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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

Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.

Proposed changes to negative gearing and capital gains tax concessions would see new and off-the-plan apartments retain access to the tax benefits, while established properties would miss out, creating a clear advantage for buyers purchasing newly built housing.

The policy direction aligns with what many developers have been saying for several years. Australia needs more housing supply, and governments are increasingly looking for ways to encourage investment into new stock rather than existing homes.

The challenge for investors is that suitable product is becoming harder to find.

For much of the last decade, one-bedroom apartments were the cornerstone of investor demand. They offered a lower entry price, strong rental appeal, and were a common feature across most apartment developments.

Today, the development pipeline looks very different.

Across both New South Wales and South East Queensland, developers are increasingly targeting owner-occupiers and downsizers, delivering larger two, three and four-bedroom apartments in response to changing buyer preferences. While one-bedroom apartments still exist, they now form a much smaller portion of many new projects.

That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.

At the same time, rising apartment prices have pushed many new developments beyond the reach of traditional investors. On the Gold Coast and across South East Queensland, it's becoming increasingly difficult to find new apartments priced around the $1 million mark, particularly those offering strong rental fundamentals and long-term growth prospects.

We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.

The one-bedroom apartments in the building were only offered to first home buyers rather than investors, and all of those have been snapped up. The two-bedroom apartments will start from $1.07 million, and the three-bedrooms, still a good investment given the popularity of Palm Beach for owner-occupiers, starting at $2,045,000.

&nbsp;

[smartcode_project:default project_id=150017 project_image_fid=370964]

Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.

True to Sherpa's booming Flourish brand of apartment projects, Flourish Soleira will have extensive rooftop amenity across both buildings including a&nbsp;wellness centre with gym, work from home, yoga, pilates, a&nbsp;heated pool, private dining rooms, pizza oven and barbecues, basketball court, and golf simulator.

<h2>Corallo, Palm Beach</h2>

Priced from: $841,500

Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.

The 105-apartment project on Palm Beach Avenue is otherwise dominated by larger two and three-bedroom residences, many of which are aimed at owner-occupiers and downsizers.

[smartcode_project:default project_id=112194 project_image_fid=808]

For investors, the appeal lies in Palm Beach's continued transformation from a laid-back beachside suburb into one of the Gold Coast's most sought-after residential markets. Residents at Corallo will be within walking distance of Palm Beach's surf beaches, the recreational amenity of Tallebudgera Creek, and the increasingly popular collection of cafes, restaurants and boutique retailers along the suburb's central dining precinct.

<h2>Corner House, Stones Corner</h2>

<h2>Priced from: $880,000</h2>

One of only two Brisbane apartment developments to make the list with prices under $1 million is DeMartini Fletcher's Corner House development in Stones Corner.

One-bedroom apartments start from $880,000 within the 88-apartment development, providing investors with exposure to one of Brisbane's most established inner-south locations.

[smartcode_project:default project_id=149098 project_image_fid=330594]

Stones Corner has long been supported by strong tenant demand due to its proximity to major employment and education destinations. The suburb sits less than five kilometres from Brisbane's CBD and is within easy reach of the Princess Alexandra Hospital, Greenslopes Private Hospital, Queensland Children's Hospital and several university campuses.

The project's location within a walkable urban village environment, surrounded by retail, dining and public transport infrastructure, continues to attract both professionals and healthcare workers seeking accommodation close to work.

Parkdrive Apartments, Chermside

Priced from: $749,000

The most affordable apartments across Brisbane's new and off the plan market are in Chermside where developer AusDev is selling one-bedroom apartments from $749,000, and two-beds from $929,000, at its recently launched Parkdrive development.

The development is strategically positioned in one of Brisbane's largest employment and retail precincts, placing residents within easy walking distance of Westfield Chermside, The Prince Charles Hospital, St Vincent's Private Hospital Northside and the suburb's major bus interchange.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Already under construction and scheduled for completion in early 2028, Parkdrive benefits from Chermside's ongoing evolution into Brisbane's northern metropolitan centre. The suburb continues to attract significant public and private investment, supporting population growth and underpinning long-term rental demand.

For investors focused on yield and tenant depth, the combination of healthcare, retail and transport infrastructure within close proximity provides a strong foundation for occupancy and rental performance.

Joel Robinson

Investors to turn to new apartments after Federal Government changes spark hunt for Queensland's best $1 million apartments

A mix of Gold Coast locals, fly-in, fly-out purchasers from Sydney and Melbourne, and Brisbane-based families has driven early sales success at Broadbeach's newest apartment tower, Lumara.

The 26-level project, a joint venture between builder-developer 5Point Projects and Bourke Projects, comprises just 37 luxury residences and is attracting a buyer profile that is looking for exclusivity, above the most amenity-rich suburb on the Gold Coast.

