2020

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EXPERT OBSERVERS
2020 is likely to see markets in recovery mode as housing prices catch up and then overtake their previous record highs, however the rapid rate of capital gains seen over the second half of 2019 is expected to lose steam as stock levels rise and affordability deteriorates, according to CoreLogic's Head of Research, Tim Lawless.
In 2019 the housing market moved through the largest and longest correction on record, followed by a fast-paced rebound in values through the second half of the year.
<img src="https://www.urban.com.au/images/2019/12/20/graph%202.png" alt="">
 
Housing turnover fell to record lows in 2019, as did new advertised stock levels.
Interest rates reduced to levels previously unseen, while the concentration of investors in the market also plumbed new depths.
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At a national level, housing values were trending lower through the first half of the year, continuing a downturn spiral that commenced in October 2017.
June saw CoreLogic’s national housing market index reach a floor after posting the longest and largest correction in housing values on record.
<img src="https://www.urban.com.au/images/2019/12/20/graph%203.png" alt="">
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Between the market peak in October 2017, and the trough in June 2019, the national index fell by 8.4%. The previous record decline in national housing values was an 8.1% drop through the early 1980’s as the economy moved through a recession and unemployment peaked slightly above 10%.
"Larger peak-to-trough falls were recorded in Sydney (-14.9%) and Melbourne (-11.1%), where housing conditions had previously been the strongest. Of course not all the capitals found a floor in housing values through the year, with data through to the end of November showing that Darwin values were still trending lower, down a cumulative 31.5%, while Perth values posted a rare rise in November, but remained 21.6% below the 2014 peak," mr Lawless added.
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Since reaching a floor in June, CoreLogic’s national index has rebounded by 4.7%, with the monthly growth rate in November the highest since 2003. Despite the recent recovery trend, housing values nationally remain 4.1% below their 2017 peak.
 <img src="https://www.urban.com.au/images/2019/12/20/graph%204.png" alt="">
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A variety of factors contributed to the housing values recovery over the second half of the year. Earlier in the year, a reduction in the rate of decline was supported by higher first home buyer activity and brought about by improvements in housing affordability and stamp duty exemptions in NSW and Victoria. However, the main contributors to a rebound in housing conditions were:
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  The positive effect of the federal government retaining power at the May federal election which removed the uncertainty around tax reform relating to negative gearing and capital gains discounts.
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  Cuts to the cash rate in June, July and October
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  And an easing in lending policy as APRA adjusted its rules around minimum interest rate serviceability tests; a move which acknowledged interest rates were likely to remain low for an extended period of time.
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Tim Lawless is the head of research at CoreLogic. 
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Real estate records set in 2019 with markets likely in recovery mode in 2020: CoreLogic's 2019 wrap

