CBD Office Market Commentary H2 2025 - Charter Keck Cramer

By Mark Willers - National Director, Mathew Young - Director, Harry Davidson - Associate Director, Charter Keck Cramer

Australia’s CBD office markets are showing early signs of stabilisation, with a clear “flight to quality” emerging across all major capitals as tenants prioritise premium spaces and investors navigate a high interest rate environment.

Sydney Summary

The Sydney office market has recently shown signs of improvement, particularly in premium grade spaces, while overall vacancy rates remain high due to ongoing tenant consolidation, flexible work arrangements, and a supply lag from previous cycles. Elevated tenant incentives continue, especially in sub-markets with greater vacancy, though face rents appear stable or slightly rising. The market is also experiencing a “flight to quality”, with premium buildings recording positive absorption and secondary grades facing negative absorption, a trend driven by businesses seeking higher quality spaces and incentives.

Investment activity has been subdued, with the bifurcation between prime and secondary yields becoming more pronounced as secondary yields soften more than those of prime assets. The higher interest rate environment has increased debt costs and softened yields, making loan serviceability more challenging and stifling transaction volumes. However, the ongoing reshaping of the CBD—supported by major infrastructure projects like the new Metro lines—along with government efforts to encourage a return to the office and narrowing price gaps between buyers and sellers, is expected to boost sales activity and gradually improve occupancy rates as the market continues to adjust.

Melbourne Summary

The Melbourne office market is demonstrating early signs of recovery, with some improvement in occupancy, especially within Premium and A-Grade spaces. However, vacancy rates remain high and overall occupancy is subdued, driven by ongoing tenant consolidation, flexible working patterns, and a lag in supply from previous cycles. Tenant incentives are still elevated, particularly in sub-markets with higher vacancies, though face rents have stabilised and are beginning to edge upwards for higher quality assets.

Charter Keck Cramer notes a widening gap between prime and secondary yields, with secondary yields likely having softened more noticeably, a trend expected to become clearer as transaction volumes pick up. The elevated interest rate environment continues to challenge net cashflows and interest cover, stifling investment activity. Ongoing major infrastructure projects, including the nearing completion of the Metro Tunnel, are expected to enhance CBD connectivity and may positively influence office occupancy in certain precincts. As price expectations between buyers and sellers converge, increased sales activity is anticipated in the latter part of 2025 and into 2026, particularly as some owners are compelled to recycle capital due to rising costs and weaker cashflows

Brisbane Summary

In Brisbane, leasing demand strengthened post-lockdowns, with face rents increasing due to both higher demand and inflationary pressures, although recent evidence suggests a slight tapering in activity. Tenant incentives remain elevated, especially in premium and A-grade buildings, reflecting increased construction and fitout costs. The market continues to see a "flight to quality," with premium and A-grade buildings outperforming secondary assets in terms of vacancy and rental growth. As of July 2025, Brisbane CBD vacancy rates stood at 10.7%, with ongoing and future developments largely pre-committed, indicating sustained demand for high-quality office space and limited relief from new supply.

The Queensland office property market experienced strong demand for securely leased, highquality assets throughout 2021 and early 2022, driven by low interest rates and a limited supply of investment options. However, following the Reserve Bank of Australia's rate hikes starting in May 2022, demand softened, with fewer purchasers and properties available. As the market adjusts, yields have softened—particularly for larger and secondary assets with higher cashflow risk— leading to a decline in capital values, despite rising rents. By early 2025, yields for premium grade office buildings averaged 6.75% to 7.00%, with secondary assets at around 8.25% to 8.50%. Owneroccupiers have remained active, less affected by traditional investment returns.

This article has been republished with permission from Charter Keck Cramer. Read full report here.

More homes, better cities: Letting more people live where they want

by Brendan Coates, Joey Moloney, Matthew Bowes, The Grattan Institute

Three-storey townhouses and apartments should be permitted on all residential land in all capital cities as part of a concerted policy assault on Australia’s housing crisis.

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Housing developments of six storeys or more should be allowed as-of-right around major transit hubs and key commercial centres. 

Housing in Australia’s major cities is among the least affordable in the world.

Restrictive planning controls add hundreds of thousands of dollars to the cost of new housing in our capital cities.

For decades, Australia has failed to build enough homes in the places that people most want to live.

Now we have a housing affordability crisis that is dividing families and communities and robbing young Australians of their best chance in life.

The key problem is that state and territory land-use planning systems say ‘no’ to new housing by default, and ‘yes’ only by exception.

About 80 per cent of all residential land within 30km of the centre of Sydney, and 87 per cent in Melbourne, is zoned for housing of three storeys or fewer. And three quarters or more of residential land in Brisbane, Perth, and Adelaide is zoned for two storeys or fewer.

The upshot is that our capital cities are among the least dense of their size in the world.

Allowing more housing in established suburbs would mean cheaper housing in all suburbs.

It would boost Australians’ incomes and quality of life, by letting more people live closer to high-paying jobs as well as transport, schools, and other amenities.

And it would mean shorter daily commutes and hence lower greenhouse-gas emissions.

Developments of up to three storeys that meet clear standards should not need a planning permit. 

Larger developments that meet pre-set criteria should be assessed via ‘deemed-to-comply’ approval pathways.

Allowing three-storey townhouses and apartments on all residential land in capital cities would unlock commercially feasible capacity for more than one million new homes in Sydney alone.

Our modelling for this report shows that these reforms could lift housing construction across Australia by up to 67,000 homes a year, which over a decade could cut rents by 12 per cent and slice more than $100,000 off the cost of the median-priced home, and by much more in the longer term.

Australia needs a housing policy revolution. The equation is simple: If we build more homes where people most want to live, housing will be cheaper and our cities will be wealthier, healthier, and more vibrant.

 Australia has built too few homes where Australians most want to live

• Australia’s housing stock per adult has gone backwards, whereas housing demand has risen rapidly

• Australia’s capital cities are among some of the least dense of their size in the world

Restrictive planning systems prevent many more homes from being built

• Land-use planning is necessary to mediate between land uses and coordinate the public realm. But there are three problems:

1. Much inner-city land in our major cities is subject to restrictive zoning & built form controls that prevent greater density

2. Development approval processes are costly, slow, and uncertain

3. The governance of planning systems favours existing residents and is biased against change

States should reform their planning systems to permit more housing

• Upzone their capital cities, particularly in high-demand areas:

- A Low-Rise Housing Standard: three-storey townhouses should be permitted on all residential-zoned land in capital cities

- A Mid-Rise Housing Standard: allow for 6+ storeys around transit hubs, and higher densities where there is unmet demand

• Modest density should use complying development pathways & higher density should mostly be deemed-to-comply

• Improve evaluation and review: subject planning controls to cost-benefit analyses and regularly evaluate feasible capacity

Recent planning reforms in NSW and Victoria don’t go far enough

• Victoria’s planning reforms are more ambitious than those in NSW, especially in allowing modest density via the Townhouse Code

• Both states’ have upzoned for higher density around transit hubs, but higher density is more feasible in Sydney currently

The federal government should sharpen incentives to encourage states to get more housing built

• The New Home Bonus isn’t working: most states are not on track to qualify for incentive payments

• The federal govt. should pay the states for specific residential planning reforms in a revitalised National Competition Policy

• The Productivity Commission should regularly assess the performance of planning systems, including feasible capacity

This article is republished from The Grattan Institute under Creative Commons license. Read it here.

Latent conditions: The silent killer of civil construction projects

Author: Alex Cox, Practice Leader, Bellrock Advisory  

Whilst losses from natural perils like flood, cyclone and fire fill the headlines, there is a silent risk which is derailing civil construction in Australia. This silent threat is latent conditions.

“A latent condition is a physical condition on or near the site that could not reasonably have been anticipated by an experienced contractor at the time of tendering.”
Common examples of potential latent conditions include:

• Contaminated soil such as asbestos or PFAS; which contributed to the 2 year delay of The West Gate Tunnel in Victoria.

• Below ground conditions (e.g. sink holes, cavities, fault lines); sink holes and a reverse fault line have contributed to the 3 year delay of Sydney’s M6 Motorway. Sinkholes were also to blame for the 2 year delay to the Forrestfield Airport Link tunnel in Perth.

• Concealed building services, such as power, water, data, cabling or other features (whether active or redundant) hidden behind walls, above ceilings or below floors; and below ground. There are many recent examples including in 2016 when Sydney light rail was delayed due to the discovery of 400 disused utilities in the CBD.

It is important that civil contractors are aware of these exposures and the contractual options available to them prior to executing a contract.

Contracts

Commercial realities

In the first instance it is best to push back on the acceptance of these risks (whether you are a contractor or a principal) however this isn’t always a commercial reality. So, the questions becomes… “if I have to accept, then how do I mitigate the risks internally?”

Mitigating the risk – tender phase

Has enough information been provided to be able to price the risk accurately?

A complete and comprehensive review of the geotechnical reports, site surveys, and utility plans must be complete to then be able to identify the gaps in data. Where uncertainty exists, assumptions should be clearly documented and clarified during tender queries.

If uncertainty cannot be clarified, then allowances or contingencies must be built into the program and pricing. These may take the form of:

• Provisional sums – agreed upfront to address unknowns.

• Contingency allocations – internal buffers in time and budget.

• Exclusions and clarifications – expressly set out in the tender submission to avoid later disputes.

Mitigating the risk – post award

Once the contract is awarded, attention shifts from pricing to active management. At this stage, risk mitigation hinges on:

• Early works and site investigations: front-loading investigative works (trial pits, boreholes, service proving, and ground-penetrating radar) to confirm conditions before bulk construction begins.

• Design risk management: ensuring that design consultants are engaged early and held accountable for the accuracy of their inputs.

• Stakeholder engagement: working closely with utility providers, authorities, and landowners to resolve conflicts before they impact the program.

Transferring the risk – insurance

There are some instances where principals and contractors can then transfer this risk off their balance sheets via insurance. Refer to the risk matrix below for details:

Transferring the risk– downstream

An equitable and fair allocation of risk is always in the project’s best interest. However, as this might not be achievable the next best option would be to ensure that you have a robust and comprehensive subcontracting regime, to then pass on the risk downstream. At Bellrock advisory our experts and legally trained advisors support our clients in achieving this.

Conclusion

Clients should be aware of the dangers of accepting latent condition risk. Assumptions or gaps in information can cause time delays and cost blow-outs if they’re not actively managed. The most reliable defence is layered:

1. Allocate the risk fairly in the contract and record clear assumptions at tender.

2. Reduce uncertainty early through targeted investigations, service proving and accountable design inputs.

3. Run tight post-award controls—notice, records, stakeholder coordination.

4. Partner with an experienced risk advisor like Bellrock to transfer risk off your balance sheet where possible, supported by wordings that fit the project.

5. Accept that some exposures are uninsurable and must be priced, programmed, or subcontracted downstream with clarity.

Done well, this approach lowers disputes, keeps projects moving, and protects margins without paying unnecessary insurance premiums.

If an entirely “equitable” allocation isn’t commercially achievable, discipline in assumptions, contingencies and subcontract flow-downs is the next best way to keep the project bankable.

Bellrock Advisory can help test your allocation, tighten your mitigation plans, and structure the insurance programme so that it responds effectively in the event of a claim, when it matters most. Contact a Bellrock Advisor today.

This article was originally published as part of Bellrock's library of risk trending articles here. 

Author: Alex Cox, Practice Leader, Bellrock Advisory  

Bellrock is a national risk advisory and advocacy firm with a specialisation in risk management and insurance for the construction industry. Discover more about our unique methodology here. 

The future of finance could be written by private credit not banks

Written by Andrew Schwartz, Group Managing Director, Co-Founder and CIO of Qualitas.

