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A few months ago I started a public awareness campaign, which we called "The RBA Appeal", in an attempt to draw the RBA’s attention to the underlying softness in the Australian economy, which could be exacerbated by risks offshore.
It appears that the economists are starting to listen: Westpac’s Bill Evans has done a 180-degree turn from predicting rate hikes to now forecasting four rate cuts.
When you accept the historically low consumer and business confidence estimates reported by the Westpac-Melbourne Institute and NAB surveys, the dismal performance of retailers like David Jones, the striking decline in employment growth, the slide in house prices, and the relentless downgrades of economic growth forecasts from various bank economists, you start to appreciate the pain that pervades the real economy, not the “official” economy that the Reserve Bank theorises about.
The Reserve Bank tells us that wages are growing, which is one rationale for a cycle of rate rises. However, these figures mean little in the suburbs, where the only thing growing is electricity charges, grocery bills, fuel prices and flood levies. Meanwhile, waiting in the shadows is a carbon tax that no one understands except for the fact that it’s another hand in their pockets.
Several weeks ago, I observed that even though the Reserve Bank had raised interest rates seven times in 18 months – and seemed committed to more rate hikes – the bond futures market, which tends to lead equities, was pricing in a full rate cut by January 2012.
I assumed this indicated the Reserve Bank would be pushed to change course by a sudden “sovereign event”, such as a government going broke, defaulting on its debts, or behaving in a way that moves markets, like declaring war.
What a difference two weeks can make: Greece and Italy are now clear contenders for a default-and-bailout scenario that will hit the global credit markets harder than the Lehman Brothers collapse in 2008.
When Lehman Brothers – Wall Street’s fourth-largest investment bank – sought bankruptcy in September 2008, Barclays and Nomura bought out its books. It was as orderly as could be expected, yet it still triggered the global financial crisis.
If a western European nation goes bust, the shock waves could hit Australia much harder; we’ll see credit freezes, lenders going out of business, and a bear market that could take years to recover. The mining industry might sail through untouched, but it only employs 2% of our workers. The other 98% of employers, and small business in particular, will bear the brunt of the turmoil.
The United States is caught in its own sovereign event: a president who wants to raise the national debt ceiling to honour its borrowings, and a Congress that wants to cut government spending to remain beneath the debt ceiling.
And while the fears of a sovereign event create the headlines, there are deeper structural problems in Australia that have already sapped confidence.
One is the “two-speed economy”. It has become fashionable for economists and media commentators to scoff at this idea, but when the derision ends the question remains: how do you judge an entire economy on the extraordinary success of the narrow mining industry? Bloomberg News put it most succinctly a few months ago when it found a 24-year-old mining rigger in Western Australia earning more than the chairman of the Federal Reserve, Ben Bernanke.
A second issue is that Australia is supposed to run on monetary policy where the cost of money controls inflation. But governments still have fiscal programs, such as the first-home owner grants and the Building the Education Revolution scheme. These are inflationary because they pump cash into the system, which the Reserve Bank has to control with rate rises. Our current rate rise cycle started as the Rudd government’s fiscal stimulus package kicked in.
The problem is that the Reserve doesn’t have the capacity to respond to – or ignore – specific causes of inflation. It can’t differentiate between wages growth in industries, or between sources of fiscal stimulus; it can only raise, lower or hold interest rates based on official inflation indices.
But that doesn’t help hardworking Australians. I talk to a lot of business owners, and I can’t recall a time when there has been so much confusion. In the early 1990s, when unemployment was high and banks wouldn’t lend to small businesses, the landscape was very clear. The pain was spread evenly.
Today, business owners are confused: how can interest rates be rising when the economy they operate in is so flat?
Unlike the low-confidence environment of the early 1990s, we’re not worrying about unemployment this time. However, the Reserve Bank should note that the quantitative driver of employment in this country is small and medium-sized businesses, not the mining industry’s wages, which only accrue to those in that industry. The Reserve Bank should remember that most businesses in this country are “mum and dad” affairs, whose business finance is raised off their family mortgages. They are highly sensitive to interest rate movements, and so are their hiring intentions.
With the financial year having ended, the Reserve Bank has an opportunity to take its head out of the technical economy and look at the practical economy. At a time when households and small businesses are low on confidence and high on costs of living, we should be easing interest rates to secure a soft landing from the expected global problems, and to guide the domestic economy back on to a sure footing.
I am glad Westpac has finally bought into my arguments. But rather than cutting rates once this year, and three times next year, as Westpac forecasts, why not get pre-emptive? If the Reserve Bank cuts rates at the next board meeting, it may avoid the need to have to slash rates in a GFC-style fashion after the crisis has already hit our shores.
People like to say the Reserve Bank gets ahead of the curve. They forget, however, that our Reserve Bank kept mortgage rates at 9.6% as late as August 2008, and only reduced rates for the first time in September that year. The RBA got behind the eight ball in the last crisis. I would hate to see history repeat itself.
Mark Bouris is the chairman/co-founder of Yellow Brick Road Group.
This article originally appeared on<a target="_blank" title="Business Spectator" href="https://www.businessspectator.com.au/"> Business Spectator</a>.
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cknowlton-QnEa6ntUYP

