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Last week’s employment data showed a fall in Australia’s workforce participation rate to 64.9%, the lowest for seven years.
If the rate had been maintained at the level of three years ago, unemployment would have been around 6.6% in September, according to some estimates. Labor thus left office with workforce participation having peaked and begun declining on its watch. It’s now a challenge the Coalition has inherited, and a significant one.
The reasons why fewer of us are in, or seeking, paid employment?—?in particular, whether it’s the long-awaited impact of ageing on the workforce?—?aren’t clear (theAFR’s David Bassanese <a rel="nofollow" target="_blank" href="https://www.afr.com/p/business/companies/ageing_only_one_part_of_workforce_RdlA0fb6pyjz3lRSaDpC1M">had a good go this week</a>). In a speech nearly a year ago on the labour market, Reserve Bank Deputy Governor Phil Lowe <a rel="nofollow" target="_blank" href="https://www.rba.gov.au/speeches/2012/sp-dg-091012">told an audience in Hobart</a> that:
<blockquote>
“One interesting aspect of the recent outcomes is that despite only modest overall employment growth, the unemployment rate has not moved up, as had been widely expected. Part of the reason for this is that there has been a decline in labour force participation?—?that is, in the share of the working-age population either with a job or looking for a job. While one always needs to interpret short-run movements with caution, the current participation rate is around half a percentage point lower than the average of the past five years. This stands in contrast to the general upward trend in participation over the past 30 years. “The Reserve Bank has recently spent some time trying to understand what is happening here and what it says about the balance of supply and demand in the labour market.”
</blockquote>
Some of this work looked at demographic changes, high levels of structural change in many industries delaying the re-entry of workers (especially men) and the weakness in construction which traditionally has high levels of self-employed workers. But from the lack of a firm conclusion in this speech, the RBA remains as puzzled, as are many other economists.
Tuesday’s minutes of the <a rel="nofollow" target="_blank" href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2013/01102013">Reserve Bank’s October meeting</a> carried this tantalising paragraph:
<blockquote>
“Members were briefed on longer-run changes in the industry composition of output and employment. The share of economic activity occurring in service industries had increased over time. Employment in services had recorded a greater increase than in goods-related industries, in part reflecting slower productivity growth in service industries. Over the past decade, the bulk of the increase in employment had been in service industries.”
</blockquote>
This is understood to have been a briefing based on an earlier request from the board. There’s no research being prepared for a later article in the quarterly bulletin or a speech by a senior official, such as Governor Glenn Stevens (who speaks in Sydney on Friday) or Lowe, who is out in public in Melbourne the following week.
The reason for the request isn’t known, but it could be linked to the way the labour market has softened since mid-year, especially with a noticeable fall in the participation rate. The minutes made this observation about the labour market:
<blockquote>
“The labour market had softened further in recent months. The unemployment rate had increased to 5.8 per cent, the participation rate had declined and the level of employment was little changed from earlier in the year. Members noted that hours worked had increased. Although the hours worked data are volatile, possible explanations for the increase included changes in sectoral employment shares, increased hours for existing staff as firms attempted to contain labour costs or reluctance of firms to take on new staff. Forward-looking indicators of labour demand remained soft and the Bank’s liaison suggested that employment intentions had been subdued in recent months, most notably in mining and mining-related sectors.”
</blockquote>
The Howard government was aware of the need to continue to push participation. Joe Hockey defended government assistance for working women in the face of opposition from social conservatives on the basis that “we’re running out of workers”. That government also tried to reduce the price of labour, via Workchoices, thus bringing underskilled workers into or back into the workforce (which had, as Treasury predicted, a negative impact on productivity).
With Workchoices dead, buried, cremated, staked through the heart and shot into space by Tony Abbott as opposition leader, that option isn’t currently available. Now in government, the Coalition does see its PPL scheme as providing a greater participation incentive than the Labor scheme it wants to replace. But addressing participation traditionally requires the rather mundane work of improving training, making jobs more interesting and lowering barriers to older workers (something Labor tried to do) and increase mobility, something Abbott has flagged previously via clunky incentive schemes to encourage workers to move to mining states?—?now useless given mining is shedding workers. And bear in mind high property prices in Sydney and Melbourne might be an increasing disincentive all of their own.
In many respects the weak participation rate is more important than abolishing the mining tax or the carbon tax. In the medium to longer term, higher levels of workforce participation boosts employment, standards of living and tax revenues (especially from the GST) and helps underwrite a higher level of demand in the economy. What the Coalition Employment Minister Luke Hartsuyker does on the issue will have a significant bearing on future budgets and economic growth.
 
<hr>
 This article first appeared on <a target="_blank" rel="nofollow" href="https://www.crikey.com.au/">Crikey</a>.
 