If we get that balance right, private credit can protect inexperienced investors, empower professionals, and strengthen the real economy – without taxpayer backing. That’s a goal worth pursuing.

The ASIC-commissioned report into private credit by independent financial services experts Nigel Williams and Richard Timbs provides a timely and much-needed diagnosis of how the financial industry can lift its game, and why private credit plays a vital role in building Australia’s future.

Private credit mobilises long-term capital to fund real assets and plugs the gaps where banks can’t or won’t lend. However, this growth brings increased responsibility. Regulators have a duty to protect investors who may not fully grasp the risks they are taking on.

That duty is even more pressing as the global economy undergoes structural change. Artificial intelligence, decarbonisation, and the reshoring of supply chains are reshaping capital flows.

Banking institutions – formed long before the rise of large superannuation and sovereign wealth funds – are maturing in sophistication. The need for government guarantees to underpin bank liabilities is diminishing as other pools of capital step up to meet growing debt demand.

The appeal of private credit is obvious: it offers attractive returns at a time when many investors are searching for yield. But higher returns often mean higher risks. Many retail investors need better disclosure and education to understand complex credit structures, illiquidity constraints, and subordination in the capital stack.

Investor protection, then, is not about stifling the industry but about curbing its weakest practices. In recent years, retail investors have gained increasing exposure to private credit. Although Australia has seen retail participation in credit markets before, history shows it hasn’t always ended well. Poor asset quality, excessive leverage and liquidity pressures drove the collapse of building societies and merchant banks in the 1990s when redemptions surged.

It’s encouraging that the regulator is focused on transparency and accountability for investors without throttling innovation.

“To sustain the vitality of the private credit sector, we need smarter standards – transparent fees, realistic liquidity terms, and differentiated regulation that recognises the industry’s diversity.”

Leverage can be a liability

Many still assume that banks represent the safest and best form of lending. Unfortunately, history says otherwise. Bank crises in 1991 and again in 2008 showed that leverage, not lending, is what brings down institutions.

When banks take excessive risk, taxpayers step in – through deposit guarantees and central bank liquidity – because banks hold the public’s money and sit at the core of the payments system.

While this taxpayer-funded safety net is understandable, it creates a massive market distortion. Banks routinely leverage their balance sheets tenfold, knowing their solvency is backstopped by an implied government guarantee. This effectively subsidises their cost of capital and masks the true risks of their funding costs. It also gives them an advantage over private credit providers who operate without such support.

From the outset, banks and private credit therefore aren’t competing on equal ground, so they should not be regulated the same way. While the report doesn’t seek to equalise them, it should be more explicit in recognising that each plays a different role in the financial system.

Measuring true risk

Risk, moreover, isn’t just about the borrower. It’s also about the relationship between asset risk and the leverage supporting it. The sub-prime mortgage crisis that contributed to the 2008 financial crisis proved this point: it wasn’t just risky borrowers but excessive leverage that caused collapse. True risk equals asset risk multiplied by leverage – not simply the quality of the loan.

Moreover, liabilities are often overlooked in discussions about financial stability. In private credit, leverage is limited, but redemption risk is real. Redemption risk is the danger that a fund cannot meet investor demands to withdraw their money in a timely manner.

When funds offer liquidity mismatched to asset terms, pressure arises precisely when markets tighten and redemptions spike. Liquidity management and honest labelling of redemption terms are vital. Outside leverage, liquidity mismatch is the biggest solvency risk the industry faces.

The report suggests the riskiest part of Australia’s private credit market is real estate construction and development finance.

While that segment carries risk, history tells a bigger story. The 1980s saw bad corporate lending, which caused banks and merchant banks to lose billions. The 1990s then brought a real estate crash, with office values falling about 40 per cent amid soaring interest rates. Even prudent lenders struggled to avoid losses.

This history shows that disciplined lending can still be hit by systemic shocks – something retail investors need to better understand. What matters is the discipline of underwriting, transparency, and proper alignment of risk and reward, whatever the sector.

On the report’s treatment of provisioning, construction lending should never be judged halfway through. As I often say, you don’t eat the cake while it’s still baking.

Interim valuations are meaningless because the building’s value is being assessed in the middle of a project before it is fully completed, sold or generating revenue. The only valuation that matters is when the project is complete.

The report also misses an important distinction: concentrated portfolios, where loans are individually managed, require different approaches than diversified portfolios that use statistical provisioning to build up reserves against expected loan losses over an economic cycle. Australia also needs stronger specialist credit-rating capability if the industry is to mature.

Transparency matters

One of the most important parts of the Williams-Timbs report concerns fees. The question isn’t whether managers should be paid for their work – of course they should. The question is whether those fees are transparent and aligned with investor interests. Borrower-paid fees and margins vary widely across funds. There’s nothing wrong with sharing in upfront borrower fees – provided it’s capped and disclosed. The problem arises when arrangements are hidden or inconsistent.

Some of this stems from ASIC’s Regulatory Guide 97 (RG 97), which governs how funds, including super funds, disclose fees and costs to retail investors. Designed for transparency, it has made it difficult for funds to pay private credit managers fairly for the labour-intensive work of origination, monitoring and restructuring.

The solution isn’t to demonise them but to modernise the rules. Regulators should clarify how super funds can legitimately pay for credit expertise without distorting the appearance of low fees. Otherwise, the market will drift toward misleading ‘low-fee’ models that hide true costs and misalign incentives.

The interim report gets many things right: transparency, liquidity management, and consistent terminology. But it understates how low fund-level leverage makes private credit more stable than banks, and it does not fully differentiate between institutional and retail segments.

A more detailed report due in November will no doubt expand on these themes and address some of the concerns that have been raised.

To sustain the vitality of the private credit sector, we need smarter standards – transparent fees, realistic liquidity terms, and differentiated regulation that recognises the industry’s diversity. If we get that balance right, private credit can protect inexperienced investors, empower professionals, and strengthen the real economy – without taxpayer backing. That’s a goal worth pursuing.

This article has been republished with permission from Qualitas under a copyright licence. Read original here.

GST and Build-to-Rent: It’s Time to Fix the Missing Link

By Ken Fehily, GST Specialist, Fehily Advisory

Ken Fehily is Director of Fehily Advisory, specialising exclusively in consulting on GST. He was a member of the Federal Treasurer’s GST Technical Advisory Committee during the introduction of GST in 2000, served nearly 10 years on the ATO’s GST Rulings Panel, and is a long term and continuing member of the ATO’s GST Stewardship Group.

The Build-to-Rent (BTR) sector has gathered extraordinary momentum as Australia grapples with housing undersupply and affordability pressures. Developers, superannuation funds, and institutional investors increasingly view BTR as a stable, long-term asset class. Yet a fundamental obstacle remains: the way Australia’s Goods and Services Tax (GST) applies to large-scale residential developments intended solely for long-term rental.

Having advised the ATO, Treasury, industry, and the private sector on GST since its introduction in 2000, I can say with authority that BTR faces a unique and unintended disadvantage. The GST system was never designed to deal with BTR at scale, and reform is now overdue.

The GST Mismatch

Under the law, largely unchanged since July 2000, GST treatment depends on the end use of the property:

• Build-to-Sell: Developers claim full GST input tax credits on land and construction. GST is payable on sales later, often reduced under the margin scheme, and is passed on to purchasers. Developers carry no permanent GST cost.

• Build-to-Rent: Rental income is GST “input-taxed” so no GST is charged on the rent, but no input tax credits are available during the development. The 10% GST becomes a permanent cost embedded in the project carried by the developer.

For BTR, this can mean millions in unrecoverable GST before the first tenant even moves in. That distorts feasibility, deters institutional capital, and limits the sector’s growth. In effect, GST favours Build-to-Sell over Build-to-Rent despite today’s clear policy objective of expanding long-term rental supply.

Realistic Options for change

The GST settings were defensible in 2000, but the housing and investment landscape is very different today. Reform is now essential:

1. Efficiency: Allowing credits on construction costs would remove a deadweight cost during the development phase and create neutrality between BTR and BTS.

2. Supply: With credits restored, more projects stack up financially, more become bankable and more rental housing comes online.

3. Investor confidence: Offshore investors are particularly sensitive to after-tax returns. A permanent 10% impost on capital expenditure makes Australian BTR less competitive.

4. Revenue integrity: GST is meant to tax private consumption, not business inputs. Denying credits contradicts that design principle.

5. Parity: Even if GST was imposed later on rental flows, maybe at a concessional rate like the current half GST rate for long-term residential accommodation and/or capping it till it reaches the GST that would be payable on the margin scheme for sales, removing the upfront denial would make BTR feasible and fair.

Learning From Abroad

Australia is not alone in grappling with a housing crisis. Other jurisdictions have acknowledged that when governments prioritise affordable housing, tax systems should not undermine feasibility and delivery.

The ATO’s Role

The ATO can only apply the law Parliament gives it. Its current draft update to GSTR 2012/6 confirms that modern BTR developments will be assessed against existing principles, but the Commissioner’s view is unchanged. The ATO is clear that it cannot rewrite the rules. That responsibility lies squarely with government.

Industry and Policy Momentum

Developers, investors, and peak bodies are increasingly vocal about the GST barrier. Federal, state and territory governments already support BTR through planning reforms and other tax concessions. But GST problem remains the missing link, undermining otherwise supportive policy settings.

Having worked with Treasury, the ATO, and the property sector for decades, I have seen how pragmatic GST adjustments can unlock investment. The law was designed to be flexible and now is the time to use that flexibility to meet today’s housing challenge.

Conclusion

BTR has enormous potential to reshape Australia’s housing landscape. Without GST reform, however, the sector will fall short of what it’s capable and desirous of delivering. The cost of inaction will be measured not only in stalled projects and subdued investment, but in the thousands of Australians who miss out on secure, long-term rental homes.

The solution is not really that radical. It is a reasonable alignment of GST laws with current housing realities. What was fit for purpose in 2000 is no longer fit for 2025. If government is serious about addressing housing supply and affordability, it must act and fix the missing link.

Do Property Developers Need an Australian Financial Services Licence?

By Andrew Patrick, Managing Director MARQ Trustees

Raising money for a development project can quickly move a property developer into the world of financial services regulation. Many assume an Australian financial services licence (AFSL) is something only financial advisers and fund managers need. However, the way projects are funded can bring them squarely within the scope of Australia’s financial services laws.

If you are a developer raising money from investors for a project, there’s a very high chance you need an AFSL. Understanding why this is the case — and what happens if you ignore the requirement — is critical for protecting both your business and your reputation.

Common Misconceptions about “exemptions”

Developers are frequently told by professional advisers or colleagues that they don’t need an AFSL, because, for example:

• They are only raising money from wholesale investors

• They are only raising money from people they know

• They are raising less than $2 million, from less than 20 people (the so-called “20/12/$2m rule”)

• They haven’t raised money before, so are only doing it for the first time, or

• They are a developer, not someone who is carrying on a financial services business.

These are common misconceptions, with serious consequences. In each of these circumstances, the AFSL requirement still applies.

It doesn’t matter whether your investors are family, friends, or wholesale investors. Nor does it matter if you raise less than $2 million, or keep the group to fewer than 20 investors. These so-called “exemptions” often only remove regulated disclosure obligations (the need to prepare a product disclosure statement or a prospectus) — they do not remove the need for an Australian Financial Services licence).

Our ‘Exemptions brochure’ explains these misconceptions is more detail.

When an AFSL is Required

An AFSL is needed by anyone “carrying on a financial services business.” However, despite common beliefs to the contrary, virtually everyone who raises money in Australia will be taken to carry on a financial services business and will require an AFSL, regardless of the method used, the type of investors involved, how the money is to be used, what their usual day-to-day business is, or how many times they raise money. 

The exemptions to this are so rare, that the only safe and realistic assumption is that you are not exempt. This includes property developers.

