Earlier this week, we learned that construction insolvencies are booming, according to ASIC:
Insolvencies in the $150bn residential and non-residential construction industry remain at a high level… insolvencies in the three months to September jumped 78 per cent in Victoria, 41 per cent in Queensland and 7 per cent in NSW.
This was a significant contributor to the 5 per cent increase in year-on-year national defaults to 2309 across all industries, with 22 per cent coming from construction.
Comparative figures for the past 12 months were 8232 insolvencies, of which 20 per cent was in construction.
Today we learn that property developers – both domestic and foreign – are being forced to sell:
“We’re definitely seeing an increase in mortgagee in possession come into the market,” [Capio Property Group chief executive Mark Bainey] said.
“Many high interest rate private loans taken out for sites that were purchased at the height of the boom are now starting to mature and lenders aren’t extending the loan terms… It’s a growing trend with the proliferation of non-bank lenders”…
“I think there will be more distressed assets coming into the market, particularly the vacant land,” [Ray White Commercial Western Sydney selling agent Peter Vines] said…
Mr Bainey said the distressed sales were mostly coming from small- to medium-sized local and Chinese developers.
This comes as developers are showering incentives on buyers amid rising vacancy levels as projects started during the height of the property bubble are completed, and as demand evaporates amid growing concerns of dodgy building standards, flammable cladding, as well as falling overseas buyer demand.
‘Big Australia’ mass immigration shills claim that Australians no longer want to live in a detached house with a backyard, and are instead choosing high density living and renting:
Danni Hunter, Victorian chief executive of the Urban Development Institute of Australia… said density would
“grow stronger … and that’s really good for the diversity of our cities, our suburbs and our population.
People want to live in apartments. People want to downsize to townhouses,” she said.
“Density in particular is making some really great changes to the way we live and is helping people come together in a community sense.”
Sydney Metro; glitch … helping people come together
[Bernard Salt] said many young people had “different values” and few wanted large homes with a mortgage in any case.
“The homogeneity of Australian society has shifted from mum, dad, four kids to the cosmopolitan diverse community we have today,” he said. “They want greater flexibility, greater fluidity, and the idea of an early life commitment to a mortgage … just doesn’t sit with the vast majority of the millennial generation.”
CAAN Photo: Chinese State Based Real Estate Greenland ‘Lachlan’s Line’ and Chinese Country Garden ‘Ryde Garden’ in the background North Ryde
*These claims are contradicted by a recent Westpac survey, albeit from New Zealand, which shows that most Millennials still pine for a house with a backyard:
The Nexus Planning & Research survey of 1,008 people aged 18 and over shows 49% consider a backyard essential when buying a home, and another 42% think one would be nice to have.
*“It’s interesting to see that people consider having a backyard much more important than living close to work, public transport, parks or schools,” says Westpac’s Robert Hill.
“Owning a home with a nice backyard has traditionally been central to the Kiwi dream, and the recent rise in house prices and increase in apartments doesn’t seem to have dented that.”
CAAN Photo: The Godzillas of Meadowbank
I can count on one hand the number of Millennials that I have met that would prefer to live in an apartment or townhouse over a house with a backyard, if given the choice.
*The reason why they are increasingly living in apartments is not by choice, but rather necessity. They have been forced into apartment living because that is all they can afford. Apartments also tend to be rented, rather than owned:
*While apartment living might be fine when living as a single or a couple, it is a sub-optimal choice when it becomes time to have a family. And this is a problem because Millennials are being locked out of family friendly homes, according to BIS Oxford Economics:
Investor demand has seen apartment construction boom — particularly in Sydney, Melbourne and Brisbane — but Mr Zigomanis said the studio, one and small two-bedroom apartments that are attractive to Generation Y as they rent in their 20s are unlikely to hold the same appeal as they age…
The large-scale, high-rise developments that sell apartments off the planto investors do not hold the same appeal to owner-occupiers…
The growing over-65s segment of the population is not tipped to favour smaller apartments either.
BIS notes downsizing has been growing at a “glacial” pace and, even if it picks up, demand is not expected to be fulfilled by small, high-rise dwellings.
“Previous research that we’ve undertaken suggests that many baby boomers would still like to stay in the area that they’re living in, where they’ve already made friends and social connections,” Mr Zigomanis said.