 
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jake-cSmGT7VXVf

Economists stumped as Australia's participation rate falls to a seven-year low

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Australia’s construction union will not back down on militancy in the face of tougher laws surrounding construction sites, <a target="_blank" href="https://www.afr.com/p/australia2-0/unions_mobilise_against_construction_PkbtlWNfS5DbOYPKHLzSSK">according to controversial union boss Joe McDonald</a>.
The Abbott government last week flagged the introduction of legislation to re-establish the Australian Building and Construction Commission, in a bid to increase productivity and reduce union militancy.
The Australian construction industry has the distinction of having had two Royal Commissions into its practices in ten years. The first was headed by Roger Gyles in NSW, the second by Terence Cole for the Howard government.
Both inquiries looked at the effect of the Construction Forestry Mining and Energy Union (CFMEU) on the industry’s productivity and efficiency. They found widespread disregard for the rule of law in industrial relations by both the union and contractors in the industry, among other issues.
After the Cole Commission recommended widespread changes to the industry’s IR laws, legislation establishing the Australian Building and Construction Commission (ABCC) as a statutory authority to monitor workplace relations was passed in 2005.
The ABCC was deeply opposed by the unions and in July 2012 was replaced by the Gillard government by the Fair Work Building and Construction Inspectorate, a body with reduced scope and powers.
In the last election campaign, the Coalition announced a policy to restore the ABCC within 100 days if elected, and intends to introduce the legislation necessary in the first sitting week of Parliament.
This is one of a number of measures the Abbott government is reported to be considering to address union militancy in the construction industry.
It’s also the only major IR reform currently expected from the government in its first term, despite considerable pressure by a number of industry bodies for a more wide-ranging reform of IR.
The good behaviour commission
There are two arguments for restoration of the ABCC. First is the need for an industry specific watchdog to monitor illegal behaviour of union representatives and officials and, if and when necessary, to intervene in disputes.
The construction industry has lagged other industries in productivity growth for several decades, and some of this is attributed to union opposition to workplace reforms that would improve efficiency.
The number of days lost in construction over the past five years has averaged around 20% of the total for all industries, although there is a wide variation in the number of days per quarter due to industrial disputes in some.
It’s these spikes in days lost — particularly the big increase in days lost to industrial disputes in Victoria in the second half of 2012 — that has attracted the attention of large contractors and the government.
On one hand the rationale for restoring the ABCC is not strong, based on union unrest and strikes in the industry as a whole. After July 2012 there was a significant increase in days lost in the September quarter, when disputes in Melbourne and Brisbane boosted the numbers.
But the following three quarters have not seen unusual or particularly high levels of days lost in the industry, as recorded by the ABS. The view of the employer and contractor associations that days lost “exploded” under the Labor government is half true, given there was an increase in days lost after 2007, but the disputes have tended to be concentrated on specific, large projects not across the industry as a whole.
On the other hand, the construction industry has always tended to have more days lost per thousand employees than some other industries, although only a fraction of the level in the coal industry (the industry with most days lost in Australia). And since the 2012 spike, this measure has come down to the overall industry average, and has been reasonably steady.
Clamping down to raise productivity?
While the CFMEU has a reputation for militancy and a propensity for industrial action, and it has always had some excessively combative officials, it is in an industry where many employers have shown little regard for issues such as safety.
The other argument for the ABCC is based on the potential for improving construction industry productivity by reducing the CFMEU’s ability to reduce on-site efficiency for building and construction projects.
This is an even more slippery argument to substantiate. The productivity estimates published by the ABS do not show the industry performing well over the last decade, but it has not done particularly badly either.
Construction industry productivity is very difficult to measure accurately. The data from the ABS covers the entire industry, and is collected for residential and non-residential building, engineering construction and the trades. But the ABS definition is wide enough for it to cover anything from self-employed tradesmen who do repair and maintenance work to the largest national contractors.
Problems with separating the different sectors of the industry make it impossible to see if productivity in the more unionised non-residential building sector is better or worse than in residential building, which is more labour intensive, or engineering construction, which is more capital intensive.
So far the industry has not been prepared to compile good data at a project level in a systematic way. Unpublished research by the Centre for Comparative Construction Research at Bond University tends to show projects across Australia do vary in terms of cost, time and quality, and these variations do add up to identifiable differences between the state capitals.
A more widespread approach to building and construction industry reform would be preferable, because there are issues like procurement practices, regulatory costs, and training and technology to be addressed.
But the CFMEU does itself no favours with its confrontational attitude, and the Abbott government needs to be seen to make a move on IR. This is as much a political issue as an economic one.
 
<hr>
 Gerard de Valence is senior lecturer at the <a target="_blank" href="https://www.uts.edu.au/?">University of Technology, Sydney</a>.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>.
<a href="https://theconversation.com/institutions/university-of-technology-sydney"></a>
 
<img width="1" src="https://counter.theconversation.edu.au/content/19027/count.gif" height="1" alt="The Conversation">
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Politics not productivity behind resuscitation of construction watchdog: Gerard de Valence

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The Nobel Prize in economics has been awarded to three economists focused on the strengths and shortcomings of asset markets.
Eugene Fama, Robert Shiller and Lars Peter Hansen have separately come up with different but complementary branches of modern asset market theory.
Shiller, the best known of the trio, is famous for his work on the inefficiencies of asset markets. In 2005, he published a paper suggesting the US housing market may be overheating.
Speaking to Reuters after his win, he told the wire service he was seeing some of the same signs today in America and across the world.
"It is up 12% in the last year [in the United States]. This is a very rapid price increase right now, and I believe that it is accelerated somewhat by the Fed's policy," he said.
Australia – as well as China, Brazil, India, Norway and Belgium – is witnessing similar price rises, he said.
“There are so many countries that are looking bubbly.”
In an interview with Bloomberg earlier this year, Shiller <a target="_blank" href="https://www.businessinsider.com.au/nobel-prize-robert-shiller-housing-not-great-investment-2013-10" rel="nofollow">took aim</a> at the notion that housing was an ‘investment’.
“[Housing] takes maintenance, it depreciates, it goes out of style. All of those are problems. And there’s technical progress in housing. So, new ones are better…
“So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000s. And I don’t expect it to come back. Not with the same force. So people might just decide, ‘Yeah, I’ll diversify my portfolio. I’ll live in a rental’. That is a very sensible thing for many people to do.”

<hr>
This article first appeared on <a target="_blank" href="https://www.smartcompany.com.au">SmartCompany</a>.
 
