<html><body>
GUEST OBSERVATION
Treasury recently released its <a href="https://bettertax.gov.au/files/2015/03/TWP_combined-online.pdf">submission to the federal Tax White Paper</a>. It has found a tax that actually confers a benefit on Australian citizens. That is, using it actually leaves us better off.
It isn’t a new tax - it is land tax.
Unbiased economists have always known a broad based nil exemption land tax has a marginal excess burden of zero. They have continually urged government to use it ahead of every other conceivable tax instrument available.
The net benefit comes about because foreign and domestic landowners must pay it yet it is spent solely on Australians.
Or, as Treasury describes it:
"Modelling also suggests that broad-based land taxes, such as municipal rates, have a low economic cost (Chart 2.9). This is because land is immobile (unlike other capital) and cannot be moved or varied to avoid tax. The model applies this assumption to both domestic and foreign ownership of land. Land taxes paid by foreign and domestic landowners are only redistributed to the domestic households, providing a benefit to Australian households and generating a negative marginal excess burden for a broad-based land tax shown in the chart."
<a href="https://www.prosper.org.au/wp-content/uploads/2015/03/ScreenHunter_6774-Mar.-30-10.24.jpg"><img class="alignright size-medium wp-image-8881" src="https://www.prosper.org.au/wp-content/uploads/2015/03/ScreenHunter_6774-Mar.-30-10.24-494x300.jpg" alt="ScreenHunter_6774-Mar.-30-10.24" width="494" height="300"></a>
There is much unrest at the high and growing level of foreign land ownership in Australia. We have abandoned the settler compact that all political parties once held as sacred: that every Australian citizen, no matter how humble, should enjoy the freedom, independence and privacy of land ownership.
Now, the share going to first home buyers is at historic lows yet there is no let to the foreign investment in Australian property, according to a recent NAB survey:
<a href="https://www.prosper.org.au/wp-content/uploads/2015/03/NAB-foreign-buyers28.png"><img class="alignright size-full wp-image-8880" src="https://www.prosper.org.au/wp-content/uploads/2015/03/NAB-foreign-buyers28.png" alt="NAB foreign buyers28" width="434" height="274"></a>
I urge a debate on land tax, not because it takes from foreigners – although that is certainly a positive feature – but because we would be richer, more active and freer with it.
If a tax exists with a positive excess burden, we have an obligation to examine its features and shortcomings with a microscope.
The only genuine negative I have ever heard about land tax came from nobel laureate<a href="https://www.youtube.com/watch?v=yS7Jb58hcsc" target="_blank"> Milton Freidman, who observed</a>: “It’s the only tax left on the books for which people have to write a big cheque.”
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
This article first appeared on Prosper's website.
</body></html>

dcollyer-7rQRVBSdz6

A land tax would leave Australia a lot better off: David Collyer

<html><body>
GUEST OBSERVATION
New Sydney flats will have to be bigger, <a href="https://www.afr.com/real-estate/residential/ruling-could-make-sydney-apartments-bigger-and-more-expensive-20150414-1mjpmk" target="_blank">the NSW Land and Environment Court ruled last week,</a> overturning long accepted common practice allowing minimum one-bedroom unit sizes at 50 square metres.
Dual-aspect flats must be a minimum 58 square metres and more common single-aspect flats 73.4 square metres.
Property observers have been watching the steady shrinking of highrise flats with some alarm. This isn’t about dizzy planners imposing costs on struggling home buyers, this is about permanent additions to our housing stock and how useful they are.
Highrise reinforced concrete buildings are <a href="https://www.theage.com.au/victoria/melbournes-new-wave-of-skyscrapers-could-survive-100-years-20150318-1m1dmx" target="_blank">very hard if not impossible to change</a>.
The one bedroom flats are mostly being sold to investors who have no intention of living in them. They are the developers’ customers, not the occupants.
In theory, two cramped flats could be amalgamated to make a single spacious one. Sadly the numbers go against this. Putting two $350,000 flats into one worth $600,000 makes no financial sense. The next buyer will simply reverse this and pocket the sacrifice. This is why minimum standards are so important.
Meanwhile, the average size of a <a href="https://www.oliverhume.com.au/news/melbourne-new-apartment-sizes-shrinking-again" target="_blank">new one bedroom flat in Melbourne</a> has fallen to 44 square metres and two bedders to 59 square metre. Smaller flats aren’t cheaper – the savings are simply capitalised into higher land prices on all future developments.
There were moves last year to establish minimum standards in Melbourne, with former Coalition Planning Minister, now Opposition Leader, <a href="https://www.theage.com.au/victoria/strict-new-rules-for-highrise-apartments-on-table-20140723-zw4qk">Matthew Guy making encouraging noises</a>, however implausably, but vanished with the election of the Andrews ALP government.
There is a democracy lesson in all this. If the bureaucracy can’t act and the parliament won’t, the judiciary must – which is why the NSW Land and Environment Court ruled on minimum flat sizes.
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
This article first appeared on Prosper's website.
</body></html>

