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GUEST OBSERVATION
Last month, the government released it’s latest <a href="https://fsi.gov.au/files/2014/12/FSI_Final_Report_Consolidated20141210.pdf" target="_blank">Financial Systems Inquiry Report</a>. 
The Inquiry led by David Murray laid out a ‘blueprint’ for the financial system over the next decade. It has been 16 years since the last 1997 Wallis report which led to ASIC and APRA being setup, amongst other things. The previous Campbell report in 1981 led to the floating of the Australian dollar and the deregulation of the financial sector.
In short, this is an important report that is listened to and will have impacts on the way financial system moves forward.
One key recommendation in the report was to ban leveraging (borrowing) within superannuation and therefore the removal of limited recourse borrowing arrangements (LRBA). LRBAs have been growing at an astounding rate as property investors have been able to use all the tax benefits of self-managed super funds to buy investment properties in a low tax rate environment. Obviously with the love of property Australians have, this has been a great idea for some and not so great for others.
The reason Murray is worried about borrowing and for considering banning these arrangements is due to the leveraging of assets may destabilise the superannuation industry sometime in the future if property prices should fall. He is also concerned by the shear number going forward and does this make our superannuation industry property heavy.
The government may after the consulting period which finishes on 31 March 2015 decide to make an immediate change from any day going forward. If it believes it is a wise suggestion, they would remove the ability to borrow inside superannuation for property and make this change for future arrangements only and all current SMSFs can continue as normal.
So is this an opportunity you could miss?
It is important to be very mindful that this is not for everyone. Investing in any property has different associated risks and especially when using debt. One of the drivers for change, is down to there being greedy property spruikers that have been targeting lower balance disgruntled superannuation members with new properties for sale.
Spruikers have been using Australians love of property as bait and selling properties to unsuitable super members. This is the real risk for this strategy; purchasing poor property at top prices with no diversification in place or buffer if things should go wrong. I have seen this first hand. I have been offered and absolutely refused the opportunity to sell horrendous investment properties to my clients for huge commissions. This is a disaster waiting to happen and I have been actively against this type of behaviour for many years.
Putting this to one side;  For some purchasing a great, sound, highly sought after investment property in an SMSF can however be an absolute brilliant strategy to build wealth for retirement in a diversified way. The tax advantages of Superannuation means debt can be repaid faster with lower tax on contributions and rental income. It does however solely come down to it being an outstanding property – one characterised by limited supply and an ever increasing demand.
So should you buy a sound stable property in your SMSF?<a href="https://www.canopyprivate.com.au/" target="_blank"> </a>
It can give you a great low volatile asset and with the power of debt can increase your exposure to the investment market by three to four times what you are currently have in an investment portfolio. While this is not suitable for all, if you are currently contributing more than $15-20,000 per year, have over $300,000 in your family super funds and have at least five years till you retire; you may like to consider it before the opportunity may go in 2015.
However, If you are still under $200,000 and still growing your contributions, I would sit tight and wait a few years before even looking at it.
I am actively disagreeing with the removal of LRBAs as i believe it should be the right for investors to decide how their superannuation is invested. I do however want greater attention on property spruikers and developers who are selling these without any concern on the effect it has on the person buying.
Chris Bates is a director of financial advisory firm <a href="https://www.canopyprivate.com.au/" target="_blank">Canopy Private</a>.
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ChrisBates-qgpJqFG5wJ

Is SMSF lending on borrowed time?

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GUEST OBSERVATION
Over the past few months of 2015, I have found myself dealing with a similar conversation almost every day. Many clients have been looking for help to think through a very difficult and challenging situation.
My clients (usually Sydney based ambitious families in their 30s and 40s) have all been battling the very same problem: “How do we get our family 'forever home' with the insane price rise in Sydney property?”
I doubt that I need to mention just how enormous the prices have been. Apparently <a href="https://www.theaustralian.com.au/business/property/melbourne-sydney-housing-prices-continue-to-rise-rp-data-shows/story-fn9656lz-1227204705717" target="_blank">Sydney is now up 57% since January 2009</a>. What makes this even more challenging is that the once affordable parts are now part of the unaffordable parts of town close to the city. 
