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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
For the second time in the space of ten days, it appears that betting markets and pollsters have got it wrong. First, despite odds showing a 90 percent likelihood of “Remain” winning, the UK voted to “Leave” the European Union in its June 23 referendum.
Now, a mammoth federal election campaign has resulted in political stalemate in Australia, and the result will not be known until Tuesday at the earliest.
Clearly, the repercussions of a hung parliament are not as wide-ranging as “Brexit” and we are unlikely to see Canberra’s streets flooded with protesters. However, when Australian markets open on Monday they will still be faced with a high degree of political uncertainty. Investors do not tend to react favourably to such ambiguity.
<h2>Investors reduce risk under political uncertainty</h2>
Investors tend to respond in one of two ways. The most-common situation is for the political uncertainty to manifest in higher levels of market volatility and a flight to quality as investors try to reduce their exposure to risk.
This was what we witnessed post-Brexit: Australian stockmarkets and the dollar fell by more than 3%, while “safe” government bond yields hit an all-time low.
An alternative is for markets to become locked in stasis – where investors sit on their hands, unsure as to whether they should buy or sell. Market liquidity falls and asset prices become resistant to change.
This is effectively what happened following the hung parliament of August 2010. In the aftermath of that election, stock prices remained within a tight trading range and the dollar hardly budged over the course of the following week.
When the result of the 2016 election is finally known, it appears that the outcome will be either a minority Coalition government or a hung parliament. The Senate is likely to be more fractious than prior to the election.
Talk has already started about potential unrest among the conservative faction of the Liberal Party who supported former prime minister Tony Abbott. There is even discussion of an election re-run if the parliament proves ungovernable. Clearly, this uncertainty could linger for months.
<h2>Concerns for jobs and growth</h2>
The likelihood of a lengthy period of uncertainty is important. It means it will be difficult to pass any economic or budgetary reforms. Without such reforms, it is unlikely the budget will return to surplus in the near future (if ever) and it becomes more likely that the AAA credit rating will be lost.
This creates multiple concerns for Australian financial markets, and the broader economy. A credit rating downgrade will likely increase the cost of funding for Australia’s banks.
The Big Four banks will be particularly impacted given the significant role that offshore funding plays in their balance sheet management. This will mean higher interest rates for borrowers – which would not be beneficial for the housing market.
A prolonged period of uncertainty will make it difficult for firms to finalise investment decisions. At a time when the economy is still attempting to transition away from the boom in mining investment this will dent economic growth and employment. So much for “jobs and growth”.
Essentially, this is a recipe for a “risk-off” environment of declining stockmarkets and a depreciating Australian dollar. It is also likely that the market will price a higher likelihood of a reduction in the RBA target rate at the July or August meeting. This will further aid a continued rally in relatively safe government bonds (bond prices rise as yields fall).
If you consider the ongoing political uncertainty resulting from Brexit and the forthcoming US presidential elections in addition to the federal election, then months of nervous markets may lay ahead.
Lee Smales is senior lecturer, Finance, Curtin University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/lee-smales-104586" target="_blank">here</a>.
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Hung parliament may lead to investor uncertainty

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GUEST OBSERVER
Brexit has delivered a shock to global financial markets. Australia’s markets have, however, seen much smaller moves than elsewhere, particularly in Europe. 
This partly reflects that commodity prices have held up well, with the iron ore price above its pre-Brexit referendum level. The AUD is down from USD0.76 to USD0.74, but the fall in the AUD is largely explained by strength of the USD. 
The market’s reaction seems consistent with the apparent limited economic significance of the UK for Australia. Britain takes only 2.8 percent of Australia’s exports and, although financial connections are larger, recent net capital inflows to Australia have mostly come from Asia. In short, Australia’s economic story is much more about Asia than about Britain or Europe. To the extent that Brexit affects Australia, it is mostly through an impact it could have on growth in Australia's major trading partners in Asia. We see Brexit as unlikely to trigger a cash rate cut from the RBA this month. 
Locally, economic focus will shift to the federal election this weekend (2 July), with current polling suggesting a tight race. The latest Newspoll show the Coalition slightly ahead, at 51:49 on a ‘two-party preferred basis’, although a 2pt lead is within the margin of error. We see the election as unlikely to have market implications, although the desire to be apolitical could explain the central bank’s recent reluctance to give much policy guidance (see Australian Election Observer, 17 June 2016). 
More generally, Australia’s growth remains strong, business conditions are at high levels, jobs growth has continued and house prices are rising. Last weekend’s consumer confidence and housing auction clearance rates remained high, despite the Brexit vote. We expect continued solid growth, although inflation remains low. 
We continue to see the RBA’s next potential trigger as the Q2 CPI print, due on 27 July. Our central case sees a 25bp cash rate cut in August, after a low CPI print. 
<a href="/images/2016/07/01/Screen%20Shot%202016-07-01%20at%2010.06.02%20AM.png" target="_blank">Click to enlarge</a>
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What does ‘Brexit’ mean for Australia? 
Brexit has had a large impact on global financial markets, although the local effect has been smaller than elsewhere. Australia’s equity market sold off only modestly and the AUD has fallen, but the decline can be fully explained by strength of the USD rather than weakness of the AUD. Commodity prices have held up well, with the Bloomberg commodity price index broadly unchanged since prior to the Brexit vote and up 13% year-to-date. Iron ore prices have risen since the Brexit vote. 
The more limited local market impact reflects the relatively small economic significance of the UK to Australia. The UK only accounts for 2.8% of Australia’s exports (Chart 2). The rest of the European Union accounts for 4.6% of Australia’s exports, so a wider effect of Brexit on Europe could be more significant. However, this event would only be a big deal for Australia if it significantly affects Asia, as 74% of Australia’s exports go to Asia.
<a href="/images/2016/07/01/Screen%20Shot%202016-07-01%20at%2010.08.10%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/01/Screen%20Shot%202016-07-01%20at%2010.08.10%20AM.png" alt="">
 