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EXPERT OBSERVATION
The 2019/20 financial year is almost complete and it is an opportune time to see how investments, financial markets and economies have performed over the past year.
Not to put too fine a point on it, the past year has been difficult.
The US-China trade stoush and Brexit dominated in the first half of 2019/20, causing businesses and consumers to restrain spending, employment and investment.
And, just when there were signs of hope that these two factors would be less depressing for the global economy, the coronavirus emerged.
It is now acknowledged that COVID-19 poses the biggest threat to the global economy in 90 years.
Central banks have slashed interest rates and governments have provided unprecedented amount of fiscal support and stimulus for their economies.
Governments started to impose lockdown measures on businesses and the movement of people from late January with the strictest measures applied from March to May. Countries have had varying success in suppressing the virus, but the financial year is ending with countries coming out of lockdown and returning their economies to some sense of normalcy.
Over 2019/20 there have been four interest rate cuts, each of 25 basis points.
The cuts occurred on July 3, October 2, March 4 and March 20.
The cash rate now stands at a record low of 0.25 per cent or 25 basis points.
The rate cuts in July and October, 2019 were made with the intention of speeding up the economy and driving unemployment lower.
The rate cuts in March 2020 were designed to shore up the economy against the depressing economic effects of COVID-19.
On March 20, the Reserve Bank also set a target for the 3-year government bond yield at 25 basis points.
The Reserve Bank also implemented a term funding facility designed to provide financial assistance for small and medium sized businesses.
The Aussie dollar began the financial year near US70 cents and is ending the year near US69 cents. But those values mask some volatility, especially in 2020.
The high for the Aussie was US70.82 cents on July 19.
The low (actually a 17-year low) was set on March 19 at US55.06 cents.
The low point largely corresponded to lows for global sharemarkets and marked the peak of the virus panic – the fears about the spread of the virus and the implications for economies.
It has been the most volatile year for the currency in five years.
Over 2019/20 we have calculated that the Aussie is the 70th strongest currency against the US dollar of 120 currencies tracked (down 1.7 per cent).
The currencies of Netherlands Antilles, Taiwan, Afghanistan and Malawi all rose 4.0-5.5 per cent.
The weakest currencies were from the economies of Argentina, Brazil, Zambia, the Seychelles and South Africa. Only 19 currencies of 120 currencies have lifted against the greenback over the year.
In the first six months of 2020, the Aussie dollar has also fallen 1.6 per cent against the US dollar, making it the 73rd strongest of 120 currencies tracked.
The currencies of Japan, Switzerland and Taiwan have lifted by around 1-2 per cent.
The weakest currencies are from the economies of Brazil, Zambia, the Seychelles and South Africa.
Only 13 currencies have lifted against the greenback so far this year.
Commodity prices eased over the second half of 2019/20 as COVID-19 fears dominated.
The Commodity Research Bureau futures index fell by 24 per cent over 2019/20, but the CommSec daily index eased by only 13 per cent.
The difference between the two indexes is gold, with its price up 26 per cent over 2019/20 while beef has risen by 7 per cent and sugar is down by only 4 per cent.
Amongst base metal prices, nickel has lifted by almost 1 per cent and copper is down 1.5 per cent.
Oil has fallen 31 per cent, while spot natural gas has slid 54 per cent and iron ore is down by 13 per cent.
The Australian sharemarket started 2019/20 with the All Ordinaries near 6,700 points and the ASX 200 near 6,620 points.
The All Ords is ending the year near 6,060 points (down 9.4 per cent) with the ASX 200 near 5,950 points (down 10.0 per cent).
 If we focus on the ASX 200, the index hit record highs of 7,162.5 on February 20 with lows hit around a month later on March 23 at 4,546 points.
We have estimated that Australia (-9.4 per cent) is the 39th strongest of 72 global bourses so far in 2019/20.
Interestingly only 15 of the 72 bourses have recorded gains over the year.
The best performers were hyperinflation-affected Zimbabwe and Venezuela but Denmark is up 26 per cent.
Notably the US Dow Jones fell by 3 per cent while the NASDAQ has lifted 24 per cent. New Zealand has risen by 12.4 per cent and has been the 5th strongest bourse.
The worst performers include Cyprus, Lebanon, Kenya, Colombia and Greece.
In the first six months of 2020, the All Ordinaries has fallen by almost 11 per cent, ranking Australia 31st of 72 nations.
Only 8 of 72 bourses are up so far this year.
Again Denmark and New Zealand are amongst the out-performers with Cyprus, Greece, Austria, Colombia and Kenya amongst the laggards.
Total returns on Australian shares have fallen by 6.4 per cent over 2019/20 which, if maintained, would be the first decline in returns in eight years.
Returns on dwellings have lifted by 12.3 per cent while returns on government bonds have lifted by 4.3 per cent.
Of the 22 identified industry sub-sectors, only eight have recorded gains in 2019/20.
Leading the gains is Consumer durables &amp; apparel (up by 45.9 per cent) followed by Pharmaceutical &amp; Biotech (up 32.3 per cent), Software &amp; services (up 19.9 per cent) and Retailing (up 15.2 per cent).
At the other end of the scale, Energy has fallen the most (down 29.2 per cent) from Banks (down 27.9 per cent) and Insurance (down 23.9 per cent).
Of the size categories, the MidCap50 has out-performed (down 2.1 per cent) from the Small Ordinaries (down 5.4 per cent), the ASX100 (down 10.6 per cent) and the ASX50 (down 12 per cent).
Now it’s all about COVID-19.
The economic outlook depends on the success or otherwise achieved by governments, health authorities and communities in suppressing the spread of the virus.
If the virus is contained and the active case load remains manageable, then more parts of the economy can re-open and a degree of normality can return to society and the economy.
As economies re-open, setbacks can be expected in suppressing the spread of COVID-19. There is no road map to follow, governments will need to quickly respond to changes in circumstances.
Ideally, a vaccine or treatment will be found.
But economies can still rebound from lockdown-driven lows in the absence of a vaccine. If and when a vaccine is found, it will still take time for testing and commercialisation.
The main short-term implication of finding a vaccine is a boost to confidence, encouraging businesses to invest and hire workers and encouraging consumers to spend.
Prospects for sharemarkets will depend on businesses returning to normal and people returning to their workplaces.
CommBank Group economists tip a 3.2 per cent fall in the global economy in 2020 and then a 4.7 per cent lift in 2021.
In Australia, the economy is tipped to fall 3.9 per cent in 2020 before recovering 3.0 per cent in 2021.
The recovery in Australia will be restrained by the drying up of external migration, affecting tourism, education and real estate markets.
We assume that Australian governments and the Reserve Bank will live up to the promise of doing “whatever it takes” to restore the economy to full health – especially restoring health to the job market. This means leaving the cash rate at record lows and continuing to provide fiscal support measures.
Governments will need to balance health risks with economic risks.
But we expect the Federal Government to live up to the mantra of protecting jobs. There are still a few weeks until the July 23 Budget update where the Government will assess whether to extend JobKeeper in some form.
We expect the unemployment rate to peak near 8.4 per cent in the September quarter before easing toward 7 per cent by December quarter 2021.
The good news for the government is that the Budget was balanced before the virus crisis hit.
That has allowed the Federal – as well as State and Territory governments – to provide all the necessary support for economies. We estimate that around $295 billion of fiscal and financial support (almost 15 per cent of GDP) has been provided by all governments and the Reserve Bank.
Budget deficits near $130 billion are expected in 2019/20 and 2021/21 (around 7 per cent of GDP). Net debt may lift from around 20 per cent of GDP to around 30-35 per cent of GDP – still low compared with other advanced nations.
The cash rate is expected to remain at 0.25 per cent until 2022.
In terms of the sharemarket, last year we noted: “Over the coming year CommSec expects the All Ordinaries index to be near 6,700-7,000 points in December 2019 and 6,800-7,100 points in June 2020.” The first forecast was achieved. Clearly COVID-19 has ensured that the June 2020 forecast won’t be achieved.
Over the coming year CommSec expects the All Ordinaries index to be near 6,100-6,400 points in December 2020 and 6,500-6,800 points in June 2020.”
The Aussie dollar is expected to trend higher over the coming year in line with expectations of economic recovery at home and abroad.
CommBank currency strategists are tipping the Aussie dollar to lift to US72 cents by December 2020 and US76 cents by June 2021.
But the strategists warn “The increasingly fraught relations between US China and Australia China will be an intermittent downside risk to AUD/USD. Some of these tensions reflect ‘great power’ rivalry between the US and China that will not go away soon.”
Craig James is the Chief Economist at CommSec
Ryan Felsman is a Senior Economist at CommSec
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The 2019/2020 financial year in review: CommSec's Craig James