Slashing rates could prevent an economic disaster

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{yoogallery src=[images/stories/july18mountbarker]}
24 Old Mount Barker Road, Crafers, SA, 5152
This 1917 country mansion is full of space and period detail. Within walking distance to Stirling Village, the seven-bedroom, four-bathroom house has more than 450 square metres of living space and sympathetically updated old-school charm. The house features 3,300 square metres of English-style gardens, five open fireplaces, an inground solar-heated swimming pool and an extensive wine cellar. It is being sold by <a href="https://www.jamespartners.com.au/Index.cfm?MenuItemID=19675&amp;subject=Home" target="_blank" title="James Partners">First National James Partners</a> agent Chris Robson with hopes of $2.35 million.
 
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Historic sandstone mansion in Crafers

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Zara could establish up to 40 stores in Australia during the next few years, a retail consultant says, as the Spanish fashion retailer prepares to open in Brisbane.
Brian Walker of The Retail Doctor Group estimates Zara’s stores in Sydney and Melbourne are likely to turn over about $45 million in their first year of operation, with the Sydney opening said to have been the second most successful in its parent company’s history.
Walker says Zara is a “huge success story in what is reported to be a cautious market” and that its growth is sustainable. There are 1700 Zara stores worldwide.
“Zara wouldn’t contemplate setting up without settling in the major cities as a bare minimum,” Walker says.
“It wouldn’t surprise me if they had between 20 and 40 stores (in Australia) within the next five years.”
According to Walker even with Australia’s relatively small population Zara could find at least 100 good sites in shopping centres across the country and might set up some of its other brands here.
According to The Australian Financial Review, Zara is looking for at least 800 squares metres in the Queensland capital, with the main target the Queen Street Mall precinct, home to high-end retailers including Tiffany &amp; Co and Swarovski.
Another site reportedly of interest is a nearby store that once housed a Borders book chain outlet.
At 800 square metres the Brisbane store would be much smaller than the 1400-square-metre Sydney CBD Westfield store but Walker says going on conservative turnover estimates of $35 million for Sydney the Brisbane store could turn over between $20-$24 million.
Walker says he is not surprised by reports that Zara is demanding turnover-based rent, saying as an anchor tenant it has arrived with plenty of bargaining power, similar to other department stores.
The arrival is somewhat of a mixed bag for competing retailers Walker says, with a store such as Zara generating much needed traffic and providing a destination for shoppers who might otherwise shop online.
“With Westfield Sydney the whole ambition is bringing people into the centre,” Walker says.
“But if you’re trying to sell fast disposable fashion next door, with less contemporary offerings and at less attractive prices, it’s a wake-up call,” Walker says.
This story first appeared on <a href="https://www.smartcompany.com.au/news">SmartCompany</a>.
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Zara aims for Brisbane as Australian expansion ramps up