The situation looks particularly dire in Sydney, which is Australia’s immigration capital. According to projections from the Urban Taskforce, apartments will make up half of Sydney’s dwellings mid-century, whereas only one quarter of Sydney dwellings will be family-friendly detached homes:
That’s the death of The Australian Dream right there. And this is celebrated by the Big Australia boosters, who continue to gaslight the population into believing it’s in their interests.
CAAN Photo: Chinese Greenland ‘Lachlan’s Line’ North Ryde looms over the village of North Ryde who had no say!
Mr Stokes, ‘growth started to get its bad name’ in the 1960s and 1970s …
AND with the mysterious disappearance of Juanita Nielsen in early July 1975 …
Juanita an Australian newspaper owner, journalist and heiress noted for her activism for urban conservation particularly anti-development campaigns … for the Victoria Street Kings Cross terraces …
FROM the ‘Comments’ here’s a tip for community groups opposing Overdevelopment … who are no doubt weary …
‘ If you don’t want that type of development you need to be vocal when the zoning rules are being drafted. The silence from all the current Local Strategic Planning Statements which have been on exhibition that past 6 months is deafening. This documents give guidance for the next 20 years on what areas should concentrate on uplift in zoning for greater density. This is when people should be making submissions but I am following them and no one, none of the local community groups like the save our valley types say anything.’
NSW Planning Minister attacks community for opposing crush-loading
They know thatpopulation growth means more development and lower living standards.
Their views are also explicitly supported by Infrastructure Australia’s modelling, which shows projects worsening traffic congestion, longer commute times, and reduced access to jobs, schools, hospitals and green space as Sydney swells to a projected 7.4 million people by 2046 under ongoing mass immigration, regardless of whether Sydney builds up or builds out:
Current mass immigration settings also means that Sydney will turn into a high-rise battery chook city mid-century, according to Urban Taskforce projections:
*Rather than attacking his own constituents, Rob Stokes should represent them and lobby the federal government to slash immigration, given it is the sole driver of Sydney’s projected population explosion and over-development:
APARTMENT APPETITE UP as McMansions Fall Out of Favour
DINAH LEWIS BOUCHER MON 11 NOV 19
Although Australia is still building some of the world’s largest houses, the size of free-standing houses have reached a 17-year low, with implications for developers and builders, reveals a new report.
Aussies were building the largest free-standing houses in the world seven years ago according to data commissioned by CommSec from the Australian Bureau of Statistics, but home buyers have since embraced apartments as well as smaller houses on smaller lot sizes.
“There are still McMansions being built, but there are fewer of them,” CommSec chief economist Craig James said.
“Now houses being built in the US are the biggest in the world, around 5 per cent bigger than in Australia.”
The average new house built in 2018-2019 was 228.8sq m, this reflects a decrease of 1.3 per cent on a year agoto the smallest house size since 2001-2002 period.
▲ While the size of an average house shrunk over the past year, the size of the average Australian apartment increased by 3.2 per cent over the past year to 128.8 square metres.
But a notable recent trend is the increasing number of apartments being built in Australia.
Eight years ago around 27 per cent of homes built were apartments.
Today, apartments make up almost half (41 per cent) of all Australian homes built.
“Free-standing houses now account for just over half of all new homes built, with high-rise apartments and townhouses most in demand,” James said.
CommSec notes that the increased number of apartments being built has served to reduce the size of the average new home built in Australia.
“The average home was 186.8sq m in 2017-2018, the lowest level in 22 years. And the average home size rose by just 1.2 per cent from these lows in the past year.
“Through the 2004-2010 period, the average apartment was around 140 square metres.Today it’s closer to around 125-130 square metres.
“The shift to smaller apartments may mean that more of them need to be built to house the growing population compared with free-standing houses,” the report notes.
The appetite forMcMansions?
Australia is still building some of the biggest houses in the world, but on average, US houses are still larger by around 5 per cent.
The ACT took the crown for building the largest houses in Australia in 2018-2019, ahead of Victoria, Western Australia and Queensland.
The average house in New South Wales is 10 per cent smaller than Victoria.
On average, NSW apartments built in 2018-2019 were the smallest in 20 years of records.
While houses built in Tasmania and Queensland were at 23 and 21-year lows respectively. #Research
NSW apartments built in 2018-2019 were the smallest in 20 years of records … why would you swap a free standing home to be cooped up … ?Unless you have little choice!