If you read, what other people are willing to say (not that you should believe it) but<a href="/expert-insights/buying/the-factors-that-will-continue-to-drive-sydneys-prices-higher-peter-chittenden"> prices appear likely to continue to rise</a>.
From what I can see on my end is that affordability is pushed to the hilt for most families. Most families are taking out very large loans but what i see is that it does not meant they are not willing to push it a bit further.
With five year fixed interest rates at 4.4%; Buyers are undoubtedly saying I do not mind if the property prices do not grow further. I am just happy to make sure I do not have to rent long-term.
With rental prices at 3-3.5% of the house value; it is not such a crazy argument to have a stable home and potentially get some capital growth. Interest rates at 7% however and it would be a totally different story.
Without going in to detail about how I think Sydney property prices work, why they are very special, dangerous in some parts and very safe in others; it has been very interesting to have these conversations.
What makes it exciting is that we have actually ended up in very different places and decisions.
While a mortgage brokers job on the surface is very similar and boring to most, in reality when they take a financial planning approach with an education mindset they are able to help clients deal with their situation in their very own individual way.
An outcome that is suited to them and their future.
I love this about my job, it’s never a one-dimension answer and I believe in all these cases the client has made a great decision for them.
So fundamentally, what is the problem and what are the options?
<ul>
<li>Option 1: do I continue to rent in Sydney and be pushed out of the market forever</li>
<li>Option 2: do I buy a home with a huge debt</li>
<li>Option 3: do I invest elsewhere</li>
<li>Option 4: do I save a bit more money and wait for Sydney prices to fall or cool down?”</li>
<li>Option 5: Many others as you will see.</li>
</ul>
"What do options create? Problems"
It’s important to know that even though they all want the very same thing - a family home to last them forever; they are all have very different circumstances. Some have property already, some know their future plans exactly, some have lots of savings built up and some have very little savings but very high incomes. No matter where they have come from and where they are today, they are all dealing with this problem of "how can we get a home in Sydney with these ridiculous prices".
Couple 1 – Don’t buy in Sydney but invest elsewhere
This couple are in their mid 30s and are soon to be getting married. One partner is from Melbourne and both are very successful in what they do. To complicate things, depending on their employment they may move to Melbourne one day.
They do not have any kids, but long-term they would love to live on the Northern Beaches in a family home. They are renting together at the moment and are questioning what they feel like is a ridiculous amount on rent each month.
At our initial conversation, they were planning on buying a two bedroom unit in North Sydney as this is what suited their needs today. We discussed the pros and cons and the more we chatted the more the conversation went in many alternative ways. 
At the end of the conversation, we realised the two bedroom unit was not the right move. We agreed that even though they knew it may be better to buy their longer term home today in Northern Beaches and rent it out, they were not sure, where, when and what they wanted.
After many followup chats, they decided to invest elsewhere and in another state. They chose to buy a great unit in Brisbane with the help of a buyer's agent. They still kept plenty of cash aside and are potentially going to buy another investment property in Melbourne in the future.
The outcome, was to get one to two great long-term investment properties and delay the home purchase due to uncertainty around where, when and what. A great result I believe, as the assets they are purchasing are top properties and it would have been riskier to buy something that did not suit their needs in Sydney long term.
Couple 2 – Buy dream home today, but fix it up and rent it out
This couple had a very large amount saved up from years working overseas. While they have no immediate plans to get married or have children they are very sure they want to stay in Sydney long-term and know the areas they love.
Happily renting a cheap property on the beach, they decided to buy a home today in the inner east. They went for the worst house in the best street approach and they are spending the first few months, tidying it up before renting it out.
While they are not planning on living in the property for at least five years, they will be making a tax deductible loss and have improved the rental return with their small renovation. 
Couple 3 – Buy their dream home but in the Central Coast for a third of the price
This couple were at a similar point in time, not married and with no kids on the horizon just yet. They loved space and the sea, and after a few discussions they did not want to put a huge debt over their head.
