Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Retail Sales

<html><body>
GUEST OBSERVATION
Our economy has <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release">grown</a> in the September quarter (the three months to September) after two quarters of going backwards.
Using the literal meaning of <a href="https://www.dictionary.com/browse/recession">recession</a>, we are no longer in one – economic output (the things we produce and consume) is no longer be going backwards.
But things won’t be like they were. Even a rebound in gross domestic product of <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/sep-2020">3.3%</a> (the biggest in 40 years) doesn’t make up for the 7% we lost in the previous quarter, meaning we’ll remain worse off than we were at the start of the year and much worse off than we would have been had the pandemic not happened.
Here are six things to expect as the economy recovers:
1. Consumer spending will recover first, but might need help
Consumer spending will to return to normal first, as <a href="https://budget.gov.au/2020-21/content/bp1/download/bp1_bs2.pdf">forecast in the budget</a>.
(Don’t be fooled by the forecast decline of 1.5% for 2020-21 compared to 2019-20. From where we stood in the June quarter 2020 – an enormous decline of 12% on the March quarter – this is a massive recovery.)
So far the signs are promising, but in part this might be because the stimulus payments are still flowing, keeping household disposable income above pre-COVID levels.
The coronavirus supplement that tops up JobKeeper and other benefits (originally A$225 per week) winds down to $75 per week after Christmas and <a href="https://theconversation.com/top-economists-want-jobseeker-boosted-by-100-per-week-and-tied-to-wages-150364">expires on March 31</a>.
<a href="https://treasury.gov.au/coronavirus/jobkeeper/extension">JobKeeper</a>, originally $1,500 per fortnight, became harder to get in October and will wind down to $1,000 per fortnight in January and $650 for part-time workers, before expiring on March 31.
Treasury expects wage growth to be slower than price growth for the next two years, so a household-led recovery is by no means guaranteed.
If the recovery stalls in the household sector, activities such as hospitality, retail and arts and entertainment will suffer a second blow and unemployment will remain high.
After the year we’ve had, the household sector could be forgiven for losing confidence.
The government should consider extending the coronavirus supplement payments, and be ready for further one-off stimulus payments if required.
Unlike the imminent income tax cuts, these measures are temporary and can be discontinued as soon as they are no longer required.
Governments can also stimulate demand directly. Victoria has announced an additional <a href="https://education.vic.gov.au/about/careers/teacher/Pages/tutors.aspx">4000 tutors</a> to assist school students left behind after an interrupted year. Other areas in which governments could usefully create meaningful jobs include the care sector and the arts.
2. Overseas demand won’t assist in the recovery
Exports face headwinds and are unlikely to recover over the next 18 months.
The International Monetary Fund expects the global economy to shrink by <a href="https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020">4.4%</a> in 2020 after growing 2.8% in 2019, a turnaround of more than 7%.
This will be apparent in all of Australia’s major customers including China and will depress demand for exports.
More importantly, travel bans have come close to eliminating “exports” of tourism and education, which together account for almost one fifth of Australian export income.
This income will remain weak until international travel properly restarts.
3. We will lose four years population growth
Before the crisis, the 2019 mid-year budget update predicted Australia’s population would grow from 25.6 million to <a href="https://budget.gov.au/2019-20/content/myefo/download/02_Part_2.pdf">28.4 million</a> by June 2026.
This year’s budget says we won’t get there until June 2030, a full four years later.
Even after travel resumes, net overseas migration is expected to remain lower than before due to economic uncertainty and weak labour market conditions.
Businesses will find it more difficult to get the staff they need through skilled migration, crating a greater role for higher education and vocational education.