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Nobel Prize in economics goes to housing sceptic

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Houses are just like people; it’s easy to fall in love with them based on the outside, but the true measure of their worth isn’t skin deep - it’s what’s on the inside that counts!  The interior layout of a home, or floor plan, is one of the most important factors when it comes to measuring a home’s success. If you’ve got a good floor plan, you’re much more likely to enjoy your home.  
Architects and designers do lots of training to create beautiful, functional floor plans, but there are a few simple ideas that anyone can use.  
For a floor plan to be “good”, it has to be good for you. In other words, it has to meet your individual needs and wishes. Start your house plan search with a clear idea of what you’re after, and you’re halfway there.  
Ask yourself these questions:  
<ul>
<li>
Do you like informal, open plan living, or do you want traditional segregated spaces with higher levels of privacy? There’s been a big movement toward open plan living but that kind of layout doesn’t suit everyone.
</li>
</ul>
<ul>
<li>
Do you want a house with flexible rooms that can be used for different purposes if your needs change? If you’re after a “home for life”, you might want a floor plan with rooms that can be used in different ways. Some plans, for example, have a small room off the master bedroom that you can use as a nursery, study or a walk-in closet depending on your stage of life.
</li>
</ul>
<ul>
<li>
Do you have lots of overnight guests? If you have a lot of people staying over, you might want to consider an extra bathroom and some extra living space so guests can enjoy a bit of time to themselves. There’s nothing worse than the feeling of tripping over each other.
</li>
</ul>
<ul>
<li>
Do you need to work from home? If you do a lot of work at home, you might like to consider a floor plan with a study nook off the main living area. A study nook can give you privacy and space without making you feel isolated. If you have a home based business with clients or customers visiting, you might need an area that you can zone-off, so other parts of the home remain private during business hours.
</li>
</ul>
<ul>
<li>
Do you need a separate space for teenagers or small children? A family room off the kitchen is a good option for homes with young children and a games area that’s removed from the “adult zone” will afford some privacy for older kids.
</li>
</ul>
<ul>
<li>
Do you need lots of storage space? Floor plans with lots of closets and walk-in robes will make your life a lot easier, and storage in the roof will help as well.
</li>
</ul>
<ul>
<li>
Do you want a home with indoor-outdoor living? If you love the great outdoors, choose a plan where the main living spaces are connected to the backyard or terrace. Double doors from the living room will open up the house for entertaining and make it easy to accommodate large groups of people.
</li>
</ul>
Good floor plans are also characterised by a range of general features that are nice to have in any home. These include:  
<ul>
<li>
A wide entry foyer. An entry space with lots of room for a hall table and drop zone is convenient and welcoming.
</li>
</ul>
<ul>
<li>
Natural light and ventilation. Try to look for layouts that allow for as much light and ventilation as possible. A home with natural light and airflow is generally happier and healthier.
</li>
</ul>
<ul>
<li>
An open kitchen. For almost everyone, the kitchen is the heart of the home and people naturally congregate there. Even if you don’t do lots of gourmet cooking, try to look for a kitchen that’s large enough for seating so other people can keep you company while you work.
</li>
</ul>
<ul>
<li>
Adequate room sizes. Rooms should be large enough to accommodate your preferred furniture layout, but not so large that they feel cold and uninviting.
</li>
</ul>
<ul>
<li>
Privacy for the bedrooms and bathrooms. Private spaces in the home should be screened off from public areas like the kitchen and lounge room, and there should be privacy between bedrooms as well. Look for homes with closets on either side of common walls to increase acoustic insulation.
</li>
</ul>
  Once you’ve got your individual requirements sorted out and you’ve found a floor plan that includes some of the positive general features listed above, it’s time to use a bit of intuition and make an assessment of issues like proportion and flow.  
If you’re inspecting a home, where do you instinctively want to walk when you open the front door? Does the sequence of rooms feel logical? Do you have to walk around obstacles or back-track to reach certain rooms? A good layout will optimize the circulation pattern so there are no wasted steps and the “energy” flows. Similarly, good floor plans will have rooms that are well-proportioned. There are various theories in relation to proportion, but generally speaking, try to avoid long, narrow rooms and favour compact rectangular shapes instead.  
Following these steps will help you find a good floor plan, but remember, houses, like people, aren’t always perfect. Sometimes a little compromise can lead you to a nurturing home that feels right, even if it doesn’t tick all the boxes.
 
<hr>
 Sam Crothers is the founder of <a target="_blank" href="https://www.houseplanology.com/">Houseplanology.com</a>, a home website that includes design and building resources, interviews with architects and designers, and a house plan directory.
You can contact Sam via <a target="_blank" href="mailto:%20sam@houseplanology.com">email</a> or on <a target="_blank" href="https://twitter.com/Houseplanology">Twitter</a>.
 
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It's the inside that counts! What makes a good floor plan: Sam Crothers