Although trade linkages are small, Australia has more significant financial exposures to the UK. The UK accounts for 16% of the stock of foreign investment in Australia and a similar share of Australia’s investment abroad is in the UK. The UK accounts for 11% of Australian-owned banks’ offshore exposures on an ultimate risk basis. However, much of the recent growth in capital inflows into Australia has been coming from growing links to Asia (Chart 2). 
For the RBA, it is likely that the comparatively muted local financial market response to Brexit and the small trade linkages to the UK are the most important elements for monetary policy. The other key issue will be the effect that the UK’s recent, post-Brexit vote, sovereign rating downgrade could have on the AUD. S&amp;P has downgraded the UK by two notches, from triple-A to AA. Australia retains a triple-A rating, and is one of only nine countries with a triple-A rating from all three major rating agencies. Australia’s strong rating could put unwanted upward pressure on the AUD at a time when a competitive currency is needed to support growth. 
Local growth is strong and housing prices are rising 
On the latest readings local growth has remained solid running into Q2, following the strong GDP print for Q1 (1.1% q-o-q). Surveyed business conditions remained at around post-global financial crisis highs in June and capacity utilisation has recently also picked up strongly (Chart 3 and 4). Should the lift in capacity utilisation prove persistent, it may be expected to motivate non-mining firms to ramp up their investment plans, which is a much needed next stage of the rebalancing of growth following the end of the mining investment boom. 
The lift in capacity utilisation and business conditions also helps to explain continued jobs growth in recent months. Employment growth is running at around 2.0% y-o-y, which has been enough to keep the unemployment rate steady at around 5.7% in the past couple of months (Chart 5).
As activity has picked up, local firms have, so far, been choosing to take on more labour, rather than increase investment to meet demand. At some point, they may start to need to increase investment to support a continued pick-up in local production. The improvement in the labour market may also, at some point, start to put some upward pressure on wages growth, which could lift local inflation.
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For the RBA, another factor that could discourage a near-term cash rate cut is the recent re- acceleration of house price growth (Chart 6). Housing prices rose by 8% y-o-y in June (based on daily data), up from a rate of 6% y-o-y in March. However, given that loan approvals have been weaker recently, housing supply is coming online and the prudential settings remain tight, we expect that housing price growth will slow in coming quarters (for more on this see Downunder Digest: Australian housing is still set to cool, 21 June 2016). Nonetheless, the RBA may want a bit more evidence that the re-acceleration does not persist before cutting again.
<a href="/images/2016/07/01/Screen%20Shot%202016-07-01%20at%2010.09.59%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/01/Screen%20Shot%202016-07-01%20at%2010.09.59%20AM.png" alt="">
 
The Q2 CPI print on 27 July is all important 
Although we expect the RBA to be on hold on 5 July, our central case is for a 25bp cut on 2 August. This view depends on the Q2 CPI print, which is due on 27 July. Keep in mind, the almost singular motivation for the cash rate cut in May, was the significant downside surprise to the Q1 CPI print, which pushed underlying inflation to well below the RBA’s 2-3% target band (Chart 7). On a q-o-q and y-o-y basis, the first quarter underlying inflation print was the lowest result since inflation targeting began in 1993 (Chart 8). 
<a href="/images/2016/07/01/Screen%20Shot%202016-07-01%20at%2010.11.30%20AM.png" target="_blank">Click to enlarge</a>
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In our view, if the Q2 print shows underlying inflation below the bottom edge of the 2-3% target band on a quarterly basis, that is, below 0.5%, we see the RBA as likely to cut in August. As our current forecast is for the average of trimmed mean and weighted median to be 0.45%, our central case is for the RBA to cut in August. A higher print will make a cut less likely, although much will then depend on other economic developments. 
Australia’s election has little bearing on the RBA 
Australia will hold a federal election on 2 July. The latest Newspoll shows the current Liberal/National coalition, led by Prime Minister, Malcolm Turnbull, slightly ahead of the Labor Party, led by Bill Shorten, at 51:49 on a ‘two-party preferred basis’, although a 2pt lead is within the margin of error. Perhaps more interestingly, the Coalition is currently leading in more of the marginal electorates. All in all, however, the polls suggest it will be a tight race. 
The market implications of the election are expected to be limited. Neither major party is proposing radical reforms. Both major parties agree on the fundamental economic framework, supporting a floating currency, independent central bank, free flow of capital and trade. For more on the economic policies of each party, see Australian Election Observer, 17 June 2016. 
For the RBA the election is unlikely to make any difference to its approach to policy. However, on the margin, a desire to remain apolitical may help to partly explain the central bank’s reluctance to provide much guidance in its recent statements. Keep in mind that the RBA’s recent statements have not included an explicit easing bias. 
We expect the RBA’s post-meeting statement to note that the board is waiting for more information, particularly on prices, thus suggesting that the Q2 CPI print will be of key focus for the RBA in determining its next move.
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 <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Brexit unlikely to trigger a cash rate cut from the RBA in July: HSBC's Paul Bloxham