For property developers, an AFSL is needed when, for example:

• Funds are raised from investors. If any investors contribute money to a development being carried-out by a developer, this will be either a “managed investment scheme” or an investment in a company.

• A property investment opportunity is promoted. Even merely telling potential investors about your project can amount to providing what is called “general financial product advice”. This requires an AFSL. It doesn’t matter who the potential investors are – you might already know them, and they might be wholesale investors. It doesn’t matter under the licensing rules.

•  The “interests” in the investment are issued (after the money is taken from the investors). Units in a trust, shares in a company, or other interests offered to investors are “financial products” under the Corporations Act. An AFSL is needed to issue those to investors.

The Consequences of Getting it Wrong

The penalties for offering an investment in a property development without an AFSL can be severe. Developers and their advisers face risks, including:

• Civil penalties and compensation orders

• Director bans and reputational damage

• Liquidation of projects mid-development

• Criminal liability.

Recent cases highlight ASIC’s focus on unlicensed property investment offers. In March 2025, for example, a property developer was banned for six and a half years for offering investments in projects without an AFSL. The group collapsed, leaving creditors owed $131 million. In another recent example, an unlicensed property scheme promoter was personally fined $1.25 million.

What You Should Do

If you are funding a project just through your own capital and bank debt, you may not need an AFSL. However, if you intend to raise money from others (including even family and colleagues), it is imperative to:

• Obtain expert legal advice. Get advice from lawyers who specialise in and understand financial services laws. Don’t rely on informal guidance or myths about licensing “exemptions”.

• Get an experienced AFSL holder involved. Developers can use a licensed professional trustee, which will allow them to raise funds lawfully, whilst focusing on what they are good at – property development.

Conclusion

Property development and financial services laws are more closely connected than many understand. It is an area rife with misconceptions and misunderstandings, even amongst professional advisers. If you are raising any capital from investors, regardless of who they are, then the chances are you need an AFSL. Ignoring this requirement exposes your project, your business, your investors and your reputation.

Getting the structure right from the start is not just about legal compliance. It is also about building credibility with investors and helping to ensure your projects can succeed.

At MARQ Trustees, we work with developers, advisers, and investors to ensure fundraising is compliant, efficient, and aligned with commercial objectives.

7 ways Brisbane 2032 can avoid repeating past Olympic planning disasters

By Tan Yigitcanlar, Professor of Urban Studies and Planning, Queensland University of Technology

Sajani Senadheera, PhD Researcher, School of Architecture and Built Environment, Queensland University of Technology

Tracy Sherwood Washington, Senior Lecturer of Urban Studies and Planning, Queensland University of Technology

Umberto Baresi, Research Fellow, Faculty of Engineering, School of Architecture & Built Environment, Queensland University of Technology

Wenda Li, PhD Researcher, School of Architecture and Built Environment, Queensland University of Technology

ROMAIN TERPREAU/Unsplash

Ahead of the 2032 Brisbane Olympic and Paralympic Games, Queensland stands at an historic crossroads.

An A$7.1 billion plan for Olympic venues is in place, with funding split 50:50 between the federal and state governments.

With about seven years to go before the games, a profound question lies before all Queenslanders: how can the games leave a positive, beneficial and permanent legacy for all?

This question has never been more urgent. As outlined in a Queensland University of Technology report released today, the answer lies in strategic, legacy-focused urban planning.

The 7 pillars of a lasting legacy

Recent games have faced heavy criticism for their immense financial, social and environmental costs.

The lessons of history are profound. For example, the venues built at great expense in Athens and Rio are now mostly “white elephants” – long-term derelicts that burden taxpayers.

Brisbane cannot afford to repeat past mistakes.

Our research team analysed the past seven games to outline seven keys to success for Brisbane, all rooted in strategic, sustainable, human-centred urban planning.

1. Reject single-use venues

Brisbane must focus on developing versatile venues that address long-term community needs.

Planning should prioritise multi-functional, adaptable facilities.

This will ensure games venues can be easily converted into community hubs, exhibition centres, or local sports clubs such as Barcelona’s Olympic waterfront, which is a lasting civic landmark. Similarly, London’s VeloPark now anchors one of the city’s premier recreational precincts.

Cyclists ride the BMX track at the VeloPark, formerly the cycling venue for the London 2012 Games. Stephen Cannon/flickr

Technology such as artificial intelligence, which turns complex data into predictive insights, and the use of digital twins – live virtual models of real places – make it possible to test future transformations in advance.

2. Plan beyond a short-term economic boost

When cities host the games, the short-term economic lift is undeniable. But history shows us these benefits often vanish quickly.

For example, infrastructure spending and tourism spikes can provide a temporary boost. However, once the games have finished, many venues become underused, maintenance costs rise, and projected long-term business or job growth may fail to materialise.

To avoid the “mega-event syndrome” of budget blowouts and misaligned priorities, all investments must be tightly aligned with Queensland’s long-term economic strategy.

This means investing in sectors with enduring value: advanced manufacturing, tourism and renewable energy.

Prioritising local procurement and workforce development ensures benefits reach small businesses and regions, spreading prosperity beyond central Brisbane.

Every dollar invested should yield long-term value.

3. Focus on social equity and community resonance

Games have historically been criticised for deepening social inequality, such as the forced evictions in Rio ahead of Brazil’s 2016 games.

Brisbane must do better. We need equity-focused planning that protects renters, long-term residents and the rights of Traditional Owners.

Conversion of athlete villages into affordable housing should be secured through binding planning agreements.

Genuine community engagement must be integrated into every stage of decision-making.

4. Set a new environmental standard

While Brisbane’s initial “climate-positive” pledge was highly praised during its bid, its quiet removal from the host contract later sparked widespread controversy.

Sustainability cannot be an afterthought.

The environmental footprint of the games is massive, from construction emissions to waste.

Brisbane should embed “nature-positive” principles at all stages of planning and development. This includes prioritising renewable energy sources, green infrastructure and the construction of venues that promote active transport.

Sydney’s Accor Stadium, designed to harvest rainwater for irrigation, shows how early planning delivers decades of benefit.

Ultimately, Brisbane will be judged on its ability to leave future generations with cleaner air, cooler streets and a truly sustainable environment.

5. Showcase transparent governance

Good governance is the cornerstone of a successful legacy.

Past failures such as budget blowouts, secret deals and bypassed planning processes have eroded public trust.

Brisbane has an opportunity to set a better standard with a robust, transparent and inclusive governance structure.

6. Celebrate and incorporate Indigenous culture

The games will be held on the unceded lands of First Nations peoples across South East Queensland.

Brisbane 2032 has the potential to make history by placing Aboriginal and Torres Strait Islander cultures at its core.

This is an exceptional opportunity to advance reflection, reconciliation and power-sharing.

Integrating Indigenous knowledge and voices – from venue design and public art to environmental management – can enrich the games’ legacy.

However, respect for these voices appears to be questionable, with a First Nations group appealing the decision to build a stadium at Victoria Park.

7. Embrace smart city innovation

The games are a catalyst for urban innovation and smart city transformation.

Brisbane can capitalise on this by deploying cutting-edge urban technology to solve long-standing challenges such as traffic congestion and housing shortages.

Innovative solutions such as autonomous shuttle buses, digital twin platforms and enhanced smart and green infrastructure can ensure the games run smoothly, while fostering a more sustainable and liveable future city.

The real finish line

Brisbane 2032 is not just a sporting event. It presents a unique opportunity to reimagine and reshape the city’s future.

By embracing bold leadership, collaborative governance and a “legacy-first” approach, Brisbane can set a global example for transforming an Olympic moment into lasting public good.

The path we choose now will define Queensland’s reputation and the quality of life for its residents for decades to come.

The stakes are high, but so is the potential.

This article has been republished from The Conversation under a Creative Commons license. Read the original.

Victoria has a once-in-a-generation chance to stamp out the 'un-Australian practice' of not paying construction contractors

By Associate Professor Matthew Bell, University of Melbourne

For the first time in nearly 20 years, Victoria is re-thinking its approach to ensuring vulnerable contractors in the construction industry get paid for the work they do

Why can’t I just get paid for the work I have done?’ This is a question many tradies in Victoria’s construction industry ask every day.

But the threat of non-payment by contractors and clients higher up the contracting chain doesn’t just affect the hundreds of thousands of people who rely on the construction industry for their livelihoods.

It also makes building and maintaining our homes and infrastructure far more costly than it needs to be.

If construction contractors and suppliers cannot rely on getting paid on time, the only rational thing they can do to cover the risk of non-payment is to increase their prices.

Construction has always been a business engaged in by private companies and individuals in the pursuit of profit. So, it shouldn’t come as a surprise that parties will seek any advantage they can within – and, not infrequently, outside – the law.

This is where the ‘security of payment’ laws step in.

Over the past 25 years, Australia’s state and territory governments have used these laws to set rules about what can and can’t be done in construction contracts, as well as to speed up dispute resolution if the parties don’t agree on how much is payable.

In mid-September 2025, the latest reforms were introduced into the Victorian Parliament.

The Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025, amending Victoria’s Building and Construction Industry Security of Payment Act 2002, is the result of multiple industry consultations, including a Victorian Parliamentary Committee Inquiry that reported in 2023.

The Bill sought to cherry-pick changes from other states over the past few years, particularly those in New South Wales and Western Australia, following a 2017 national review.

The key proposed changes include:

• Allowing adjudicators, courts and others to declare terms in contracts unfair and unenforceable

• Imposing maximum limits on how long claimants have to claim payment and how long respondents have to pay

• Giving parties who provide bank guarantees or other types of payment security the right to receive notice before it is called upon and to have it promptly returned

• Imposing a ‘blackout period’ for the Act’s processes across the Christmas industry shutdown, de-fanging the risk that respondents to payment claims (and their lawyers) find themselves ‘ambushed’ when their offices are closed for the holidays

• Removing Victoria’s unique and complex ‘excluded amounts’ regime: this confuses and slows down the Act’s fast-track scheme for payment and dispute resolution because the regime does not allow claims under the Act for commonly occurring matters like latent site conditions or delay costs.

The aim is to make sure subcontractors "get paid fairly and promptly for their hard work".

Overall, the Bill proposes sensible changes that should bring Victoria into line with other states where payment adjudication has become an accepted (though sometimes still resisted) part of the construction contracting landscape.

That said, the many ways the proposed legislation limits parties’ abilities to write their preferred contracts will remain controversial, especially as the Bill’s intent seems to be to override existing contracts where their provisions are out of line with it.

It’s also worth bearing in mind that the Bill runs to around 80 pages of amendments, adding to an existing Act of about the same length.

So, there is significant potential for ‘devil in the detail’ to be lurking: ambiguities and loopholes in the eight Acts in place around the country have made security of payment one of the most litigated areas of Australian construction law over the past quarter century (indeed, there are so many cases that we have an entire Masters subject on payment at Melbourne Law School).

The current Bill also only brings in the ‘tranche 1’ reforms; there’s a second tranche of complex issues – those the Victorian Government did not support in full in its response to the Committee’s recommendations – still under consideration.

Despite these challenges, there is cause for optimism.

These reforms could help move the dial towards the Government’s goal of making sure subcontractors “get paid fairly and promptly for their hard work”.

They are part of a broader Victorian program that recognises that effective construction industry regulation requires a holistic approach.

That program is founded upon the creation of the Building and Plumbing Commission, intended as a well-resourced regulator that accepts that ‘the buck stops’ with it. The BPC also intends to be a ‘one-stop shop’, bringing together the Victorian Building Authority (VBA), Domestic Building Dispute Resolution Victoria (DBDRV) and the domestic building insurance arm of the Victorian Managed Insurance Authority  (VMIA).

Security of payment laws set rules about what can and can’t be done in construction contracts.