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Record low interest rates are stoking Australia’s property market, with some expressing concern that property spruikers are targeting self managed superannuation funds <a target="_blank" href="https://theconversation.com/are-smsfs-inflating-a-property-bubble-18658">investing in the sector</a>.
Providing property investment advice can be a very lucrative business. Anecdotally, a property investment adviser can earn anywhere between $20,000 to $40,000 commission on one property deal, selling a $500,000 new apartment or house-and-land package. Considering the money you can make, some of you reading this might now be thinking that working as a property investment adviser is a smart career move. But before you do, answer the following questions.
<ol>
<li>
To become a property investment adviser, what educational qualifications are required?
<ul>
<li>
Diploma in Financial Services
</li>
<li>
Diploma in Real Estate
</li>
<li>
Bachelor of Business
</li>
</ul>
Answer: none of the above. That’s right, you can advise someone on buying a million dollar property and make tens of thousands of dollars in commission in this one transaction, yet you are not obligated to have any educational qualifications; not even completed Year 12.
</li>
<li>
The compulsory continuing professional development requirements for a property investment adviser are:
<ul>
<li>
Attendance at the national conference (15 hours)
</li>
<li>
Equivalent of 20 hours which can include attendance at seminars, conferences, guest speaking
</li>
<li>
Equivalent of 30 hours which must include attendance at the national conference.
</li>
</ul>
Answer: none of the above. It makes sense, doesn’t it? Why would you have to do any ongoing training or development to keep up your skills if there was no minimum training or education requirements when you first started in the job?
</li>
<li>
The licensing requirements to become a property investment adviser include:
<ul>
<li>
Police check
</li>
<li>
Minimum entry educational qualifications
</li>
<li>
Endorsement from two current property investment advisers
</li>
<li>
All of the above
</li>
</ul>
Answer: none of the above. A life insurance salesperson needs to be licensed. A real estate agent needs to be licensed. You would think that someone who is advising you on making one of the biggest decisions in your life is also licensed. Well, you thought wrong.
</li>
<li>
The regulatory body that oversees the property investment advice industry is:
<ul>
<li>
Real Estate Institute of Australia
</li>
<li>
The Financial Advisers Commission
</li>
<li>
Australian Securities and Investments Commission (ASIC)
</li>
<li>
A and C
</li>
</ul>
</li>
</ol>
                Answer: none of the above.
You would hope that a large and powerful organisation such as Australian Securities and Investment Commission (ASIC) would be keeping an eye on investment advisers who are involved in some of the most important and expensive life decisions people will make. Unfortunately this is not the case. “Why?” I hear you ask.
The simple answer is real property is not considered a “financial product” under the Corporations Act. Anyone can give advice on real property and is not obligated to abide by the Corporations Act nor do they come under the scrutiny of ASIC.
This is despite well-known cases such as the <a target="_blank" href="https://www.asic.gov.au/asic/asic.nsf/byheadline/03-237+ASIC+obtains+undertakings+from+Henry+Kaye+and+others?openDocument">collapse</a> of the high-profile property spruiker Henry Kaye’s empire, which was prosecuted by ASIC in 2003 for providing false and misleading investment advice to property investors. In 2010, Kaye was <a target="_blank" href="https://www.asic.gov.au/asic/asic.nsf/byheadline/10-160AD+ASIC+disqualifies+Henry+Kaye+from+managing+corporations+for+five+years?openDocument">disqualified by ASIC</a> from managing corporations for five years.
The Property Investment Professionals of Australia (PIPA) are <a target="_blank" href="https://www.propertyobserver.com.au/news/property-industry-regulation-closer-pipa/2013091665038">lobbying for the regulation and licensing of property investment advice</a>. They are trying to clean up the industry and have instigated entry level educational qualifications, ongoing professional development, a code of conduct and advisers can study to become a Qualified Property Investment Adviser (QPIA).
Unfortunately it is not compulsory for advisers to join this organisation but their member base is slowly increasing. They are building awareness of the lack of regulation in property investment advice but at this stage they have been unable to convince federal government that changes need to be made in this area. However, they are hopeful that with the recent change in government, some progress will be made.
In the meantime, if you attend a property seminar (which in many cases is a front for a property developer’s cleverly disguised hard-sell session), ask the so-called “adviser” the following questions:
<ul>
<li>Are you a QPIA?</li>
<li>What qualifications do you have in property or investment?</li>
<li>Can you disclose the arrangement you have with the developer of the properties that you are trying to sell?</li>
</ul>
If they can’t provide you with satisfactory answers to these questions, keep your wallet in your pocket and your hands on your purse.
 
<hr>
 Peter Koulizos is a lecturer of property at the <a href="https://www.unisa.edu.au/" target="_blank">University of South Australia</a> and is the author of “The Property Professor’s Top Australian Suburbs” and “Property vs Shares”. Peter Koulizos is affiliated with PIPA.
This article was originally published at <a target="_blank" href="https://theconversation.com">The Conversation</a>. 
<img width="1" src="https://counter.theconversation.edu.au/content/18792/count.gif" height="1" alt="The Conversation">
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What qualifications does a property investment adviser need? None: Peter Koulizos

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Self-managed superannuation funds (SMSFs) have come under criticism from regulators amid concerns that the sector is over-investing in the residential property sector.