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Fish are the most threatened group among Earth’s freshwater vertebrates. On average, freshwater fish populations have declined by 76 percent over the past 40 years. Damaged fish communities and declining fisheries characterise global freshwater environments, including those in Australia.
Fish migrate to complete their life cycles, but water-resource developments disrupt river connectivity and migrations, threatening biological diversity and fisheries.
Millions of dams, weirs and smaller barriers – for storage and irrigation, road and rail transport and hydropower schemes – block the migration of fish in rivers worldwide.
These barriers serve our needs for water supply, transport and energy. But, by obstructing fish migrations, they also degrade ecological integrity and reduce food security.
This is bad news for those who depend on fish for food. For example, in the Mekong River fish supply over 70% of the people’s animal protein, but catches are falling drastically following dam building.
In our paper published today in CSIRO’s Marine and Freshwater Research, we take stock of the impact these barriers have on our freshwater fish, most (perhaps all) of which migrate, and how we can help them.
<h2>Dam it all</h2>
There are countless barriers across Australia’s rivers. Roughly 10,000 barriers of all kinds obstruct flows in the Murray-Darling Basin. Flow is unobstructed in less than half of the basin’s watercourse length.
Native fish numbers in the basin’s rivers have declined by an estimated 90% through habitat fragmentation by barriers together with altered flows, overfishing, coldwater pollution and invasive species.
Similar problems also affect coastal river systems. One or more barriers obstruct 49% of rivers in southeast Australia.
Local species extinctions and loss of biodiversity have occurred nationwide in developed regions, especially upstream of large dams.
<h2>Overcoming barriers</h2>
One way to help fish overcome barriers is to build fishways (or “fish ladders”).
Fishways are designed to aid fish travelling upstream or downstream at high (dams, weirs) or low (road crossings, barrages) barriers. These are classed as “technical”, with hard-engineering designs, or “nature-like”, mimicking natural stream channels.
Recognition that dams threaten freshwater fish communities lagged well behind their construction. Nonetheless, European and American observations of declining fisheries for species moving from the sea to breed in rivers prompted early attempts in Australia to provide for fish passage.
The first Australian fishway was built near Sydney in 1913. By 1985, 52 had been built, but they adopted Northern Hemisphere designs for salmon and trout. These were unsuitable for Australian species, which rarely leap at barriers, and their flow velocities, turbulence and other aspects were excessive.
Seeing the failure of these fishways, New South Wales Fisheries sought advice in 1982 from George Eicher, an American expert, who advised on research to create designs for local species.
This led to expanding fishways research and construction in eastern states. The result was markedly improved performance, for example in the Murray-Darling’s Sea to Hume program.
<h2>Fishway performance</h2>
Our research shows that regrettably few Australian fishways have yet been shown to meet ideal ecological criteria for mitigating the impact of barriers. Furthermore, fishways are in place at relatively few sites.
In NSW, for example, only about 172 in total serve several thousand weirs and 123 dams. They can be expensive to build and operate, so costs retard mitigation at numerous important sites.
Fishways have seldom been built on dams (fewer than 3% of Australia’s 500 high dams have one); they have generally cost tens of millions of dollars; and most operate, with limited effectiveness, for less than 50% of the time. The need for much greater investment in innovation, research and development is pressing.
<h2>How to store water and also rehabilitate fish</h2>
To reduce the impact of dams on fish we need to look at resolving problems at river-basin scale; improving our management of barriers, environmental flows and water quality; removing barriers; and developing improved fishway designs.
One way to accelerate improvements nationally would be to pass legislation for routinely re-licensing waterway barriers at regular intervals. This would mean that older barriers are re-evaluated and upgraded or removed where necessary. Under the NSW Weir Removal Program, 14 redundant weirs have already been removed, with others under assessment.
We are developing an innovative pump fishway concept at UNSW Australia. It combines aquaculture fish-pumping methods for safe fish transfer with existing fishway technology.
We hope the project may help transform past practices through less-costly modular construction, adaptability to a wide range of barriers and improved effectiveness.
Better fishway developments will mean that we can store and supply much-needed water while also restoring fish migrations. This will be increasingly important as climate change reduces streamflows in many regions, and will help rehabilitate fish populations.
John Harris is adjunct associate professor, Centre for Ecosystem Science, UNSW Australia and can be contacted <a href="https://theconversation.com/profiles/john-harris-94224" target="_blank">here.</a>
Bill Peirson is adjunct, Water Research Laboratory, School of Civil and Environmental Engineering, UNSW Australia and can be contacted <a href="https://theconversation.com/profiles/bill-peirson-277095" target="_blank">here</a>.
Richard Kingsford is professor, School of Biological, Earth and Environmental Sciences, UNSW Australia and can be contacted <a href="https://theconversation.com/profiles/richard-kingsford-134" target="_blank">here</a>.
All are authors for The Conversation.
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Deadly eco-systems: We can have fish and dams

