<html><body>
<img src="https://counter.theconversation.edu.au/content/59595/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Dairy giants Murray Goulburn and Fonterra played a dangerous game of chicken by hanging onto high milk prices despite the global dairy market volatility.
Even though both cooperatives are shifting responsibility to each other for the fall in milk prices, which is pushing dairy farmers to the brink, they are both at fault for their race to the bottom. Now both will have to work hard to win back the trust of farmers.
The two companies, both cooperatives (although Fonterra has most of its members in New Zealand) compete head-to-head for farmer suppliers in Australia.
Fonterra is the world’s largest dairy exporter accounting for about 40 percent of global dairy trade and is the fourth largest dairy company behind Nestle, Danone and Lactalis with an annual gross revenue of A$17.61 billion, and 1200 suppliers in Victoria, Tasmania and South Australia. By contrast Murray Goulburn has annual sales revenues of A$2.87 billion, 9 percent of the global trade market and has 2500 suppliers in Victoria and Tasmania.
Since 2005, when Fonterra purchased Bonlac the two companies have fought for suppliers in Australia and grown their respective businesses to meet increasing global demand for dairy product. Their resulting pricing models to farmers were assured while dairy prices continued to rise. Farmers accepted claw back provisions - it was never thought that they would be invoked - and the companies accepted loose contractual obligations to supply. The competitive environment that ensued, from which dairy farmers benefited meant that neither company was able to hold the mantle of market leader for long.
The game of chicken was on as early as August, 2015 when Fonterra began reducing its advance payments to New Zealand dairy farmers). Throughout the following eight months Murray Goulburn and Fonterra steadfastly sat behind their respective wheels committed to hanging tough. Much was at stake.
For both cooperatives a reduction in advance payments to their suppliers in March, or earlier would have saved them considerable reputational risk, and in many cases reduced the exposure of dairy farmers to financial failure. Instead they chose not to swerve, but to hang tough, failing to ignore the significant decline in global prices, for which they both appeared oblivious.
While Murray Goulburn swerved first by lowering the milk solid price, they did so far too late. Fonterra swerved last, but by then the events in the international market had raced past the game – leaving both companies’ suppliers stranded with the over-payment problem from which they now suffer. Recklessly both cooperatives thought they could run the gauntlet with global dairy. That they actually did so for eight months is testimony to the merits of market competition.
Where to now for the two beleaguered companies and suffering dairy farmers? The benchmark for corporate behaviour and accepting responsibility for ‘bad’ outcomes was set by Johnson &amp; Johnson in 1982.
The handling of the Tylenol crisis, where a series of poisoning deaths resulted from drug tampering, set the standard for corporate ethics against which all other subsequent behaviours can be compared. Johnson &amp; Johnson took responsibility, took action and set about the recovery – despite not being responsible for the tampering of their product on shop shelves in Chicago.
It will be through remedial behaviour by each of the dairy giants over the next months that these cooperatives will re-cement their relationships with suppliers, as they both try to win over farmers and gain disproportionate market share at the others’ expense. The outcome both cooperatives have been seeking since Fonterra’s market entry in 2005.
Fonterra have reiterated the view that they warned farmers that the price paid did not reflect the collapse in global dairy prices yet appear to have left the responsibility to them to manage.
Worse, Fonterra’s CEO, Theo Speirings, has now defended the price cuton the grounds that their strategy is to repatriate profit for the benefit of their New Zealand shareholders. This overlooks that the majority that of tradeable shares are held by Australian superannuation funds and that Fonterra’s Australian suppliers had to be subsidising their New Zealand counterparts. How else do you explain the 30% increase in farm gate price on this side of the Tasman?
By contrast Murray Goulburn’s behaviour, especially that towards their suppliers, appears far more conciliatory. Murray Goulburn has been transparent about resignations from the board and management; open about reorganisation and appointment of their interim CEO, David Mallinson; and, shared with suppliers the prioritisation of effort.
They have now offered suppliers a Milk Supply Support Package designed to spread the impact of lower milk payments across the next three years. This package sits on the cooperative’s balance sheet - where it should - with no need to take on individual loans at supplier level.
Whether or not either company can emulate the recovery of Johnson &amp; Johnson remains to be seen, but it is reasonable to expect considerable energy, effort and enterprise being expended by them in the months that follow.
Telling evidence will be reflected in market share in 12 months.
This piece has been altered since publication to correct Fonterra’s annual gross revenue, which is $A17.61 billion and Murray Goulburn’s annual sales revenue, which is $A2.87 billion.
James Lockhart is senior lecturer, School of Management, Massey University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/james-lockhart-265538" target="_blank">here</a>.
Danny Dinghy is professor of Dairy Production Systems, Massey University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/danny-donaghy-265818" target="_blank">here</a>.
Hamish Gow is professor of Agribusiness, Massey University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/hamish-gow-265539" target="_blank">here</a>. 
 
