Old Government House—no longer Parra’s tallest building
I grew up a few train stops west of Australia’s second oldest white settlement, Parramatta. For the 20-something years I lived nearby, not a great deal changed to the built environment. They finished the 83m-tall Commonwealth Centre in the Bicentennial year. There were a few similarly-sized commercial buildings completed in the early 1990s, just in time for the nationwide office glut.
Around the same time, Westfield Parramatta started metastasising to the south of the train tracks, sucking away a similar quantity of life from the street-level environment. Kicks nightclub closed (and they say binge drinking is a growing problem?).
Over the subsequent 20 years, to today, quite a bit of mid-level residential has been built, particularly down by that ancient river that did most of the grunt work carving out Sydney Harbour, plus around the highways and in fringing suburbs like North Parramatta. In the last 5-10 years, there’s been increasing decentralisation of government commercial offices towards Parramatta.
But something has definitely shifted abruptly over the past five years, roughly coinciding with the Wanderers and The Poznań coming to town, and hopefully nothing to do with the Eels‘ demise. A pro-development council has been in charge for a while. Life is spilling onto the streets. The claim ‘Sydney’s second CBD’—a term now actively embraced by all three levels of government—no longer rings hollow.
The 89m Eclipse became the city’s tallest structure in 2012, perhaps the last ever commercial building to claim the title. It was already itself eclipsed by the residential B1 Tower (90 metres) in 2013. That’s currently the area’s tallest building, officially at least.
But there is a potential tsunami of development in the pipeline. Not all of it will get built (it never does), perhaps not even most of it. But those lamenting or relying on NSW’s lack of housing supply might want to take a look.
The 92m Rise Apartments (mixed use) is topping out at the moment. It will soon, briefly and theoretically, be called Parramatta’s tallest. But it already isn’t in practice. Three buildings have already surpassed the height of Rise – they just haven’t finished growing yet. In total, there are 6 taller towers already under construction for completion this year or next, all residential or mixed use, all above 100 metres. The 177m Altitude Apartment Tower A will be almost twice the height of today’s tallest building.
Then there’s the planned and approved stuff, yet to start construction. If it all gets built (again, it won’t), a few years from now the tallest building today (B1 Tower) won’t even be in the top 30, according to skyscrapercenter.com. According to Westie skyscraper buff (and sibling) Mitchell Brown, if you include plans for immediate fringe suburbs like North Parramatta, Rosehill and Camellia, B1 might not even make it to the top 50 tallest buildings. The first site alone to be developed in a reimagined Camellia is proposed to have 9 buildings as tall as anything completed in the Parramatta CBD today, and a few shorter ones too.
Developer’s ambitions have unsurprisingly grown to meet the council’s. A few anecdotes are illustrative. The under-construction Altitude apartment complex was first approved as a 32- and 22-floor complex. In a deal with authorities the 32-level tower grew to 55 levels in exchange for an adjoining car park being gifted to council to convert to ‘green space’. You’re thinking playground, right? While plans are not finalised, it now seems likely that this green space will itself contain two towers of a similar height to Altitude (unless the state makes good on its threat to usurp the land for a relocated Powerhouse museum – much to council’s chagrin). Subsequent to this horsetrading, it was felt that the shorter tower in the Altitude complex needed to grow from 22 to 39 levels, to give the complex a ‘more balanced aesthetic’.
Perhaps an even more striking example of growing ambition is with the long ago completed and occupied Meriton complex on George Street. It is a relatively low rise, large floorplate building of barely 10 levels. A year or two ago, plans were submitted to build twin, 12 level towers directly atop this structure. Before this plan had even gotten through the approval process, new amended plans have been drawn for twin 180m towers (50-55 levels) instead, bang on top of an existing building.
Almost all these skyscrapers either under construction or being planned are intended for residential use. The tallest will be as low as 240m and as high as 300m, depending on if the architects or the aviation authorities win the argument.
While the Sydney CBD long-ago succumbed to skyscraper tall poppy syndrome, focusing on infill and allowing its height to be dictated by that relic of what the future looked like from 1970, Sydney Tower, other Australian capital city CBDs have grown up, and up.
Parramatta is keenly joining them, full throttle. And it’s not just skyscrapers, there’s also plenty of mid-sized apartments being built or planned. Those wondering about Sydney’s housing supply might want to take their eyes off outer suburban land releases and take a look.
Thanks Gareth,
what percentage of the apartments have been pre-sold?
there is lots of medium density new housing going up in central Melbourne but when you walk past only about a third appear to be occupied after a year compared to fully occupied older buildings.
Is this cost carried by the developer or are they the cashed up foreign buyers who own them and are not concerned about income, or even leveraged local negative gearers?
In other words are we witnessing over-investment?
Developers are actively getting investment from overseas buyers in order to meet pre-sale thresholds for bank and mezzanine funding to complete developments.