The fact that the Bill brings Victoria into line with key aspects of the security of payment regimes in other states should reduce transaction costs for national construction firms, along with their lawyers and other consultants.

Ultimately, though, the reforms will only be as effective as the industry and broader community allow them to be.

This buy-in requires that anyone affected be informed about the changes and ensures any unworkable aspects are resolved before the Bill is passed.

If this happens, Victoria has a once-in-a-generation opportunity to do what the security of payment laws were originally designed to do: “stamp out the un-Australian practice of not paying contractors for work they undertake on construction”.

This article has been republished from the Pursuit under a Creative Commons license. Read original here.

Planting the seeds of prevention: How green spaces can transform public health

By Rongbin Xu, Tingting Ye and Yumin Guo, all of the Climate, Air Quality Research (CARE) unit at Monash University

Picture: Krisztina Papp on Unsplash

It’s long been known that green spaces can improve our wellbeing, but in today’s post Rongbin Xu, Tingting Ye and Yumin Guo, all of the Climate, Air Quality Research (CARE) unit at Monash University, share their research which demonstrates the emerging understanding of how green spaces protect our physical health as well. Such findings point to the importance of green spaces as planning and policy priorities.

In our cities, parks are often seen as luxuries—nice to have, but not essential. But what if green space was one of the most powerful tools we have to improve public health?

In the past few years, our Monash Climate, Air Quality Research (CARE) unit have been examining how green (and blue) spaces—like parks, trees, and waterways—impact human health. Across four recent studies, we've found that nature doesn’t just make us feel better. It protects us, from before we’re born to our final years. And these findings carry critical implications for how we design our cities and allocate resources.

Green neighbourhoods slow biological ageing

In one of our studies, published in Environmental Health Perspectives, we found that women living in greener areas appear biologically younger than their peers. Using a sophisticated DNA-based marker of ageing measured in about 500 Australian women, we found that for every 0.1 increase in the vegetation index (a measure of greenness) within 500 meters of homes, their biological age was 0.31 years younger. This is equivalent to a 3% reduction in all-cause mortality. Our findings were confirmed by a following study conducted in 924 US adults. These studies suggest that urban greening isn’t just about aesthetics or recreation. It can make you biologically younger and potentially extend your life.

Green spaces reduce Heat-Related Mortality

With climate change bringing more frequent heatwaves, finding ways to protect public health is crucial. Our recent study published in The Lancet Planetary Health investigated the global impact of greenness on heat-related deaths. It analyzed data from 11,534 urban areas and found that increasing greenness by 10%, 20%, or 30% could decrease heat-related deaths by 27%, 32%, and 37%. This means that more green spaces could save lives by cooling our cities and reducing the impact of extreme heat in a warming climate.

Green space protects unborn babies from heat

Pregnant women are particularly vulnerable to heat exposure, which can increase the risk of preterm birth. We conducted a large cohort study in Sydney, Australia, published in JAMA Pediatrics, analyzed over 1.2 million births. It found that daily extreme heat and nighttime extreme heat exposure during the third trimester can increase the risks of preterm birth by 61% and 51%, respectively. However, living in greener areas mitigated this risk. Higher greenness was associated with lower odds of preterm birth, and increasing greenness could reduce heat-related preterm births by up to 20.9%.

Planning matters: not all green space is created equal

Our fourth study asked a key question: what types of green infrastructure work best to reduce heat-related health risks? This study, published in Environmental Health Perspectives, showed that different types of green have varying effects on reducing heat-related mortality: green spaces like forests, parks, nature reserves, and street greenery can effectively mitigate heat-related mortality, but the benefits of grasses, farms, and scrubs are quite limited. This suggests that urban planners need to consider the specific types of green spaces when designing cities to maximize health benefits.

What this means for good policy

These studies provide compelling evidence for the health benefits of green spaces and highlight the need for policies that promote their creation and preservation. Here are some key policy implications:

1. Increase Urban Green Spaces
   Cities should prioritize the development and maintenance of parks, gardens, and other green areas. This not only beautifies our cities but also improves public health by slowing ageing, reducing heat-related deaths, and protecting pregnant women from preterm birth risks.

2. Targeted Planning for Green Spaces
   Since different types of green spaces have different impacts, urban planners should design spaces that are most effective for their local climates and populations.

3. Heat Mitigation Strategies
   As heatwaves become more common due to climate change, green spaces can act as natural air conditioners, cooling cities and protecting residents from heat-related illnesses and deaths. Policies should integrate green spaces into urban design as a key strategy for heat mitigation.

4. Public Health Focus
   Policymakers should recognize the health benefits of green spaces, especially for vulnerable groups like pregnant women, the elderly, and those with chronic illnesses. Green spaces should be considered an essential part of public health infrastructure.

5. Equitable Access to Green Spaces
   Green spaces must be accessible to all communities, not just affluent areas. Ensuring equitable distribution can help reduce health disparities, as lower-income neighbourhoods often face higher exposure to heat.

The big picture: Greener cities, healthier futures

Green spaces are not just pleasant to look at—they are essential for our health and wellbeing. From slowing biological ageing to reducing heat-related deaths and protecting pregnant women, the benefits are clear. By supporting policies that promote green urban environments, we can create healthier, more resilient cities for everyone. It’s time to recognize green spaces as a vital part of public health and urban planning.

Planting trees is planting prevention.

Rongbin Xu currently holds a VicHealth Postdoctoral Research Fellowship which is mapping the health impacts of extreme heat and bushfire smoke across Victoria. His views may not reflect the position of VicHealth.  

This article has been republished from Power to Persuade under a Creative Commons license. Read original here.

Australian parents are helping their kids buy a first home with less money, but more rent-free living

By Rachel Ong ViforJ, John Curtin Distinguished Professor & ARC Future Fellow, Curtin University, Amity James, Associate Professor and Discipline Lead Property, Curtin University, Christopher Phelps, Research Fellow, School of Accounting, Economics and Finance, Curtin University and Paul Vivian, PhD Candidate, School of Accounting, Economics & Finance, Curtin University

As many young Australians struggle to enter the housing market, research shows the “bank of mum and dad” is often called on to help.

But what kind of financial support are parents willing to offer their kids? And how has that changed over time?

That’s what our recent survey of 1,725 Australian parents – mostly aged 45 to 64 – sought to find out.

More parents are stepping in

Despite the growing body of research showing young people’s reliance on their parents to help buy their first home, we still don’t know enough about how parents are helping their children.

This includes how much parents are dipping into their own pockets to fund this assistance, and what the financial implications might be for parents who do so.

Earlier this year, we sought to find out more using Qualtrics, an online platform used for survey research. Of the 1,725 parents who responded to our survey, 61% were aged 45-64, while 34% were 65-69, and 5% were under 45.

We started by asking if they had done anything to help at least one of their three eldest kids buy their first home.

More than half of the 1,725 respondents – or 994 parents – said yes, they had helped at least one of their kids.

Of those whose children bought more than ten years ago, 44% had helped.

If their children bought within five to ten years ago, 50% had helped.

And if their children had bought within the past five years, an even higher share – 58% – had helped their children buy their first home.

(Note: some parents surveyed helped multiple children in different time periods.)

Rent-free living overtakes gifts

Our survey found living rent-free in the family home has become the number one way parents helped in the past five years.

Cash gifts are still crucial, but less common than a decade ago.

These findings are part of a wider, yet-to-be published study of parents’ attitudes and motivations on assisting their children into homeownership. They offer timely insights into how families are responding to one of the biggest challenges facing young people: unaffordable housing leading to declining homeownership rates.

Our study sample was not designed to be nationally representative of all Australian parents, as our primary interest was in those who’ve helped children buy their first home. However, quotas were applied on income, region and ethnicity to ensure sufficiently diverse representation.

Broader trends emerging over time

Looking at all 994 parents who said they’d helped at least one of their children buy a home over the past decade or more, some longer-term trends emerged.

Over the past ten or more years, around one in five children (22%) of the parents we surveyed received more than one type of help. The most common combinations paired direct help – gifts, loans, guarantorship – with rent-free living.

Both homeowning and renting parents said they had helped their children. But homeowning parents were more likely to assist in financial resource-intensive ways, such as cash gifts and loans, while renting parents tended to help in other ways, such as letting children live at home rent-free.

The use of loans rose sharply with parental income, spiking to 41% among those with parental incomes above $200,000.

Children of higher-income parents were also more likely to benefit from rent-free accommodation in their parents’ second or investment home. This is a distinct advantage, as this support is likely to more than double the odds of private renters of becoming homeowners.

The survey also explored where the money comes from when parents provide financial gifts or loans.

The majority (78%) of parents who offered cash gifts over the past decade or more drew on their savings.

Among those who offered loans, a much smaller share (46%) drew from savings; nearly one in three (29%) drew down on their own home equity; while another 12% drew equity from a second property.

A few parents went further

Thirty-six parents surveyed reported taking “other” measures to help their children access homeownership. Seven (19%) said they had co-purchased homes with their children, or entered into loans as co-borrowers using their own home as collateral.

Three (8%) said they had signed their house or another property over entirely to their children.

Another three (8%) gave their children early inheritances, passing on intergenerational wealth earlier than usual.

An entrenched wealth divide

The benefits of parental homeownership are now transmitted across generations. Parents giving cash gifts or loans are drawing down from multiple sources of assets, including their own savings, home equity and superannuation.

Homeowning and higher-income parents are better resourced to assist their children through cash gifts and loans, but these are not risk-free. Aside from the potential financial burden, the lack of legal protections for the “bank of mum and dad” expose older Australians to the risk of financial abuse.

Finally, significant numbers of young people do not have well-resourced parents who can support their homeownership aspirations. As the importance of parental assistance grows, this will widen an intra-generational housing wealth gap between young people with and without access to the bank of mum and dad.

This article has been republished from The Conversation under a Creative Commons license. Read the original.

Demanding, and in-demand: advancing the data centre asset class

By Vicky Grillakis, Director Urbis and Eleni Roussos, Director Urbis

Smart precincts increasingly enable the way we live, work and interact. But while data centres are critical infrastructure that will fuel our economic future, if we do not invest in them, we risk eroding our global competitiveness and ability to have productive cities.

Data centres have become a star-performing property asset class, offering attractive returns for investors. Data centres power the technology that defines modern life, from work and banking to social media scrolling and Netflix streaming. With this expanding digital economy and exponential growth of artificial intelligence (AI), this asset class is tipped to power on with Australia's market for data centres alone expected to nearly double to $40 billion by 2028. This has triggered a globally competitive 'arms race' among data centre providers and developers to secure sites, water and power.

“Within just a few years, data centres have emerged as a core investment sector spanning a global scale, poised to have transformative impact on national economies, cities and communities in the next decade,” says Jonathan Denis-Jacob, Director at Cistri.

While the pivotal role of data centres in powering smart precincts of the future is clear, their development is complex and challenging – particularly regarding power consumption and water supply. Addressing these challenges is required to integrate data centres into smart precincts.

The opportunity and challenge for data centre construction

Goldman Sachs estimates that international data centre power demand is projected to grow by a remarkable 165 per cent by 2030, rising from 411 terawatt hours (TWh) in 2023, driven by the exponential growth of AI. For instance, an average ChatGPT query requires 10 times the power load of a Google search. 

Globally, data centres are projected to consume up to four percent of power generated by 2030, a significant increase from today’s 1-2 per cent. But the opportunity lies in the transition to sustainable and integrated solutions for data centre construction. Operators are increasingly securing renewable power supplies to meet part of their substantial energy needs. However, green energy supplies and battery technology are not anywhere near the minimum scale required to supply adequate power. In a land abundant with natural resources, it seems obvious we should be able to find solutions that utilise renewable energy. 