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GUEST OBSERVER
Sales activity and price growth in the prime London residential market have both slowed since mid-2014. The EU referendum has been only one of a number of headwinds which have impacted the market. 
The UK election, the threat of a Mansion Tax, the imposition of higher rates of stamp duty as well as the additional rate for investors and second home buyers, have all conspired with the EU vote to dampen market sentiment. 
The very strong volume of sales seen at the end of Q1, bolstered by the impending additional rate of stamp duty, was bound to weigh on deal levels in Q2, but it is fair to speculate that at least part of the decline since April has related to market uncertainty caused by the referendum.
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There is no doubt that the vote in favour of Brexit will generate a period of renewed uncertainty in the prime London residential market. Some demand, especially from investors, will be delayed and in some cases redirected to other markets – although the significance of these trends should not be overstated. 
Demand for prime London property rests on a wide range of drivers – most of which are unaffected by the referendum decision: the scale of London’s business cluster, depth of skills, education, lifestyle and language. It is not easy to identify an obvious alternative destination for investors despite short-term nervousness. 
On the eve of the vote the pound sat 14% below its mid-2014 peak meaning pricing in the prime market was more attractive for dollar buyers. While a further weakening of the pound could increase inward investment, this impact will be constrained by the fact that around 80 percent of central London buyers are UK residents.
It seems a reasonable assumption to make that interest rates will be lower for longer, despite the risk of imported inflation from a weaker pound. While the long-term benefit of ultra-low interest rates on the housing market may be questionable, in the short- term they will act to underpin demand especially for equity rich buyers with access to the best funding rates. 
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The prime country house market will be similarly impacted by the result. However while the market has performed relatively well over recent years, following a slow recovery immediately after the financial crisis, prices have not tracked London to date and there is scope for some out- performance in the short to medium term. 
While we are entering a period of renewed uncertainty in the UK and London market, ongoing issues around EU and especially Eurozone stability, which will be highlighted in the run up to French and German elections, are likely to counter this risk and shore-up London’s safe- haven appeal. 
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Liam Bailey is partner, Global Head of Research for Knight Frank and can be contacted <a href="https://www.knightfrank.com/research" target="_blank">here</a>.
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The factors dampening UK residential market sentiment: Knight Frank's Liam Bailey

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Real estate website onthehouse has compiled a list of Canberra's most affordable suburbs, with Hughes, Curtain and Downer making up the top three affordable suburbs.
The comparison table, below, features median values, capital growth and rental yield.
 
Suburb Postcode Dwelling Region Median Value Capital Growth Last 12 Months Rental Yield Median Rent
Hughes 2605 Units Metro $280,000 9.79% 5.74% $310
Curtin 2605 Units Metro $292,000 -2.98% 5.49% $305
Downer 2602 Units Metro $302,500 4.91% 5.52% $320
Lyons 2606 Units Metro $303,500 4.13% 5.48% $320
Crace 2911 Units Metro $320,500 5.12% 5.72% $350
Fisher 2611 Units Metro $337,500 -3.18% 5.02% $325
Theodore 2905 Units Metro $339,500 -4.28% 5.49% $355
Macgregor 2615 Units Metro $340,500 -1.06% 5.57% $365
Franklin 2913 Units Metro $344,000 2.51% 5.49% $360
Ngunnawal 2913 Units Metro $344,000 -2.28% 5.44% $360
Holt 2615 Units Metro $347,500 4.87% 5.50% $365
Gordon 2906 Units Metro $349,000 -3.93% 5.34% $355
Phillip 2606 Units Metro $350,000 -0.54% 5.35% $360
Palmerston 2913 Units Metro $352,000 -2.64% 5.46% $370
Melba 2615 Units Metro $354,500 -1.40% 5.82% $395
Calwell 2905 Units Metro $357,000 -2.48% 5.41% $370
Isabella Plains 2905 Units Metro $362,000 -3.75% 5.28% $365
Kambah 2902 Units Metro $362,000 -0.11% 5.25% $365
Belconnen 2617 Units Metro $362,500 0.61% 5.26% $365
Watson 2602 Units Metro $369,000 1.95% 5.28% $375
Casey 2913 Units Metro $371,500 4.50% 5.47% $390
Harrison 2914 Units Metro $371,500 0.77% 5.12% $365
Conder 2906 Units Metro $373,000 -0.28% 5.22% $375
Wanniassa 2903 Units Metro $373,500 1.67% 4.98% $355
Page 2614 Units Metro $385,000 1.73% 5.14% $380
Macquarie 2614 Units Metro $386,500 1.64% 5.10% $380
Hackett 2602 Units Metro $388,000 4.42% 4.81% $355  
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Canberra's most affordable suburbs: Onthehouse

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<div>GUEST OBSERVER </div>
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There is no doubt that the vote in favour of Brexit will generate a period of renewed uncertainty, but mainly in the UK and Europe. Some demand, especially from investors and businesses (hiring and investing), will be delayed and in some cases redirected to other markets.
Demand for Australian property may actually benefit (as a safe haven) as globalinvestors pause in directing capital into Europe and our demand rests on a wide range of drivers – most of which are unaffected by the referendum decision: the scale of Australia’s business clusters, depth of skills, education, lifestyle and language etc. 
However it must be said that the world is entering a period of renewed uncertainty inthe UK and London market, and ongoing issues around EU and especially Eurozone stability, which will be highlighted in the run up to French and German elections. Uncertainty and instability is bad for financial markets and capital investment, so let’s see what impact it may have on borrowing costs and business/consumer confidence here in Australia. 
The UK has long been a destination for Asian (Chinese mainly) real estate investors, with the attraction of the strong liquidity, stable governance, transparency and clear title. With the decision to exit the European Union, for existing Asian property owners, the fall in the pound will impact the repatriation of any income returns, as well as the gains on any disposal.
Although there is likely to be more volatility in the market, ultimately most investors are looking to the long term – so will continue to hold their assets, in the hope that any short-term instability will eventually subside when more clarity of the UK’s role in Europe is determined.
The decision, however, could also present a buying opportunity for owners not already set, as the significant drop in the value of the pound, as in 2009, could lead to an uptick of interest by Asian investors, who, over the last few months have adopted a wait-and-see approach to the referendum – and will now see their buying power increase significantly.
As stated above, Chinese, Singaporean and Hong Kong investors especially, looking at both residential and commercial properties, could also start to look even harder at markets like Australia over the remainder of 2016 until the dust settles in UK/Europe.
Regarding interest rates, an interest rate cut of 25 basis points is a strong possibility at the UK Monetary Policy Committee’s July meeting, or perhaps earlier if required. We may also see a return of quantitative easing, if there are signs that investment is deteriorating. I think the RBA is now even more likely of cutting rates, either in July or more likely in August once the inflation number comes through.
Uncertainty for businesses is the biggest threat to Australia in a very global world. It is therefore inevitable that business behaviour will be stifled over the short-term and delays in occupier decision making will persist. 
Despite this, over the medium-term there are reasons to be positive. First, the pessimistic scenarios highlighted during politicised campaigns often fail to emerge. Second, as the dust settles, and the UK and global economy stabilises, businesses will reconnect with the fundamental qualities of Australia as a business location; ranging from corporate tax rates, to the large consumer market, to the highly skilled worker base, to the lifestyle.
Matt Whitby is Head of Research &amp; Consulting, Australia, Knight Frank and can be contacted <a href="https://www.knightfrank.com.au" target="_blank">here</a>.
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Potential impact of Brexit in Australia: Knight Frank's Matt Whitby