[smartcode_project:default project_id=150454 project_image_fid=364156]

Jamie Bourke, Director of Bourke Projects, says every buyer secured so far intends to use Lumara as a lock-up-and-leave residence, combining holiday use with the ability to work remotely when required.

“The size of the apartments, both half- and full-floor options, and the different zones within the floorplans, lends itself perfectly to dedicated home office setups and multi-generational family holidays,” Bourke says.

That flexibility has become a key drawcard for affluent buyers seeking a second residence on the Gold Coast without sacrificing the ability to conduct business away from their primary home base.

The absence of holiday letting within the building has also resonated strongly with purchasers.

“This type of buyer doesn't need to generate holiday rental income,” Bourke says. “They're paying for exclusivity, privacy and certainty around who their neighbours are.”

[smartcode_project:default project_id=150454 project_image_fid=366491]

The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.

“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.

“A lot of those buyers are looking to place more capital into premium lifestyle assets rather than investment-grade stock that has been targeted by the Federal Government.”

[smartcode_project:default project_id=150454 project_image_fid=366486]

Designed by Cottee Parker, Lumara adopts a slender, sculpted form with an emphasis on natural materials suited to its beachfront setting. The architectural approach draws on coastal influences, with a palette of stone, timber and concrete selected for durability and the ability to weather over time.

Apartments are limited to three and four-bedroom configurations, with a maximum of two residences per floor through the mid-levels and a selection of full-floor and dual-level homes in the upper levels. All apartments are oriented to the north to maximise natural light, cross-ventilation and views across the ocean, city skyline and hinterland.

A two-level amenity offering is positioned high within the building on levels 20 and 21, conceived as a sky wellness retreat. Facilities include a magnesium pool, spa, sauna and steam rooms, alongside more social spaces such as a private dining room, resident lounge, workspaces and outdoor barbecue areas integrated with landscaped greenery.

The uppermost levels are reserved for larger-format residences, including several full-floor homes and a dual-level penthouse with its own private wellness features and recreational spaces.

&nbsp;

To give buyers confidence, 5Point and Bourke commenced construction ahead of the apartments launching to the market, a sure-fire way to prove they mean business, and the building will be delivered. They are targeting a 2028 completion date.

[smartcode_project_cta:default project_id=150454]

Locals, interstate holiday makers, drive early sales at Lumara, Broadbeach's newest luxury apartment tower

Often when it comes to purchasing property, the biggest barrier to entry is the deposit. Buyers of established homes typically aim for a 20 per cent deposit to avoid the added cost of Lenders Mortgage Insurance, while most property transactions require around a 10 per cent deposit when contracts are exchanged.

The off-the-plan market works differently, with buyers typically paying a deposit during construction and settling the balance upon completion. As completion approaches at <a href="https://www.apartments.com.au/new-apartments/fabbrica-fitzroy-369-gore-street-fitzroy-vic-3065">Fabbrica Fitzroy</a>, developer <a href="https://www.apartments.com.au/developers/pace-development-group">Pace</a> is making it easier for buyers to secure a residence through a deposit-matching incentive. Purchasers need only contribute a five per cent deposit*, with Pace matching the remaining five per cent.

The offer comes as Pace unveils a completed display apartment and townhouse, now available for inspection by appointment ahead of the project's Spring completion.

[smartcode_project:default project_id=139552 project_image_fid=371009]

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/winwood-mckenzie-architecture">Winwood Mckenzie</a> and landscaping by <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a>, Fabbrica draws on Fitzroy’s industrial and manufacturing history, incorporating references to the former Argyle Shirt Factory and Life Savers Confectionery Company that once occupied the site.

The development comprises 85 residences, spanning low-maintenance apartments through to larger-format townhouses with private street access and double lock-up garages, a relatively uncommon offering in Fitzroy’s higher-density apartment market.

Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.

[smartcode_project:default project_id=139552 project_image_fid=371016]

Inside the residences, Winwood Mckenzie has focused on adaptable layouts and integrated detailing, with features including custom joinery, and concealed storage solutions. The material palette leans into warm, tactile finishes intended to complement the building’s industrial architectural language.

Fabbrica’s rooftop amenity is a key part of the project offering. Spanning around 800 sqm, the communal rooftop includes a private dining room, communal kitchen, lounge spaces, work-from-home zones, and outdoor dining areas overlooking the Melbourne CBD skyline.

[smartcode_project:default project_id=139552 project_image_fid=371017]

Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.

The Fitzroy location also positions residents within walking distance of Brunswick Street, Smith Street, parks, cafés, galleries, and public transport, while remaining only minutes from Melbourne’s CBD. The project has an enviable Walk Score of 96.