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Sydney’s real estate prices were the sturdiest in March, with prices in most capital cities subdued and heading towards decline, according to the latest quarterly analysis from Domain.
According to the report, Sydney house prices rose 13.1%, to $1,168,806, in the year ending March 2020. 
There was 2.6% in the March quarter.
<div data-sticky-id="0">Melbourne’s median house price is expected to fall after it reached a record high of $918,350 in the March quarter.</div>
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<div data-sticky-id="0">Sydney, Hobart and Melbourne saw the largest price increases for the March quarter, the Domain House Price Report calculated. </div>
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<div>Darwin, Canberra and Brisbane recorded house price gains between 0.3 and 1.2 per cent.</div>
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<div>Prices in Perth and Adelaide were flat.</div>
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The unravelling coronavirus crisis, however, has taken its toll on the market, with a shutdown of non-essential services, and a temporary ban on onsite auctions and open inspections, taking effect in late March and early April.
The number of homes on the market fell.
Between March 23 and April 10 new sale listings dropped 12 per cent compared to the same period last year, Domain’s figures show.
More than 14 per cent of vendors have since revised their price expectations, reducing them by an average of 4.36%.
<img src="https://www.urban.com.au/images/2020/4/23/house%20prices.png" alt="">
In the March quarter Sydney maintained its status as Australia's most expensive capital city for residential real estate, with a median house price of $1,168,806 and a median unit price of $744,672.
Melbourne and Canberra rounded out the top three - Melbourne holding a median house price of $918,350 and a median unit price of $554,306, and Canberra holding a median house price of $779,050 and a median unit price of $441,055.
Canberra, however, saw significantly weaker growth quarter-on-quarter than Sydney or Melbourne. The nation's capital saw house prices grow just 0.3% (compared to Sydney's 2.6% Melbourne's 2%), and saw unit prices drop a substantial 5.2% (compared to a growth of 2.7% in Sydney and a 0.4% contraction in Melbourne).
In Darwin house prices grew by a respectable 1.2%, however the value of units plummeted by  8.1% - The highest margin in the nation.
The drop is part of a massive 16.2% year-on-year nosedive in Darwin's unit market.
Sydney saw the most quarterly grows in houses at 2.6%, however Adelaide topped the list for units with a growth of 4.2%.
<img src="https://www.urban.com.au/images/2020/4/23/unit%20prices.png" alt="">
In Domain’s February forecast for the year ahead, a combined average growth of 8% was predicted for houses in Australian capital cities during 2020, with a further 5-7% growth projected in 2021.
Sydney topped this list, with a projected 10% growth in 2020 (and 6-8% in 2021), while Hobart and Adelaide were at the bottom of the list with a projected growth of just 3% in 2020 (and 2-4% in 2021).
<img src="https://www.urban.com.au/images/2020/4/23/feb%20forcast%20house.png" alt="">
For units, a combined average growth of 6% was predicted across Australian capital cities during 2020, with a further 3-5% growth projected for 2021.
Sydney had the highest projected growth in 2020, at 8% (with 3-5% predicted for 2021).
Hobart saw the least expected growth, at just 2% (with 1-3% predicted for 2021).
<img src="https://www.urban.com.au/images/2020/4/23/feb%20forcast%20unit.png" alt="">
The rapid development of the coronavirus and the ensuing economic fallout, however, have thrown these projections into uncertainty. 
Dr Nicola Powell, the senior research analyst at Domain, said that the pandemic was weighing heavily on sellers’ minds.
“Those who have to sell are editing their price to achieve the timely sale in fear of what could be ahead economically,” Dr Powell told Domain.
“The recovery was well on its way before coronavirus. Houses had regained the majority of the $165,000 loss in the downturn. Units had regained about $62,000 of the $103,000 lost in the downturn.
“When the market is moving and moving rapidly, those asking prices need to meet the market. We’ve seen the market flip in March.
“It’s almost a given we’re going to see fewer transactions. The fact we’ve got wage subsidies, mortgage repayment holidays and low interest rates will help support prices.”
Dr Powell said it was unclear how far prices would drop in months to come.
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Real estate recovery stopped in its tracks amid March shutdown; Domain quarterly analysis