Various property insiders agree that the Morrison Government’s first home buyer (FHB) deposit subsidy is likely to raise property values when it is introduced in January, thereby eroding housing affordability:
SQM Research real estate analyst Louis Christopher said the Morrison government’s free LMI for 10,000 first-time annual buyers would “marginally” increase prices from January…
“Past first home buyer schemes have tended to only benefit people who used them at the very start, because the remainder of people had to pay a price over and above the value of the grant”…
Richard Wakelin, founder of buyers’ agent Wakelin Property Advisory, said last week the first home loan deposit scheme would inject “extra stimulus” into the housing market…
Perversely, the stimulatory impact of the scheme may force first home buyers to pay thousands more for property than they save in LMI,” he said.
*Supporting property values, not affordability, was the stated intent when Prime Minister Scott Morrison announced the scheme a week prior to the federal election:
“We want to see more first-home buyers in the market, absolutely, and we don’t want to see people’s house prices go down” – Prime Minister Scott Morrison, 13 May 2019.
*The Coalition also admitted that the policy was developed by the property lobby: *
Mr Morrison rejected suggestions the plan announced on Sunday, and quickly matched by Labor was a taxpayer-funded subsidy and said it won’t lead to an increased risk of purchasers getting into financial trouble.
“It enables them to open the door and actually turn the key on their first house,” Mr Morrison said.
“In a couple of years they will undoubtedly refinance and they will go through that process again. The equity in their home will build and they’re up, up and away. That’s where we want to get them to”…
Asked what modelling had been done, Mr Frydenberg said the government “had spoken to people in the sector.”
*Basically, Scott Morrison wants to sacrifice FHBs to boost the profits of his property industry mates.*
A Dahua Group spokeswoman said the developers had worked had to deliver a good housing precinct.
“It would not be appropriate for Dahua to comment on setting precedent for other projects,” she said.
“Dahua has taken a collaborative and best practice approach to planning for the long-term future of Menangle Park and the Macarthur region. This planning proposal is the result of over two years of work with Campbelltown Council, the existing Menangle Park community and other key stakeholders.”
The spokeswoman said the Dahua masterplan would bring “significant benefit to the local and regional community” and the proposed changes would “enable increased diversity of housing for Menangle Park residents [and] ensure hat the community will be able to accommodate all potential residents”.
“The increased density will be appropriately located in proximity to the new town centre and associated with high amenity and increased open space. The increased population will also enable the introduction of a larger town centre so residents will be less dependent on private transport while creating further job opportunities.”
Baby Boomers are primarily responsible for hostility toward housing growth and density, Planning Minister Rob Stokes says, accusing the generation of being the drivers of so-called NIMBYism.
The ‘Not In My Back Yard’ mindset, which is opposed to nearby development, sprung from an anti-growth mentality of the 1960s and 1970s, Mr Stokes said. Baby Boomers were “the largest cohort, I suppose, in NIMBYs and also an important cohort in decision-makers today”, he said.
“When they were reaching their level of political activism and awakening was at a time in the 60s and 70s when growth was being challenged,”
Mr Stokes told the Good Growth Summit last week.
Speaking to developers, planning bureaucrats and community leaders, Mr Stokes said growth had become a concept to be suspected, resisted or treated with outright hostility.
He said many policymakers had grown up during the 1960s and 1970s when “growth started to get its bad name” because of books such as Rachel Carson’s Silent Spring and the apocalyptic predictions of the Club of Rome in The Limits to Growth.
“That idea has seeped into the popular culture and is a pervasive, if unrecognised or almost subconscious mental model in many of the people leading the discussion today,” he said.
“So we actually are fighting against a great weight of cultural development over the last 40 or 50 years.”
ThePlanning Minister also called for a new approach to housing that recognised the rights of renters to have security of tenure and embedded “diversity” across Sydney.
“We need to recognise that housing is not just an asset class, actually far more than that, it’s about providing a place to live,” he said.
He emphasised the importance of accommodating different cultures, housing types and tenures across Sydney rather than in ghettos.
“And that is an incredibly difficult thing to do,” he said. “Because we’re working against all sorts of ingrained prejudices, working against a planning system that itself has been based on the idea of excluding uses.”
Despite these challenges, Mr Stokes said it was important to build an “inclusive” city.
“It is hard work but it’s important work because if we don’t live next to each other, we don’t understand each other, we don’t talk to each other,” he said.
“And if we don’t do that, we’re not building a health inclusive city. And we’re actually creating huge blockages toward productivity that can increase prosperity for all.”
*Labors’ planning spokesman Adam Searle said the planning system had worsened under the Liberal-National coalition.
