as there will be a market flood when they all hit the market seeking tenants.</p>
<p>Investor beware! Australia is currently locked in to its biggest apartment development boom ever seen and the big problem is that these developments are congested into the same post codes and are not spread, so a cold can quickly turn to pneumonia.</p>
<p>What scares me the most is that we can trace this boom starting back in December 2008 when the ratio of foreign buyers was moved from 50 percent of new developments to 100 per cent. This ignited property developers and respective state and territory governments to move over night without any analysis to high density.</p>
<p>Again without analysis these developments have been contained into developing areas – so what if the foreign buyers decide not to proceed as the vast majority of these developments are yet to be completed?</p>
<p>It will be property investor mayhem because it’s one big Ponzi scheme totally reliant on the good faith of foreign investors completing on their transactions. Melbourne has another 123,622 apartments in the pipeline and Sydney has 88,013 and there are plenty more on the way awaiting approval. In the case of New South Wales, Victoria and Queensland the state governments are only focused on millions and millions of dollars in stamp duty and land tax.</p>
<p>Sorry to tell you but nobody has a contingency plan should these new developments start to collapse, because if they do the prices will drop 30 per cent minimum overnight.</p>
<p>So whilst housing affordability is directly a responsibility of government I, like many, are not feeling comfortable at how they plan to make it more affordable. With Sydney and Melbourne building the lion’s share of apartments we should also note they are contributing 41 per cent of the Australia’s GDP.</p>
<p>This is precisely the conversation our elected politicians need to be having and this should have started years ago. We may be building an apartment revolution but just like the share market we could be looking at the biggest ‘shorting’ in the property market we have ever seen before too.</p>
<p>Very, very happy to be wrong on this.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 72</p>
<p>• Number of houses on the market last week – 54</p>
<p>• Number of houses on the market this week – 48</p>
<p>• Number of apartments on the market this time last year – 61</p>
<p>• Number of apartments on the market last week – 42</p>
<p>• Number of apartments on the market this week – 45</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 6</p>
<p>• Number of houses on the market last week – 4</p>
<p>• Number of houses on the market this week – 6</p>
<p>• Number of apartments on the market this time last year – 17</p>
<p>• Number of apartments on the market last week – 28</p>
<p>• Number of apartments on the market this week – 28</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 15</p>
<p>• Number of houses on the market last week – 7</p>
<p>•Number of houses on the market this week – 6</p>
<p>• Number of apartments on the market this time last year– 36</p>
<p>• Number of apartments on the market last week – 26</p>
<p>*Number of apartments on the market this week – 25</p>
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<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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Are we about to see our property investors short the market? Robert Simeon

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<p>Co-founder of AllenWargent Property Buyers Pete Wargent has tweeted more than half of the current national building work done has been in New South Wales and Victoria.</p>
<p>Posting through his Twitter handle <a href="https://mobile.twitter.com/petewargent" target="_blank">@PeteWargent</a>, he said<span> in Sydney, at the increase in higher density construction has to some extent come at the expense of detached house construction, with house completions in New South Wales still tracking well below historical levels.</span></p>
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Tweet of the day: Pete Wargent notes detached housing construction makes way for high density building

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<p>Improving consumer confidence and market conditions in Melbourne, Sydney and south-east Queensland have helped residential developer Sunland Group boost profits for the 2015 financial year. </p>
<p>The group reported an after-tax profit of $30.1 million, 111% up on its 2014 result. </p>
<p>It said higher development margins and an increase in settlement values were partly responsible for the profit uplift, but most of the increase came from the sale of $90.1 million worth of assets in Sydney and Melbourne. </p>
<p>Some of the sale proceeds were earmarked for reinvestment in south-east Queensland, including the acquisition of a 42 hectare site on the Gold Coast and the group’s first residential housing development site in Brisbane.</p>
<p>“Sunland has maintained a counter-cyclical approach to site acquisition and divestments, positioning the group’s development portfolio to capitalise on the improving south-east Queensland residential markets,” managing director Sahba Abedian said.</p>
<p>The group also used the proceeds to pay out a special 6 cent per share dividend, bringing dividends for the year to 10 cents, fully-franked. </p>
<p>Sunland, which has developments along Australia’s eastern seaboard, reported sales were up 20% on the previous year to 754 lots, however settlements were down by 13% to 389.</p>
<p>“Whilst settlement volumes decreased as a result of [the] strategic asset sales, settlement values still increased by 7% across the balance of the portfolio,” Abedian said.</p>
<p>Multi-storey apartment buildings account for $2.3 billion worth of the group’s $3.7 billion portfolio, with residential housing and urban developments making up the balance. </p>
<p>It has 10 projects scheduled to launch in 2016 and aims to increasingly focus on multi-storey developments over the medium-term. </p>
<p>The group intends to issue profit guidance at its annual general meeting on November 20.</p>
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Sunland Group boost profits for FY2015