Apartments prices in Parramatta, on a sqm basis, are starting to challenge Hong Kong prices. There is argument these prices don’t reflect economic fundamentals but are rather a means to move graft funds out of China and other countries. There are some recent residential developments in the Melbourne CBD that are showing 10%+ vacancy years after construction having never been leased out to tenants based on water meter readings. I suspect same issues will occur in Parramatta as well. Interesting that the residential property industry isn’t (currently) subject to the monitoring and reporting requirements of the The Anti-Money Laundering and Counter-Terrorism Financing Act.
Some of the proposed developments are occurring on Parramatta river flood plains so will be interesting what happens to underground car parks when the next major flood occurs (remember what happened in Brisbane…).
Thanks Ben, good points. It’s amazing that someone wanting to invest $200 month in a Forager fund needs to go through those reporting requirements, but not to buy a $1.5m apartment!
I hadn’t thought about the flood plain issue, very interesting.
Very interesting question Craig. I haven’t looked property by property but many claim to be pre-sold to quite high levels. But bear in mind this anecdote from John Hempton and Jonathan Tepper, what I thought was one of the more interesting points from their work in January. This comes straight from an AFR article – http://www.afr.com/news/economy/employment/uncovering-the-big-aussie-short-20160223-gn130w
‘Hempton says in their research they encountered developers lying about units and houses being sold in the west. “You’d go into a building in Parramatta and it will mark the apartments as sold. You say, ‘I really want the one on the north-east side’ and suddenly one will be unsold.”‘
Nice post as always Gareth. Got any idea what the new development means in terms of increase in Parramatta housing stock/residential population? And what it does it mean for infrastructure use (esp Parramatta station)? Or will people just have to pack themselves tighter and tighter into existing carriages? Don’t know if you saw it but there was a good article by Bob Carr the other day discussing pollies’ keenness for ‘big Australia’ but lack of interest in dealing with the infrastructure issues that brings with it. You’ve also got to wonder what happens to all these apartments once the current high immigration/property boom ends? I don’t really follow the Sydney property market very closely but it seems like any sort of reversion to mean (in terms of rates of immigration and property price ratios) could see many of these towers become ‘ghost towers’?
Thanks mate. The plans will be massively impactful to the Parramatta CBD population (not many people lived in that area prior to 10-15 years ago), meaningful at a regional/Western Sydney level and perhaps not so meaningful at a state level. But add it to what they’re planning for the Parramatta Road corridor which goes most of the way to Sydney centre, the long Parramatta River corridor plus what’s happening in Sydney’s other secondary CBDs, it’s hard not to come to the conclusion that the supply response looks very different this time to the underwhelming supply response over the past 20 years.
RE infrastructure, I think if you’re going to build a densely populated second CBD, Parramatta is as good a place as any. There are plenty of jobs, perhaps more coming (although CBA is leaving for Redfern). And that fast connection to Sydney city is really quick. Trains are plenty crowded already in peak hours, not sure what the government is planning in response.
Yeah I saw that article, a good read. As I tweeted, I never feel so dirty as when I agree with Bob Carr.
The same story seems to be repeating all over the place. I grew up in Mentone in suburban Melbourne, which in the 80s and 90s almost had a country town feel to it.
I still go there every now and then, and I am flabbergasted by some of the places that they are building apartments – like on the site of the old bowling alley, at a five-way intersection that has plenty of traffic 24-7-365.
I can’t fathom why anyone would want to live in a place that combines the worst of suburban (long commutes, traffic, poor public transport infrastructure etc.) and city (noise, pollution, lack of space etc.) living.
SG, probably because they can’t afford to live anywhere else in this country’s ridiculously expensive property market
Unfortunately aspects of the Australian resi market seem eerily reminiscent to:
– The massive apartment tower boom in China 2003-2014 (ghost towers);
– The US resi property market pre-GGC;
– Ireland resi property market pre-GFC.
Or is it just me???
As an old Bond & FX trader for over 30 years, all I know is that when a market – any market – is subject to constant frenzied discussion and media saturation over an extended period – then we are very close to a major change in market direction.
‘You’d go into a building in Parramatta and it will mark the apartments as sold. You say, ‘I really want the one on the north-east side’ and suddenly one will be unsold.’
This seems to be pretty common.
The developers do this to create the feeling of scarcity: a version of “call in the next 30 minutes or you will miss out”.
In some cases, they actually do make a sale to a sham company that they also own, so can play the title-go-round game and make it available if wanted, or just a bit later they come on the market.
Stories in Adelaide of developments working like this, with 30% – 50% vacancy rates a couple of years later based on counting garbage bins.
Fundamentally is comes down to our (Australians) ability to pay for all this housing – Chinese money aside. Watch it all come to a abrupt halt once interest rates and unemployment rises.