With the operators’ need to be close to population centres, there is a push for innovative design and integration of data centres into urban environments. This need to integrate must be balanced with the need for security. Despite generating relatively limited direct employment, data centres need to be recognised as critical economic infrastructure that attracts investment, stimulates economic activity in surrounding areas, and employs a high-tech workforce, thus contributing substantial value to the economy. These broader economic benefits are crucial to recognise in the puzzle of creating a sustainable and successful mixed-use precinct.

The NSW Government recently introduced the Investment Delivery Authority to streamline approvals for large projects, including data centre construction, recognising their "first-of-a-kind scale challenges" and "nation-building" significance. 

But the scarcity of appropriate and available land in major cities is driving up land values and complicating strategic site selection. Data centres require large plots of land with specific zoning designations and utilities access. Their land size requirements have grown significantly, pressuring constrained industrial land supply. 

In NSW, most data centres trigger State Significant Development due to their MegaWatt capacity, leading to increased government interest in design outcomes and potentially lengthening approval timeframes due to strict design requirements influenced by operators. In Victoria, they can be considered via the State Development Facilitation Program under the voluntary Significant Economic Development Pathway. 

Local councils often face challenges in balancing data centre needs with community expectations and public domain considerations, as these are highly secure facilities with limited public access. Therefore, advocating to local authorities and communities about the economic benefits and critical role of data centres is essential for facilitating support and approvals. Noise and air quality, particularly from backup generators during maintenance testing scenarios, also remain key criteria under scrutiny from agencies.

Where to from here?

The strategic siting of data centres is not just about finding available land; it’s about integrating these facilities into smart precincts. Effective site selection ensures that data centres can support the digital infrastructure needs of precincts, fostering economic growth, enhancing connectivity and promoting sustainability. By strategically planning the location and design of data centres, we can create precincts that are technologically advanced, vibrant and resilient.

The growth of the requirement for data centres is and will be a major use of our cities and regions resources. Effective and strategic siting of these facilities through holistic land acquisition that considers power, water and land-use requirements, and uses the renewable energy transition to their advantage, will help support their ongoing growth and integration into our cities in a sustainable manner. 

This article has been republished from CEDA under a Creative Commons license. Read the original.

Building faster isn’t building better

As Australia’s productivity summit focuses on boosting housing supply, are we prepared to sacrifice quality for speed?

By Dr Paulo Vaz-Serra, University of Melbourne

Paulo Vaz Serra is a Senior Lecturer in Construction Management within the Faculty of Architecture, Building and Planning. He is a civil engineer with over twenty years’ experience in commercial, industrial, institutional and domestic construction as a senior construction manager and as a senior project manager.

The Australian Federal Government’s promise to deliver 1.2 million new homes by 2029 through the National Housing Accord has become one of the most pressing policy debates in Australia.

It’s an ambitious target, intended to relieve housing pressures, particularly for younger Australians locked out of ownership and renters facing record-high costs.

Parliment House Picture: Social Estate/Unsplash

But as negotiations between the housing industry and the Housing Minister intensify this month, and “building more homes more quickly” is touted as one of ten reform directions announced from the just-completed productivity summit, a critical question looms.

What are we prepared to sacrifice for speed?

Speed vs quality

Cutting corners in construction isn’t new, but the risks are magnified when governments set aggressive targets without equally ambitious planning frameworks.

On the surface, reducing red tape looks like a solution to the housing shortfall.

In reality, it risks locking in systemic defects.

A 2022 Architects Registration Board of Victoria report highlighted that time pressures and cost-cutting were the leading causes of building failures.

Poorly built homes often require costly repairs or, in extreme cases, demolition.

The Grenfell Tower fire in London remains a sobering reminder of how quickly good intentions can collapse into catastrophe when safety is compromised.

The complexity of building a home

Constructing a house is never just about pouring concrete and putting up walls.

A recent report by the National Housing Supply and Affordability Council has identified ten critical stages, from zoning and land acquisition to infrastructure planning and approvals.

At nearly every step, pressures for speed can create disputes or poor outcomes. Four of the ten stages – land acquisition, development approval, planning infrastructure and construction – were assessed as having a strongly adverse impact on housing supply.

Consider infrastructure: new suburbs require water, sewage, power grids, roads and public transport. Without them, homes are shells, disconnected from the fabric of sustainable communities.

This mismatch is already evident in Melbourne, where the transport network is playing catch-up on planning decisions made two decades ago.

Inadequate infrastructure around new housing can lead to decades-long problems. Picture: Leon Hitchens/Unsplash

The bottleneck isn’t red tape, it’s labour and materials

Even if approvals were fast-tracked tomorrow, Australia lacks the workforce to deliver on these housing promises.

The Master Builders’ 2024 Productivity Report tracked an 18 per cent fall in productivity over the past decade.

Industry estimates put the labour shortfall at 80,000, 90,000 or even 130,000 workers, and that number could rise to 480,000 in 2026.

And this isn’t just about raw numbers.

Building 1.2 million homes requires a delicate balance of skills – electricians, plumbers, carpenters, tilers, surveyors – available in the right places at the right time.

Apprenticeships take years to complete, yet completion rates remain stubbornly low. In 2023, 28,445 people commenced a construction services traineeship or apprenticeship, but only 13,800 completed one.

And even if enrolments and completions rise dramatically, those starting an apprenticeship now won’t be fully qualified for at least four years – after the promised 1.2 million homes are due to be completed.

Materials add another layer of complexity.

The government’s investment of $AU300 million in forestry will help meet timber demand – but steel, concrete and other emerging structural materials are already under pressure.

Without proper forecasting of material availability risks and upfront investment in supply, shortages will stall projects and push up costs, undermining affordability, the very goal of the housing push.

Safety, oversight and responsibility

Beyond workforce and material concerns, the way Australia regulates construction remains a weak link.

Prefabrication can help ensure consistent quality in house builds.

Compared to our international peers, professional qualifications required for people to register as builders in Australia are minimal.

In countries like Singapore and Portugal, builders must employ teams of architects and engineers to sign off on projects.

In Australia, builders can register with TAFE-level qualifications, with responsibility for oversight often outsourced to stretched inspectors.

This is a recipe for inconsistency, and small mistakes can add up to major risks.

Modern methods of construction, such as prefabrication, can help, but without a regulatory system that adapts to new materials and techniques, innovation risks becoming another casualty of the rush to build.

Planning for communities, not just numbers

If Australia is serious about building 1.2 million homes, we must invest time upfront in planning. That means:

• Mapping capacity suburb by suburb: Local councils should identify what growth they can sustainably manage, with state governments aligning infrastructure and services accordingly.

• Workforce planning as policy, not afterthought: Incentives must not only attract trainees but support them to complete qualifications and stay in the industry.

• Better regulation and professional accountability: Builders should be required to employ or consult qualified engineers and architects, ensuring that quality is embedded, not inspected after the fact.

This will take longer but it’s a delay worth making.

A proper 20-year strategy, with the first five years focused on planning and preparation, would avoid locking Australians into substandard housing for generations.

The bigger picture

The urgency of housing affordability is real, and the political temptation to move faster is understandable.

But homes are not just numbers on a spreadsheet or photo opportunities at a sod-turning.

They are the places where families grow, communities form and cities evolve.

Rushing to meet a target without laying the groundwork risks leaving Australians with homes that are unaffordable to maintain, disconnected from infrastructure, or unsafe to live in.

Knee-jerk reactions like freezing the National Construction Code is likely to provide a strong temptation for developers and builders to cut corners.

Getting this right means resisting the urge to sprint.

It means preparing for the marathon of building communities that last and accepting that building well will always take more time than building fast.

This article has been republished from the Pursuit under a Creative Commons license. Read the original.

The science of beautiful buildings

By Michael J. Ostwald & The Conversation Digital Storytelling Team

Dr. Michael J. Ostwald is Scientia Professor of Architectural Analytics at the University of New South Wales (UNSW), Sydney (Australia) where he was previously Associate Dean of Research in the Faculty of Arts, Design and Architecture and in the Faculty of the Built Environment. He is an adjunct Professor at XJTLU (China) and University of Liverpool (UK) and has consistently been ranked 'top 10' in the world in architecture (Stanford 2019-2024) and 'a top 2%' globally cited researcher in all fields (Stanford 2019-2024) .

If you asked someone on the street to name Australia’s favourite building, there's a good chance it would be the Sydney Opera House.

Sydney Opera House was opened 1973. Bernard Spragg / Wikimedia

But this iconic structure hasn't always been considered one of the country's most beautiful buildings. In the 1960s, it was described as an ugly “monstrosity” that looked like a “disintegrating circus tent”.

This dramatic shift in attitude raises two questions about our experience of the built environment.

• How do we make decisions about what is beautiful?

• And why do we then change our minds?

Answers to these questions can be found in psychology and neuroscience.

The science of attraction

This is what we'd call a standard suburban home. Notice where your eyes drift first.

In the late 19th century, scientists realised there are patterns in the ways people respond, emotionally and intuitively, to what they see.

More recently, studies have identified several qualities of objects that attract the eye and hold its gaze, triggering pleasurable spikes in brain activity, making the heart beat faster and the skin tingle.

Here, we tracked the eye movements of people looking at that standard suburban home. The eye is drawn to the complex features like the balcony and arched windows, or the centre like the door and steps.

One of the simplest models for explaining this aesthetic attraction was developed in the 1960s by psychologist Daniel Berlyne.

Berlyne’s model of aesthetic appreciation is typically represented by a bell-shaped curve on a graph.

The horizontal axis (‘arousal potential’) depicts the volume of stimulation we experience when viewing something.

It ranges from bland or repetitive objects on the left to complex and unexpected ones on the right.

Bland and repetitive

Complex and unexpected

The vertical axis of the graph (‘hedonic value’) is the amount of pleasure we feel when viewing something. This scale rises from unappealing at the bottom to attractive at the top.

This model suggests that we are most likely to perceive something as beautiful if it is neither too simple nor too complex, and not too dull or too surprising.

We find beauty, science tells us, in the balance of these properties. This is also why, if we become more familiar with an object (like the Sydney Opera House), we may reassess our initial judgements.

Let's look at some famous buildings and place them on Berlyne's curve. We can apply the principles of pleasure, stimulation and beauty and see how these architects stack up.

Villa Stein, France - Le Corbusier

Robie House, USA - Frank Lloyd Wright

Gunther House, USA - Frank Gehry

In the 1960s, viewing the Sydney Opera house for the first time may have triggered the 'shock of the new'.

The building would have seemed both complex and alien.

But as the shock subsided, the Opera House's underlying geometric properties like symmetry and repetition at different scales would have cemented its present day, more central location on the curve.

Is there a remedy for ugliness?

If you asked someone on the street to name Australia’s ugliest building, they might single out the ‘McMansions’ multiplying at the edges of suburbia.

Clarendon Homes ‘Kirribilli’ Dwelling Façade Options. Peter McManus, UNSW

These project homes, almost never designed by architects, would be found to the left of centre in Berlyn’s curve. They are slightly dull and predictable, but not entirely in the ugly zone.

Large, suburban homes. Michael Tuszynski / Pexels

Here's the problem with suburbia: imagine if we took the world’s most beautiful house and then placed almost identical copies side by side on a street.

Next, push them so close together that there's only room for a dark concrete strip between them, no trees or shrubs.

Is the house still beautiful?

In isolation, it may be, especially for the euphoric homeowner who's simply happy to have a roof over their head. But the collective ugliness of the street, its monotonous and oppressive character, overwhelms any beauty that may exist.

The problem with suburban ugliness is that people who build and buy McMansions tend to prioritise the interior (marble benchtops, tick; butler's pantry, tick; ducted air conditioning, tick) and ignore the qualities of the street it is located on.