By 2024 migration is assumed to return to normal, yet population growth will continue to be slow. This is because the birth rate is <a href="https://population.gov.au/docs/recent_impacts_on_australias_population_quick%20guide.pdf">projected</a> to be lower than usual for the remainder of the decade.
4. Business investment will be weaker, and different
2020 has been a difficult year, but it’s also been the year we’ve learnt to do things differently.
We have learnt about on-line shopping, working from home, telehealth and on-line entertainment, and we will continue to make use of what we have learnt after the pandemic is over.
These changes could drive the next genuine wave of productivity growth.
Bricks-and-mortar retail, commercial office space, roads, bridges and railways are all investments that facilitate the meeting and movement of people.
With new technologies and a smaller population that is learning to keep things local, these old-world investments won’t be as generate the same returns as they once might have.
Where we might see the investment dollars being spent is on home improvements, while government investment dollars could be spent on improving local amenities such as parks and community centres.
5. We’ll need to get more people into paid work
A year ago, 66% of Australia’s adult population was participating in the labour market, either by being employed or looking for work.
During the crisis the participation rate dipped below 63%.
It has since returned to 65.8%, a touch above where the budget expects it will stay. Other countries including <a href="https://data.oecd.org/emp/labour-force-participation-rate.htm">Canada, Britain, New Zealand and Germany</a> do better than us.
There’s room to get more unpaid carers (many of them women) into the paid workforce.
More than <a href="https://www.abs.gov.au/statistics/labour/employment-and-unemployment/barriers-and-incentives-labour-force-participation-australia/latest-release">900,000</a> people who perform significant unpaid caring work say they would like more paid employment.
In my work for the National Foundation for Australian Women, I found the net budgetary cost of increasing caring services was <a href="https://nfaw.org/wp-content/uploads/2020/10/Appendix-A.pdf">modest</a>, mainly because it brought about a strong increase in the tax-paying workforce.
6. One last dark cloud: the terms of trade
The terms of trade measure what we can buy for each unit of what we sell; how many imports we can buy for each unit we export.
The budget forecasts a fall of almost 11% in 2021-22 as a result of lower prices for iron ore.
Taking a long view, this may be nothing more than a correction, but it is as big a fall in a single year as we experienced in the <a href="https://www.blackincbooks.com.au/books/dog-days">dog days</a> after the end of mining boom when the terms of trade declined for four consecutive years, and we experienced four years without real growth in income growth per capita.
Population, participation and productivity are the “three P’s” that drive economic growth in the long run, but in the short run a big decline in the terms of trade poses a <a href="https://theconversation.com/myefo-projections-signal-a-deepening-income-recession-35539">real risk</a> to a household-led economic recovery.
Where to from here
In an effort to avoid more economic pain, the government has rightly abandoned fiscal restraint in the most recent budget.
Much of its recovery strategy (perhaps too much) is built around income tax cuts and investment incentives.
I see a need for a greater emphasis on temporary measures aimed at supporting household spending, given the role it will have to play in unwinding the recession.
<hr>
 Read more: <a href="https://theconversation.com/modelling-finds-investing-in-childcare-and-aged-care-almost-pays-for-itself-148097">Modelling finds investing in childcare and aged care almost pays for itself</a> 
<hr>
In the longer term, there is a case for paring back some of the larger income tax cuts to expand child care, aged care and disability care; measures that would support low-paid workers, boost labour force participation, and improve the standard of living for many Australians.<img src="https://counter.theconversation.com/content/148797/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/janine-dixon-11006">Janine Dixon</a>, Economist at Centre of Policy Studies, <a href="https://theconversation.com/institutions/victoria-university-1175">Victoria University</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/6-things-to-watch-for-as-australia-crawls-out-of-recession-148797">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Six things to watch for as Australia crawls out of recession