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GUEST OBSERVER
We are about to enter a period of substantial reform.
We have therefore prepared a brief ‘stock take’ of what the reform proposals look like as at the start of July 2016. In particular, we consider the proposals announced in the 3 May 2016 Federal Budget by the Liberal Government.
We also briefly compare these with the Labor Government’s proposals. Remember that these proposals are not yet law and the final form they take if they are introduced as law depends on a number of variables.
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LIBERAL PARTY PROPOSALS - CHANGES THAT APPLY FROM 3 MAY 2016
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The following change, if enacted, will apply from the date of the Budget announcement, being 7.30pm on 3 May 2016:
<h2>Lifetime non-concessional contributions cap</h2>
A lifetime non-concessional contributions (‘NCC’) cap of $500,000 will apply. This lifetime cap will take into account all NCCs made on or after 1 July 2007. Contributions made before the Budget announcement, however, will not result in excess NCCs.
The most difficult aspect of the Liberal Party’s superannuation reform proposals is the practical retroactive application the lifetime cap by including almost 9 years (ie, 1 July 2007 to 3 May 2016 is around 3,230 days or just over 8.8 years).
Thus, people who have previously relied on the law during this 9 year period in making contributions to their superannuation funds may now have no or little lifetime NCC cap remaining. Despite this practical impact, the Liberal Party is firm (and correct) in its view that this proposal is not retrospective (from a strict legal perspective).
The Liberal Party takes the view that the lifetime cap is prospective as it only affects excess NCCs made after the Budget announcement. That is, if more than $500,000 was contributed prior to 3 May 2016, that amount is not required to be withdrawn from superannuation.
However, if someone who has contributed more than $500,000 after 3 May 2016 (including contributions made prior to that date), the excess must be removed from superannuation or will be subject to penalty tax. A special ATO release authority will issue allowing the removal of the excess.
The Liberal Party has stated that there may be transitional provisions implemented for superannuation trustees who entered into contractual arrangements prior to the Budget announcement and who intended to make additional NCCs to settle the contract.
The proposed lifetime NCC cap will replace the existing NCC caps of $180,000 each financial year (or $540,000 averaged over three years under the bring-forward provisions). The $500,000 NCC cap will be indexed to average weekly ordinary time earnings (‘AWOTE’). Further, this proposal does not alter contributions made to superannuation under the CGT cap.
For more information on the $500,000 lifetime NCC cap, <a href="https://www.dbalawyers.com.au/announcements/new-500000-lifetime-contribution-cap-retrospective-bad-law/" target="_blank">click here</a>.
<h2>CHANGES THAT APPLY FROM 1 JULY 2017</h2>
<h2>Retirement transfer balance cap </h2>
A balance cap of $1.6 million on the total amount of accumulated superannuation a member can transfer into the tax-free retirement phase will be introduced. 
Currently, the earnings on assets supporting the trustee’s liability to pay a pension to a member are tax free without any maximum limit; this is known as the exempt current pension income (‘ECPI’) exemption. This proposed measure caps the ECPI of each member at $1.6 million of capital that can be used to commence a pension.
There will, however, be no restrictions placed on the subsequent earnings on the balance cap of $1.6 million. Therefore, the tax free status of the earnings derived from assets supporting a pension will not be limited.
Amounts in excess of the balance cap can be maintained in accumulation phase. Generally, earnings during the accumulation phase are taxed at 15%, with a 10% applying to net capital gains on assets held for more than 12 months after allowing for the 1/3rd CGT discount. 
Members already in the retirement phase with balances above $1.6 million will be required to reduce their pension account balance to $1.6 million by 1 July 2017.
A tax on amounts that are transferred in excess of the $1.6 million cap (including earnings on these excess transferred amounts) will be applied, similar to the tax treatment that applies to excess NCCs. 
Excess amounts will need to be transferred to accumulation phase or withdrawn, and tax paid on the associated earnings after allowing a 15 percent tax offset. 
The balance cap remaining for a member seeking to commence more than one pension will be determined by apportionment. Broadly, this means that if a member only uses part of their balance cap, they can utilise the remaining balance cap and if the cap has been indexed, they obtain a proportionate increase to their remaining cap.
The $1.6 million balance cap will be indexed in $100,000 increments in line with CPI.
For more information on the $1.6 million balance cap, <a href="https://www.dbalawyers.com.au/announcements/1-6m-balance-cap-examined-tax-death-benefits/" target="_blank">click here</a>.
<h2>Division 293 threshold</h2>
The threshold at which high income earners pay additional contributions tax will be lowered from $300,000 to $250,000 from 1 July 2017.
Annual concessional contributions cap will be reduced to $25,000
The annual concessional contributions (‘CC’) cap will be reduced to $25,000 each financial year (indexed in line with AWOTE).
<h2>Rolling 5 year concessional contribution cap</h2>
Members with a superannuation balance of less than $500,000 will be permitted to make additional CCs where they have not reached their CCs cap in the prior five FYs. This will effectively equate to a rolling five year average CC cap of up to $125,000. 
For example, if a member contributes $10,000 in FY2018, the member will effectively have a CC cap of $40,000 in FY 2019 (ie, $25,000 plus $15,000). 
<h2>Tax deduction for personal superannuation contributions</h2>
All members up to age 75 will be allowed to claim an income tax deduction for personal superannuation contributions up to their CC cap. This effectively allows all individuals, regardless of their employment circumstances, to make CCs up to the CC cap.
For example, if an employer makes superannuation contributions of $10,000 on behalf of an employee, the employee may make an additional $15,000 of personal CCs to superannuation, and claim a deduction for this amount (subject to having sufficient taxable income to offset the deduction).
For more information on personal deductions, <a href="https://www.dbalawyers.com.au/ato/budget-means-right-now-personal-deductible-contributions/" target="_blank">click here</a> 
<h2>Abolishing the work test for members under age 75</h2>
The current restrictions on people aged 65 to 74 from making superannuation contributions will be removed. In essence, this means that the work test requirements (ie, gainful employment for 40 hours in 30 consecutive days before a contribution can be made) will cease to apply for members under age 75.
For more information on the CC proposals, <a href="https://www.dbalawyers.com.au/announcements/spotlight-concessional-contributions/" target="_blank">click here</a>.
<h2>Low income superannuation tax offset</h2>
A low income superannuation tax offset (LISTO) will be introduced to reduce tax on superannuation contributions for low income earners. Note that this announcement ensures that the Low Income Superannuation Contribution, which has been legislated to cease on 30 June 2017, will effectively continue to operate.
<h2>Spouse tax offset</h2>
The income threshold for the recipient spouse (whether married or de facto) of the low income spouse tax offset will be increased from $10,800 to $37,000. The contributing spouse may be entitled to a maximum tax offset up to $540 for contributions each financial year made on behalf of the recipient spouse.
<h2>Transition to retirement income streams</h2>
The tax exemption on earnings derived from assets supporting transition to retirement income streams (‘TRIS’) will be removed from 1 July 2017. Therefore, members who have reached preservation age, but not yet retired will be able to commence a TRIS (or continue to receive a TRIS), but the earnings will be taxed at the concessional rates that apply to amounts in the accumulation phase.  
<h2>Lump sum election</h2>
It is proposed to remove the provision that allows individuals to treat certain superannuation income stream payments as lump sums for tax purposes under regulation 995-1.03 of the Income Tax Assessment Regulations 1997 (Cth). This measure will primarily affect members under age 60 in receipt of a TRIS. 
<h2>Anti-detriment provisions</h2>
The anti-detriment provision in respect of death benefits from superannuation will be removed from 1 July 2017.
<h2>LABOR PARTY PROPOSED SUPERANNUATION CHANGES</h2>
At this stage, the Labor Party has proposed the following two changes to superannuation if it wins the July 2016 election:
<h2>Pension exemption limit of $75,000 p.a.</h2>
If elected, the Labor Party intends to reform the tax exemption for earnings on superannuation balances in pension phase that exceed $1.5 million. From 1 July 2017, future earnings on assets supporting income streams will be tax‑free up to $75,000 a year for each member, while earnings above the $75,000 threshold will be taxed at 15% that applies to earnings in the accumulation phase.
It is proposed, however, that assets acquired prior to 1 July 2017 will be grandfathered for capital gains tax purposes. In respect of future discounted gains (ie, capital gains entitled to the 1/3rd discount), the gain will be added to income earnt in any year and included in the $75,000. 
<h2>Division 293 threshold</h2>
The Labor Party also proposes to reduce the Division 293 threshold from $300,000 to $250,000.
<h2>Labor Party’s position</h2>
While the Labor Party has stated that it opposes the retrospective effect of certain Liberal Party proposals, Labor has not as yet formally adopted a position with regard to the Liberal Party proposals. 
For more information on the Liberal Party v Labor Party pension proposals, <a href="https://www.dbalawyers.com.au/announcements/liberals-v-labor-different-election-outcomes-mean-smsf-pensions/" target="_blank">click here</a>. 
<h2>CONCLUSIONS</h2>
The superannuation reforms will have wide ranging impact and are likely to take several years to finalise. Most people will have to adjust their superannuation planning, especially their SMSF succession planning, and are best positioned to do so if they monitor and keep on top of the changes. There are strategies that can be implemented ahead of these proposals becoming law and expert advice should be obtained as needed.
DBA Lawyers will be continually refining its SMSF and related documents to keep at the forefront of this change. We also offer an extensive range of education options to keep you updated on an ongoing basis.
Daniel Butler is director, DBA Lawyers and Rebecca James is special counsel. They can be contacted <a href="https://www.dbalawyers.com.au" target="_blank">here</a>. 
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Property 101: Proposed super reform