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EXPERT OBSERVER
So it’s 1946 and we’re about to see the largest increase in birth rates the country has seen for some time until 1965, roughly 5.5 million Aussies were born. 
Post the depression and war, our guys and gals got together and lovingly created what we now know as the baby boomer generation. The Boomers have been known throughout history to be a real bunch of trend setters, not just because of their teenage antics throughout the swinging 60’s and 70’s but due to the sheer size of the cohort and their housing preferences they have had an impact on property markets worldwide. 
Now when you think about it logically, most of us aspire to live the great Australian dream and buy a property one day, a house with a yard would be good and while it’s not always the first property you buy it is often a house that was home to the Boomers and their growing families. 
Fast forward 55 years and you’ve now got a group of people that are 55 – 74 years old, have already or are near to exiting the workforce and typically own their homes. I’m sure you’ve got a fair idea about what happens next… 
Well it’s not as obvious as you might think, given the rising costs of living and aged care options that are now available we’re seeing more and more boomers simply stay put. 
Let’s say you were hanging up the shingle and putting yourself out to paddock (retiring), one of your first thoughts might be around whether you have enough money/assets to live out your retirement years. 
We don’t discuss financials but often we see clients factor in the value of their home as part of their retirement strategy and you get the call, “Hey Chris, can you come over and tell me what the house is worth”. 
So we establish what the house might be worth and then you start to wonder where you’re going to live if you did sell; a luxury apartment, over 55’s resort, buy some wheels and do the Grey Nomad thing or just plain old downsize to a run of the mill apartment. Let’s be real about it, you’re going from a house to something smaller and while you’re wanting something cheaper to put some cash in your pocket you’re probably not wanting to jeopardise your lifestyle. 
This is where it gets tricky when you’re then looking at apartments in and around where you already live, often we find that the price variance between large-ish or luxury apartments that downsizers typically go for are not all that much cheaper than the houses they’re moving from when you factor in all the costs. 
So is it worth it?  
Well not always and that’s why we are seeing an increase in the number of Boomers that are choosing to ‘Age in place’ which has had a flow on effect in the property markets supply. 
As a direct result of less detached homes coming to market there’s essentially less people upgrading because there isn’t the supply to do so, house prices have typically held fairly strong in recent times and are continuing to rise in capitals due to low supply in contrast to apartments in the same markets. 
With more and more apartments being delivered in metro areas to meet demand, we are fast moving toward a unit economy in the big cities whereby the great Australian dream hasn’t been lost, it’s just become more realistic to consider apartment living. 
So when you’re wondering why there’s not the same volume of property on the market compared to past years, I guess you need to ask yourself the question. Is this the new normal?
CHRIS ORR is the Residential Director at Savills
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Is this property market the new normal? Savills Chris Orr