To buy a home near the sea in Sydney would have cost them a fortune and after a few trips up the coast they decided to buy a home on the central coast at less than a third of what they would have paid for something similar in Sydney.
This decision suited them to a tee. They can now live the life they want but without the worry of a huge mortgage over their head and pressure to earn very high incomes.
Couple 4 – Buy a great Investment Apartment in Sydney and borrow at 88% to keep cash available for the home.
This couple similar to the above were looking to purchase a property in Sydney with the idea of selling again in five years to buy a home. After a long and lengthy discussion, we agreed that this may not be the best decision due to buying and selling costs, the type of investment they were looking at and what they want to buy long term.
We agreed that if they were going to buy in Sydney it would need to be a great asset that they could hold forever – not have to sell. They would have to get a great property and after some heavy negotiation with a very sharp agent they picked up a top two bedroom unit in the inner east of Sydney. A beautiful unit that will stay highly desirable forever.
We realised to buy this place and put down a 20% deposit would be a big ask and may not be wise. We decided to borrow at 88% and paid a portion of lenders mortgage insurance as a result. This kept a significant amount still available for when they purchase a home one day and lowered their risk for what was a minimal fee. A very happy outcome and couple. They haven’t got the dream home yet but they do have a cracking property in Sydney market for the next five years at least.
Couple 5 – Buy now with the help of parents and pay down the debt fast
This couple in their 40s and had a family already well underway. After a divorce, a wedding and bringing up teenager kids in Sydney, savings were limited. Fortunately however their combined salaries serviced loans well over $2 million.
After a lengthy chat, it was clear that it would be possible to use the equity in their retired parents investment property. While extreme care was taken, they are now able to purchase the home they want today. It should not affect their parents as long as they continue to pay the loan and in a few years hopefully they can remove this guarantee. With interests low, they are able to pay down the debt significantly over the next five years as long as they bought within their limits due to the very high incomes. A great result that means they have their home forever now for the family and do not have the stress of having to continually pay very high rent for a family of four.
These are just five examples and there are actually many other examples. Sydney prices are insane and difficult but there are other ways to cut the cake.
Chris Bates is a director at boutique financial advisors <a href="https://www.canopyprivate.com.au/" target="_blank">Canopy Private</a>.
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Sydney's insane property prices - the tale of five couples: Chris Bates

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GUEST OBSERVATION
One of the biggest frustrations I have with the financial industry is the inability and general exclusion of property discussions by financial advisers and mortgage brokers alike.
I know this general lack of care and foresight in itself is affecting clients in life changing and sometimes irreparable ways. Whether they have not benefitted from the huge growth in the property market in the last five years as the adviser thought it was "too expensive", have unfortunately bought wrong assets with huge risks because they didn’t know who to ask, or they have gone ahead and not purchased anything at all because the adviser never discussed it with them.
One of the most cherished parts of my day to day role as a trusted adviser is to help my clients think through their property related decisions.
For example, this daily discussion could be helping my clients to understand whether they should or should not buy an investment property today, or when they want to buy a home in the future. It might be to discuss whether they should sell and buy a new family home or if it is better to renovate the one they live in today. It may be a strategic plan on how to build a multiple property portfolio over the next 30 years or it could be whether they should be buying a property at all.
All of these conversations are highly interesting and add huge measurable value in the future life of my clients. I love to help them think through their decisions and help them go deep in to the property market psyche. Let me be clear, this is not recommending individual properties on individual streets, but educating them on what drives the market and what type of properties suit their plan at this stage. I leave the hard work of finding the right property to professionals who know what they are doing - called buyer's agents. They are the ones who will find the right property to suit them long-term and not just today - not me.
Unfortunately however, I know I am rarity in the financial planning and mortgage industry. I would prefer that I wasn’t but due to being a financial planner, my previous experience in a property firm and also a mortgage broker I have had exposure to the many different areas of the property market. This experience while invaluable is also unique but I believe this should be a necessity and obligation for any aspiring financial planner.
Property has been an asset class that financial advisers have never had, and purposely not had, on their radar.