Sydney apartment size ruling a lesson in democracy: David Collyer

<html><body>
GUEST OBSERVATION
Rents always go up – don’t they? The 1.2 million negatively geared Australian tax payers whose property expenses exceed their rental income think so. Their cunning plan is to patiently wait while the rent ratchet turns their negative cash flows positive and net income losses into profits.
If house prices stabilise at current levels – even if they fall back for a time – overall, wages will continue to grow if only by inflation, pushing up rents. And time is on the land owner’s side.
That’s why it’s called a ratchet. Rentiers make money in their sleep or while striking alpha male poses around the BBQ.
But what if rents don’t rise?
Blasphemy! Yet the historical record shows that is exactly what happens in downturns – and rents can keep falling for years.
My pals, Paul Egan and Philip Soos produced the following chart, of both nominal and real rents Australia 1880-2012.
<img class="alignright size-medium wp-image-9199" src="https://www.prosper.org.au/wp-content/uploads/2015/04/australioan-real-rents-1880-2014B-526x300.png" alt="australioan real rents 1880-2014B" width="526" height="300">
After the 1888 boom, rents fell hard and kept falling for eight long years. In WWI, real rents fell again, while wartime inflation maintained at least nominal rental growth and rentiers’ poise. The 1929-33 depression again saw savage cuts with three years of strongly negative rent contraction. WWII was an era of rent controls to keep wages down and protect the war effort. The spike after the election of the second Menzies government and their removal in a housing shortage shows just how effective the controls were. The 1959, 1972 and 1990 recessions are clearly seen, even though rising inflation kept nominal rents rising.
I expect the legions of spruikers and yes-men employed by the FIRE sector to distract citizens from reality will find fault with my skip through the historical record.
A key theme will be that it is the nominal change in rents that matter as borrowings are in nominal dollars, and that the Australian economy is more broadly based now.
OK. Let’s look in nominal terms at Australia’s last recession in 1989-92. I have to acknowledge Australia’s extraordinary 25 years that followed without a technical recession, a world record, but the downturn really hurt residential rents.
<a href="https://www.prosper.org.au/wp-content/uploads/2015/04/australian-ABS-nominal-rents-1972-2014.png" target="_blank"><img class="alignright size-medium wp-image-9203" src="https://www.prosper.org.au/wp-content/uploads/2015/04/australian-ABS-nominal-rents-1972-2014-526x300.png" alt="australian ABS nominal rents 1972-2014" width="526" height="300"></a>
The record shows very weak rental growth from 1990 to 2006, under four per cent annually in nominal terms, while inflation consistently tracked near 3%. In fact, aside the three years 2006-09, nominal rents have been quite stodgy since 1990. The weakening trend since 2010 continues to this day.
That is a very very long time between drinks. And remember, the Australian economy was much more diversified then – we weren’t relying on iron ore and coal for export income – we even exported cars.
For every well-chosen well-located rental property that sailed through this era providing solid rent rises to absent owners, another underperformed. Never mind the continual fresh investment to update property facilities and features in a highly competitive market for quality tenants.
Real, after inflation rents 1972-2014 fluctuated around zero.
<a href="https://www.prosper.org.au/wp-content/uploads/2015/04/australian-real-rents-1972-2014.png"><img class="alignright size-medium wp-image-9205" src="https://www.prosper.org.au/wp-content/uploads/2015/04/australian-real-rents-1972-2014-526x300.png" alt="australian real rents 1972-2014" width="526" height="300"></a>
This is not the stuff of fortune-building or a secure retirement, let alone making a decent return on investment. We as a nation have gone massively into debt in pursuit of paltry returns. Nuts.
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
This article first appeared on Prosper's website.
</body></html>