The profession has hit back at the criticism, saying that most SMSF borrowings do not relate to residential property, and that the surge in the cost of housing is not due to SMSFs. So what is going on?
There are two separate issues at play here. Firstly SMSFs are becoming more active investors, including in the residential property market; and secondly the rules restricting borrowing by a superannuation fund have been relaxed since 2007.
The problem arises at the intersection of these two trends, where residential property is being aggressively marketed to the SMSF market on the basis that it can borrow for the purchase.
The fundamental rule of superannuation, known as the sole purpose test, is that the core purpose of a superannuation fund is to provide <a href="https://www.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s62" target="_blank">benefits to its members in retirement</a>. Risky investments are discouraged as this could compromise the ability of the fund to pay retirement benefits; and benefits to members are supposed to be deferred until retirement.
Prior to 2007 superannuation funds were not permitted to borrow, however the restriction could be circumvented by the use of instalment warrants, a financial instrument that allowed the fund to leverage to acquire assets, accordingly in 2007 <a href="https://www.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s67a" target="_blank">the superannuation legislation</a> was amended to allow superannuation funds to use such instruments to fund property acquisitions.
These changes were <a href="https://www.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s67a">superseded in 2010</a> by the limited recourse borrowing provisions, which allow a superannuation fund to borrow to acquire an asset through a mechanism that ensures that the risk of borrowing is quarantined to the specific asset. This is intended to protect the remaining assets within the fund in the event of a default by the borrower.
It is within this framework that the concern over borrowings by SMSFs has arisen but there are several trends that coalesce around this issue. There has been a sharp rise in the number of Australians setting up SMSFs as many investors establish a self-managed superannuation funds in order to manage their own investments, particularly in the wake of the GFC. This has been facilitated by the superannuation choice rules that allow a person to choose the superannuation fund their compulsory contributions will be paid into. Finally, Australians have always been attracted to bricks and mortar investments, and many investors lost faith in shares as the value decreased during the GFC.
The residential property market is already under pressure with concerns over affordability for home buyers. Activity by investors has increased due to the combination of low interest rates and increasing property values, and SMSFs are increasingly visible among investors.
The Reserve Bank, in its recent <a href="https://www.rba.gov.au/publications/fsr/2013/sep/html/contents" target="_blank">Financial Stability Review</a> noted that the ability to borrow for investments has resulted in an increase in property holdings. It shows that SMSFs have a higher proportion of assets in property than other funds, although property, without differentiation between residential and commercial, still ranks fourth behind cash, Australian equities and “other” investment classes.
The Reserve Bank did not limit its concerns to bricks and mortar, but also indicated that hybrid securities were an emerging problem area. The SMSF Professionals Association of Australia (SPAA) <a href="https://www.spaa.asn.au/library/spaa-media-releases/keep-smsf-property-investment-in-perspective,-says-spaa.aspx?categoryid=1371#.UkT3A38nJpQ" target="_blank">claims</a> that residential property is a minor element of the total SMSF investment market as most property held by SMSFs is commercial.
At June 30, 11.7% of SMSF investments were in commercial property compared to 3.4% in residential property, and the <a href="https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Tax-statistics/Taxation-statistics-2010-11/" target="_blank">latest Taxation Statistics</a> show that less than half of 1% of all property investment was geared.
SMSF trustees need to be aware that it is not always a tax effective strategy to borrow to acquire property in a SMSF. Superannuation funds pay a concessional rate of tax, so negative gearing within a superannuation fund will often be less tax effective than if the member invested directly, outside the fund. The income available to make the payments will be primarily from the return on the asset, with the shortfall from other income, particularly member contributions to the fund, which are subject to the contribution caps.
Borrowing may allow the SMSF to leverage up an investment in the hope of receiving a higher capital gain when the property is sold. Capital gains will be exempt in a SMSF but only if the property is sold after the fund enters the pension phase, which may be many years down the track. Accordingly this is only likely to be tax effective if the member is approaching pension age.
The worrying trend identified by the Reserve Bank is the increased promotion of leveraged property purchases to SMSFs. Activity in the residential property market is also highly visible, due to the increasing number of SMSFs in the market, and many of the promoters of this strategy are not regulated by APRA.
It is this lack of supervision of this sector of the industry that is of most concern. Not only is this strategy pushing up the price of real estate, but it is exposing SMSF members to risk if property prices crash.
 
<hr>
Helen Hodgson is senior lecturer at the School of Tax and Business Law at the <a href="https://www.unsw.edu.au/?" target="_blank">University of New South Wales</a>
Helen was a Member of the Legislative Council in Western Australia from 1997 to 2001 representing the Australian Democrats. She is not currently a member of any political party.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>.
 
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Are SMSF investors blowing up a property bubble? Helen Hodgson