</body></html>

jchancellor-FAypfDUnLy

Murray Goulburn and Fonterra are playing chicken with dairy farmers

<html><body>
There has been a $1,535,000 sale of 8 Wild Cherry Drive, Eltham.
It had been listed with a $1.35 milion to $1.5 million price range through Fletchers agent Prue Fletcher.
It’s a <a href="https://www.realestate.com.au/property-house-vic-eltham-110140997" target="_blank">mud-brick house</a> - an Alistair Knox original.
There are soaring timber ceilings, pale mud-brick walls and bulky, beautiful beams, leadlight windows, a lofty brick hearth and polished brick floors 
It last traded for $1.35 million in 2012. 
</body></html>

Alistair Knox Eltham 1960s trophy home sale

<html><body>
A Glebe property with a fascinatingly disturbing past went to weekend auction without initial success.
However the 1833 Georgian <a href="https://www.realestate.com.au/property-house-nsw-glebe-122459534" target="_blank">Regency villa, Lyndhurst</a> in Glebe which had $7 million plus hopes sold soon afterwards.
It was the home designed by esteemed architect John Verge as a marine villa for the colonial surgeon James Bowman, the husband of the iconic pastoralist John Macarthur's daughter, Mary. 
Lyndhurst colourful history saw it briefly as the headquarters of an Australian neo-Nazi party in the late 1960s.
Regarded as one of the inner Sydney’s most historically significant homes, it last sold at $3.3 million in 2005 to stockbroker Tim Eustace and his partner Salvatore Panui.
Eustace and Panui are bound for Darlinghurst, where they bought another historic inner city landmark, Iona, for $16 million from entertainment industry couple Baz Luhrmann and Catherine Martin.
The top result under the auction hammer of the weekend was in Strathfield, in Sydney's inner west where Dr Vipin Goyal sold his seven-bedroom home for $6.83 million through Devine Real Estate.
</body></html>

Lyndhurst, Glebe finds $7 million plus buyer

<html><body>
Just like the Labor Government in Victoria, overseas property investors will have to pay more to buy a home in NSW under Treasurer Gladys Berejiklian’s state budget­ plan.
The Daly Telegraph's state politics reporter Andrew Clennell says Ms Berejiklian is understood to be seriously considering a 1.5 percent foreigner land tax surcharge to "tackle housing affordability­."
It mirrors a 1.5 percent surcharge in Victoria, ­although there is a suggestion Ms Berejiklian could impose a slightly lesser rate of 1 percent.
Victoria also imposes an extra 7 percent on stamp duty for foreign buyers but Ms Berejiklian is understood to have ruled that out.
</body></html>