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The Australian Tax Office has warned against schemes that seek to make interest payments on home loans tax deductable.
The draft determination relates to a taxpayer with separate loans for at least two properties – residential and investment – with a line of credit.
The line of credit is then drawn down to pay the interest on the investment loan as it falls due, and where no repayments are required the taxpayer does not make any repayment, which results in the interest on the line of credit being capitalised and compounded.
The ATO says without the line of credit, the taxpayer would have made interest payments with cash.
“A key feature of the investment loan interest payment arrangement is the use of the line of credit to pay the interest on the investment loan. This results in interest on the investment loan, in effect, being capitalised and thus its payment deferred in order to enable the taxpayer(s) to repay an equivalent amount on the home loan.
“Therefore, the real effect and substance of the investment loan interest payment arrangement is to purportedly make the payment of interest on the capital sum paid in reduction of the home loan tax deductible."
The draft determination says it is “open for a reasonable person to conclude … that one or more of the parties that entered into or carried out the scheme did so for the dominant purpose of enabling the taxpayer(s) to obtain a tax benefit in connection with the scheme".
“If such a conclusion is reached, Part IVA applies to the scheme and the Commissioner would be entitled to determine … that any deduction for the relevant interest incurred on the line of credit shall not be allowable to the taxpayer(s).”
Gavan Ord, business policy adviser CPA Australia, says the intent of the scheme is to get a tax deduction on your home loan – and that’s precisely what the ATO doesn’t want.
While expressing surprise that the issue has reared its head again, Ord says the ATO has “obviously seen something, and it’s quite clear it’s something they don’t accept.” 
“Somehow the issue’s come back up, and people seem to be offering the product and probably making a risk-assessment to put it out there to see whether the ATO will act.
“And they’re finding the ATO is now acting.
“For those that are doing it, and those that are offering, they need to clarify the tax benefits.”
Ord urges individuals to speak to their accountant first before entering into a similar scheme, adding a lot of them come up at the end of the financial year.
Those that sign up for the scheme are expected to have their deduction claim rejected, and be subject to penalties if they are found to have paid insufficient tax.
Likewise, businesses promoting this scheme could be subject to ATO’s promoter penalty regime, which contains very large fines for the company and its directors, Ord says.
Gerald Foley, managing director of National Mortgage Brokers, was also surprised.
“I haven’t heard of anyone writing these loans for years,” Foley says.
“It seemed as though a small number jumped on the structure and fought a good fight to get it ticked off by the tax office.
“As I recall, it wasn’t success.”
This article first appeared on <a href="https://www.smartcompany.com.au/index.php">SmartCompany</a>.
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ATO sounds warning on split loan schemes

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The build-up to a new national licensing regime for mortgage brokers has contributed to an exodus of one in five practitioners as ASIC starts to crack the whip.
 
From July 1, 2011 all mortgage brokers must either hold an Australian credit licence, be a licensed credit representative or cease trading.
Brokers who operate without a licence or that do not comply with responsible lending obligations (in place for a year now) aimed at ensuring consumers are not recommended unsuitable mortgages risk heavy fines of up to $220,000 ($1.1 million for corporations) and up to five years’ imprisonment.
To date 6,800 licences have been issued by ASIC, the industry watchdog. Phil Naylor, CEO of the Mortgage and Finance Association of Australia, the peak industry body, says the vast majority of these were issued to mortgage brokers.
No toothless tiger
ASIC has already shown it means business, issuing its first credit infringement notice on June 28, just days before the new regime is set in stone.
The offender was an unnamed Sydney-based mortgage broker, who was hit with a penalty of $27,500 because the company continued to advertise it provided credit services on its website in contravention of consumer protection legislation.
In issuing the notice, ASIC chairman Greg Medcraft made it quite clear that while the decision to issue such notices was not be taken lightly the watchdog will be no toothless tiger: “The issuing of an infringement notice should send a clear message to traders that we are prepared to take action for the alleged breach,” Medcraft says. “Mortgage brokers are the gatekeepers between consumers and lenders, and they have an obligation to act in accordance with the law.” 
Others to have felt ASIC’s wrath include mortgage broker Moshe Yair Mordechai, formerly of Glenwood, NSW, who was permanently banned by ASIC on June 10 from engaging in credit activities and financial services as a result of a history of serious fraud offences. ASIC also cancelled the credit licence issued to Mordechai’s Australian Lending and Finance Corporation on the grounds that the application was false or misleading.
Industry exodus
 
Rather than face ASIC scrutiny and a tougher operating environment, many have decided on a career change instead.
 