[smartcode_project:default project_id=139552 project_image_fid=371025]

Pace, which is also delivering the project as builder, has developed more than 100 projects across Melbourne over the past three decades. The vertically integrated approach has become increasingly common among developers seeking greater control over construction delivery amid broader market pressures affecting the apartment sector.

The strikingly contemporary Gore Street development is now around 70 per cent complete, with purchasers expected to move into their new homes in Spring 2026. A limited number of residences remain available under the current deposit match offer.

*Conditions apply in relation to the deposit match offer.

[smartcode_project_cta:default project_id=139552]

Pace offers five per cent deposit match at Fabbrica Fitzroy ahead of Spring completion

Sydney developer Hyecorp's roots on the Lower North Shore stretch back three generations, and that deep understanding of the market continues to shape where and how it develops today.

From high-rise towers to boutique apartment projects, the family-run developer has built its reputation by focusing on a part of Sydney it knows intimately. Founded by Michael Abolakian in the early 1990s, Hyecorp is now led by his sons Stephen, Troy and Patrick.

Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.

Abolakian says the developer's disciplined focus on where it chooses to operate has been, and continues to be, one of Hyecorp's greatest strengths.

“We know the buyer profile exceptionally well,” Abolakian says.

“The demographics between places like Willoughby, Chatswood, St Leonards and Roseville are very similar. There are nuances between suburbs and projects, but culturally and from a buyer perspective, there’s a strong overlap.”

That buyer has historically been overwhelmingly owner-occupier driven.

Unlike many Sydney apartment developers that have traditionally relied heavily on investor demand, Hyecorp’s projects have typically attracted downsizers, upsizers, rightsizers and family owner-occupiers seeking long-term homes rather than short-term investments.

“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.

“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”

That philosophy extends well beyond apartment layouts.

From landscaping and communal gardens to shared amenities and circulation spaces, Hyecorp’s developments are designed around how people actually live, something Abolakian believes has become increasingly important in Sydney’s apartment market.

“There was probably a period where having an approved project in market was enough,” he says.

“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”

“There’s more supply in the pipeline now, particularly with TOD precincts and low and mid-rise reforms opening up opportunities across Sydney. Buyers have more choice, so if you get the product wrong, they’ll simply go elsewhere.”

[smartcode_project:default project_id=110379 project_image_fid=311393]

The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.

For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.

“People buying now often aren’t moving in for several years,” Abolakian says.

“You might have a young couple buying today, but by the time they move in they may have children, older children, or changing lifestyle needs. You’ve got to think about how families evolve.”

That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.

[smartcode_project:default project_id=149594 project_image_fid=362634]

While resort-style facilities have become increasingly common marketing tools across Sydney apartment developments, Abolakian says the challenge is ensuring amenities are genuinely usable and appropriate for the scale of the project.

“If amenities are done right, they can materially improve the living experience,” he says, adding however that if you&nbsp;overdo it or get it wrong, you can end up with facilities nobody uses that simply create ongoing strata costs.”

That balance is something Hyecorp is aiming to strike with projects like Roseville Avenue, one of the group's upcoming Lower North Shore developments, which Abolakian describes as bringing a resort-style living experience into a metropolitan setting.

“It’s about creating something that feels special without being excessive,” he says.

“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”

<img alt="Hyecorp" data-entity-type="file" data-entity-uuid="13c4c0f3-b1b7-44cf-9344-0b3d1d07797a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-02%20at%2012.14.57%E2%80%AFPM.png?VersionId=9OLWjyj2bYkDV35F78WJnyMSPfc2bJ2z" />

The focus on owner-occupier product comes as Sydney’s apartment market continues to navigate a difficult development environment.&nbsp;For Hyecorp, maintaining an in-house operating model across construction, sales, marketing and development management has become increasingly important in navigating that environment.

“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.

“It creates efficiencies, but it also creates quality control. You can make faster decisions and ensure the end product stays aligned with the original vision.”

Despite the challenges, Abolakian believes demand for quality owner-occupier apartments across Sydney remains strong beneath the surface, particularly across established Lower North Shore suburbs where downsizers continue to seek new housing options close to existing communities.

“There are definitely people waiting,” he says.

“Once some of the broader uncertainty settles, whether that’s the global environment or some of the local economic noise, I think the right projects will perform very strongly.”

Hyecorp currently has three residential developments on the market across Sydney’s Lower North Shore.&nbsp;Audrey, St Leonards, positioned opposite Newlands Park, is nearing completion and preparing to welcome its first residents, with the project now almost sold out.

Hyecorp has also recently launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/celine-chatswood-37-archer-street-chatswood-nsw-2067">Celine Chatswood</a>, an architectural tower, while continuing to deliver&nbsp;<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet Roseville</a>, a more boutique scale of development with just 34 apartments.