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For all our talk about housing affordability, few people want house prices to drop. That’s because most Australians are home owners, and much of our wealth is stored in housing.
But recent figures released by the <a target="_blank" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/4130.0">Australian Bureau of Statistics (ABS) </a> suggest a growing divide between those enjoying the financial benefits of home ownership, and those who may never be able to afford it.
Overall home ownership rates slipped from 69% to 67% between 2011-2012, signifying real change in Australia’s housing system. Age-specific home ownership rates have seen much sharper falls.
Since the Survey of Income and Housing began in 1995, home ownership rates have hovered between 71%-69%, although the proportion of home purchasers (people with mortgages) began to exceed outright home owners in 2004.
By this time Australia’s long housing boom (between 1996-2005) had begun to play out. Younger generations took longer to enter home ownership and needed to take on larger mortgages. As housing equity grew with the rising market, established households tapped into their home loans to finance other purchases, again meaning longer and bigger loans.
While some speculated that Gen Ys were avoiding the responsibilities and commitment of home ownership by choice, a <a target="_blank" href="https://www.coop.com.au/media/white-paper-august-2013.pdf">recent survey</a> of Australian university students reveals that home ownership remains an overriding aspiration for younger people. However, affordability (saving a deposit and meeting repayments) is a major concern for these students. Despite relatively bright employment prospects they fear they may never be mortgage free.
Housing and wealth
Home owners are vastly more wealthy than renters. The <a target="_blank" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6523.0Main%20Features22011-12?opendocument&amp;amp;tabname=Summary&amp;amp;prodno=6523.0&amp;amp;issue=2011-12&amp;amp;num=&amp;amp;view=">latest ABS figures show </a>that the net worth of renter households was on average only about 13% of that enjoyed by owners with no mortgage, and about a fifth of the net worth of home purchasers.
Housing equity through ownership has provided an important nest egg for older Australians, with baby boomers the main winners in the housing market. Not only did they buy when prices were far more affordable, but family homes barely affect eligibility for the aged pension. If some retirees might over-invest in their castle, others are using super to pay off their home loan.
But although older Australians generally live in their own homes, home ownership among the over-55s has fallen too. This reflects changing household circumstances. Divorce is one of the flashpoints for falling out of home ownership, especially for women, and many are unable to climb back on the ladder. Older, lone person households are more likely to be in private rental than couples, and their financial future seems grim.
Falling rates of home ownership point to a looming problem. Government expenditure on older people, particularly the relatively low rate for the aged pension, depends on minimal housing costs and the capacity for co-payment (for care) by accessing home equity when the time comes. If older people retire with mortgage debt, and worse, without housing equity, ongoing government obligations for income and housing related payments will rise sharply.
More renters, less equity
The new data shows that while renting was once considered a transitional tenure, the proportion of renters is now roughly equal to the numbers of outright home owners (30.9%), down from nearly 42% in 1995. The proportion of households renting from a private landlord has grown from 18% in 1994-95 to 25% in 2011-12.
Households in public or social housing has fallen from 5.5% to 3.9% over the same period, exacerbating the shortage of affordable homes. Rather than investing in new social housing construction, government housing assistance has shifted to rental subsidy to help low-income earners afford rents in the private market.
Government subsidies for home ownership (largely through <a target="_blank" href="https://www.bsl.org.au/pdfs/Yates_tax_expenditure_and_housing_2009.pdf">preferential tax treatment</a>) amount to around $8,000 per household per year, but renters get only around $1,000 per year. Support for property investment equates to an additional $4,000. All up, that means in excess of <a target="_blank" href="https://www.rba.gov.au/publications/confs/2011/yates">$45 billion</a> for home ownership compared to around $8 billion for renting, including concessions for private landlords through negative gearing.
There’s a generational aspect here too – renters and younger home purchasers get much less than older, higher-income home owners without mortgages.
Worse, as the Henry Tax review highlighted, many of these incentives for property investment push up house prices, further disadvantaging aspiring first home owners.
In 2009/10 only 5.2% of houses sold were affordable to those on lower incomes, and 60% of low-income private renters were in housing stress (when housing costs exceed 30% of income). Overall homelessness has grown 17.3% since 2006, with more than 105,200 Australians sleeping rough, couchsurfing, in crisis or temporary accommodation in 2011.
A fairer housing system
In election season, it’s disappointing to see that housing hasn’t really made it on the radar. What can be done to make things fairer?
It’s time to consider real changes to benefit the growing numbers of renters in Australia. The major differences between living in your own home and renting, relate to tenure security and wealth. <a target="_blank" href="https://www.shelter.org.au/index.php?option=com_docman&amp;amp;view=docman&amp;amp;Itemid=487">Reforms to tenancy laws</a> in each state might improve security for private tenants, making rental housing more a choice than necessity.
The <a target="_blank" href="https://taxreview.treasury.gov.au/content/finalreport.aspx?doc=html/publications/papers/final_report_part_1/chapter_12.htm">Henry Tax Review recommended</a> a number of changes to housing and related taxes, including negative gearing, capital gains and land tax and stamp duties. The review also recommended extending the Commonwealth’s rent assistance scheme for lower-income households, while warning that initiatives to increase the supply of housing affordable for low and moderate-income earners are needed.
We’re still waiting for the tax reforms, so what about affordable housing supply? Demand for housing is concentrated in established, inner-city locations accessible to transport and jobs; where supply is inherently constrained. So, just increasing the overall number of new houses produced in Australia won’t fix affordability problems for those currently locked out of home ownership.
Specific strategies to target the production of housing affordable for these groups are needed.
The federally funded <a target="_blank" href="https://www.fahcsia.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme">National Rental Housing Affordability Scheme </a>(NRAS) is worth keeping. It provides tax credits (worth $100,000 per dwelling) to investors or community organisations who build and rent dwellings for low and moderate-income earners, at 20% below market rates.
South Australia, WA and the ACT have all introduced programs to increase the supply of affordable homes for purchase, combining planning requirements and incentives, and in some cases, government land or equity sharing.
Design initiatives
Ingenious design may also help. With smaller households and more people preferring to live in inner-city areas near transport, jobs and services, some designers are experimenting with smaller, cost-effective and high-density housing prototypes.
Cash strapped, tech happy Gen Y’s keen to stay in the hood will like the new <a target="_blank" href="https://yo.co.uk/">Yo!Home</a> hitting London right now. A single room transforms to kitchen, diner, lounge or boudoir at the push of a button. It’s cramped, but facebook friends hang in virtual space.
For others, a prefab backyard flat might appeal. Changes to the NSW planning system mean small accessory dwellings (AKA granny flats) are now permissible on most residential lots.
It’s about making sure there’s sufficient housing of all sizes, types and costs in well-located areas. Extending the range of housing options also means sensible and committed strategies for planned decentralisation, in selected suburban and regional centres.
Home ownership rates in Australia have fallen, threatening to deepen the wealth divide. But it’s not too late to make things fairer for aspiring home owners and long-term renters alike.
 
<hr>
 Nicole Gurran is associate professor at the <a href="https://sydney.edu.au/" target="_blank">University of Sydney</a>. Nicole receives funding from the Australian Research Council and has received funding from the Australian Housing and Research Institute (AHURI).
Peter Phibbs is chair of urban planning and policy at the <a href="https://sydney.edu.au/" target="_blank">University of Sydney</a>. Peter receives funding from the Australian Housing and Urban Research Institute.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/17697/count.gif" width="1">
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The growing wealth divide in Australia's home equity: Nicole Gurran and Peter Phibbs

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A surging Australian dollar to near three-month highs overnight will help to bring a big dose of realism to all this talk of expectations and confidence driving a weak Australian economy higher. As US economist Paul Krugman said, the "fairies of confidence" and the "imps of expectations" are nothing but ephemera in the greater scheme of things, there to wave their wands when all else fails. We saw this yesterday when the sharp rise in business confidence in the National Australia Bank's August business survey, but little or no impact on weak trading conditions.

Today it was a big rise, to a three-year high, in the Westpac/Melbourne Institute Consumer Sentiment survey for September, the highest level since late 2010 (when which government was in power? Why the Gillard government).