A typical Roman street features terraced apartment blocks with restaurants and shops on the street frontage. Rachel Claire / Pexels

The reverse occurs in many parts of Europe, where tree-lined boulevards shelter cafes on the ground level with apartments above. These buildings often have very simple repetitive shapes, but are finished with subtle variations in colour, texture and materials.

Here, beauty is found in the collective qualities of the street, not in the appearance of a single home.

A Spanish street. Photo: Anna S / Pexels

Many of Melbourne’s and Sydney’s most sought-after suburbs were once regarded as ugly.

Perhaps when the owners of houses in the new suburban sprawls gradually repaint their homes, remodel their facades, replace old cladding, reject black roofs, plant trees and celebrate diversity in their neighbourhoods, suburbia may swing just slightly closer to the peak of Berlyne's curve.

This article has been republished from The Conversation under Creative Commons license. Read the original.

What’s behind the high rate of suicide in Australia’s construction industry?

By Milad Haghani, Associate Professor and Principal Fellow in Urban Risk and Resilience, The University of Melbourne and Nick Haslam, Professor of Psychology, The University of Melbourne

The construction industry is a pillar of Australia’s economy, employing more than a million people.

But construction work is also among the most dangerous industries.

According to Safe Work Australia, construction had the third-highest fatality rate of any sector in 2023. With 3.4 deaths per 100,000 workers, it far exceeded the national average of 1.4.

Many workers also sustain serious injuries, resulting in a 33% higher compensation claim rate than the all-industry average.

Yet despite these well-known physical hazards, the leading cause of death among construction workers is not falling from heights, electrocution, or being struck by heavy machinery.

By a wide margin, it is suicide.

This raises urgent questions: why is suicide so prevalent in this sector, what progress has been made in addressing it and what more needs to be done?

How big is the issue?

Each year, the construction industry loses around 190 workers to suicide. A construction worker is five to six times more likely to die by suicide than from an onsite incident.

Men suicide at higher rates than women, but construction workers are nearly twice as likely to take their own lives as other employed Australian men of the same age.

The rate of suicide, adjusted to allow fair comparison between age groups, is 26.6 deaths per 100,000 male construction workers, compared with 13.2 per 100,000 for other employed men.

This pattern is not unique to Australia. In the United States, construction workers make up only 7.4% of the workforce, yet account for almost 18% of all workplace-recorded suicides.

In the United Kingdom, suicide rates in construction are almost four times the national average. In New Zealand, male construction workers have rates nearly double the general population.

Although rates of suicide are relatively high in the construction industry, rates of suicidal thoughts are similar to other industries. By implication, certain features of the construction sector make those thoughts far more dangerous.

What’s behind the trend?

The nature of work in the sector and its culture appear to play a part in these trends.

Working conditions may also be a factor, as suicide risk is not evenly distributed among workers. Lower-skilled workers such as labourers are most vulnerable.

Job-related pressures are likely to account for this uneven distribution of risk.

Many construction workers have limited control over their work, face job insecurity, workplace bullying and periods of unemployment or underemployment.

Long hours, transient work arrangements and frequent travel often mean extended time away from family and support networks.

Apprentices are particularly exposed. Almost a third report having had suicidal thoughts in the previous year, with similar numbers reporting bullying and reduced wellbeing.

Many do not trust their supervisor as a source of mental health support.

Cultural factors compound the problem.

The industry’s male-dominated environment – 88% of construction workers are men – reinforces traditional masculine norms of self-reliance and reluctance to seek help, which are associated with higher risk of suicide.

A recent review of 32 international studies into this issue identified five recurrent suicide risk factors in the construction industry.

Job insecurity was the most frequently cited, followed by alcohol and substance abuse, lack of help-seeking, physical injury and chronic pain.

Together, these factors form a combustible mix.

What has been done and has it worked?

Although suicide rates remain high among Australian construction workers, the numbers have fallen markedly in the past two decades.

This is a reflection of the combined impact of national mental health initiatives, male-specific interventions and targeted industry programs.

Following the 2003 Cole Royal Commission, which identified suicide as a leading cause of death in Queensland construction industry, the sector began treating the issue as an urgent safety priority.

MATES in Construction, launched in 2008, is a flagship program. Built on worker-to-worker peer support, it has trained more than 300,000 people, backed by nearly 22,000 volunteer “connectors” (who help keep someone safe in a crisis and connect them with professional help) and 3,000 suicide intervention-trained workers.

The strength of this initiative lies in its capacity to build trust through its relatable peer workforce. It frames suicide as an industry-based injustice to be solved collectively through “mateship”.

Evaluations show the initiative reduces stigma, boosts mental health literacy, and increases help-seeking.

Other peer-to-peer support network programs – such as Incolink’s Bluehats Suicide Prevention, which provides education, training and support to workers – are further contributing to this declining trend.

From 2001 to 2019, the construction industry’s suicide rate declined by an average of 3% a year, double the drop seen in other male workers.

What remains to be done?

Although the disparity in suicide rates between construction and other industries has narrowed, it is still substantial. To reduce it further, prevention efforts will need to be extended and enhanced.

Workplace initiatives must continue to expand their reach and build a culture in which struggling workers feel supported to seek help and their peers feel capable of offering it. Programs must also target younger and less skilled workers, who are at elevated risk.

Similarly, awareness among families about the heightened risks in this sector could help them identify warning signs earlier and support workers in seeking help.

Efforts must continue to remedy workplace conditions known to contribute to suicide risk, like job insecurity, long hours and remote work.

It is particularly important to do so during industry downturns when insecurity rises.

Finally, we must reckon with the impact of high rates of musculoskeletal pain among construction workers.

Pain is associated with two major risk factors for suicide – poor mental health and substance misuse – so efforts to address it might play a role in reducing suicide’s terrible human cost.

If you or someone you know is struggling, help is available. In Australia, you can contact Lifeline at 13 11 14 for confidential support.

This article is republished from The Conversation under a Creative Commons license. Read the original.

The RBA has cut rates for the third time this year. More relief may be on the way

By Stella Huangfu, Associate Professor, School of Economics, University of Sydney

The Reserve Bank of Australia lowered the official interest rate by 25 basis points to 3.60% at its meeting today, marking the third cut this year. The move follows reductions in February and May, and comes after a pause in July that surprised analysts and upset mortgage holders.

The Reserve Bank cut its outlook for economic growth, and said inflation was back within its target band. In a post-meeting press conference, Governor Michele Bullock said:

The forecasts imply that the cash rate might need to be a bit lower than it is today to keep inflation low and stable, and employment growing, but there is still a lot of uncertainty. So the board will continue to focus on the data to guide its policy response.

Markets had widely anticipated the decision. Futures pricing put the odds of a cut at nearly 100%, and all four major banks had forecast at least one more reduction before the end of the year. A Reuters poll last week found all 40 economists surveyed expected the Reserve Bank to lower rates this week.

Bullock told reporters the bank did not discuss a larger rate cut. The Commonwealth Bank was the first to pass on the rate cut to mortgage rates. Other banks followed suit.

The economy is cooling

The Reserve Bank is encouraged by the sharp fall in inflation. This is the second straight quarter with its preferred measure of core inflation, the trimmed mean, below 3% — a marked turnaround from 2023, when inflation was well above target. Headline inflation has slowed to 2.1%, comfortably inside the 2–3% target range, while the trimmed mean sits at 2.7%.

As the Reserve Bank noted, “inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and potential supply closer towards balance.”

At the same time, the economy is clearly cooling. Gross domestic product (GDP) grew just 0.2% in the March quarter and 1.3% over the year, well below the bank’s earlier forecasts.

The unemployment rate has climbed to 4.3% and job ads are trending lower. Household spending remains subdued, with retail sales flat and consumer sentiment still negative.

In its quarterly policy statement, the bank trimmed its GDP forecast for December 2025 to 1.7% from 2.1%, based on slower consumer spending and business investment. The reduction suggests further rate cuts will be needed to support growth.

Minutes from last month’s policy meeting showed the decision then was finely balanced. Three members favoured cutting in July, while six preferred to wait for more inflation data.

Today, all nine board members voted unanimously for a cut — signalling the Reserve Bank is now more convinced about acting early, choosing to provide extra support now rather than risk a sharper slowdown later.

A cautious outlook

The Reserve Bank’s statement kept the door open to further cuts, noting that rates could fall again if inflation remains contained and economic activity softens further.

The Board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply.

Markets are still betting on additional cuts this year. Traders now see a high probability of another 25 basis point cut in November, with markets suggesting the cash rate could fall to around 3.35% by year-end.

Major bank forecasts point to lower rates ahead: NAB expects a cash rate of 3.10% by February 2026, while Westpac sees 2.85% by mid-2026. While the pace and scale differ, the consensus is that today’s cut is unlikely to be the last in this cycle.

Global uncertainty

The decision comes as the slowdown becomes more evident across key indicators. The economy is barely growing, the job market is weakening, and inflation has returned to the central bank’s target range. Wage growth is still above inflation but is no longer accelerating, easing fears of a wage–price spiral.

Australia’s move mirrors a global trend toward lower rates.

In the United States, the Federal Reserve cut official interest rates three times in the second half of 2024 and has since held steady.

In Europe, the European Central Bank paused at its July meeting, after eight straight 25 basis point cuts since June 2024, balancing weak growth in economies like Germany and France with stubbornly high inflation in other parts of the euro area.

Bullock noted at the press conference that Australia had not raised rates as aggressively as other central banks to tame inflation, and therefore would be more modest in the cuts:

Because we didn’t take rates as high as some other countries, it may be that we don’t need to reduce rates as much either.

By lowering the cash rate to 3.60% today, the Reserve Bank is showing it’s ready to act more quickly to help the economy as prices slow and growth weakens.

Markets expect more cuts ahead, but the pace will depend on whether inflation stays in check and the slowdown deepens. The interest rate cut cycle is clearly still in motion — and today’s decision suggests it may have further to run.

This article has been republished from The Conversation under a Creative Commons license. Read the original article.

Addressing the housing crisis for vibrant cities

By Nicola Lemon

Nicola Lemon is a partner at KPMG and the National Social and Affordable Housing Lead. Nicola brings a wealth of experience to her role, having dedicated her purpose-driven career to increasing the availability and affordability of housing. Nicola is well recognised as an influential CEO, Chairperson and leader. Her previous roles include 15 years as CEO of Hume Community Housing, and a nine-year tenure as both Chair of PowerHousing Australia and the Vice Chair of the International Housing Partnership. Nicola is currently a member of the Property Council of Australia’s National Build to Rent Committee.

The housing crisis in Australia was a key theme in the 2025 federal election, however our housing system has been under stress for decades.

According to the KPMG residential property market outlook for January 2025, national house prices have increased by 5.1 per cent, rent inflation sits at 6.7 per cent and it takes roughly 50 per cent longer to build a house than it did four years ago.  

Price increases in major cities have outpaced wage growth for decades, putting significant pressure on low- and middle-income earners.

The absence of significant social housing investment over the past 30 years has also exposed lower-income households to an increasingly unaffordable private housing sector. This structural undersupply was exacerbated by the COVID-19 pandemic, which led to steep increases in construction costs and rendered large swathes of Australia commercially unfeasible for development despite strong demand. 

This is prime fuel for deepening wealth, health and geographical inequality, declining productivity, increasing homelessness and generational disadvantage, and cannot be fixed with just one solution. For decades, housing has been considered an investment commodity, a wealth creation tool, rather than a human right that is key to building a fair and thriving society.

Why is diverse housing so important for vibrant cities? 

There’s not a city council in Australia that doesn’t want their region to be fair, thriving and vibrant. Vibrant cities are essential for economic growth, cultural exchange, high quality of life and social interaction – they attract businesses, talent and diverse populations, while providing rich experiences and amenities.  