The Mortgage and Finance Association of Australia is losing about 200 to 250 members per month. Its current membership sits at 12,000.
This exodus comes on top of a 20% drop in member numbers over the last three years as a result of commission cuts and major bank dominance of lending in the wake of the GFC.
Former mortgage broker Corinne Coombs saw the writing on the wall in 2007. 
The effects of the GFC had just started to hit Australian shores, and Coombs says she was frustrated by the major banks, which were dragging out processing times on broker-introduced home loans and threatening to cut their commissions. 
“It really affected my health, as I was stressed to the max,” she says. 
After six years in the industry, she quit. 
The credit crunch led to an almost complete withdrawal of the non-bank sector, a sector previously reliant on brokers for distributing its mortgage products. 
This gap was readily filled by the major banks. 
Former Competition and Consumer commissioner Stephen King noted at the time that the previous 18 months reversed a 20-year trend in banking competition. 
With a near-complete stranglehold on the mortgage market, banks cut broker commissions by about 35% in 2008, blaming higher wholesale borrowing rates for their decision to decrease payments. 
In many cases, the cuts were accompanied by the introduction of “quality metrics” – a complicated payment system that rewarded brokers for cross-selling and achieving higher conversion rates. 
In short, brokers were suddenly required to do more work for less money. 
At the time, the MFAA issued a statement bemoaning the commission changes. 
“Time and time again, members have said to me, ‘Why are mortgage brokers, which are for the most part small businesses, being singled out for 35% remuneration reductions in order to boost bank profit margins?’,” says MFAA chief executive Phil Naylor. 
Although high property prices in Australia’s major cities mean some brokers have the potential to earn six-figure salaries, the majority sit well below that. According to PayScale, the average mortgage broker brings home $64,000. 
Cuts to commissions have been compounded by lender clawbacks. 
Clawbacks were initially introduced by banks as a method to deter customer churn – but the government’s recent decision to ban exit fees has prompted an even greater number of players, particularly in the non-bank sector, to introduce clawback measures. 
Clawbacks essentially mean brokers who receive a commission for placing a loan with a lender could have to forfeit part or all of that commission should the borrower refinance within two years. 
Home Loan Experts director Otto Dargan calls the situation with commission cuts and clawbacks “madness”. 
“Brokers’ profit margins are very slim considering we now do online lodgment, need to meet conversion and quality requirements and comply with new regulations. If we don't focus on profitability then we will not be around in the future. I strongly believe that the banks need to increase commissions for brokers to ensure that the good brokers stay in the industry. There has already been a significant loss of talent from the broker market and the retail banking market to other industries.”
Loan minimum volume requirements are another area of angst for brokers. Commonwealth Bank, for example, informed brokers they must submit a minimum of four home loan applications with a minimum of three home loans settled within a six-month period. Brokers who failed to meet the criteria would be required to attend a reaccreditation workshop for a fee of $500. 
Effect on consumers 
So what do the changes to the mortgage broking industry mean for consumers? Borrowers can also expect to experience a flow-on effect from the commission cuts. 
Many brokers are looking at diversifying their service in an effort to boost their bottom line. As result, consumers can expect to be offered insurance, credit cards or personal loans when making a loan enquiry. 
According to 1st Street principal Jeremy Fisher, “brokers are looking for a more holistic service offering and are now looking to include the cross-sell more than before. Personally I am not looking to cross-sell to make up for commission cuts, but more so to ensure I am offering my clients the complete service proposition to ensure a long-term relationship with the client.” 
Vow Financial’s Brown believes less than 5% of brokers are currently offering a diversified service, but expects we’ll see that increase to 20% over the next 12 months. 
Another possible outcome for borrowers could be the introduction of a “fee for service”. The fee for service issue has become a hot topic in broker circles as many look to charge clients a consultation fee in addition to receiving a commission from lenders. 
According to Busby, “there is a place for fee for service when you are going beyond a standard transaction. This could be for service, structure, planning or advice that you will not be paid for your service and time.” 
Some brokers have already successfully introduced a fee, but whether consumers as a whole are ready to pay for a service that was formerly free remains to be seen.
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Time's up for unlicensed mortgage brokers

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The price of a property in the rural NSW suburb of Gosford West that has appeared on SQM Research's Top 10 Most Discounted Properties list since early June has been slashed again.
The property at 3 Boolari Road, Gosford West originally went on the market on July 8, 2009 with an asking price of $990,000. It appeared on SQM director Louis Christopher's most discounted properties list on June 1, 2011, and its asking price had dropped to $650,000, a 34% reduction in price during its 682 days on the market. 
The price expectation for the 10-hectare property is now $580,000 a 41% discount from the original asking price. Gosford City Council has expressed interest in buying nine hectares of undeveloped land for $75,000.
 