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<p><span>GUEST OBSERVER</span></p>
<p><span>Our forecasts for global growth to stay around the 31⁄4% yoy mark remain basically unchanged; a sub-trend outcome that falls well short of the IMF’s rosier predictions. The hard data provides no evidence that overall global growth has picked up and our leading indicators suggest further stagnation through to September. The bursting of the share market bubble will probably only worsen China’s trend slowdown. </span></p>
<span style="line-height: 1.3em;">The main issues of market focus are the likely timing of US/UK interest rate increases, the recent devaluation of the CNY (intended to align the currency more with market expectations and support exports), and the implications of measures Chinese authorities have used to prop up the share market. Apart from that, bond yields have reversed some of their recent recovery from exceptionally low levels. Facing an improving labour market, we think the Fed will start lifting rates in September, although they have signalled that the process will be gradual. Given recent USD strength, it is not yet clear whether the devaluation of the CNY will have any consequences for the timing of Fed rate hikes. </span>
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<span style="line-height: 1.3em;">The decline in Chinese share prices from the mid-June bubble peak has wiped out a significant amount of market capitalisation. However, as investors only held recent paper gains for a short time the consequences on spending behaviour may prove to be relatively limited. If investors have borrowed heavily on margin to then face margin calls, there is potential for broader problems.</span><br><br><span style="line-height: 1.3em;">The disappointing trends in global industrial output and trade have continued. Industrial growth was disappointing in March quarter 2015 and the June quarter is shaping up to be even weaker. World exports are faring even worse with volumes trending down, mainly because of poor Asian data. The strong $US has depressed trade flows but there is also an underlying weakness. There is, however, a more fundamental problem at work with export volumes falling below year-earlier levels and faring worse than global trade. Commodity prices have fallen heavily, lowering export earnings and national income across a range of primary exporting countries. Lower commodity prices do boost incomes and spending power in importing economies but the immediate impact on global activity could be negative.</span><br><br><span style="line-height: 1.3em;">After a disappointing start to the year, economic growth in key advanced economies picked up in the June quarter. Business survey results look better in the Euro-zone, despite the Greek crisis, with the upturn broadening out to include services activity. Monthly Japanese business surveys also look slightly better</span><span style="line-height: 1.3em;">, </span><span style="line-height: 1.3em;">but the quarterly GDP figures are volatile and kicked up in March, posing the risk of a slowdown in June. Canada is the weakest G7 economy with GDP falling through the first 5 months of the year as investment activity falls. </span>
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<span style="line-height: 1.3em;">The acceleration in US and UK growth in June continues the trend recovery trajectories seen through the last few years in their economies. Timely monthly business surveys generally point to ongoing moderate growth. This growth is generally broad-based with upturns in both the manufacturing and services sectors with the US and UK service sectors being the stand-out performers for growth</span><span style="line-height: 1.3em;">, </span><span style="line-height: 1.3em;">whereas Japan has been the laggard when it comes to growth in all areas.</span><br><br><span style="line-height: 1.3em;">Given that the emerging market economies have been the main drivers of global output growth in recent years, the slowdown in China along with very weak outcomes in Brazil and disappointing data in India all present a major headwind to the world economy. The monthly trade volume and industrial output data that allows us to track how the emerging economies are faring does not look positive, signalling that there is little sign of an imminent upturn in their growth momentum. The monthly data for China and India continues to show a slowing trend in the pace of growth. </span>
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<span style="line-height: 1.3em;">Recent trade figures have been particularly soft but there is also evidence of a softening in expansion across key sectors of activity like fixed investment spending in China and infrastructure output in India. The People’s Bank of China surprised markets with a large devaluation of the renminbi in mid-August – signalling a greater role for markets in setting the exchange rate in the future. This move may also provide support for struggling exporters. The picture is even worse when we turn to the other emerging market economies in East Asia and Latin America. Industrial output and exports are falling in both regions as sluggish global trade and weaker commodity markets take their toll.</span><br><br><span style="line-height: 1.3em;">Overall our global forecasts have been left broadly unchanged in 2016 (3.3%) and 2017 (3.4%), although this sub-trend outcome falls well short of the IMF’s rosier predictions. The hard data provides no evidence that overall global growth has picked up and our leading indicators suggest further stagnation through to September.</span><br><span style="line-height: 1.3em;"> </span><img src="file:///page1image41080" alt="page1image41080" width="0.720000" height="12.180000" style="line-height: 1.3em;"><img src="file:///page1image41240" alt="page1image41240" width="3.660000" height="0.600000" style="line-height: 1.3em;"><img src="file:///page1image41400" alt="page1image41400" width="0.720000" height="12.120000" style="line-height: 1.3em;"><img src="file:///page1image41560" alt="page1image41560" width="3.600000" height="0.600000" style="line-height: 1.3em;"><br><span style="line-height: 1.3em;">Australia: The economic outlook remains mixed and patchy. Mining investment is declining sharply, public spending is limited and national income growth is weak amidst declining commodity prices. Meanwhile, monetary policy is highly stimulatory and the AUD is acting as a shock absorber, with tentative evidence of recovery in non-mining activity. Our GDP forecasts are marginally stronger than last month – 2.4% in 2014/15, 2.8% in 2015/16 and 3.2% in 2016/17 – with domestic demand weak and net exports making a large contribution. </span>