Why Hyecorp continues to back Sydney's Lower North Shore apartment market

South East Queensland’s apartment market is entering a new phase defined by rising prices, constrained affordability, and mounting pressure on the construction pipeline, according to RPM Group’s latest SEQ Apartments &amp; Townhomes Market Report.

The May 2026 report highlights a widening divide between what buyers can afford and what developers can viably deliver, with detached house prices continuing to push more buyers toward apartments across Brisbane, the Gold Coast, and the Sunshine Coast.

RPM says Brisbane’s median house price has reached around $1.5 million, accelerating the shift toward higher-density housing as buyers are increasingly priced out of the detached market.

[smartcode_project:default project_id=135094 project_image_fid=356540]

Median unit prices rose across all three major SEQ markets in the March quarter. Brisbane City recorded the strongest annual growth, with median unit prices climbing 21 per cent to $862,000, while the Gold Coast reached the highest overall median at $950,000, up 17 per cent year-on-year. The Sunshine Coast followed at $870,000, representing annual growth of nine per cent.

RPM noted the affordability gap between houses and units remains significant, with detached homes commanding premiums of 67 per cent in Brisbane and 68 per cent on the Gold Coast relative to apartments.

The report suggests this price disparity is increasingly consolidating buyer demand within the apartment market, particularly among downsizers and owner-occupiers.

“Demand is real. Supply is moving. But they’re operating on different timelines and the gap between what’s being built and what buyers can afford is the defining tension in this market right now,” RPM Queensland and NSW Managing Directors Peter Neale and Clinton Trezise said in the report.

[smartcode_project:default project_id=150787 project_image_fid=366230]

While approvals and commencements are strengthening, RPM argues the delivery pipeline remains constrained by construction costs, labour shortages, and extended build timelines.

Apartment approvals across Queensland increased 86 per cent over the year to February 2026, reaching 12,682 approvals, the highest level recorded since 2016. Brisbane overtook the Gold Coast as the state’s most active apartment approval market, with nearly 5,000 apartments approved over the past 12 months.

Unit commencements also strengthened considerably, rising 48 per cent year-on-year to 5,453 commencements in the December 2025 quarter, the highest level since 2018.

However, RPM’s research found apartment delivery timeframes have expanded sharply compared to the previous cycle. Projects are now averaging around 30 months from approval to completion, compared to roughly 20 months a decade ago.

[smartcode_project:default project_id=143932 project_image_fid=367515]

The number of units under construction has climbed to approximately 31,530 dwellings, nearing the previous 2016 peak, though projects are remaining in the pipeline for considerably longer.

Construction costs continue to weigh heavily on feasibility. RPM found the average apartment construction cost in Greater Brisbane reached $630,000 per dwelling in 2025, exceeding both Sydney and Melbourne. Coastal Queensland markets, including the Gold Coast and Sunshine Coast, were even higher at an average of $817,418 per apartment due to the prevalence of larger premium product.

The report also points to increasing pressure from Olympic-related infrastructure spending ahead of Brisbane 2032, with labour competition expected to intensify over the next several years.

[smartcode_project:default project_id=150017 project_image_fid=370960]

ANZ Associate Director of Property Daniel Gradwell said the underlying demand drivers across South East Queensland remain strong, supported by interstate migration, downsizers, and population growth.

“The challenge is bringing enough supply to market to meet that demand, and nothing on the horizon makes that straightforward,” Gradwell said.

RPM’s analysis found the affordability challenge is becoming more pronounced in the new apartment market itself, with only three per cent of surveyed new apartments priced below $1 million.

Instead, the market is increasingly concentrated in higher price brackets, with the most common new apartment price band across SEQ sitting between $1.5 million and $1.75 million. Around half of all new apartment stock surveyed is priced below $2 million.

The report suggests developers are not necessarily avoiding lower price points by choice, but because current construction economics make delivering affordable apartments increasingly difficult at scale.

Rental conditions also remain tight across the region. Median rents for one-bedroom apartments rose 12 per cent in Brisbane over the past year to $580 per week, while Gold Coast one-bedroom rents increased nine per cent to $630.

Despite rising rents, RPM noted bond lodgements have generally trended downward over the past five years, indicating more apartments are being absorbed by owner-occupiers rather than retained as investor-held rental stock.

Looking ahead, RPM expects projects targeting the mid-market owner-occupier segment between $1.25 million and $2 million to remain the most viable part of the market, while premium projects in highly constrained coastal or riverfront locations continue to attract demand.

“Construction costs are rewriting the feasibility rulebook across Greater Brisbane, and with little relief in sight, only projects in the right price band, right location, and with presales secured early will make it through,” the report concludes.

Cassidy Knowlton

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