<html><body>
EXPERT OBSERVER
Interestingly, Australia’s policymakers say we are in recession. But clearly it is a very interesting recession. Retail spending rose 2.4 per cent in June after a 16.9 per cent rise in May. Overall, Australians spent 8.2 per cent more on retail goods and services than they did in June last year. Recent jobs data shows that a record 210,800 jobs were created in June. And national home prices are 7.8 per cent higher than a year ago.
There is no doubt that Australia – like other nations – is battling the COVID-19 crisis and the impacts on the economy. But today’s data shows that our economy is indeed doing better than most – as the Treasurer and Reserve Bank Governor have noted. Stimulus measures provided by state and territory governments and the Reserve Bank have been significant, helping businesses and consumers navigate these challenging times.
The June retail trade data is 22 days old, but it is almost ancient history. Melbourne is under lockdown and many NSW residents are in isolation due to virus outbreaks. Governments and banks have done a lot so far to support Aussies but more may still be required.
The services sector, including restaurants, pubs &amp; clubs, sporting venues and arts &amp; recreation continue to struggle. But food, alcohol and household goods remain very much in demand, driving the overall retail sector higher.
The road will be bumpy in the re-opening phase, and there will be setbacks, but the Australian economy is on the way back. We just need to rely on all Australians doing the right thing – social distancing, wearing masks when required and maintaining good hand hygiene.
What do the figures show?
Retail trade – June
‘Preliminary’ retail trade rose by 2.4 per cent in June after rising by a record 16.9 per cent in May (highest in 38 years of records). Retail spending is up 8.2 per cent on the year. The final June data will be released on August 4.
The ABS reported, “there were large increases in turnover in Cafes, restaurants and takeaway food services, and Clothing, footwear and personal accessory retailing. While some restrictions on trade remain, many businesses saw a full month of trade in June, having been closed for the first week of May 2020."
Rises in Cafes, restaurants and takeaway food services exceeded 20 per cent for the second consecutive month, but will remain 17 per cent below the levels of June 2019, while Clothing, footwear and personal accessory retailing rose around 19 per cent, remaining 6 per cent below June 2019 levels.
Food retailing rose 0.9 per cent following a 7.2 per cent month-on-month rise in May, and remains elevated in through-the-year terms.
Analysis of supermarket scanner data shows that compared to June 2019, Perishable goods rose 14.4 per cent, Non-perishable goods 12.4 per cent, and All other products 7.8 per cent. The annual growth reflects a continuation of more food being prepared and consumed at home due to social distancing. At the end of the June month there was some evidence of stockpiling of goods such as toilet paper, flour, rice and pasta. At the aggregate level, stockpiling is most evident in Victoria.
Household goods retailing fell in June 2020 although remains 23 per cent above June 2019 levels.
Department stores saw a significant fall after a large rise in May 2020 in seasonally adjusted month-on-month terms.”
In its press release the ABS said: “Rises in June 2020 were led by cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing. While some restrictions on trade remained in June, many businesses in these industries saw a full month of trade, having been closed for the first week of May 2020. Turnover in these industries remained below the levels of June 2019.
Food retailing saw a minor rise of 0.9 per cent, with a rise in supermarkets and grocery stores offset by a fall in liquor retailing. Levels in supermarkets and grocery stores remained elevated, with evidence of stockpiling occurring at the very end of June, particularly in Victoria.
Household goods retailing fell in June 2020, however this industry continued to trade significantly above the levels of June 2019. Department stores fell 12 per cent following a large rise in May.”
Skilled Job Vacancies – June
In seasonally adjusted terms, the Department of Employment Internet Vacancy Index (IVI) increased by 26.3 per cent (or 24,600 job advertisements) in June 2020 to stand at 118,300. Despite this increase, job advertisements are 31.0 per cent (or 53,100 advertisements) below the level recorded in June 2019.
All states and both territories recorded an increase in job advertisements in June 2020. NSW (up 22.5 per cent); Victoria (up 35.4 per cent); Queensland (up 29.3 per cent); South Australia (up 29.5 per cent); Western Australia (up 32.4 per cent); Tasmania (up 52.3 per cent); Northern Territory (up 35.7 per cent); ACT (up 3 per cent).
“Job advertisements increased in all occupational groups. The strongest gains were recorded for Community and Personal Service Workers (up by 54.5 per cent), followed by Sales Workers (39.2 per cent) and Technicians and Trades Workers (32.1 per cent).
Despite the gains observed during the month, 45 of the 48 detailed occupational groups recorded falls in job advertisement over the year to June 2020.
Education Professionals recorded the largest increase (up by 21.9 per cent or 390 job advertisements) over the year. Construction Trades Workers, and Cleaners and Laundry Workers were the two other occupational groups to record increases, both up by 3.9 per cent (or 80 and 60 job advertisements respectively).
Job advertisements for Education Professionals and Cleaners and Laundry Workers now exceed pre COVID-19 (February 2020) levels.”
What are the implications for investors
The economic environment remains very fluid, driven by daily developments in the virus crisis. Volatility will persist until a vaccine is found or there are fundamental advances in virus treatments.
The Federal Government will release the July Economic and Fiscal Update (JEFU) at 11am on Thursday.
CRAIG JAMES is the Chief Economist at CommSec
</body></html>