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Value capture secures some of the benefits delivered by public investment to offset the costs of provision. The notion has been around in various forms for a while, but recently gained steam. Prime Minister’s Malcolm Turnbull’s Smart Cities Plan touts value capture as a way to better distribute “the costs and benefits in publicly funded infrastructure to facilitate a project that may not otherwise occur”.
But there’s a lot of confusion about what value capture actually means and how it might operate in Australia.
<h2>What is ‘value capture’?</h2>
Public investment in a new rail line or motorway can generate huge increases in surrounding land values. In part the increase derives from improved accessibility for existing residents and businesses. High windfalls also arise once land has been rezoned to capitalise on higher development opportunities generated by the new infrastructure.
Since public investments and decisions are intended to maximise community benefit, it seems unfair and inefficient that some private landowners profit immensely from the process while others gain little or may even be disadvantaged.
Value capture mechanisms seek to rectify this by clawing back at least some of the increased business revenue or land value. These funds are then allocated towards the initial costs of infrastructure provision. In the case of a planning change, land value uplift can also help ensure that affordable housing for low income groups is included in new development.
<h2>How does value capture work?</h2>
The PM’s Smart Cities Plan doesn’t offer much detail as to how a value capture model would operate in Australia. Several different approaches are used overseas, but their potential transferability is unclear.
Transit value capture is used in Hong Kong and Japan to fund railway lines and new town development. This is a project-based approach which packages investment in railway and housing development together. Commercial holdings along the railway line deliver an ongoing revenue stream as does long term investment in residential development. In Hong Kong, a significant program of public rental and subsidised home ownership has also been delivered as part of this model.
Project-based transit value depends on access to large swathes of low cost land (in Hong Kong the government retains land ownership, so the land component is essentially free). It also depends on ongoing residential and commercial investment along the new route over time, which in turn assumes buoyant economic growth. When the Japanese economy stagnated, the potential for railway operators to self-finance their projects did too.
Tax Increment Financing (TIF) is used widely in the US to finance new transit and urban renewal projects. The model draws on anticipated increases in business revenue or rents in areas where incremental value uplift will occur. A portion of the increase is captured via a special property tax which is then allocated to repay the debt.
Australian local governments can also introduce special purpose levies to fund specific items through property taxes or rates. The Gold Coast light rail project for instance, was partly financed via the council’s annual transport levy (now around $111). However, since the levy applies to all ratepayers, rather than confined to areas where direct value uplift occurred, this doesn’t represent value capture in the strict sense of the term.
Value capture through the planning process is another approach. Unlike development contributions, which in Australia are used to internalise the costs of servicing a particular project (like roads, carparks, or footpaths), so they aren’t borne by existing ratepayers, value capture focuses on the benefits (often called “betterment” or “planning gain”) accruing from public investment or planning decisions.
One way of capturing value created through public investment or planning is to levy the charge on the first property transaction (ie. land sale) following the change. Another is to add an additional levy to existing contributions paid by developers.
The NSW government’s foreshadowed “Special Infrastructure Contribution” for new residential development along the Parramatta Rd light rail corridor ($200 per metre of gross floor area) is a recent example.
While this amounts to around $20,000 an apartment (at most about 3% of current sales prices), industry lobby group the Urban Taskforce claim the levy will discourage development and hurt home buyers. That’s cheeky since house prices are set by the market – which in the case of a light rail corridor will rise by much more than 3%. Ultimately the Taskforce worries that value capture places “an unfair burden on particular sectors of society” by which they presumably mean landowners and developers.
<h2>What would need to happen to extend value capture models in Australia?</h2>
Besides the politics, a number of issues must be addressed if value capture is to be extended in Australia. First, calculating value uplift is complex. Often land prices rise well in anticipation of investment or a planning change, so robust framework for value capture should be in place well before such speculation might occur.
Second, value capture should not discourage development or make land acquisition more expensive. This means close attention to project viability when setting capture requirements. Third, robust mechanisms for collection through either the planning process, as an ongoing property tax, or when land is sold, are needed.
Finally, although the current conversation focuses on transport, over time there will be pressure to fund other socially beneficial infrastructure. Two obvious candidates are schools, which also improve land values, or affordable housing, which is often lost when land values rise.
However fuzzy current conversations about value capture may be, the Commonwealth’s new interest in cities and the need to support more affordable homes near public transport, is welcome. So too the recognition that public investment and policy changes in urban and regional areas generate enormous value, which can and should be shared more widely.
Nicole Gurran is professor - Urban and Regional Planning, University of Sydney and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/nicole-gurran-759" target="_blank">here</a>.
Stewart Lawler is lecturer in Property and Built Environment, University of Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/stewart-lawler-262628" target="_blank">here</a>.
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What is ‘value capture’ and what does it mean for cities?