The rent ratchet mumble of the BBQ landlords: David Collyer

<html><body>
GUEST OBSERVATION
We usually look at macro economics, yet a micro example of what can go wrong in the property market – very, very wrong – might aid your concentration.
Andrew, a Sydney ‘investor’ bought properties in Mackay and Blackwater Queensland, “when rents were crazy and out look was bright (sic)”.
<a href="https://somersoft.com/forums/showthread.php?t=106133">He posted his entirely credible dilemma</a> on the Somersoft property investor forum.
He paid $495,000 for a Blackwater rental returning $49,400 per annum gross – a hearty 9.9%. Blackwater houses workers at the BMA and Curragh coal mines. With coal prices in the doldrums and layoffs creating plenty of vacancies, agents now value the property at $200,000 and estimate its rental potential at 18,200 per annum gross. The property carries a mortgage of $475,000 at 4.89% interest or $23,200 per annum.
Andrew’s other property in Mackay cost $485,000 for a passing rent of $36,400 per annum, or 7.5%. Now, it is worth $380,000 and market rents are around $10,400 per annum gross. The property carries a mortgage of $450,000 at 4.89% interest or $22,000 per annum.
Violent re-pricing indeed.
Rule of thumb says direct costs, rates, land tax, etc, would be half the gross, certainly on the later rents. So his net rents of around $29,000 support an interest cost of $45,200 per annum, or a net loss of $16,200 per annum, assuming nil vacancies.
Clearly unhappy with his position, Andrew wants out. He faces a loss of $70,000 on the Mackay property and $300,000 on Blackwater if he sells. I suspect these figures disregard stamp duty and other transaction costs.
He says: “I have a house in Sydney that has about $500,000 equity. My mum lives with my family who has contributed into this purchase so selling this property is not an option.”
That equity isn’t his to risk in support of his rental investments. Mum and family would be unimpressed with the idea of selling Baulkham Hills for a Queensland adventure.
“Will this get worse???” he asks plaintively.
His horror story is being repeated all over Queensland and Western Australia. Goaded into action by an army of spruikers in an anecdote-rich, fact-poor media, a naive investor class saw stellar yields and paid a seemingly reasonable capitalization. He thought he won the lottery, when in fact the winner was the vendor.
Little can be done for Andrew and his very hard life lesson.
Yet there is an insight available in what government can do in a volatile land market.
Andrew pays state land tax (SLT) on both Queensland rentals. Valuations are conducted every two years, which softens his liability on the way up but doesn’t retreat nearly quickly enough in a falling market. In an era of wild land price gyrations, government should step up to annual valuations, both to moderate the rise and ease the fall. While this sounds like I am recommending annual revaluation of every parcel of land in the country, it is entirely possible to value half each year and interpolate the rest. SLT already piggy-backs on council valuations, so this is a cost-less exercise.
Land tax is a powerful automatic stabiliser, if we use it properly.
The investor frenzy in Sydney would be less if their bidding up of land prices was immediately transmitted into higher SLT. Dizzy buyers would get a good kicking from existing owners for driving up their costs, rather than the slap on the back for increasing values.
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
This article first appeared on Prosper's website.
</body></html>

Dizzy buying turns to disaster with violent repricing for Queensland investment purchases: David Collyer