cjames-5S2v74qSNK

Retail spending up 8% on last year: CommSec's Craig James

<html><body>
After two solid months of growth in August and September, online retail sales weakened in October, according to the latest NAB Online Retail Sales Index data.
Transactions went back -1.4 per cent over October, however year on year were up over seven percent despite slowing growth.
The largest sales category, homewares and appliances, recorded a significant monthly contraction in sales, and was a key contributor to the headline result. 
There was further improvement in sales growth for the second largest sales category, grocery and liquor.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/Online%20retail%20sales%20mom%20NAB.jpg" alt="">
This category was significantly impacted by the mid-year sales weakness, so much so, that its share of the online index has dropped from around 28% a year ago to about 26% now.
The smallest sales category, takeaway food, has been the most volatile in terms of sales growth; through this volatility, this category’s sales are up 80% when compared to the monthly sales of October 2018, and is almost 50% larger in the 12-months-to October 2019. 
 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/12/4/NAB%20MOM%20retail%20sales.jpg" alt="">
Alan Oster said, Chief Economist, NAB said, "The three most populous states represent just over 80% of all online sales, slightly above their share of the population. Of these large sales states, Victoria leads in year-on-year growth, with ACT and NT leading the smaller sales regions."
"On average, online sales growth in Victoria has been higher than NSW over the past couple of years. Consequently, the gap in spend share between the two is narrowing."
"Representing about two-thirds of all online sales, metropolitan areas recorded a bigger contraction in sales growth in October, relative to regional areas."
"This generally followed across all states except WA, where regional sales growth contraction was larger than metro areas. In addition, regional online retail continued to grow in NSW and SA, indicating that the headline contraction for these states was driven by metro areas."
"By merchant location, international retailers (+1.0%) grew strongly in the month, while domestic (-1.6%) retailers contracted."
"While key domestic categories of grocery and liquor, and personal and recreational continued to grow, it was insufficient to offset weakness in the sales categories of homewares and appliances, media, fashion, and department stores."
"Fashion, games and toys, and small sales category takeaway food contributed to the continued growth for international merchants, he concluded.
<address> </address>
</body></html>