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
In the current housing tax debate a number of studies have come out arguing that while prices will fall (by varying amounts) rents will not be affected. That rents will be unaffected is surprising and (in my view) wrong.
Outside of the heat of an election, the Henry Tax Review’s comprehensive review of the tax system argued for lower taxes on savings, a proposition that most economists would regard as unexceptional. (There is now a (small) school of thought arguing for higher taxes on savings but this author for one does not subscribe to that.)
Specifically, the Henry Review recommended the marginal tax rates on interest and rental income should be 40 percent lower; for example, the 35 percent and 45 percent income tax rates on labour income would be lowered to 21 percent and 27 percent. For property investors these rates would also apply to capital gains and net losses, thereby reducing the value of negative gearing.
For ‘ungeared’ investors (those who do not take on debt), the effective tax rate would be lower while for highly geared investors the effective tax rate would be higher, leading to less incentive to leverage (making the Reserve Bank of Australia happy). Overall, the effective tax rate for the “average” investor would be higher.
Now the Henry Review acknowledged that its proposed changes would, by lifting the user cost of capital of investors, lift rents. It therefore explicitly said that its proposed changes would need to be accompanied by measures to both lower the cost of housing by removing supply constraints, and to lift levels of rental assistance for households in the private rental market. In short, it did not see the increases in rents as immaterial.
If the increase in user cost of capital (on investors who are ‘geared’ by borrowing money to invest) with the Labor proposal is higher (roughly double), on what basis could rents not rise? It is not evident to me.
The key component of the user cost of capital, and the one which varies the most over time, is interest rates. When interest rates rise or fall, we expect prices to fall, or rise. But interest rates also change rents, since rent = user cost × value of house.
And what we also see is that a rise in interest rates causes the rent-price ratio (that is, the ratio of home prices to annual rent, also referred to as the rental yield) to rise, while a drop in interest rates will see it fall.
To illustrate, consider Melbourne for the period 1991-2014 when interest rates have fallen significantly and the rent-price ratio has followed suit. This has seen prices increase significantly (4.9 percent pa in real terms), and faster than the rise in costs (3.2 percent). In inner areas where there is a significant location premium (over living at the urban fringe), the rise in prices has been fastest (5.8 percent) as the value of that location premium has been bid up.
That is, most of the change in the rent-price ratio has come from rising prices. On the other hand, in the outer areas, where there is no location premium and the value of a house is the structure plus the cost of land, prices (3.4 percent pa) have moved in line with costs (3.2 percent pa) but rents have risen much more slowly (1.4 percent). That is, rents explain the decline in rent-price ratios.
So, while the assumption of most commentators is that price movements do the work in changing rent-price ratios, and that is so over the short term, over a longer time span, rents do some of the adjustment.
Changes in interest rates are uncontroversial. But the same principles apply to changes in tax if they change the cost of capital, which is why the Henry Review expected rents to rise.
In the case of the Labor’s negative gearing changes, the waters are muddied for some by its proposed exemption on new housing. A couple of points here. Firstly, ABS figures are quoted to suggest that investors’ purchases are 93% established housing, and only 7% new housing. This significantly understates the role of investors.
The NAB residential property survey has domestic investor purchases of new housing at about 20-30% - that is, domestic investors are already a significant component of the new market (adding to supply!).
Secondly, Henry also expected a change in the mix of landlords to consolidate from one with a large number of small landlords, to one with a smaller number of large landlords. More marginal investors – middle income/low wealth investors – will be the first to vacate the field as their entry point is typically cheaper, old stock not premium new stock.
High income/low wealth investors will have the option of new dwellings. High income/high wealth individuals will benefit from the higher rents and lower prices on established dwellings.
That is, the ownership of the dwelling stock (and tax benefit!) will shift to the top end of income earners. But it is not clear that the special treatment of new housing will add materially, if at all, to supply of new dwellings.
In short, the law of unintended consequences will apply. Logic says that rents will rise, and with the 30 percent renting in the private market skewed to low income earners, that means housing affordability will have declined for these people.
Nigel Stapledon is Andrew Roberts fellow and director Real Estate Research and Teaching Centre for Applied Economic Research, UNSW Australia and an author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/nigel-stapledon-269708" target="_blank">here</a>.
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Why rents will rise under Labor’s negative gearing proposal