<html><body>
GUEST OBSERVATION
Victorian Labor in its <a href="https://www.danielandrews.com.au/wp-content/uploads/2013/11/Victorian-Labors-Project-10000.pdf">November 2014 election transport manifesto Project 10,000</a> boldly announced it would “remove our 50 worst level crossings” at a cost of $5-6 billion.  They are now the government.
Grade separation of rail – elevating the track or, preferably, putting it underground in cut and cover trenches – removes congestion for both rail and road.  Higher transit speeds shrink the city. The savings available are quite substantial.
I am sure Melburnians quite like all this – provided someone else pays for it, and their personal amenity improves.
Tantalisingly, Labor alluded to ‘value capture’ as a funding mechanism:
"This engineering work requires a considerable amount of track on either side of the crossing to be submerged underground, freeing up land at ground level.
"At some locations there is likely to be an opportunity to develop this available land and ‘capture the value’ created by the removal of the level crossing.  While development opportunities will vary with each site depending on physical restraints, Victorian Labor will actively pursue appropriate development opportunities and reinvest the proceeds generated back into further improvements to the public transport system."
Those ‘appropriate development opportunities’ are the subject of a fascinating research paper, <a href="https://msd.unimelb.edu.au/sites/default/files/docs/Intensifying%20Melbourne%202014_180dpi.pdf">Intensifying Melbourne by the Melbourne School of Design</a> at the University of Melbourne, looking at practical urban design opportunities – like turning waste land around rail stations into high density residential – to transform the way this city lives.
The paper is broader than rail station redevelopment, but I want to focus here because of the principles involved.
Intensifying Melbourne looks at redevelopment scenarios for Reservoir, Sunshine, Surrey Hills and Batman rail stations, all surrounded by large areas of currently unused land with the potential for high density residential. The newly-created high-value land funds undergrounding the rail, overall density increases and congestion falls – a win-win-win.
Intensifying Melbourne is astonishingly honest about the difficulties around change of this magnitude. The sobering realities are nasty and include:
<ul>
<li>Councils are often elected to enforce the anti-development views of residents. Those in well educated, wealthy suburbs often see anything higher than two stories as gross over-development and are formidable opponents.  Governments take them on at their peril.</li>
</ul>
<ul>
<li>The cost of trenching is triple that of raising rail lines, and many scenarios result in negative land values – the engineering cost exceeds the land value uplift.</li>
</ul>
<ul>
<li>Reservoir and Sunshine are considered highly unattractive residential locations by planners and developers. Developers face above-average risks in realising their investment, relative to other competing opportunities. There is a genuine possibility of failure after government has spent hundreds of millions liberating land over time-frames longer than the four year electoral cycle.</li>
</ul>
I say, the problems and solutions are structural and go deeper that revealed by this analysis.  These calculations are incomplete and overlook key free-carried interests.
Labor identified major, widely dispersed congestion reduction benefits.  Large scale level crossing removal will uplift land values everywhere, as faster travel times shrink distance and cut both time and cost.
The current cultural narrative that all such benefits must accrue to land owners is the barrier.  Intensifying Melbourne sees this: “The way in which urban infrastructure investment creates capital gains and increased economic flows need to be better understood to ensure the capital gains due to public investment can be captured to fund that investment.”
This, of course, goes back to the structure of taxation.  We rely heavily on wage taxes and under-tax land.  Rebalancing this anomaly – an economically damaging imbalance imposed by major land owners on other citizens – would dramatically realign the economy toward productive activity if the beneficiary pays.
Shrinking the distance between say Narre Warren and the CBD brings important efficiencies and would permanently raise land prices along the entire corridor between.  The Victorian government has the tool to ‘value capture’ enough of the uplift to square the equation.  It is called state land tax.  Use it.
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
</body></html>

Could value capture be the key to Melbourne's infrastructure development?