Online retail sales weakens after strong growth: NAB

<html><body>
EXPERT OBSERVER
The September retail report disappointed in every respect. Monthly sales showed another weak gain, up just 0.2%, and real retail sales contracted 0.1% in the quarter to be down –0.2%yr, the first annual contraction since the early 1990s recession. The consensus forecast was for a 0.4% gain in the month and a 0.3% rise for the quarter.
The monthly profile continues to show little or no response to policy measures – interest rate cuts in June-July and tax relief from July should have added about $3bn to monthly household disposable incomes. With retail sales running at $27bn a month, even a small flow on impact to spending would quickly turn the dial. Monthly sales have instead posted lacklustre gains, flat in July, up 0.4% in August and a 0.2% gain in September. Comparing reactions to fiscal and monetary policy easings historically, the current response is at the lowest end of the range.
Quarterly real retail sales have now declined in three of the last four quarters. Importantly, the slowdown in real terms is due to a combination of moderating nominal sales growth and stronger price gains. In fact, the price side has had the larger effect – over the last year, annual growth in nominal sales has slowed by 0.7ppts but retail price inflation has surged 1.6ppts from 1.1%yr to 2.7%yr. The pick-up reflects a mix of factors including the impact of the drought on food prices and easing disinflation in some AUD-affected segments. There are also some indications that retailers have been shoring up weak margins in recent quarters.
For the September quarter, the storetype breakdown showed a very result for cafes &amp; restaurants (–1%qtr, –0.4%yr); slippage for department stores (–0.1%qtr, +0.5%yr); flat sales for basic food (flat%qtr, –1%yr); but modest gains for clothing (+0.3%qtr, +0.9%yr) and 'other retail' (+0.3%qtr, +0.9%yr); and a surprisingly strong bounce for household goods (0.9%qtr, flat%yr) coming off back to back quarterly declines.
By state, all the eastern states recorded sales declines, WA bucking the trend with a surprisingly strong 0.9%qtr gain but coming off back to back falls. Annual spending growth shows a much clearer pattern with NSW and Vic driving the slowdown over the last year, sales in outright contraction in NSW (–1.7%yr) and contracting in per capita terms across both.
Looking by channel, online sales have posted a solid pick up since June, annual growth back above 15%yr (a double digit pace but subdued for this segment). The performance by firms size remains stark with large retailers recording steady nominal sales growth of around 4.5%yr but small retailers seeing sales falling at around 1.5-2%yr.
Overall the report suggests consumer spending remained very weak through the third quarter, pointing to clear downside risks to the wider consumption measures in the national accounts and near term forecasts for GDP growth. 
Read full article <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/November/er20191104BullRetailQ3.pdf">'Australian retail sales Q3' (PDF 257kb)</a>
MATTHEW HASSAN is a Senior Economist at Westpac
</body></html>

Matthew_Hassan-HHWHptmrw4

Australian retail sales running on empty: Matthew Hassan

<html><body>
A private South Australian investor has paid $12.95 million on a 7.57 per cent yield for Moelis Australia’s Hollywood Plaza Large Format Retail Centre at Salisbury Downs in Adelaide’s outer north.
According to CBRE Director Investments Justin Dowers who brokered the Expressions of Interest deal with Mark Wizel, Kevin Tong, and Michael Fenton, the property attracted significant local and international interest eliciting seven formal offers.
The asset features include, full occupancy, the integrated nature of the six tenancies and space available for future expansion.
It is located opposite the Hollywood Plaza shopping centre.
The fully leased, 8080 sqm centre, returns an annual net income of $980,000 from six separate tenancies including Cheap as Chips, Supercheap Auto, Salvation Army and Anytime Fitness, with a WALE of 5.8 years.
Mr Wizel said the 3.7 hectare site presented investors with significant value-add or expansion opportunities, including mixed-use development, due to the low 22 per cent site coverage.
Mr Dowers said some positive news regarding the South Australian economy was also noted by purchasers.
"South Australia is currently experiencing a period of growth buoyed by significant investment in key sectors including the ship building program and the $5 billion investment in the largest teaching hospital in the Southern Hemisphere, projects which are expected to benefit the state for decades to come," he stated.
</body></html>

Adelaide's Hollywood Plaza retail centre sold for $13 million

<html><body>
A ground floor retail investment in Ascot Vale, Victoria has been sold for $935,000 to a local investor. 
The 131 square metre property at 202 Union Road, Ascot Vale has been leased to Flemington Financial Services Ltd T/A Bendigo Bank.
It returns $45,395 per annum plus GST on a four plus four year lease term, equating to a yield of 4.86% and building rate of $7,137 per square metre.
The property features an open plan reception/office layout, two partitioned offices, ducted heating and cooling, staff amenities and kitchenette.
It was sold by Craig McKellar of CVA.
It has 6 metre frontage to Union Road and rear access via The Parade.
Union Road is located under 5 kilometres from Melbourne CBD and is supported by an array of retail shops, cafes, restaurants and offices and is serviced by tram.
</body></html>