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GUEST OBSERVER
New home sales declined by 4.4 percent in May after falling by 4.7 percent in April. The decline reflected a fall in detached house sales (-6.7 percent) but sales of ‘multi-units’ rebounded (+4.9 percent).
The new home sales data is important for housing-dependent companies such as builders, developers and retailers.
What does it all mean?
The latest weakness in new home sales resonates with all the other data on the housing sector - in particular the data on home loans, which has been decidedly more mixed in the past few months. It is clear that housing activity is consolidating with potential home buyers being more circumspect on purchases – a result which is encouraging, as it should ensure a much more sustainable housing market.</div>
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 Interestingly the data is for May and would not fully factor in the surprise decision by the Reserve Bank to cut the cash rate, and the subsequent decision by the banks to pass it on to mortgage rates. It is likely that the rate cut and the speculation of low interest rates over the medium term will support demand for property.</div>
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<div class="column">Importantly the pipeline of new home building remains solid and should support an array of sectors and broad- based activity. The latest data doesn’t have a great influence on the next interest rate decision. The Reserve Bank is determining whether lower-inflation Australia can justify having an interest rate structure closer to those in other major advanced economies.</div>
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<div class="column"><a href="/images/2016/06/29/Screen%20Shot%202016-06-29%20at%202.23.06%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/06/29/Screen%20Shot%202016-06-29%20at%202.23.06%20PM.png" alt=""></div>
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<div class="column">What do the figures show?</div>
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<div class="column">New home sales</div>
<div class="column">Total seasonally-adjusted new home sales declined by 4.4 percent in May 2016 after sliding by 4.7 percent in April. The decline in total sales was reflected in a decline detached house sales (-6.7 percent) but sales of ‘multi- units’ rebounded (+4.9 percent). The Housing Industry Association reported: “In the month of May 2016 detached house sales declined in three of the five mainland states: New South Wales (-11.5 percent); Victoria (-8.2 percent); and Queensland (-11.0 percent). Detached house sales increased in South Australia (+3.8 percent) and in Western Australia (+5.4 percent).”
What is the importance of the economic data?
The Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia's largest 100 home builders. 
The survey covers around 14 percent of the home building industry.
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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Back to back declines in new home sales: CommSec's Savanth Sebastian

Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.

Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.

There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.

<img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" />

Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.

"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."

The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;

The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;

Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a>

Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a> 
&nbsp;

Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

Joel Robinson

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.

The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.

Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.

The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.

<img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" />

A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.

Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.

New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.

GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.

First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.

The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.

Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.

[smartcode_project:default project_id=135876 project_image_fid=368853]

The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.

GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available.

Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.

[smartcode_project:default project_id=135876 project_image_fid=368851]

The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.

The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.

[smartcode_project:default project_id=135876 project_image_fid=368852]

For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.

GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.

"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.

"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."

[smartcode_project_cta:default project_id=135876]

GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.

The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.

&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.

The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.

<img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" />

A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.

The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.

"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.

The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.

Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."

The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.

<img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" />

The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.

S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.

Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.

John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.

First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Jonathan Chancellor

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