All agree the economy is waiting for the confidence fairy to emerge and convince consumers to spend, business to invest and jobs to be created. Just a sprinkle of confidence dust and the economy will be surging. If you were in the UK in 1992 after John Major unexpectedly won, you would have seen Rupert's papers pushing this line -- "Cash Happy Shoppers Celebrate Tory Win" was one Sun headline. Before, of course, Black Wednesday arrived in September that year. Before the bad times.

Much of this "confidence" stuff is economic gobbledygook -- like Tony Abbott's line that Australia is now "open for business". Improving expectations and confidence among business and consumers is imprecise and hard to formalise, and has minimal correlation with real-world outcomes.

And since the poll there has been a surge in the value of the Australian dollar -- not because of the Coalition win, but because of more evidence that the Chinese economy has stopped weakening and is now probably just starting to grow again. It underlines what Abbott, new treasurer Joe Hockey and Andrew Robb (temporary finance minister until Arthur Sinodinos has his Senate spot confirmed) ignored for the past two years: the fact that offshore investors view Australia and the dollar as proxies for the Chinese economy.

Australia is now the most exposed of all major economies to the health of the Chinese economy and, with the fifth most traded currency in the world, it's been easy for investors offshore to bet against China (go short) or go long and believe the China story. There's been a battle between the shorts and the longs, and from May onwards the shorts won. The combination of both, plus the August interest rate cut from the Reserve Bank, saw the Aussie dollar hit a low of 88.48 US.

But with Chinese economic data for July and economic better than expected, there is now a growing belief that China is recovering. Demand for the dollar is up and the currency is over 93 US cents, the highest since late June. Should China continue to recover, the Aussie dollar will rise, even if the Fed reveals next week a timetable to end its $US85 billion a month in spending.

If that happens, Abbott and Hockey will only be able to sit and watch with the same sense of frustration as Julia Gillard and Wayne Swan as a strengthening Aussie dollar starts to put a stranglehold on the economy and the budget's revenue base. Helping this is the virtuous circle of good economic management by successive governments and the RBA; we have low inflation, reasonable growth, rising labour productivity and low interest rates that have resulted from the high dollar/ high credit rating and good economic management by the federal government, and especially the Reserve Bank.

"This could very well emerge as a flash point between the new government and the regulators. House-price booms always end in tears in Australia."

This is a positive feedback loop. Like the Gillard government, Abbott will be an unwilling bystander to the fallout from years of solid, successful management of the economy and creative policy measures during the GFC.

One thing that is more within the control of policymakers is housing. The picture on housing construction has been mixed -- it looked like the sector was recovering from its post-GFC lull this calendar year, until growth tapered off. But Australian Bureau of Statistics data released on Monday showed a 2.4% rise in loan approvals (for both existing and new housing) to 52,204 in July, compared to 50,983 in June. The number of loans approved for the purchase of existing homes was 43,809 in July, the highest since 2009.

There's also solid demand for new homes, with the number of loans to finance new home construction 5265 in July. But the number of loans to buy a just-built new home was 3131 in July, the highest since March 1979. July's rise means the number of home loans approved has risen for seven months in a row, thanks to solid demand from investors (many self-managed super funds) for existing homes or off-the-plan units or apartments.

Growth in demand for new homes is what the RBA has been aiming for as part of its goal of an economy transitioning from a mining investment boom. But demand for existing homes is more problematic. House prices are now up 10% in some markets in the past year. The last thing the economy needs is a housing boom which distorts the economy and brings higher interest rates. Already APRA has signalled concerns about the rising number of home loans where the loan-to-valuation ratio is 90% or more, and has told banks to start being tough on these high LVR loans. APRA and the RBA could very well start trying to "lean against" the surge in the prices of established houses.

The RBA believes in confidence and expectations that flow from consumers feeling more wealthy as asset prices rise, but members also know that contains the seeds of the next, unwanted crisis if left alone for too long. This could very well emerge as a flash point between the new government and the regulators. House-price booms always end in tears in Australia.

Revenue-pressed states want the boom (for higher stamp duty revenues) and News Corp Australia and Fairfax media want the house price boom to continue because their online real estate businesses are the only area of growth for their troubled empires -- that's why newspapers have been talking up house price movements, auction results and other fluff for the past six months. As the ABS data shows, there's a recovery underway, but it is not doing as much to stimulate demand for new house construction as it is for existing homes and apartments.

If anything this home-price - rather than new-home - boom may become the most pressing problem for the economy, rather than the value of the dollar.

 
<hr>
 This article was originally published on <a target="_blank" href="https://www.crikey.com.au">Crikey</a>.
 
 
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Our biggest economic problem could be a housing price boom

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Panellists at a high-level property lunch in Sydney yesterday presented contrasting views of the Australian economy and the post-election outlook. 