Ascot Vale ground floor retail investment sold for $935,000 

<html><body>
The April retail update came in weaker than expected, sales dipping 0.1% in the month compared to consensus forecasts of a 0.2% gain.
Annual growth slowed to 2.8% per year, the slowest pace since mid 2018.
The timing of public holidays may have been a factor in April, with Easter falling in the month this year and the ANZAC day public holiday a week later encouraging many to take leave.
While the ABS tries to adjust for these shifting seasonal effects, there may have been more of a dampening effect compared to previous years.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%201.jpg" alt="">
That said, both the sub-category and state detail in April point to wealth effect spillovers from the Sydney and Melbourne led housing market corrections weighing on sales.
In particular, household goods retail sales – a bellwether for discretionary 'durables' spending – fell 0.9% in the month and NSW and Vic both recorded more pronounced 0.4% declines.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%202.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%202.jpg" alt="">
The remaining sub-category detail shows a 0.2% gain in the large basic food retail category and more mixed results elsewhere – clothing down 1.2% month and cafes &amp; restaurants down 0.7% month but both coming off sold gains in March; and department stores up 1.8% month and 'other retailing' up 0.8% month but both coming off declines last month.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%203.jpg" target="_blank">Click here</a> to enlarge:  <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%203.jpg" alt="">
Needless to say it pays to look through the monthly volatility.
Looking at sales across the major states: NSW –0.4%mth, +1.2%yr; Vic –0.4%mth, +3.7%yr; Qld +0.7%mth, +6.0%yr; SA +0.6%mth, +0.5%yr; and WA +0.1%mth, +2.6%yr.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%204.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%204.jpg" alt="">
Looking by channel, online sales look to have posted a reasonably solid 1.1% gain in the April month, although the annual pace of growth in this segment continues to slow. 
The breakdown by retailer size shows weakness concentrated amongst small retailers, sales in the segment down 0.9%mth. Large non-food retailers saw a flat result while large food retailers recorded a 0.6% gain.
Overall the April retail update is clearly on the soft side, marking a weak start to the June quarter and with some worrying signs that wealth effect drags may be intensifying.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%205.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%205.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%206.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%206.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%207.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%207.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%208.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%208.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%209.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%209.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%2010.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/4/retail%2010.jpg" alt="">
MATTHEW HASSAN is a Senior Economist for Westpac
</body></html>

Australian retail sales soften again: Westpac's Matthew Hassan

<html><body>
The retail premises of of Lorna Jane on Hastings Street, Noosa Heads has been sold.
The $5.06 million sale was negotiated by CBRE’s Brendan Robins and Ryan Parry on behalf of the vendor, a private NSW based investor.
Mr Robins said, “the offers to purchase campaign attracted over 30 enquiries from qualified investors, with the sale price translating to a yield of 5.25% and a rate of $44,779 per square metre.”
With an NLA of 113sqm, Shop 1 at 55 Hastings Street, Noosa Heads is leased to Lorna Jane Pty until August 2022 with a five-year option and has a net rental income of $265,533 after land tax deductions.
Featuring a 9 metre frontage to Hastings Street, it also has 2 car spaces. 
In 2007, Mr Robins managed the sale of the same property, then tenanted by Hugo Boss, for $4.65 million.
</body></html>

Lorna Jane retails premises on Hastings Street, Noosa sold for $5.06 million

<html><body>
EXPERT OBSERVATION
Retail sales rose 0.1% in January, a disappointing result compared to consensus expectations of a 0.3% gain. Retail was coming off a 0.4% fall in the final month of 2018, so the muted January rise speaks to continued weakness carrying into early 2019.
Annual sales growth has slowed to 2.7%yr with the trend pace over the last six months closer to 2%yr.
The detail showed gains were confined to food sub-categories – both basic food and cafes &amp; restaurants up 0.3%mth – with non food categories down 0.1%mth on a combined basis. Within the latter: department stores booked another sizeable decline (–2.1%mth following –1.3% in Dec and a muted 0.4% gain in Nov); clothing was down 0.3% coming off a 3% fall in Dec but a strong 4.4% gain over Oct-Nov; and household goods retail was flat, coming off 0.8% gains in Nov and Dec. The 'other retail' category - mainly 'small ticket' discretionary items – posted a 0.7% gain.
The picture by state did have one slight positive with a solid 0.7% rise in NSW. The state had shown a much weaker finish to 2018, raising concerns that wealth effect drags were starting to bite harder. The Jan gain pares that weakness back a bit although trend sales are still weaker, flat lining vs slight 0.2% a month gains in most other states.
Looking by channel, online sales look to have posted a 2-3% gain for the month, with retail ex online down slightly (–0.1%mth).
By retailer size, small retailers reported a 0.6% fall with non food retailers driving the monthly gain amongst larger retailers. Despite this, large food retailers have still seen the best growth over the last year, sales up 4.9%yr on a combined basis, some of which relates to firmer pricing.
Separate data on vehicle sales have been mixed in early 2019. Our estimates suggest monthly seasonally adjusted sales rose in Jan but slipped back a touch in Feb. Seasonal adjustment is more problematic around this time of year so these moves should be treated with caution. Sales are still down about 10%yr. The Q4 national accounts detail showed a 1.5%qtr decline in consumer vehicle purchases, tracking a 6% annual pace of declines over the last three quarters of 2018.
Overall the slight gain in January retail sales indicates that the soft spending conditions over the second half of 2018 have extended into 2019. While sales may not be contracting in nominal terms they are likely to be down in volume terms once price changes are excluded.
MATTHEW HASSAN is a Senior Economist for Westpac
</body></html>

