[tayser]

land and labour costs would be higher in Melbourne - and Australia in general. Australia doesn't have a nice little (read 180 million) country to the south full of low-skilled labour seeking a better life across the Rio Grande!

Although no-one in the development industry is on them, Australia has the 2nd highest minimum wage in the world (and it's national - no regional variances) and flows through to everything up the chain - look at the Big Mac index for a crude, but accurate comparison.

re: construction financing. 10 years ago, banks would require 50% pre-sales for projects to get the go ahead, post-GFC it's more like 70-80% for residential construction and probably the same for commercial development.

Docklands has been a plus and a minus for the city as its soaking up all the commercial tenancies as big tenants can get their own building to manage on huge floor plates and that's the key difference between this boom and the one 10 years ago - more of Docklands is becoming more attractive hence you get massive "groundscrapers" - like ANZ (bank), Aurecon (engineering), NAB (bank - they're already starting on the 2nd!), Myer (retailer (head office, not retail shop)), Fujitsu (consulting), Ericsson (telco) et al.

Banks like RBS, BNP, BoA, Citi and HSBC used to deal a lot in development financing, they're mostly still in the game but have cut back to repatriate capital back to the Northern Hemisphere for obvious reasons.

A new twist these days is S.E. Asian developers - particularly from Malaysia - are getting in on the gig, Fulton Lane is a good example, first tower primarily sold to Malaysian owners, 2nd tower more domestic focus - both are going ahead.

I think the best way to differentiate Australia (actually Victoria because this doesnt apply across Australia) and say California is that the local councils where most people are elected on anti-development campaigns - local councils are just that, the City of Melbourne only has about 100k people living in it, but it's also only about 75 square kilometres - they're overruled by a powerful central state government planning somewhat frequently. For example any proposal which has a gross floor area over 25,000 square metres is automatically sent to the state government's Department of Sustainability of Environment for approval and the local council area is only advised or asked for opinion. Ultimately this works because the state government has a far bigger picture in its head rather than just a tiny region like a local council. That probably wouldn't be the best way for California to go given that the state is 1.5 times the size of Australia and has two massive urban areas to potentially implement that policy in... just wanted to highlight how different is.

As I understand it, local councils in the US (and Canada) have far more power and from my own observation in LA, I noted that if you're in the city of Santa Monica, you pay a different rate of sales tax compared to a neighbouring city!!! That doesn't happen here and is a prime example of how most of the strategy and power lies in the state government (and effectively the federal government - although they're very light on city policy like in the US etc).