Diversity of housing, tenure, typology, amenity, accessibility and affordability helps create thriving urban environments by ensuring inclusivity and sustainability, which in turn fosters stable communities, reduces inequalities and supports local economies by keeping essential workers close to their jobs. 

In KPMG’s ‘Keeping us up at Night 2025’ report on social issues concerning business leaders, housing availability and affordability has risen to the top, up from fifth a year ago. The lack of meaningful progress on housing affordability was seen as the number one issue, not only for the immediate outlook but, given the runway required to achieve improvements in supply, also for the medium-term outlook. 

The human reality 

The housing crisis is affecting some groups more adversely than others.  

Essential workers like first responders, teachers, hospitality staff and cultural contributors are the lifeblood of most cities. As these jobs tend to come with lower pay, irregular shifts or fluctuating income, many are unable to afford to live near where they work. In fact, an Anglicare 2024 rental affordability report showed that workers on a full-time minimum wage, could afford less than 1 per cent of all rental properties. 

Another group disproportionately affected by the housing crisis in Australia is women. Between 2011 and 2021, the number of women aged 55 and over experiencing homelessness increased by 40 per cent. More caring responsibilities fall on women, and women are the least protected in terms of their savings, asset accumulation and superannuation balances. As such, affordable, flexible, safe and secure housing options close to workplaces are essential for women, and central to combating gender inequality.

What are the solutions? 

KPMG’s Shaping Cities of Value report explains that inclusive housing and polycentric cities can enhance community engagement and economic activity. Diverse models of housing can mitigate economic and social disparities, while innovative construction methods and inclusive planning can accelerate the creation of dynamic and sustainable urban landscapes. 

We need solutions that are: 

• Focused on increasing social and affordable housing: Australia will need over 1.1 million social dwellings by 2037 according to AHURI research. To address this, ideally one in every 10 homes should be social or affordable housing (currently sitting at under one in four).

• Approved by all sides of politics: a bipartisan Commonwealth housing strategy that treats social and affordable housing as essential infrastructure, with cooperation from state and local governments, is crucial for creating effective partnerships across the housing eco-system. 

• Replicable, scalable and certain: national housing targets, backed by a pipeline of land release and government investment, providing certainty and reducing sovereign risk. 

• Invested in accelerating production and capabilities: our skills shortage challenges require focus on construction worker training and the time to construct requires advancing technologies for sustainable, efficient and faster production of homes. 

• Mastering density planning: developments that integrate mixed-use spaces, efficient designs, vertical buildings and an inclusive approach for optimal land use and quality of life. 

• Including diverse typology options: vibrant cities must meet the physical housing needs of their citizens, e.g. culturally appropriate housing, large and small generational living options, ageing in place, and solutions for differing mental and physical needs. 

• Promoting mixed tenure: citizens need access to home ownership options, secure affordable and private rental properties, student specific housing, youth foyer models, co-living options, shared home ownership, aged care homes, specialist disability accommodation and social housing in perpetuity. 

• Developed in partnership with community housing providers (CHPs): CHPs understand local needs, deliver tailored services, and collaborate with government and private sectors to tackle housing challenges. Policy certainty enables CHPs to invest in skills, resources and growth with confidence, attract investment and deliver quality housing for communities in need.

Significant systemic reform, government support and industry innovation are needed to improve housing supply and affordability. A consistent and collaborative effort across the housing ecosystem is required. By adopting these approaches and being innovative, we can tackle economic disparities, support communities and watch our cities thrive.

This article is republished from CEDA under a Creative Commons license. Read the original article.

Oliver's Insights: Seven key charts on the state of the Australian property market

By Dr Shane Oliver, Head of Investment Strategy and Chief Economist, AMP

Key points

• The Australian housing market remains far more complicated than many portray it to be.

• The Australian housing is cycle is turning up again; falling interest rates are the key driver; along with a chronic undersupply of homes of 200,000-300,000 dwellings; this partly reflects a surge in building times; poor affordability is a key constraint though; but it varies significantly between cities; and finally, mortgage arrears remain low.

• Average prices are expected to rise 5-6% this year boosted by falling rates but constrained by poor affordability.

Introduction

The Australian residential property market creates much consternation. On one level there is the debate about the outlook for home prices with some real estate spruikers still wheeling out versions of the old “property will double every seven years” line versus property doomsters at the other extreme saying it’s overvalued and overindebted and so a crash is inevitable. The problem with the former is that it implies the already high ratio of home prices to incomes will double again over 12 years! The trouble with the doomsters is that they’ve been saying that for decades. On another level there is much understandable angst about affordability with some blaming investors and property tax breaks versus others seeing it as largely due to poor housing supply relative to demand. As always with these things there is no black or white answer. To shed some light on this here’s seven key charts on the state of the housing market.

First – the property cycle looks to be turning up again 

After a brief dip of just 0.3%, national average property prices have been rising steadily from February (with Cotality data pointing to another 0.5% rise this month) indicating that they have entered a new cyclical upswing. 

Source: Cotality, AMP

So far, the gains have been broad based with the soft cities of Melbourne, Hobart, Canberra, Darwin and Sydney now picking up at the same time that the boom time cities of Brisbane, Adelaide & Perth remain strong. 

Second – interest rates are a key driver

Interest rates matter a lot to the property market because lower rates boost the relative attractiveness of property as an investment and allow home buyers to borrow more. And vice versa for higher rates. Of course, the impact of interest rates can be swamped by other factors at times, as was the case in 2023-24 with the population surge and weak supply. Lower rates are a key driver of the current upswing in prices. As can be seen in the next table, the start of rate cutting cycles since 1982 has been associated with higher home prices over the next 12 and 18 months in five of the last seven rate cutting cycles, providing there is no recession. The average gain over the subsequent 12 and 18 months is 3.9% and 8%.  Our base case is for 0.25% RBA rate cuts in August, November, February and May. With increasing signs of labour market weakness this may occurs faster with back to back cuts in August and September. 

Cotality. Australian recessions are in red. The GFC is in blue. Source: RBA, Cotality, AMP

Third – Australian housing is chronically undersupplied

This has been the case since the mid-2000s when immigration levels, and hence population growth, surged and the supply of new homes did not keep up. Our assessment is that the accumulated housing shortfall (the green line in the next chart) is around 200,000 dwellings at least and possibly 300,000 depending on what is assumed in terms of the number of people per household.  

Source: ABS, AMP

The economic reality is that when underlying population driven demand for housing exceeds its supply prices rise and that is what we have been seeing for the last twenty years. The capital gains tax discount, negative gearing and foreign demand may have played a role, but they have been a sideshow to this demand/supply imbalance.

Fourth – home building completion times have surged

Part of the solution is to slow immigration (and hence population) growth to levels more in line with the ability of the housing industry to supply homes. And immigration has been falling lately. But it’s also about boosting supply and if we want to reduce the accumulated undersupply it’s critically important that Federal and state governments retain the Housing Accord commitment to build 240,000 dwellings a year (or 1.2 million over five years), compared to around 180,000 over the last year.

The next chart shows part of the problem. Over the last decade the time taken to build a house from approval has risen by 57% and that for units has increased by 65% reflecting increasing regulations, rising costs, labour shortages, etc. To meet the Housing Accord target we need deregulation, measures to boost the number homebuilders, a greater focus on units and finding more ways to lower costs (like pattern plans in NSW, smaller houses and greater reliance on wood than bricks and concrete).

Source: ABS, AMP

Fifth – Australian housing is very expensive  

Chronically deteriorating housing affordability in Australia has been evident since the 1990s. It’s clearly evident in rising home price to wage and household income ratios (with the latter adjusting for the increase in two income families), a rise in the years taken for an average earner to save a 20% deposit from around 4 years 40 years ago to around 10 now and the ratio of home prices to rents (which is a bit like a PE for shares) adjusted for inflation being around 30% above its long term average level.

Source: ABS, Cotality, AMP

The expensive nature of Australian property and the high level of debt that goes with it leaves the economy vulnerable should high interest rates or unemployment make it harder to service loans and is leading to rising wealth inequality. In the near term though it may constrain the extent of the upswing in property prices through this cycle. 

Sixth – it’s also very diverse 

While we often refer to “the Australian property market”, in reality there is significant divergence between localities resulting in diverse cycles. The divergence is reflected in measures of valuation. The next table shows the percentage difference between price to annual rent ratios adjusted for inflation relative to their average since 1983. On this basis while houses are 30% overvalued, units are only 1% overvalued. And Perth and interestingly Melbourne stand out as the least overvalued markets in terms of houses and both are actually undervalued in terms of units.

Source: REIA, AMP

Finally – mortgage arrears are still low 

Reports of mortgage stress have been common for the last two decades. There is no denying housing affordability is poor, debt is high, and many households are still suffering significant mortgage stress. But despite this mortgage arrears rates remain remarkably low at less than 1% on average which leaves them low in international comparisons too. They are higher for those with high loan to valuation (LVR) ratios and high loan to income (LTI) ratios but even here they are still low and have been falling lately.

RBA Financial Stability Review, April 2025

The low level of arrears partly reflects strong lending standards in Australia combined with the strong jobs market and a high level of savings buffers coming out of the pandemic.  So absent a shock, like much higher unemployment, don’t expect an avalanche of distress listings.

Where to now?

Forecasting property prices is fraught. But our base case is for property prices to rise 5 to 6% this year driven by rate cuts and the chronic housing shortage but with poor affordability constraining the upswing. The main downside risk is that rising unemployment and a delay in rate cuts depresses buyer demand, but the main upside risk is that another bout of FOMO takes hold as rates fall.  The key for savvy investors, is to look for properties offering decent rental yields.

This article was republished with permission by AMP. Read the original article here.

Subdued outlook for Australia’s construction industry

By Oliver Nichols, Director - Rider Levett Bucknall

Oliver Nichols is a Director of RLB in New South Wales, where he has been based since 2008.

With more than 25 years’ experience in quantity surveying and commercial advisory, Oliver specialises in cost planning, financial reporting and post-contract cost management. He has played a key role in delivering some of Australia’s most complex placemaking and infrastructure projects, including the Sydney Metro integrated stations at Martin Place, Gadigal and Victoria Cross, Central Barangaroo and the Sydney Football Stadium.

In June 2025, Oliver was appointed Oceania Director of Research & Development, where he now oversees the firm’s regional research strategy and major publications, including the RLB Crane Index, Rider’s Digest and the quarterly Market Intelligence Reports. His dual focus on project delivery and market insight ensures that RLB’s data and commentary are informed by real-time experience on the ground.

Rider Levett Bucknall’s latest Q2 2025 Construction Market Update for Australia presents a cautious outlook for the sector, as global instability and local constraints continue to disrupt delivery, inflate costs and dampen investment appetite.

Read the full report here

Geopolitical risk compounds domestic challenges

The ongoing conflicts in the Middle East and Ukraine are placing renewed strain on global supply chains, escalating the cost of fuel, raw materials and shipping. Within Australia, this has collided with persistent labour shortages, rising interest rates, and tighter regulatory conditions—contributing to delays, cost overruns and heightened project risk.

Oliver Nichols, Director of RLB Oceania Research & Development, said the complex interaction between global and domestic forces was redefining the market outlook.

“Developers are grappling with tighter margins, stretched delivery timelines and softening confidence. Meanwhile, large-scale infrastructure projects are facing increasing viability challenges—especially where budgets are locked in or public funding is limited.”

Material costs and supply chain volatility pressure delivery

RLB has observed rising prices for key inputs including fuel, steel, copper and aluminium. In some locations, this is being compounded by delays in the delivery of imported mechanical and electrical components, particularly for specialist works.

These material and logistical constraints are influencing not only delivery timelines but also cost planning and investment decisions. Housing affordability, mortgage rates, and infrastructure feasibility are all being affected.