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Embarking on a new decade welcomes <a href="https://www.urban.com.au/expert-insights/buying/reimagining-the-norm-of-apartment-design">the next era of design trends</a>, building innovation and technology. Architects, urban planners, builders and developers will collectively relook at how our built environment responds to social, cultural and environmental shifts — as well as buyer demand. 

Based off industry dialogue and the exploration of new technology in 2019, we’ve compiled a list of building design predictions we’re expecting to see become more prevalent over the next few years.

1. Buyers are becoming more aware of what their home is built of and are driving a market shift for quality over quantity

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/5environmentaldesigns.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="327" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/5environmentaldesigns.jpg?itok=6FTt-4uf" width="580"></a></figure>Urban has noticed a shift in buyer demand for a more <a href="https://www.urban.com.au/news/5-of-melbournes-environmentally-conscious-new-development-highlights">sustainable approach to building design and construction</a>. Buyers are keen to play a more active role in ensuring their home is built to a high standard, using quality, safe and eco-conscious building materials. As home seekers move towards a more environmentally friendly lifestyle (including everything from food choices to beauty products), the conversation around harmful toxins and pollutants extends to the construction of their home too. With this sentiment in mind developers are actively marketing the health benefits of their properties, from “low VOC and formaldehyde-free” building materials to above minimum standard insulation for excellent thermal performance. These building choices both boost resident health and wellbeing, as well as lift the value of the home, <a href="https://www.urban.com.au/news/kelvin-rachel-taing-of-excelon-projects-discuss-buyer-demand-for-sustainable-developments">providing developers with a strong incentive</a> to uplift the quality of their developments in 2020. 