While completing initial qualifications it is barely mentioned and let alone tested in any way. The major financial institutions do not have any desire to encourage or educate their financial advisers to recommend property. To put simply, it would hurt their profits and shareholders would not like that.
Why has it not been discussed? Why have the majority of the advice industry decided to ignore a recommendation for over 20 years?
Internally within the industry, we all understand that the reason financial planners do not discuss it is because they do not get paid.
Financial planners have always been paid a commission for recommending investment share based products. If they recommended clients to purchase a property, they would not get paid. Sounds simple and maybe a rhetorical question; but is that advising or selling I ask?
If they recommended their client to consider purchasing a property and not shares, they would in affect rule themselves out of a nice paycheck today and to compound the issue further a lot of income in the future.
You see the ongoing fee package for the vast majority of financial planners is based on a percentage based fee. It is called an Asset Based Management Fee and has been around 1% for a long time.
Therefore, the more an adviser recommends for you to invest with them in shares and the less for you invest in property – the more money they make every year. If you a noticing a slight conflict here, you could be on to something?
To make you aware, there are legislation restrictions on advisers from recommending individual direct property and importantly professional indemnity insurance usually does not cover this advice. I am in complete and resounding support of advisers not recommending individual property. It would be highly conflicted and we are not the right people for the job in the first place.
Property is not an investment Australians would generally go to a financial planner to discuss. I would argue however that it one of the most important things they should be able to and need to discuss.
Property has been a great asset class for investors and homeowners. An important part and only a part of an adviser role is to help their clients to invest wisely, safely and in line with their future aspirations. The property market has been a great asset to help clients achieve their aspirations. But why do so many advisers choose to avoid this asset class entirely. In my eyes this should be called either insanity or greed. I’ll let you decide.
Lets put that to one side.
If financial planners are not advising property investors; where do they go?
Unfortunately the vast majority they make this key investment decision themselves. They may ask their friends and family what to do or quickly read a property education magazine, which is full of property developers selling property.
On first glance the property market seems simple, but the more clients understand it, they realise it is not as simple as everyone tends to believe. The first big mistake is that the property market is not one market. Just like the share market every property will perform very differently to every other property over the next 10 or 30 years. Some will do better than others, some will go down in value and some will go up significantly in value. Every property is different, that’s the biggest mistake.
What can be very complex to understand is also exponentially magnified, as the industry is unregulated. Every man, woman and their dog can sell property. They can tell you how amazing growth will be and how outstanding your rental yield is.
Three years ago I was telling clients to avoid mining towns like the plague and sure we all knew a crash was coming. There are houses selling at 20% of the value they were selling three years ago.<a href="https://www.dailytelegraph.com.au/realestate/news/property-prices-in-once-booming-mining-towns-crash-providing-lesson-in-where-not-to-invest/story-fni0cly6-1227210791143" target="_blank"> </a>
There are more horror stories of people buying the in the Docklands in Melbourne, Gold Coast and Noosa. There are fundamental risks with huge developments in apartment heaven near Sydney Airport.
You see people have bought all these properties, people are making all these horrible and life changing mistakes. They are real people and they are real losses.
Clients need guidance, clients need protection and clients need help. Unfortunately the property market can say whatever they want to say. Its buyers beware people.
For most Australians, their biggest asset is their home. Therefore their biggest investment decision would usually be the purchase or sale of their home. This decision alone will without doubt have huge impacts on their future wealth and prosperity. If a planner or mortgage broker is not skilled in talking about this decision nor makes an effort to help them with it then whom I ask does? Who are clients getting help from for the biggest financial decision in their life?
The issue I have is that very few planners or mortgage brokers are educating their clients on the property decision. Is it training, conflicted remuneration, education or general lack of care? Unfortunately the consumer society we live in and the significant growth we have witnessed has caused all sorts of problems in the property market. We now believe that anything new is better than old, we now believe that the property market only goes up and we all watch the block thinking renovating and making money in property is simple. I argue however that all three of these are incredibly wrong.
The biggest reason why so many people have made money in property is not through buying smart but it is due to the fact that they have owned property in the first place. This feeling has made people think that any property will do and society pressure to get on the ladder is causing investors to take the line of least of resistance when purchasing. Something new.