<html><body>
GUEST OBSERVATION
The report of the parliamentary committee inquiry into the Foreign Investment Review Board (FIRB) is out.
<a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/Foreign_investment_in_real_estate/Tabled_Reports" target="_blank">The inquiry</a> has been conducted with great fanfare to edify the Liberals’ rising star Kelly O’Dwyer.
And what are its findings, once the party-political propaganda is removed?
<ul>
<li>
"A national register of land title transfers that records the citizenship and residency status of all purchases of Australian real estate would fix this and would allow facts to be injected into discussions about foreign investment, rather than ‘best guestimates’. A national register would also help with compliance and enforcement with the foreign investment framework – allowing data to be compared easily."
</li>
</ul>
Ahem, <a href="https://www.psma.com.au/?product=cadlite">we already have a national cadastra (land registry).</a>
It aggregates state land data and has existed since soon after Federation.  104 years ago, the Fisher ALP government believed large swathes of the country were under-utilised and vowed to break up the big estates. Fisher set up the national register within the Australian Tax Office as a pre-condition to imposing a federal land tax with the Land Tax Act 1910 and the Land Tax Assessment Act 1910.
The economics committee recommendation merely overlays citizenship and residency criteria on this existing dataset.  Data-matching departing visa-holders ought give a clear and complete picture of whether owners are in the country and compliant.
<ul>
<li>"The systems failure at FIRB needs to be repaired; and new resources injected into FIRB to ensure better audit, compliance and enforcement outcomes."
</li>
</ul>
Well, quite.  Underresourcing the FIRB began under the Howard government. The Liberals’ free-trade posturing (code for freedom to invest, not the icy blast of real competition on cosy monopolies) leads them to look away when foreign interests buy Australian assets – even where there are national strategic imperatives.  Smearing Rudd and Gillard for their budget errors does not mean Liberal hands are clean.
<ul>
<li>"The ability to sanction people who have breached the foreign investment framework more easily is critical. Hence the need to bring in a civil penalty regime for breaches of the foreign investment framework; along with the need to capture those people, who have previously stood outside the framework but materially impact the integrity of our foreign investment regime. For instance, third parties who knowingly assist foreign investors to breach the rules."
</li>
</ul>
The key word here is ‘sanction’, which likely refers to international law and the trans-national reach of our domestic laws.
Funny, the disputed asset is land, which remains subject to Australian law under all circumstances – it is remarkably difficult to shift offshore.  It could be argued any purchase by a foreigner ought have a covenant added to the title as a warning at sale of the property’s special status. Third-parties playing straw man for ultimate owners are notoriously difficult to expose – good luck bringing a civil case against any but the most obvious examples.
<ul>
<li>"Currently, non-resident foreign investors can profit from the illegal purchase of property. Given this, the current financial penalty that can be applied to a property, regardless of its value, is seen by many as simply the ‘cost of doing business’. Fines and pecuniary penalty orders should directly relate to the value of the property concerned. Furthermore investors who breach the framework should not be able to profit."
</li>
</ul>
Sure.  Just remove the cap on the fine and leave calculation to the judge.
The inquiry recommendations are typical for a conservative government. They are internally coherent, appear to resolve the issue and allow commerce to continue.
They do not address the core of the problem: foreign, absentee owners invest to collect the economic rent accruing to land from the activity of residents. They are not resident, so do not contribute to this activity.
As a parallel, Ireland suffered for centuries from absentee English landowners demanding rents in currency which they spent in London – a constant economic drain that beggared the country.
Why not use that recently-discovered federal land registry to charge them land tax at the state rate for the privilege of capturing the value from our soil and toil?
The maximum State Land Tax rates are: NSW 2.0%, Vic 2.25%, SA 3.7%,  QLD 1.75%, WA 2.67%, TAS 1.5%,  ACT 1.23%.
Prosper did not make a submission to the inquiry, despite our very strong interest in the matter.  We saw it as a witch hunt with a twist to enable the government to brand its critics racist.
Ed Husic for the ALP played the race card and leapt blindly into the Liberals trap, the damn fool. <a href="https://www.macrobusiness.com.au/2014/11/alp-dill-opposes-enforcing-foreign-propery-regime/">Leith van Onselen shreds him here.</a> I can only wish the ALP’s parliamentarians had the vision and statesmanship of Andrew Fisher. We wouldn’t have a land bubble – or this fight over foreign interests.
David Collyer is policy director of <a href="https://www.prosper.org.au/" target="_blank">Prosper Australia</a>.
David ran as a Senate candidate for the Australian Democrats in the 2013 federal election.
</body></html>