2. Solar technology is being developed for more seamlessly integrated uses

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/the-general-in-northcote-melbourne-c111218-p12_0.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="870" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/the-general-in-northcote-melbourne-c111218-p12_0.jpg?itok=XVFNNruR" width="580"></a></figure>What was once an arbitrary placement of photovoltaic panels on residential roofing – solar technology has been developed to deliver more seamless integration within our built environment. Northcote’s The General impressed us with cutting edge <a href="https://www.urban.com.au/news/spotlight-on-sustainable-the-general-melbourne">photovoltaic balustrades</a>, giving the glass a dual purpose, and more aesthetic consideration. In 2020, we’re likely to see greater use of the exciting new paper-thin solar technology used within developments. Scientists have been making thin films out of <a href="http://www.buffalo.edu/ubnow/stories/2020/01/zeng-thin-films%C2%A0">barium zirconium </a><a href="http://www.buffalo.edu/ubnow/stories/2020/01/zeng-thin-films%C2%A0">sulfide</a><a href="http://www.buffalo.edu/ubnow/stories/2020/01/zeng-thin-films%C2%A0"> (BaZrS3)</a>, a material which has exceptional electronic and optical properties. With the ability to absorb light effectively and its light-weight quality, makes the material an ideal option for photovoltaic conduction.

<blockquote>
“For many decades, there have been only a handful of semiconductor materials that have been used, with silicon being the dominant material... Our thin films open the door to a new direction in semiconductor research. There’s a chance to explore the potential of a whole new class of materials.”
</blockquote>

Hao Zeng, Lead researcher, Professor of Physics, College of Arts and Sciences

3. Communal offerings within apartments are becoming more creative and future-focused

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/screen_shot_2019-11-13_at_3.14.20_pm_0.png" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="190" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/screen_shot_2019-11-13_at_3.14.20_pm_0.png?itok=llI9krHe" width="580"></a></figure>Apartment-living has seen an increased buyer interest across the board from a varied range of property seekers, from first home buyer and investors to families and downsizers. The demand for apartment living has pushed developers to think of creative ways to accommodate the varying requirements of buyers from each demographic. In recent years, apartment amenities have extended beyond a pool, gym and communal rooftop, to state-of-the-art wellness facilities, on-site cinemas, golf simulation rooms and fully integrated master-planned precincts. A trend we’ve noticed which is likely to continue this year is the emphasis on grass-roots facility offerings - mimicking that of a detached dwelling. This includes communal vegetable patches, living areas, tools sheds, maker spaces, and composting/recycling facilities.

4. Climate change will see a greater emphasis placed on the circular economy and supply chain of building materials and furniture

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/123.jpg" rel="gallery-all" title="Photo credit: Nicholas Failla"><img alt="" class="image-article-full-width-580px" height="327" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/123.jpg?itok=CtEkZsZl" title="Photo credit: Nicholas Failla" width="580"></a>

<figcaption>Photo credit: Nicholas Failla</figcaption></figure>Having a green approach to business operation is becoming increasingly important to Australian companies’ strategies – and this approach encompasses the entire lifecycle of a product. Transparency within the supply chain means that the end-user (developer, builder, apartment owner) knows exactly where the materials have been sourced, who manufactured them and how it was transported to the final destination. Current conversation suggests that in the next few years, digital passports will be assigned to products so that buyers can confirm that the materials have been sourced ethically and environmentally consciously – as well as providing more accountability in the manufacturing line. 

<blockquote>
"Customers want clarity. It is expected that traceability will continue to become more prevalent and could reach the point where customers will be able to scan a product’s barcode at the point of sale and access data about its entire journey through the supply chain."
</blockquote>

Sean Galea-Pace, <a href="https://www.supplychaindigital.com/supply-chain-management/three-key-ways-tackle-supply-chain-2020%C2%A0">Supply Chain Digital</a>

Extending further than the supply chain is the circular economy, which looks at the recyclability of the product upon its end of use. This can mean opting for more natural, biodegradable products, or materials that can be repurposed after a building has been demolished.