The purchase or sale of the property is huge decision. This decision has a whole list of other decisions it also brings. There are hundreds of different strategies, issues and opportunities that an investor needs to understand and consider.
Chris Bates is a director at boutique financial advisors <a href="https://www.canopyprivate.com.au/" target="_blank">Canopy Private</a>.
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Greed or insanity? The financial advice industry is ignoring a key problem: Chris Bates

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GUEST OBSERVATION
As a financial planner my role is to always be thinking about what is the best strategy and path for my client to take. Since I have been working very closely with mortgage brokers for many years, I have realised the vast majority of brokers and to a greater extent bank employees do not take the same strategic view.
Being a somewhat transactional role, most mortgage brokers take the line of least resistance to get the deal done. Whether they understand structuring strategies or not, very few take the time to educate their clients on the pros and cons of different decisions and how to make the most of their situation. In reality, they are also limited by compliance standards in some cases.
As a warning upfront, this can become very confusing and challenging for new clients to get their head around. If you end up feeling a little unsure, I’m not surprised as it does go against everything you may believe.
Moving forward, whether you should choose to go interest only or principal and interest is a question that every borrower needs to consider and answer when taking out a home loan.  Naturally we rush to find an answer, but before you make that decision, it’s important to truly understand it.
Our natural response is “principal and interest”. Our parents, grandparents and society all tell us that debt is bad and we need to repay it and that is true to a certain extent.
So why would I go interest only when I want to pay my debt down?
Well the truth is you can pay your debt down and a whole lot more by choosing to take an interest only loan with offset account.
Before I get marching in to why, I recommend nearly all my clients to go interest only, though there are ones from time to time that it is better to go principal and interest. These are generally borrowers who do not have their cash flow under control and feel like they need to be forced to save. This is purely the only benefit of going principal and interest – the bank forcing you to save.
I know I would prefer to choose what I do with my money each month and if I want to pay my debt down I will. If I need to just pay interest this month or use this money to cover short-term additional expenses I will.
So how does it work?
Firstly it’s important that when you setup the interest only loan, you also open an offset account linked to your loan. These are usually included for free with any package loan from a bank. An offset account does exactly that, offset your loan account. For example, if you had a loan of $500,000 and you had $20,000 in your offset account, you in reality only owe the bank $480,000. When they calculate your interest due for that day, you will only be charged interest on $480,000 owing, not $500,000. Without trying to drum the point home further but if you happened to put another $20,000 in your offset account, you would only pay interest on $460,000.
The offset account I believe is the best invention and tool in the financial planning world. I absolutely love them. They give my clients complete flexibility in what they would like to do with their cash flow and savings. We use this as a  “savings account” that will always be getting a greater return than any other savings account. It is completely assessable and can moved wherever needed. So if you do not have an offset account, I suggest you get one and secondly, understand how to best use it.
So if the key to paying down your debt each month is not by principal and interest each month, how do I do it?
I ask all my clients to reassess their lifestyle expenditure every year. This allows them to see what income they are likely to earn and what expenses are going to be this year. On the back of this we choose an affordable amount and my clients commit to this amount for 12 months straight.
Each month this amount goes in to the offset account and when interest is due, the bank takes it out of the offset account. Whatever is left over is build up in that offset account and means they pay less interest the following month.
By growing the offset account as much as possible, we are reducing the interest due and that means they can grow the offset account even further. Each year my clients goal is not to pay down their debt by $50,000 but it would be to increase their offset account by $50,000 for example.
The key benefit to understand is that interest is calculated daily and you would be in the exact same position financially if you decided to save the same amount each month and pay via principal and interest.
For example, If you took two routes over 10 years and saved the exact same amount on a debt of $500,000. One route the debt may now be paid down to $300,000. The other route the debt would still be at $500,000 but you now have $200,000 in an offset account.
At this stage, you may be asking so what is the benefit?
There is no obvious benefit, but I can assure you, you would always want to take the debt of $500,000 and $200,000 in the offset account and I’ll explain.