Australian retail sales tick up, just: Westpac's Matthew Hassan

<html><body>
EXPERT OBSERVER
Department stores and clothing retailers are drawing on consumer behaviour and psychological research to compete with online shopping. 
Bricks-and-mortar retail stores are under intense pressure from online competition. Feeling the most heat are clothes shops and department stores.
This year David Jones’s profit halved, to A$64 million. Myer declared a “disappointing” <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-09-12/myer-full-year-results-2018/10236074" target="_blank">A$486 million loss</a>. German giant Esprit, whose global sales have fallen 40% in four years, has shuttered <a href="https://www.ibisworld.com/industry-insider/analyst-insights/espirit-the-clothing-retailer-set-to-close-its-australian-stores/" target="_blank">its Australian operations</a>. The US-based Gap closed its <a href="https://www.news.com.au/finance/business/retail/gap-closes-final-australian-store-ending-its-disastrous-foray-down-under/news-story/c27860366c3c290e087339aaec3c8503" target="_blank">last Australian store</a> back in February. Other brands to have collapsed include Metalicus, Oroton, Marcs, David Lawrence and Pumpkin Patch.
<hr>
<iframe style="border: none;" src="https://datawrapper.dwcdn.net/43k4k/1/" frameborder="0" width="100%" height="400"></iframe>
<hr>
What to do?
One answer is to invest in and enhance those aspects of the shopping experience that online retailers just can’t provide.
To do so department stores and clothing retailers are drawing on consumer behaviour and psychological research to make themselves more appealing – sometimes without shoppers even consciously realising it.
Here are three of the most significant strategies.
<h2>Home is where your heart is</h2>
Shopping from home is comfortable. You can do it in your time. You feel no pressure to hurry up and buy something. You can do it in your pyjamas.
To compete against the home shopping experience, retailers are exploring how to make you feel more at home in their stores. Tactics involve evoking sensory familiarity through furnishings, lighting and even scents.
Men’s clothing retailer Rodd &amp; Gunn is taking the homeliness vibe to its logical extreme, with shop fit-outs that mimic an actual home.
<img src="https://images.theconversation.com/files/247179/original/file-20181126-149311-1x3m3l0.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""> Rodd &amp; Gunn’s ‘experiential’ retail store in Chadstone, Melbourne. Rodd and Gunn blog
The picture above shows Rodd &amp; Gunn’s “<a href="https://www.insideretail.com.au/news/stores-news/rodd-gunn-opens-experiential-chadstone-store-201810" target="_blank">experiential store</a>” in Chadstone, Melbourne. There’s a slanted wood-panelled ceiling to evoke a real house roof. In the centre of the shop floor is a “living room” space with sofa, armchairs and a coffee table. Artworks hang on the walls. It’s all intended to make you feel as relaxed (almost) as you would in your own home.
This approach reflects the research that shows how <a href="https://www.sciencedirect.com/science/article/pii/S096969891630577X" target="_blank">familiar design elements</a> help make shoppers feel comfortable. Colour and music choices apparently don’t make much difference, but layout and other sensory experiences do.
Familiar scents, for example, can affect your decision to go into a store, how long you stay and ultimately how much you spend. They are particularly effective when they <a href="https://www.sciencedirect.com/science/article/pii/S0969698916305483" target="_blank">complement</a> the brand, such as the faint smell of wood in a hardware store or a more herbal scent in a wellness store.
<h2>You want space, but not too much</h2>