“Growth and development in Sydney have a bad reputation today because over the last decade it has been allowed to occur unevenly, with some areas bearing the brunt while other areas do not take their fair share,” he said.
Mr Searle also said infrastructure had not kept up with the pace of development.
“To add insult to injury, much of the housing stock produced is simply too expensive for many in our community, with investors snapping up new properties,” he said. “This damages public confidence and acceptance of further development.”
David Barrow, the lead organiser of the Sydney Alliance, said the NSW government and local councils had failed to build adequate affordable housing for low-income workers, pensioners and the homeless.
“The redevelopment and gentrification of Sydney on the new Metro lines will likely outprice and displace thousands out of their own communities unless thousands of affordable homes are built,” he said.
Mr Stokes also emphasised the importance of democratic planning processes, which he said could be “enormously frustrating” for developers.
“You can’t create a place without talking to the people who are going to live and work and inhabit those places,” he said in his speech.
Karl Fender lives a quarter of a kilometre into the sky.
In his eyes, “it’s the most elegant, convenient and safe way of living”.
Though the co-founder of architecture firm Fender Katsalidis concedes high-rise buildings have plenty of room for improvement, too.
“Architecture and urban design, really, are the fundamental determinants for the quality of our built environment and, therefore, the quality of our lives,” Mr Fender told The New Daily.
“So I reckon every new building carries with it a key responsibility to contribute positively in a broader sense to our cities. And they have to do it not just with quality, but also in a sustainable way.”
In the past, apartment blocks have all too often consumed more than they’ve contributed, Mr Fender said.
They’ve gobbled up public space, taken more than their fair share of water and energy, and, more often than not, given non-residents little in return.
“But they have the potential to be contributors, depending on how they’re designed,” Mr Fender said.
Among other things, this means replacing private foyers with public spaces, and providing infrastructure and services lacking in the local community.
Occupying an entire city block on Melbourne’s Southbank, the mixed-use project will span more than 20,000 square metres and have a 3700-square-metre public park at its feet.
It will come with a new supermarket, a handful of restaurants, and a new childcare centre, in what its creators say is an attempt to “address the amenity gaps currently existing within Southbank”.
“There’s been a real shift towards an expectation that people buying into an apartment building need that amenity, and they want to know that the areas in the cities that they live in are great,” Mr Curry told The New Daily.
“Apartment buildings and mixed-used projects need to contribute and improve the city, and not just put a residential project in the city without considering the impact.”
The aim is to provide spaces which support residents’ wellbeing and simultaneously encourage neighbours to connect with one another.
“You might build high-rise buildings for various reasons, such as if there is a land shortage, but there isn’t any environmental reason for building them.”
According to research by University College London, electricity use, per square metre of floor area, is nearly two and a half times greater in high-rise buildings of 20 or more storeys than in low-rise buildings of six storeys or less.
Ask Mr Curry about sustainability, though, and you get a more nuanced take. He says the glass industry has made huge strides in improving thermal performance and efficiency in recent years, and that correct orientation can dramatically boost a building’s green credentials, too.
“At the same time, though … in the city of Melbourne, the urban design team is looking for a shift away from the numerous glass towers that have created the city, to get more diversity and texture into the city, which obviously starts to open up other possibilities as well,” he said.
“So some of the new projects we’re working on at the moment do have a lot more masonry elements (stone) within the tower components.”
Meanwhile, Mr Fender is also optimistic that high-rise towers will continue to improve their green credentials.
“We now have the technology to harvest water and energy from our buildings, and this can help make our cities self-sufficient, even with zero waste,” he said, adding that governments should give more of a leg up to sustainable buildings, by providing greater rewards and incentives.
The many faces of apartment living
With Australia adding more than 388,000 people to its population in the 12 months to March 2019, few would dispute the need for greater density in our cities.
Continually ripping up our urban growth boundaries to build new suburbs on the fringe is not a sustainable model. It eats into agricultural land, forces people to travel large distances to work, and normally leaves them without essential infrastructure.
But high-rise towers aren’t the only alternative. Low-rise, medium-density projects in our middle-ring suburbs can keep a lid on emissions, while connecting people to jobs and infrastructure.