<blockquote>
“We’re transforming the way we think about waste and resource recovery – developing a circular economy will deliver better environmental, social and economic results for Victoria.”
</blockquote>

Minister for Energy, Environment and Climate Change Lily D’Ambrosio

Good Environmental Choice Australia CEO, Kate Harris, recently had a chat with Urban.com.au about the importance of implementing the circular economy concept here in Australia as a means to mitigate construction waste. Harris suggested that some key drivers towards growth in recycling and upcycling in the construction environment could be incentivising, as well as a shift in dialogue about how upcycling can be beneficial rather than a hindrance to your project. 

<blockquote>
“It is reframing it as ‘resource recovery’. If we start to see it differently, we’ll use it differently.”
</blockquote>

Kate Harris, Good Environmental Choice Australia CEO (Listen to the podcast here)

5. Passivhaus design is becoming more popular among Australian homeowners

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/thefern1-1.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="327" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/thefern1-1.jpg?itok=RGDv7mgv" width="580"></a></figure>The year 2019 saw the launch of Australia’s first Passivhaus apartment building, <a href="https://www.urban.com.au/news/no-dust-no-noise-no-bills-australias-first-passivhaus-apartments-are-almost-here">The Fern</a>, delivered by Steele Associates. Passivhaus design has proven to be a viable option for all parties – from its attractive financial savings for buyers (they can expect practically zero utility bills), to its environmentally-conscious energy-saving techniques and <a href="https://www.urban.com.au/news/oliver-steele-of-steele-associates-discusses-australian-building-codes-and-apartment-design">health benefits</a> (including exceptional ventilation, insulation and thermal bridging).

<blockquote>
“Passivhaus takes sustainable development to the next level, using proven building physics to create healthy living spaces that stay cool in summer and warm in winter with ultra-low energy use.”
</blockquote>

Oliver Steele, Steele Associates Director

With benefits that attract buyer demand and support developer’s commitments to environmental sustainability, it is likely we could see a rise in Passivhaus designed apartments in the pipeline for 2020.

6. Biophilic design is just as integral in commercial development as it is in residential

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/68clarkestsouthmelbourne_exterior_0.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="682" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/68clarkestsouthmelbourne_exterior_0.jpg?itok=BytWRjsS" width="580"></a></figure>Similar to Passivhaus design, Biophilic design is the human-centric approach to building design, by creating spaces which support the health and wellbeing of its residents. This can include promoting natural light and airflow, integrating urban greening through blurred indoor-outdoor distinction, adaptable floor-plans, and more. Last year, <a href="https://www.urban.com.au/news/elenberg-frasers-vicki-karavasil-discusses-market-lanes-biophilic-design-approach">Elenberg Fraser designed</a> an exciting new ‘non-office, office’ called Market Lane.

<blockquote>
“In Market Lane, biophilic design has been applied in ways where there is a direct relationship to nature in space. Landscape is the obvious one, however here we go far beyond a few scattered pots, this is seriously dense planting, undulating in height and form to create usable spaces of varying levels of intimacy.”
</blockquote>

Vicki Karavasil, Elenberg Fraser

In addition to landscaping, Market Lane features a central void which allows air to circulate freely, tracked air quality and lighting sensitive to the circadian rhythm. 

<blockquote>
“What needs to be understood, is that some of these strategies may cost more upfront, however in the long-run if they have huge benefits which can retain the major tenants who value wellness high in their company identity, and can in effect have economic benefits through the ability to adapt and control of building services based on occupant needs and patterns.”
</blockquote>

Vicki Karavasil, Elenberg Fraser

7. Retrofitting and repurposing of older buildings remains a viable option 

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/old-new_1.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="327" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/old-new_1.jpg?itok=w-4CMFWA" width="580"></a></figure>Australia’s cities are enriched with a unique tapestry of architecture and history, so where buildings can be preserved, it is often a desirable option to do so. With a future focus on climate change and environmental sustainability, the 'take, make and dispose' ideology is a concept that needs to change immediately if we want to see our planet regenerate any time soon.

By <a href="https://www.urban.com.au/news/upcycling-australia-why-demolish-when-you-can-re-polish">upcycling building materials</a> such as bricks, or historic facades, we can extend a material’s lifecycle, as well as reducing carbon emissions that would be used in the production of the brand new equivalent material. 