What can make or break your experience in a shop is how the staff treat you. As <a href="https://www.researchgate.net/publication/282224094_The_Thin_Line_between_Love_and_Hate_of_Attention_The_Customer_Shopping_Experience" target="_blank">Sarah Alhouti and her colleagues</a> have put it, there’s a thin line between love and hate of attention.
An overly attentive salesperson can be perceived as desperate, pushy or aggressive and <a href="https://www.sciencedirect.com/science/article/abs/pii/S0148296304000372" target="_blank">drive you away</a>. Too little attention, on the other hand, can leave you feeling <a href="https://www.jstor.org/stable/pdf/2786426.pdf" target="_blank">ignored, unwanted and unworthy</a>, with the same result.
With the Goldilocks zone being different for different people, retailers are turning to technology to help get the attention levels right.
For example, Australia’s largest swimwear label, Seafolly, is trying out an <a href="http://www.ragtrader.com.au/news/seafolly-has-launched-a-magic-mirror" target="_blank">interactive mirror</a> in the fitting room of its Bondi Junction store in Sydney.
<img src="https://images.theconversation.com/files/250180/original/file-20181212-76974-17a4act.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""> The interactive mirror in Seafolly’s Bondi Junction store. Seafolly
It allows the customer to message staff directly from the changing room for assistance only if, and when, they decide they need it.
<h2>You’re so special</h2>
Shopping online is highly convenient but it doesn’t necessarily make you feel special.
Some bricks-and-mortar retailers are positioning themselves at the premium end of the shopping market by appealing to the human desire to be pampered. It makes sense to invest in the “VIP experience”, because now every customer they get is very important.
Creating the VIP experience extends from personal greetings to champagne and caviar bars.
Department store <a href="https://www.smh.com.au/lifestyle/fashion/department-stores-are-promising-better-service-but-is-it-too-late-20181003-p507i8" target="_blank">David Jones</a> has embraced this trend as part of the A$200 million redevelopment of its Sydney premises.
Its revamped shoe floor – the largest shoe store in Australia – includes “shoe concierges” to greet and guide you and specialist shoe fitters recruited from around the world. And yes, there’s also a champagne bar.
<img src="https://images.theconversation.com/files/247180/original/file-20181126-149317-1nzb9wa.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""> David Jones’ new ‘Level 7’ shoe floor in Sydney. David Jones media release
Such experiences meet the desire for <a href="https://www.forbes.com/sites/njgoldston/2017/12/29/what-you-need-to-know-about-luxury-consumer-trends-for-2018/#2d19680921eb" target="_blank">a “luxe” experience</a> without the luxury price tag. Research has found that even the simple act of just being welcomed at the entrance of a store can influence how your <a href="https://www.sciencedirect.com/science/article/abs/pii/S0148296316304295">perceive service quality</a> as well as <a href="https://www.researchgate.net/publication/324159812_The_Social_Servicescape_A_Multidimensional_Operationalization" target="_blank">customer satisfaction and store loyalty</a>.
Whether such strategies can save bricks-and-mortar stores remains to be seen.
In the meantime, champagne anyone?<img src="https://counter.theconversation.com/content/107506/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/eloise-zoppos-579650" target="_blank">Eloise Zoppos</a>, Senior Research Consultant, <a href="http://theconversation.com/institutions/monash-university-1065" target="_blank">Monash University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/brick-bait-three-tricks-up-retailers-sleeves-to-lure-you-back-to-physical-shops-107506" target="_blank">original article</a>.
</body></html>

Retail Sales

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Retail Sales

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News