1
<a target="_blank" title="4 Flora Street" href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.domain.com.au%2FPublic%2FPropertyDetails.aspx%3Fadid%3D2008173508">4 Flora Street, Midland, WA, 6056</a>
On the market since: August 16, 2009
Initial asking price: $1.9 million
Current asking price: $850,000
Reduction: 55%
Days on market: 673
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">2</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.domain.com.au%2FPublic%2FPropertyDetails.aspx%3Fadid%3D2008659274" title="83 Queensbridge Street" target="_blank">2506/83 Queensbridge Street, Southbank, Victoria, 3006</a>
On the market since: October 10, 2010
Initial asking price: $2.15 million
Current asking price: $1.5 million
Reduction: 30%
Days on market: 231
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">3</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.domain.com.au%2FPublic%2FPropertyDetails.aspx%3Fadid%3D2008491614" title="25 Vicary Street" target="_blank">25 Vicary Street, Triabunna, Tasmania, 7190</a>
On the market since: August 2, 2010
Initial asking price: $299,000
Current asking price: $189,000
Reduction: 37%
Days on market: 322
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">4</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.realestate.com.au%2Fcgi-bin%2Frsearch%3Fa%3Do%26id%3D106364068" title="22 Fenton Avenue" target="_blank">22 Fenton Avenue, Christies Beach, SA, 5165</a>
On the market since: March 6, 2010
Initial asking price: $1.195 million
Current asking price: $845,000
Reduction: 29%
Days on market: 469
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">5</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.realestate.com.au%2Fcgi-bin%2Frsearch%3Fa%3Do%26id%3D106966579" title="1350 Wynnum Road" target="_blank">1350 Wynnum Road, Tingalpa, Queensland, 4173</a>
On the market since: November 6, 2010
Initial asking price: $700,000
Current asking price: $380,000
Reduction: 46%
Days on market: 224
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">6</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.realestate.com.au%2Fcgi-bin%2Frsearch%3Fa%3Do%26id%3D106984366" title="35 Flinders Drive" target="_blank">35 Flinders Drive, Stuart Park, NT, 0820</a>
On the market since: November 13, 2010
Initial asking price: $1.15 million
Current asking price: $925,000
Reduction: 20%
Days on market: 217
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">7</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.realestate.com.au%2Fcgi-bin%2Frsearch%3Fa%3Do%26id%3D105832903" title="3 Boolari Road" target="_blank">3 Boolari Road, Gosford West, NSW, 2250</a>
On the market since: July 8, 2009
Initial asking price: $990,000
Current asking price: $580,000
Reduction: 41%
Days on market: 710
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">8</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.domain.com.au%2FPublic%2FPropertyDetails.aspx%3Fadid%3D2008734656" title="3 Mugga Way, Forrest" target="_blank">3 Mugga Way, Forrest, ACT, 2603</a>
On the market since: December 11, 2010
Initial asking price: $1,995, 000
Current asking price: $1,699,000
Reduction: 15%
Days on market: 190
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">9</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.domain.com.au%2FPublic%2FPropertyDetails.aspx%3Fadid%3D2008511720" title="12 Melrose Street" target="_blank">12 Melrose Street, Mosman, NSW, 2088</a>
On the market since: August 14, 2010
Initial asking price: $2.2 million
Current asking price: $1.69 million
Reduction: 23%
Days on market: 308
 
<h2 style="outline-style: none; outline-width: initial; outline-color: initial; font-size: 18px; font-family: Georgia, Utopia, Palatino, 'Palatino Linotype', serif; line-height: 21px; padding: 0px; margin: 0px;">10</h2>
<a href="https://sqmresearch.com.au/homediscounts/redir.php?url=http%3A%2F%2Fwww.realestate.com.au%2Fcgi-bin%2Frsearch%3Fa%3Do%26id%3D106703025" title="229 Steyne Road" target="_blank">229 Steyne Road, Saratoga, NSW, 2251</a>
On the market since: July 24, 2010
Initial asking price: $695,000
Current asking price: $495,000
Reduction: 29%
Days on market: 329
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NSW discounted property on SQM's list gets even deeper discount

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{yoogallery src=[images/stories/june28isleofcapri]}
2126 The Circle, Sanctuary Cove, Queensland, 4212
This four-bedroom, five-bathroom house on 771 square metres has a waterfront position, luxurious fittings and fixtures and state-of-the-art everything. The wet-edge swimming pool has views across the river, and the deck has a semi-circular seating area around a fire pit. The home cinema has leather reclining seats. The house is being sold through <a target="_blank" title="Coldwell Banker Ledgerwood" href="https://www.cblrealty.com.au/buying/QLD/Gold-Coast-and-Hinterland/SANCTUARY-COVE/House/31P0167">Coldwell Banker Ledgerwood</a> agent Peter Ledgerwood with price hopes of $4.6 million plus.
 