The FIRB review failed to address the core problem - foreign absentee investors

<html><body>
Peter Wargent used Property Observer a few weeks ago to have a chortle over my February 2012 prediction of a steep and imminent land price correction.
<a target="_blank" href="https://www.propertyobserver.com.au/economy/average-investors-are-notoriously-poor-at-timing-property-market-cycles-pete-wargent/2013080863794">He gloats: “Since the property market troughs in mid-2012, unfortunately, prices have not fallen by 20% or even 15%.”</a>  
Hmmm.  Prices still remain well short of the 2010 peak.  Add three years of insistent 2-3% inflation to the following graph and the real price changes start to hurt.      
<img alt="collyer_aug_28_one" height="281" width="470" src="/images/stories/2013/08/collyer_aug_28_one.png"> 
Clearly, my call was courageous. The bursting of The Great Australian Land Bubble has not yet happened.  The economic catastrophe for the heavily indebted and the banks remains dead ahead.  
I have been warning young home buyers against borrowing heavily and signing away their lifetime earnings to buy a house in a market climax.      
<img alt="collyer_aug_28_two" height="250" width="470" src="/images/stories/2013/08/collyer_aug_28_two.png">
I urge them to rent, which is an absolute bargain compared to buying.  If a negatively geared property investor wants to subsidise my lifestyle, I’ll have his dollar.  
I urge them to save a giant deposit.  If rent is dead money, then by the same measure so are interest payments.  There is no point exchanging paying rent on a house for paying economic rent to a bank.  
I urge them to build up their credit rating so they have ready access to loans in the future.  
And I urge them to await the inevitable correction.   A detailed explanation of these forces, which every Property Observer reader should know and understand, is <a target="_blank" href="https://www.prosper.org.au/2013/02/22/a-long-ugly-list-of-house-price-precedents/">here</a>. 
Peter Wargent cites various mainstream forecasters who see modest future rises and asks ‘what happens if the market forecasters are right?’  
If they are right, renting will continue to be an eye-popping deal.  
I am staggered that negative gearers are prepared to stick fistfuls of dollars into tenants’ pockets, month after month, year after year.  1.5 million ‘owners’ have 1.8 million rental properties, a little over one each. Almost all are middle income earners. 
They pay a very high price to reduce their income tax, as the graph below shows.    
A detailed critique of Negative Gearing can be found <a target="_blank" href="https://www.prosper.org.au/2012/10/04/written-off-negative-gearing-report/">here</a>.      
<img alt="collyer_aug_28_three" height="250" width="470" src="/images/stories/2013/08/collyer_aug_28_three.png">
The proportion of rental investors among buyers in the residential market is now around 35%.  They will never make a decent return at current price to rent ratios.  
Wealthy people do not enter into deals with low cash returns and big borrowings on fragile, high maintenance assets like houses.  If they love bricks and mortar, better returns are available in commercial property, without the stress.  
Peter Wargent asserts: “More than anything, my message was to do something by spending less that you earn and investing in a diversified portfolio of assets rather than fail conventionally by doing nothing.”  
Agreed.  This sentiment is central to achieving future financial independence.  
So, avoid lumpy illiquid assets, after-tax debt, poor returns and high risk.  I think this exactly describes Australia’s residential property market.  
Don’t Buy Now!
<hr>
David Collyer is campaign manager of <a target="_blank" href="https://www.prosper.org.au/" rel="nofollow">Prosper Australia</a>.
</body></html>

In the current market young buyers should save and rent, don't buy now! David Collyer

<html><body>
Young would-be home buyers who took Prosper Australia’s advice – Don’t buy now! – exactly a year ago have typically saved themselves $58,000.
I congratulate everyone who stood aside from this dreadful Ponzi scheme known as the Australian property market.
These savings are staggering – they are genuine and they are conservatively calculated. For home buyers who waited, it is as if someone just slipped this much in their wallet.
It would take years to save $58,000 from after-tax earnings.
Consider a typical Melbourne first-home buyer couple with a 20% deposit ($120,000) ready to buy a home at the median $585,000 a year ago. Instead, they waited.
Their savings:
Melbourne median house prices have fallen 6.1% (ABS) – $35,000
The difference between Melbourne median rents $17,680 (TUV) and interest at 7.46% (WBC) on a $465,000 mortgage (ignoring stamp duty, principal repayments, rates, insurance, depreciation and repairs) – $17,009
Interest earned on $120,000 savings at 5.5% (ignoring tax) – $6,600
TOTAL: $58,609
There is a further long-term benefit not included above: the smaller required mortgage would leave an extra $250 per month interest in a buyer’s pocket, or $41,000 over a 25-year loan. This money would be available at the buyers’ discretion for living expenses or to accelerate principal repayments.
This is not a cue to immediately buy a house.
Prosper expects house prices to fall much further. We repeat our forecast made February 23 of house price falls of at least 15% and possibly 20% this calendar year.
A fall of this size will deliver massive further savings to those who resist the temptation to commit to a working life of toil lived 90 days from bankruptcy.
We urge prospective home buyers to focus on saving as large a deposit as possible. Avoid exchanging renting a house for renting money from the bank. That is not the path to economic freedom.
Don’t buy now!
David Collyer is campaign manager of <a target="_blank" href="https://www.prosper.org.au/">Prosper Australia</a>.
 
 
</body></html>

First-home Melbourne buyers who didn't buy last year saved $58,000: Prosper Australia

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]

Joel Robinson

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>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

David Collyer

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News