To make sure we are both on the same page, the key takeaway here is that you can still repay your debt via interest only but the different is, it’s your choice to do so, not the bank forcing you to.  Instead of reducing your loan every month, you are aiming to build your offset account up.
Chris' six reasons are on the next page. Please click below.
<hr class="system-pagebreak">
Why I do not like principal and interest loans
<ol>
<li>
Separating Debt By going interest only on all loans, you keep the original debt at that level forever. You then put any left over savings in an offset account against any debt that is not tax deductible. This flexibility means you can move your savings around to whatever debt is not tax deductible at the present time and it also clearly separates your debt. If you decide to move to another property you own, you transfer your offset account to a different loan and this will save you a lot of tax. 
</li>
<li>
Lower Commitment On a P&amp;I loan the minimum payment due to the bank each month is roughly 20% higher on a 30 year loan. In reality if you cannot afford that 20%, you have probably got too much debt but why would you force yourself to a higher commitment. Personally, I would prefer to have a minimum payment 20% lower and choose to save more regardless in to my offset account. 
</li>
<li>
False Pretenses  I also believe that paying the minimum payment each month gives clients false pretenses that that is the amount they should pay per month. The bank want you to take as long as possible to pay this debt down. That’s why they give you loans for 30 or 40 years. Do you really want to have a loan for 40 years? T he best way to pay your debt down is to pay as much as you can afford each month by undergoing a detailed lifestyle questionnaire each 12 months. Disregard what the bank minimum payment says as that is not what matters. Just save as much as you can above your interest only amount per month. 
</li>
<li>
Flexibility    The negative with paying the extra 20% and more every month, is that this begins to add up to a lot of money over time. There may be times in your life when you cannot afford your minimum repayment each month and you do not have any buffer built up as you have paid it all in to the loan. By paying this amount in to an offset account instead you are building your buffer every month and if you cannot pay this month, that’s ok you have money in the offset account to cover it. 
</li>
<li>
Home becoming an investment property = tax savings  The ATO states that once you pay down your debt you cannot redraw on that debt and get a tax deduction unless it is for investing purposes. In the example above, because the debt has never been paid down, if you moved out of this house and decided to use as an investment property. The tax deductible will be at $300,000 and not at the original loan of  $500,000 not $300,000. A big difference and at current interest rates that you would be $4,000 a year better off in tax. 
</li>
<li>
Home Purchase in Future  It is very common that we are going to purchase a new home in the future and this debt will not be tax deductible as it is your principal place of residence. What you need at this point in time is cash or equity to cover the 20% deposit and costs. But what you would also like is to put every single dollar you have saved over the many years before hand and put this in to an offset account against this new debt. If you pay down your loans via principal and interest, you cannot get this money back to put in to the new offset account. If you have it sitting in an offset account, you can move it straight away and get the tax benefit.</li>
</ol>
As you can see above these are just six points, why I challenge you to rethink how you structure your loans. This is a mental mind shift and that is all that it is. Once you understand it; you still pay down your loans just as you were and just as fast but do this by having a focus to increase your offset account.
I cannot stress the benefit of going interest only and using an offset account. By not doing this, I’ve had many clients who have been forced to sell their homes that they would have kept if they went interest only. 
I’ve seen clients been able to keep their homes through financial tragedies due to having a buffer and I’ve seen clients pay down their debt faster by staying disciplined to the amount they can afford not what the bank tells them to repay.
Chris Bates is a director at boutique financial advisors <a href="https://www.canopyprivate.com.au/" target="_blank">Canopy Private</a>.
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The six reasons why interest only loans are the way to go: Chris Bates

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GUEST OBSERVATION
Can I see a virtual show of hands for anyone who can remember bank interest rates at 16% in the 1990s?
Keep your hands up and can I see anyone who can remembers rates at 7% in the 2000s or all the way back in the 1970s?
Now can you put your hand up if you can remember a time besides present when they were at 4%?
As you can see, no one has ever experienced rates this low and from the look at long term fixed rates banks are offering well under 5%. They are going to stay this low for some time.