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The lap of luxury in Sanctuary Cove

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{yoogallery src=[images/stories/june28musgrave]}
1201 Musgrave Street, Coolangatta, Queensland, 4225
This penthouse of gargantuan proportions is in the Gold Coast fashionable locale of Kirra Beach. The 700-square-metre, two-level penthouse is heavy on light, space and opulence. The four-bedroom, four-bathroom property has a lift, swimming pool on the second floor, 2.7-metre ceilings and the finest fittings and fixtures. It has absolute beach frontage, with water views from every angle. It is being sold through <a href="https://www.ljhooker.com.au/JBNF2T" title="LJ Hooker" target="_blank">LJ Hooker Coolangatta/Tweed</a> agent Terry Doyle, with price hopes of $6.5 million plus. 
 
 
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Bigger is better in Coolangatta

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{yoogallery src=[images/stories/june26oldecoach]}
6 Olde Coach Lane, Glen Osmond, SA, 5064
On the market for the first time since it was build in 1995, this neo-Georgian residence is luxuriously appointed and adjacent to Seymour College. The three-bedroom, three-bathroom house on a 615-square metre block offeres a marble fireplace with gas fire perfect for winter, manicured gardens, a separate study with built-in desk and storage and an upstairs balcony with lovely views. It is being marketed by <a target="_blank" title="Top&amp;Too[" href="https://www.toop.com.au/fulldetails.asp?refid=6OLDECGLE0A&amp;startat=0&amp;recno=1&amp;suburb=glen+osmond&amp;surround=&amp;fromprice=&amp;toprice=&amp;bedrooms=&amp;bathrooms=&amp;carports=&amp;keyword=&amp;tenniscourt=&amp;ipix=&amp;investment=&amp;pool=&amp;new=&amp;PropertyTypeID=&amp;LandSizeID=&amp;howmany=10&amp;PropertyStyleID=&amp;view=&amp;sort=suburb&amp;action=submit&amp;area=&amp;checkdom=&amp;from=&amp;video=">Toop&amp;Toop</a> agents Tim Thredgold and Stephanie Williams, with a price expectation of $1,795,000 plus. The property goes to auction on Friday, July 1 at 11am. 
 
 
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Elegant neo-Georgian in Glen Osmond

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{yoogallery src=[images/june26jonnelpark]}
14112 Pacific Highway, Nabiac, NSW, 2312
Comprising 14 hectares of excellent farmland, Jonnel Lodge has plenty of sheds, bores and good grazing land. The property currently has more than 30 head of cattle, but would also be good as a horse farm or used for hospitality. It is a 20-minute drive from the town of Forster and an hour and a half from Sydney. The beach is a 15-minute drive away. The house itself has 590 square metres of space and includes four bedrooms and three bathrooms. The games room, currently set up with a full-sized pool table and wet bar, overlooks paddocks and the nearby Wallamba River. <a href="https://www.ljhooker.com.au/7P7F85" title="LJ Hooker" target="_blank">LJ Hooker Wigham</a> agent Peter Sayers is marketing the property, which has a price expectation of $1.4 million plus. 
 
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Rural haven in Nabiac

For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.

At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.

It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.

The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.

After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.

In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.

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<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.

"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.

"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."

The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.

Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.

The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.

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The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.

Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.

"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.

"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."

On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.

Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.

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Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.

That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.

John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.

"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.

"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."

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Equitifund isn't just commenting on Melbourne's property market, it's investing in it.

The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.

The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.

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The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.

Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.

Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.

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The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.

Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.

"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.

"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."

He said rising construction costs are also changing the way buyers assess completed developments.

"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."

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According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.

"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.

"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."

He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.

"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."

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Why now is the time to buy in Melbourne's premium apartment market

Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

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Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

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Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

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Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

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Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

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<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

Cassidy Knowlton

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