While entire building retrofits are costly and challenging, salvaging perfectly sound materials and preserving the unique quality of Australia’s historic architecture remains popular among architects, due to the unique quality of the finished result, and the ability to eliminate significant wastage.

<blockquote>
“Upcycling adds value by transforming or reinventing an otherwise-disposable item into something of higher quality.”
</blockquote>

William McDonough, Founding Principal of William McDonough + Partners

8. Carparking and car-use is likely to be reconsidered within both residential development and urban design

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/park2.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="327" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/park2.jpg?itok=h5BCykQK" width="580"></a></figure>With the rising popularity of car-sharing, taxi service apps and public transport upgrades, car use in Australia is changing drastically. This is encouraging designers and urban planners to <a href="https://www.urban.com.au/news/university-of-western-australia-students-discuss-disrupting-the-car-parking-status-quo-in-perth">relook at how car parking is integrated within our cities</a> and apartment buildings. <a href="https://www.urban.com.au/developers/nightingale-housing">Nightingale Housing</a> made a bold decision to avoid creating car parking spaces, and instead provide residents with a carsharing membership, which was approved by Moreland City Council as an appropriate solution. In the City of Melbourne, despite having more than 215,000 parking spaces available, approximately one-third are <a href="https://profile.id.com.au/perth/car-ownership">not used every day</a>. 

Over the course of 2020, we are expecting to see further developments in the introduction of electric car charging facilities, integration of car-sharing and <a href="https://www.urban.com.au/news/high-yield-produce-gardens-with-next-to-no-maintenance-are-set-to-enhance-apartment-living-in-australia">innovative repurposing of disused parking spaces</a>. 
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Olivia Round

Urban’s 8 building design predictions for 2020

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It has been a tough year for the retail sector so far in 2019 and the upcoming festive spending will likely do little to change that underwhelming result, according to the latest quarterly retail forecast from Deloitte Access Economics.
It reported that weak wage growth, high debt levels and increasing price pressures are hurting demand, while tax returns and interest rate cuts have yet to fully come through.
However there is some positive news, with 2020 holding more promise.
According to Deloitte Access Economics’ latest quarterly Retail Forecasts subscriber report (Q4 2019):
<ol>
<li>Retail sales in September posted the weakest result since the 1990s recession, falling 0.2% over the year</li>
<li>Retail price pressures remain strong, eating away at volumes growth as households struggle with weak wage growth and high debt levels</li>
<li>Tax offsets and lower interest rates provided limited support to consumer spend to date</li>
<li>The outlook for 2020 is more positive with retail spending expected to grow 2.6% over the year.</li>
</ol>
"Retail sales look to be ending 2019 on a relatively soft note as consumers face increasing budget pressures, said Deloitte Access Economics partner and Retail Forecasts principal author David Rumbens.
"Stagnating wage growth and weak house prices have limited consumer willingness to spend, while tax offsets and interest rate cuts have yet to translate to sales. And with retail prices increasing, spending volumes have taken the hit posting the weakest growth since the 1990s recession.
"The start of the Christmas season looks to hold little cheer for retailers after a tough 2019 to date, and according to Deloitte’s recent Retailers’ Christmas Survey, only 21% (down from 41% last year) of respondents expect a growth above 5% this year."
Retail prices are surging on supply factors
Rumbens said retail price growth has been accelerating over the past year, with prices growing 2.6% in the year to September quarter.
"This is the first time since 2009 that retail prices have consistently outpaced general price pressures in the economy," he said
"Unfortunately for retailers, price growth is not reflective of stronger demand, but rather increasing cost pressures from a weaker Australian dollar, the increase to the minimum wage, and supply disruptions from droughts and floods.
"With retailers being squeezed on both sides from weak sales volumes and increasing costs, margins are coming under pressure."
Looking to 2020 for a turnaround
"We expect to see a much-needed improvement in the drivers of spending, providing the environment for a turn around the weak retail demand profile in 2020," Rumbens said. 
"Stronger wage growth, a reinvigorated housing market and moderating prices pressures are expected to support a much stronger growth outlook in the year ahead."
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