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<div class="column"><span style="line-height: 1.3em;">The unemployment rate is forecast to stay around 61⁄4% before easing slightly into 2016/17. Central forecast is for the RBA to hold rates steady, with the next move likely to be up, but not till late 2016.</span></div>
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<span style="line-height: 1.3em;">Recent exuberant readings on business confidence were pared back in July. While confidence eased in most industries, much of the change stemmed from mining and construction firms (which includes a large share on non-residential and engineering firms), suggesting an escalation in Chinese growth concerns could be putting firms on alert. Confidence fell back below the long-run average but remains positive and the trend has held up around average levels. Business conditions also dropped back. Looking through the volatility in conditions and confidence, however, suggests a turnaround in the non-mining economy. Yet, leading indicators from the Survey – such as forward orders and capacity utilisation – generally eased.</span><br><br><span style="line-height: 1.3em;">The labour market appears to be performing more strongly than suggested by traditional relationships with economic activity at present. The average pace of employment growth has strengthened, which has been enough to stabilise the unemployment rate between 6 and 6.3% over the past year. The July reading of 6.3% likely reflects some statistical noise (as it was accompanied by an unusually sharp increase in the participation rate) and we expect some retracement. </span>
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<span style="line-height: 1.3em;">Readings from various forward-looking measures of the labour market are mixed, but in general suggest employment growth should be sufficient to stabilise the unemployment rate in coming months. Capacity utilisation, which has historically led the unemployment rate, continues to improve and the employment series in the NAB survey (while soft) is suggesting job creation of 15k per month - enough to keep pace with now slower population growth.</span><br><br><span style="line-height: 1.3em;">Consumers remain cautious, but spending has picked up moderately with growth in retail sales volumes accelerating a little in Q2. Retail sales for the month of June were particularly strong (both traditional and online), which could partly reflect spill-over from small business spending encouraged by Budget measures targeted at micro-businesses. Rising dwelling investment in the Eastern states could be another factor behind strong household goods sales. Nevertheless, consumers are nervous, with unemployment expectations high. Against a backdrop of subdued household income growth, we expect a modest pick up in consumer spending growth through to 2017, underpinned by a gradual decline in the household savings rate.</span><br><br><span style="line-height: 1.3em;">Dwelling prices in Australia have risen to 11.1% in the year to July according to RP Data- Rismark. Strength remains concentrated in Sydney (18.4% y/y) and Melbourne (11.5%), but more moderate in the other states and negative in Perth (-0.6%) and Darwin (-5.3%). Undersupply of housing is particularly prevalent in Sydney, and to a lesser degree Melbourne. These markets are also being supported by foreign demand, as well as investor demand, which should slow somewhat as APRA attempts to limit growth in investor housing credit to 10% y/y (currently at 10.7%). Overall we see Australian house price increases to be around 6.1% in 2015 and slowing to 3.0% in 2016, a rate more consistent with household income growth.</span><br><br><span style="line-height: 1.3em;">The outlook for mining investment remains starkly negative, with recent falls in commodity prices further questioning the viability of marginal projects. Dwelling investment is helping to plug the gap, although it’s potential to do so is limited by its small share of GDP (5%). Higher density developments (namely in Sydney and Melbourne) are contributing significantly to the construction pipeline, and the long lag times for these projects means high levels of approvals should drive further growth in construction until late 2016. In other sectors, trend improvement in business conditions, confidence and capacity utilisation (despite the payback in July), suggest an improving outlook for business investment. </span>
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<span style="line-height: 1.3em;">However, non-residential building approvals remain weak and firms are reporting very high required ‘hurdle rates of return’ (13%) before investing. Indicators of medium-term investment expectations are at best mixed, with the ABS capex survey suggests an outright decline in non-mining capex in 2015/16, while the NAB Business Survey measure of capex intentions suggest a slightly less pessimistic outlook.</span><br><br><span style="line-height: 1.3em;">Our GDP forecasts are marginally stronger than last month – 2.4% in 2014/15, 2.8% in 2015/16 and 3.2% in 2016/17. Despite recent volatility in the labour market figures, our peak unemployment rate is unchanged at 61⁄4%, although spare capacity in the labour market is expected to remain for an extended period. Our central case is for the RBA to sit on its hands until late 2016 when a gradual tightening cycle begins.</span>
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<br><em><span style="line-height: 1.3em;">Alan Oster is group chief economist, National Australia Bank, and </span>can<span style="line-height: 1.3em;"> be contacted <a href="https://business.nab.com.au/author/alan-oster/" target="_blank">here</a>.</span></em>
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