 Two of the three property market experts at yesterday’s Australia-Israel Chamber of Commerce function had recently arrived here from overseas. Both were very bullish, saying that the Australian economy compared very favorably with those of the United Kingdom and the US. 
 In contrast, local property developer Lang Walker, the executive chairman of developer Walker Corporation, said that Australian business confidence was low due to political instability and a lack of job security. 
 Susan Lloyd-Hurwitz, the Managing Director of listed real estate group Mirvac, has spent many years working overseas. She contrasted Australia’s GDP growth rate of 3% with that of the UK, which was 0.3%. 
 There are a lot of opportunities for people to carry assets given the strong economic fundamentals, Ms Lloyd-Hurwitz said. The unique transparency of the local property market was one of the qualities that gave “developers confidence to deploy certain amounts of capital.” 
 The third member of the panel, American Bill Powell, recently relocated from New York to become the CEO of Brookfield Australia. Brookfield’s parent company, based in North America, is a global asset manager focused on property, renewable power and infrastructure with over $175 billion of assets under management. 
 Mr Powell said he was “shocked with the negativity” around the local economy, as we had a “great GDP, low unemployment, low CPI and banks that were well capitalized.” 
 Other advantages were a strong fiscal outlook and the presence of an educated workforce with capital to invest, he said. 
 By way of contrast, Mr Walker said that this country needed foreign workers because the work ethic of young Australians was lacking. On top of this, the government had recently “virtually doubled” the wages of apprentices, making them too expensive for many employers to hire, he said. 
 The 67-year-old executive chairman of property development company Walker Corporation, who was last year estimated to be worth be worth $2.1 billion, went on to say that “in the old days, the training process took three to five years and you were paid a little bit more each year. That’s not the case now, it’s too expensive.” 
 His statements are not quite right, however. Last month the Fair Work Commission increased the wages of first-year apprentices from $304 to $400 a week, to reflect the fact that most apprentices are now school leavers. 
 Mr Walker also said that although, as a nation, we are “burdened by regulation”, his recent dealings with the Queensland bureaucracy, which has been slashed by Premier Campbell Newman, had been extremely positive. His latest approval from the Queensland Land Titles Office had taken only one day, he said. 
 A total of 800 people attended the lunch, which is one of the most popular events in the AICC calendar. 
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Property experts present contrasting outlook on Australian market

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I am often asked if I would buy an NRAS property. I can honestly say, I would rather stick a fork in my eye rather than buy an NRAS property.
As a professional investor I would never consider a property simply because you receive some extra tax benefits.
For those of you saying “what is an NRAS property?” let me quickly explain. It’s the National Rental Affordability Scheme. If the name alone doesn’t make you run, then the word “scheme” surely should.
Let me go into “the scheme” a little further. You, the investor, buy a house and land package that has been NRAS approved.
Mistake number one: you have possibly just been ripped off on price by your “adviser” as the developer often pays kickbacks to advisers, mortgage brokers, accountants and property companies for selling these types of houses. They can be as big as $50,000 per house. This kickback falsely increases the median house price of the area as well.
Did you notice there is no negotiation on price?
Mistake number two: the property is let out to people who cannot afford market rent. Essentially you have people on pensions, welfare and/or very low-income earners living in your brand new property. We have tens of thousands of people with good paying jobs, wanting to get ahead in life that cannot afford to buy a new home to live in, yet these properties are let to people who cannot afford the basics in life. I am sure there are some genuinely nice people who need to be supported by our government and I do not have a problem with this, but why are they rewarded with a new house or unit?
Why wouldn’t the government make it more attractive for home buyers and investors to buy new properties, leaving the more established properties for those needing the assistance?
I am 38 years old and my home was originally built in the 50s with the extension built in 1982.
So to make this “scheme” attractive, the government allows you claim more deductions on the property than you could normally. Approximately $10,000 per annum more.
The break up is made up of the following:
<ul>
<li>$7,486 tax offset per annum – after spending countless hours on the phone to the ATO it is now unclear whether this is a gross or a net number, either way, it doesn’t change my mind on NRAS.</li>
<li>$2,495 cash rebate per annum.</li>
</ul>
The property must be approved to be an NRAS property and let out to a government-approved tenant for a 10 year period. The rent charged is calculated at 20% below market rent and adjusted with CPI.
Some thoughts come flying into my mind straight away:
<ul>
<li>Rents in Australia have generally increased a lot faster than CPI of 3%, the rents on my own properties are currently increasing between 6% to 12% per annum.</li>
<li>What happens if they don’t pay the rent? How do you get them out? Tenancy laws are tough enough to get bad tenants out let alone government-backed tenants. I’m sure the tenancy tribunal would favour the landlord here over making a low-income earner homeless. Not.</li>
<li>What are the capital gains prospects of an area drowned in NRAS properties? Potential buyers would run for the hills rather than live in this area. Have you heard of anyone ever selling an NRAS property for a profit? I’m in the game and I haven’t.</li>
<li>If you decide to sell before the 10 years is up, then you are limited to selling to investors only, limiting your potential buyers to about 30% of the market.</li>
<li>Of all the NRAS advisers I have spoken to, the majority of them own one NRAS property. If they are such a good investment, then why don’t they own 10 plus each?</li>
</ul>
Now if that doesn’t make you change your mind, how about this good news story.
In a medium density development in Sydney where almost 60% (around 40 units) of the development was sold to owner occupiers and investors for a pretty penny, the developer then became cash strapped and had to sell fast so a property company came in and struck a deal with the developer. The remainder of the units were approved for NRAS and sold 20% cheaper than the earlier sales and investors snapped them up with NRAS approved tenants moving in.
As a consequence, the sales price of those units are now down another 25% in value. Great deal? I think not.
Nice to know the so called “property company” who recommended these units as an investment were looking after their clients best interests.
Now before you jump down my throat, I have also heard of the programs that allow police officers and other government workers to live in their properties but honestly, what police officer would want to live in these neighbourhoods?
Now don’t let me deter you from exploring this as an option, I just like to make sure that as investors, you have my honest opinion.
 
<hr>
 Todd Hunter is buyer’s agent, director and location researcher for Sydney-based <a target="_blank" href="https://www.wheregroup.com.au/">wHeregroup</a>.
He reached a personal investment portfolio of 50 properties in 2006 and has also started building an SMSF portfolio.
This article was originally posted on <a target="_blank" href="https://www.wheregroup.com.au/blog/todd-hunter/">Todd's blog</a>. 
 
 
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I’d rather stick a fork in my eye than buy NRAS: Todd Hunter

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

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.

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.

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[smartcode_project_cta:default project_id=152737]

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Jacob Robinson

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