You see we live in a world that is debt ridden from tip to toe. This same world was filled with people that love to spend money they don’t have and the issue with spending money you don’t have means you are effectively bringing forward the things you are going to buy in the future to today. You are having Christmas today and paying for it tomorrow.
Unfortunately due to interest, the horrible thing you have to pay when you borrow, the banks will make money from these borrowers till the day they pay every penny back. This interest further increases their future expenditure problem, as they would have been able to spend this interest in the future. There goes another Christmas.
The winners in all this are the bank, home owners through excessive rises in property prices and the businesses who did well in the boom years, which was for nearly 20 years I might add.
The losers were people who spent beyond their means and took on personal debt, anyone who did not own property or investments and those who did not own a business in these boom years.
So what is the new world? 
The increase in debt has caused two major issues; firstly the world cannot afford high interest rates due to every 1% rise causing a major increase in the amount of interest we all need to pay each month.
Secondly, because we have too much debt and have been scared away from taking on more…we are not spending like we used to. This reduction in spending has already caused the world to stagger it’s way through a recession.
We do need to say thanks to the government for following our lead however and spending BIG to get us through it.
So in 2015, we are all debt ridden; governments, individuals and corporations to a certain extent.
Governments are the ones who are in control of interest rates. While they are still at the mercy of the economy, in reality all the governments around the world do not want interests rates to go up. The more interest they pay, the less they can spend. The less they can spend, the less votes they win and the less votes they win.
Without trying to sound pessimistic, as I believe the world will be very productive long-term, I do believe we are in for a long period of slow growth. Slow growth means slow employment and wage growth. If we are not earning more, we are not spending more.
On a side point however there is technology innovation happening on a grand scale. This brings opportunity to be more efficient and to drive a new round of expenditure but at cheaper prices.
For example, like we have seen in big TVs. I see the owners of smart innovative businesses will do very well in the coming years but due to capitalism the profits will stay with the owners of these businesses not the majority of the population, the worker themselves.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
So what does this mean for interest rates?
If we are in a low growth world, the government know that they need to keep rates low as long as possible and that is good news for home owners.
Investors of the past few years, saw this as an opportunity to take on more debt and have geared themselves up to the eye balls, some much wiser than others. This has pushed prices in the Sydney property market up 50% in the past five years, a ridiculous amount.
Will we ever see rates this low again?
The truth is we might. We might this year and we may next year.
When I was working in the UK in 2008, if someone had asked me if rates would still be zero effectively in 2014 I would have fell off my chair. The truth is they are today with no end in sight.
Where are they going to be in five years? The answer is no one knows but long-term interest rates do give you some insight in to what the world is thinking and that is staying low.
<a href="https://www.canopyprivate.com.au/wp-content/uploads/2015/01/image_thumb11.png"><img class="alignnone size-full wp-image-20717" src="https://www.canopyprivate.com.au/wp-content/uploads/2015/01/image_thumb11.png" alt="image_thumb[11]" width="782" height="399"></a>
What should I do?
I see this an opportunity to pay your debt down as fast as possible for as long as possible on the home you live in. By paying less interest, you are freeing up more cash flow and your choice is either to spend or to save. I suggest you save.
For investment debt, you should be looking to build a buffer by saving. This will support you as much as possible when rates do finally rise and mean that you can consider further investing in the future.
The best way to save is to know exactly what you are going to spend each month and the biggest expense you have is likely to be your home loan or your kids. To protect yourself you may like to fix a portion for five years at under 5% – unheard of rates.
Secondly, banks know rates are going to stay low and are happy to suffer a little bit to their profits by offering even bigger discounts. The discounts we are seeing today at over 1.3% to small loans was a dream two years ago to home loan borrowing.
I cannot encourage borrowers enough to review their lending rates as i’m sure there are better rates out there.
There are plenty of options but I stress that just because rates are low it is not a reason to spend; it is an incentive to save or to invest wisely in to a business, property or shares.
Christopher Bates is a director at <a href="https://www.canopyprivate.com.au/" target="_blank">Canopy Private</a>.
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Will interest rates ever be this low again?

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Chris Bates

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