Industry insolvencies on the rise

Recent data shows a notable increase in construction sector liquidations, particularly among subcontractors and small to medium enterprises (SMEs). In an environment marked by slow approvals, project delays and tight payment terms, even marginal cost increases are forcing some firms into insolvency.

“The risk of rising insolvencies within the construction supply chain continues to be a concern,” said Nichols. “When projects are delayed or disrupted, it creates cascading impacts across all tiers.”

Adaptive strategies emerging across the sector

In response, some construction firms are diversifying their supply chains, adopting digital tools to improve workflow visibility and renegotiating contracts to include escalation clauses. These measures are designed to manage cost risk and enhance resilience.

Governments are also responding. The recently released Blueprint for the Future by the National Construction Industry Forum outlines targeted recommendations to boost productivity, workforce capability, and industry stability. However, implementation and impact will take time.

Forecasts signal varied conditions across cities

RLB’s Tender Price Index for Q2 2025 indicates that cost escalation continues nationwide, though rates vary by region. Cities such as Brisbane, Townsville, and the Gold Coast are forecast to experience sustained upward pressure over the next five years, while Canberra and Sydney are expected to see more moderate growth.

Regional market insights

• Adelaide: Growth continues across defence, health, renewables and infrastructure sectors, but contractor and subcontractor capacity remains tight.

• Brisbane: Government programs in health, education and corrections are sustaining pipelines, but the private sector remains constrained by cost feasibility.

• Canberra: Positive outlook underpinned by major ACT Government initiatives, including North Canberra Hospital and Canberra Theatre Redevelopment.

• Darwin: $2.74 billion committed in the 2025–26 Territory budget for infrastructure, including public housing, education and corrections upgrades.

• Gold Coast: Cost pressures persist but are easing slightly with greater subcontractor availability in some sectors.

• Melbourne: Labour shortages continue to strain delivery and drive cost escalation. Insolvencies are rising as financial stress deepens.

• Perth: Market operating near capacity, with high demand in both regional and metropolitan areas fuelling pricing pressure.

• Sydney: Labour remains the critical constraint, particularly on public infrastructure projects. Specialist imports continue to experience delay and cost volatility.

• Townsville: A reduction in major project tenders has moderated pricing levels, shifting from opportunistic to balanced conditions.

Outlook: constrained opportunity amid heightened risk

While governments and industry stakeholders are acting to stabilise conditions, the path ahead remains uncertain. As geopolitical uncertainty persists and domestic pressures continue, Australia’s construction industry is likely to remain in a climate of heightened risk, fragile confidence and uneven opportunity.

This article was republished with permission by RLB. Read the original article here.

Mortgage arrears remain contained despite high rates and cost of living pressures

By Tim Lawless, Research Director at Cotality

While mortgage arrears have risen from record lows, the portion of borrowers falling behind on their repayments remains well below 2% of the Australian loan book.

APRA data measuring the proportion of borrowers who are overdue or impaired on their mortgage repayments ticked slightly higher through the March quarter, from 1.64% in Q4 2024 to 1.68% in Q1 2025. Despite the subtle lift, mortgage arrears remain below the recent high of 1.86% recorded in Q2 2020. Mortgage arrears include loans that are 30-89 days overdue as well as those categorised as non-performing. A non-performing loan is one where the borrower is 90 days or more past due on their repayments or where the lender considers the borrower unlikely to pay their credit obligations without recourse from the lender. A more detailed breakdown of mortgage arrears can be found in the latest Financial Stability Review from the RBA. The review showed that while highly leveraged borrowers and lowerincome households tend to have higher arrears rates, even in these categories, arrears are generally low and trending lower. Mortgage arrears for borrowers with a loan to valuation ratio of 80% or higher peaked around 2.5% in 2024 but are now falling, while borrowers with a loan-to-income ratio above four reached roughly 1.5% and are also trending lower.

Several factors help explain how the vast majority of mortgagors have kept on top of their mortgage repayments during a period of elevated interest rates and severe cost of living pressures, including strong prudential standards, tight labour markets, extremely low levels of negative equity, and accrued liquidity buffers. Lending standards have been unquestionably strong throughout the recent cycle, with a consistently low portion of mortgage originations considered ‘risky’. Interest-only lending comprised 19.7% of originations in the March quarter and has consistently held well below the previous temporary limit of 30% set by APRA between 2017 and 2018. High LTI and high DTI lending remains well below pre-rate hike levels, tracking at 3.1% and 5.8% of loan originations respectively in Q1. Similarly, high LVR lending has come in around 7% of originations or lower since mid-2022.

The mortgage serviceability buffer, which assesses prospective borrowers on their ability to repay a mortgage at three percentage points above the current mortgage rate, has also played into the resilience of borrowers. Lifting the buffer from 2.5 percentage points to 3.0 percentage points in October 2021 has helped to lower the default risk, even though mortgage rates have risen a lot more than three percentage points from their 2022 lows. Although interest rates are now falling and expected to reduce further, there has been no sign from APRA that the serviceability buffer will be lowered. While tight lending policies have contributed to financial stability and provided protection for borrowers, there is a counter argument that lending policies may be too tight, reducing access to credit.

The ‘double trigger’ hypothesis for higher mortgage rates

The RBA has previously theorised that higher mortgage arrears rates would need to be predicated by a “double trigger” of both an inability to repay the loan and for the loan to be in a negative equity position. So far, most borrowers have retained their ability to pay despite higher debt servicing costs, thanks to persistently tight labour market conditions, while instances of negative equity remain rare across the Australian housing market. Debt servicing costs have risen substantially over the recent rate cycle. Variable mortgage rates have roughly moved in-line with the cash rate, bottoming out below 3% in 2022 before surging by around four percentage points. A borrower with a $750k mortgage saw their monthly repayments rise by around $1,550+ (depending on the type of borrower and loan) between the low point and high point of the rates cycle.

However, most Australian’s have retained an ability to service their mortgage through gainful employment, with labour markets holding tight. The unemployment rate came in at 4.1% in May and has held around this level or lower since early 2022. Similarly, underemployment, which measures workers who want to work more hours, remains close to multidecade lows. The second component of the ‘double trigger’ hypothesis relates to negative equity in housing markets – or simply, where the value of property is less than the debt owed. The RBA estimated in their most recent Financial Stability Review that less than 1% of households are experiencing a negative equity situation. Given the low portion of homes in negative equity, most borrowers facing financial hardship should be able to sell their property and clear their debt before moving into default.

Another factor staving off higher arrears relates to an accrual of savings through the pandemic. The household saving ratio held above 10% between mid-2020 and early 2022. Households have been able to draw down on their savings as higher debt servicing costs and cost of living pressures eroded balance sheets. Although it's harder to measure, we have probably also seen households tightening the purse strings, acting out the “wagyu and shiraz” scenario, where households pull back on non-essential spending, focus on debt repayments and fund essential cost of living expenses. The “wagyu and shiraz” reference relates to the federal court ruling from Justice Nye Perram in the ASIC v Westpac hearing: "I may eat Wagyu beef everyday washed down with the finest shiraz but, if I really want my new home, I can make do on much more modest fare.” Overall, it’s likely mortgage arrears will trend lower from here as mortgage rates continue to reduce and cost of living pressures ease further. With housing values once again on a broad-based rise, instances of negative equity are expected to remain a tiny portion of Australian housing stock, providing further resilience to default.

This article was republished with permission from Cotality. Read the original article here.

Property Market Overview: July 2025 By Scott Keck

By Scott Keck | Chairman, Charter Keck Cramer

Scott Keck is Chairman of Charter Keck Cramer. Scott has over 50 years’ property valuation and corporate real estate experience across the national markets. As an experienced independent practitioner Scott provides specialist strategic and mediation consulting services, including an emphasis on land acquisition for major infrastructure projects. A highly regarded and regular contributor to the national media and business magazines, Scott has published over 500 articles on topics related to the property market. Scott is a member of Charter Keck Cramer’s Board of Directors.

Australia has become a very property centric society, both for individuals and also significantly in the corporate sector for Managed Funds and REITS, due to a very favourable and inducing tax and superannuation environment. This has sustained a long period of almost uninterrupted growth during which, as a community, we have become faithfully confident in compounding performance and reliable risk adjusted returns.  We are, however now probably entering into a phase of possible Capital Gains Tax reform and a changing property investment and development market which will be affected by both positive and negative influences, summarised as follows:

Positives

1. Baby boomer capital

2. Acute supply shortage - strong demand at right price point

3. Government subsidy for social and affordable housing

4. Interest rates easing

5. Costs slowing

6. Techno advance / modern methods, prefab

7. Gradually supportive Government policy

8. Economic step back from stagflation

Negatives

1. Covid legacies

2. High construction costs

3. Low affordability

4. Contractor insolvency

5. Regulatory and zoning constraints

6. Infrastructure deficiencies and levies

7. Environmental and climate concerns

8. Foreign investor taxes

9. Financial complexities including statutory charges and capex  

10. Global uncertainties

Whilst I don’t underestimate the risk, I do view residential development mainly as a process of calculated SUPPLY whereas commercial development including retail, industrial and office is more complex, carries greater risk and rather than providing supply, provides negotiated, invariably underwritten SOLUTIONS … both of course require patience and persistence but the commercial sector generally requires higher levels of development management, negotiation skills and of course commencing capital.  Usually participants are one or the other but not both. If you want to be involved I think you need to strategically commit to one sector.

Notwithstanding current headwinds which require planning, taxation and labour reforms and which also include sector insolvencies and slow design and construction innovation, there are immediate and emerging opportunities.  Amongst current projects and proposals in our office or of which we are aware I mention:

1. Downsizer luxury apartments

2. Social and affordable housing

3. Medium rise residential and mixed use projects

4. Land lease projects

5. Residential to rent / BTR with a twist (student and retirement accommodation)

6. Value add v. passive

7. Regional opportunities

8. Adopting existing building built form provides planning and timing advantages

9. Master plan centres

10. PPPs … working with Government

11. Office refurbishments

12. Large mixed use inner urban infill sites

Having summarised examples of current potential viability, the question may well be how does one find such opportunities ... the answer is in part that as always there is the entrepreneurial awareness of opportunity and intuition that successful developers and investors demonstrate … those who live and breathe the property markets … but even they increasingly rely upon the support, guidance and analysis of research agencies. They may intuitively sense an opportunity, but invariably through the process of research discard many prospects before making a commitment.  And to be emphasised, don’t underestimate the relatively recent strong resource of AI … more often than not is likely to point you in roughly the right direction.

Another source of engagement which is quite common is to be willing to consider Joint Venture opportunities …there are many property professionals, particularly for example architects, planners, project and development managers, even valuers who may have insight and viable proposals but lack capital ... if you maintain an active and wide property network you will experience that awareness invariably leads to opportunity. The majority of projects that pass through our office do involve joint ventures one way or another … usually passive equity capital joining with development and project management expertise. 

There are mixed views about the challenge of residential under-supply, yet the need for long-term population growth through migration to boost productivity. Inevitably, Australia’s economic future security depends on a substantial increase in economic growth which means a much larger population which will be sourced through migration mainly from the Asian region, China, India, Bangladesh and Pakistan. As our community embraces this prospect we will also experience cultural change as our population transitions to a higher Asian proportion of our population. Simultaneously there will inevitably be an increase in the percentage of households that rent rather than owner occupy.

As community growth and cultural and economic impetus feeds mainly into the economies of Victoria and New South Wales, there will be increasing opportunity for residential and infrastructure development and investment across all sectors. Currently there may understandably be some negativity about the property sector in Victoria but the medium to longer prospects offer assessable opportunity as statewide community expansion drives continued demand in all built form sectors.

This article has been republished with permission from the author, Scott Keck, Chairman Charter Keck Cramer.