Domain has published a drivelling article celebrating ‘Highrise’ Harry Triguboff’s rise to becoming Australia’s second richest person living in one of Sydney’s biggest waterfront mansions:
Triguboff’s efforts to pay off his first home is an oft-quoted success story for first-home battlers: the developer owned a taxi fleet and supplemented his income with a milk run in Chatswood…
His company, Meriton…, has built one in 10 Sydney apartments, and some of the tallest residential towers in Sydney, Brisbane and the Gold Coast – a total of 75,000 apartments across the eastern states…
Sydney’s obsession with real estate has proved a windfall for Triguboff. He became a billionaire in 1997 and was ranked second in this year’s Australian Financial Review Rich List, worth $12.77 billion.
The 85-year-old and his wife, Rhonda, have been Vaucluse locals since 1983 when their waterfront home was bought by Meriton for $4.1 million, and next door added in 1998 for $6 million.
The amalgamated 5200-square-metre block is one of the largest, privately held waterfronts in Vaucluse, eclipsing Justin Hemmes’ Hermitage and fellow billionaire Leon Kamenev’a $80 million amalgamated block.
Let’s not beat around the bush here. Harry Triguboff is a key player in Australia’s ‘growth lobby’ – the cabal of rent-seekers that benefits from ‘growth’, most visibly via mass immigration.
For decades, Triguboff has actively lobbied Australia’s politicians to implement policies that are beneficial to his interests, including running a strong migration program. The below interview from 2006 highlights this point in all its hideous glory:
IT’S simple, says Harry Triguboff. Sydney has too much green and not enough grey, and if you want to look at trees – well, go climb a mountain…
“You go north and we have all these reserves and you go south and you have all the reserves, and they are the best part of the coast. That is crazy. We should be building on this area,” he said.
“If they want to see trees, they can go to Katoomba, there are plenty of trees there”…
He also called for a big increase in immigration, saying the population of Sydney should be 20 million by 2050, with the population of Australia 150 million.
And he has dismissed proposals for values and language tests for immigrants, saying: “What’s more important for me – a guy who can fix my tap or a guy who can speak English?”…
[Triguboff] also gave a rare insight during the interview into the level of influence he had with the former premier, Bob Carr.
He said he spoke far more to Mr Carr than he does to his successor, Morris Iemma, and convinced him to change laws concerning owners’ corporations to stop rogue elements in body corporates engaging lawyers and consultants without a proper vote.
He said that about three years ago he convinced Mr Carr there should be more development in Sydney, saying Mr Carr would have more than $1 billion in stamp duty if councils approved developments on all of Meriton’s land.
“He was telling openly he saw me more than he saw cabinet ministers. That doesn’t mean he did what I told him but he knew [my] story very well,” Mr Triguboff said.
“This is the way it works, you have a minister of planning and then sometimes you’re not happy with what he does and you go to Carr … and you say ‘listen, this is the position’.
[Triguboff] was quoted in the very reliable Australian Financial Review late last year as dismissing concerns that there might be an over-supply of apartments.
Triguboff was asked, “But might rents fall in Sydney and Brisbane when all the new apartments are completed in the next two years?”
He responded, “Then I will bring in more migrants.”
Whoops, I must have got in wrong when I said above that the Federal Government sets the migrant quotas. Apparently, property developers set migrant targets in Australia. Or at least federal politicians are so beholden to them and their donations that, in effect, they determine migration quotas.
Make no mistake, a large proportion of Harry Triguboff’s wealth has arisen because he has ‘privatised’ the gains from mass immigration and other pro-growth policies, whereas the costs have been ‘socialised’ on everyone else.
In his “forgotten peoples” speech, Prime Minister Robert Menzies pronounced: “One of the best instincts in us is that which induces us to have one little piece of earth with a house and a garden which is ours”.
In 1963, Harry Triguboff decided to challenge the Great Australian Dream of owning a house on a quarter-acre block.
“I looked around and I saw cottages everywhere… I thought it was time they lived in apartments.”
So everyone was to live in apartments. Everyone except for Harry Triguboff.
Sadly, Harry Triguboff’s dream is fast becoming a reality. Not only are apartments now the dominant form of new housing in our migrant hotspots of Sydney and Melbourne:
But in Sydney at least, the Urban Taskforce projects that only one quarter of all homes will be detached houses by mid-century:
Sydney is facing a future whereby only the wealthy elite like Harry Triguboff will be able to afford to live in a decent detached house with a backyard, while the ordinary folk are crammed like battery chooks into apartments.
It’s high time our policy makers ignored rent seekers like Harry Triguboff and set policy in the interests of the ordinary residents, who are being kicked to the curb by the ‘Big Australia’ mass immigration policy.