NSW state budget plans foreign investors land tax surcharge

<html><body>
House prices are going nuts again, according to Australian Financial Review columnist Chris Joye.
He noted home values across the five capital cities have expanded 9.8 per cent over the last year with "staggering" 4 per cent capital gains in the past three months alone.
The correction called by so many in late 2015 has been superseded by an elongation of one of the biggest, and certainly most dangerous, house price cycles in history, Joye suggested.
Over the 12 months to mid-May, Sydney and Melbourne prices have leapt by a stunning 12.4 per cent and 12.7 per cent, respectively.
Dwelling values in Brisbane and Adelaide have increased 7.4 per cent and 5.6 per cent over the last year which, according to CoreLogic RP Data, which Joye noted while seemingly modest, is 3.5 and 2.7 times the pace of wages growth.
Joye advised the Reserve Bank of Australia's decision to further crush the cash rate to another record low of 1.75 per cent in May had compelled his upward revision to his 2016 forecasts.
In December his nominal appreciation forecast was of 2 per cent to 4 per cent which assumed an unchanged cash rate. 
"Given current yield curve expectations for a second cut in 2016, my central case is house prices run at three to five times wages, which represents capital growth of between 6 per cent and 10 percent.
"We are, therefore, in completely unchartered territory that means the risk of policymaking errors apropos asset price bubbles is higher than it has been before.
"So if you are buying a house, you would be well-advised to embed a chunky margin of error in price terms to hedge against such hazards," said Christopher Joye who is a director and shareholder in Smarter Money Investments, which manages fixed-income investment portfolios.
</body></html>

Chris Joye says house prices are going nuts again - maybe up by 10 percent

<html><body>
GUEST OBSERVER
We’ve put together a short guide to help you maximise the benefits of passive design solutions by understanding orientation in your home.
With a particular focus on light and wind, we break down each aspect and offer suggestions for a more environmentally friendly and comfortable home.
North
<ul>
<li class="p1">Mornings generally receive Northerly winds from the inland due to land breeze. During winter this is the dominant source of wind. In summer, Northerly winds can be quite hot.</li>
<li class="p1">Direct sunlight and an excellent source of passive heating.</li>
<li class="p1">Necessary to use shading methods, such as planting deciduous trees (which permit low-angle Winter sun through) or installing eaves and blinds.</li>
<li class="p1">Suitable for daytime, living and dining rooms or courtyards.</li>
<li class="p1">Ideal orientation of the home with the long side facing North, or 20-30° off from the center.</li>
</ul>
West
<ul>
<li class="p1">Be wary of hot Northwesterly winds in summer and cold Southwesterly winds in the cooler months.</li>
<li class="p1">Evening sun can be quite harsh and hot in summer.</li>
<li class="p1">Option to strategically plant trees and shrub to divert undesirable winds and provide shading in the evening.</li>
<li class="p1">Alternative is to place utility areas facing West (e.g. laundry, bathrooms, storage) which insulate and shade living areas.</li>
</ul>
East
<ul>
<li class="p1">Little to no Easterly wind all year round. Design should promote cross-ventilation from other rooms.</li>
<li class="p1">Direction of sunrise and cool morning light.</li>
<li class="p1">Suitable for kitchens, breakfast rooms or bedrooms, as morning light is beneficial to regulate our circadian rhythm (natural body clock).</li>
</ul>
South
<ul>
<li class="p1">Evenings generally receive Southerly winds from the ocean due to the sea breeze effect. Southwesterly winds in the cooler months can be quite harsh.</li>
<li class="p1">Indirect light, therefore requires little to no shading. Borrowed light methods include use of skylights or reflections off neighbouring buildings.</li>
<li class="p1">Should be properly insulated as there are minimal passive heating options. Active heating may also be necessary.</li>
<li class="p1">Suitable for bedrooms or artist studios, as South light produces cool and controlled colour values.</li>
</ul>
<a href="/images/2016/05/23/Screen%20Shot%202016-05-23%20at%2012.21.38%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/23/Screen%20Shot%202016-05-23%20at%2012.21.38%20PM.png" alt="">
Paul Osborne is founder, Secret Agent and can be contacted <a href="https://secretagent.com.au" target="_blank">here</a>.
</body></html>

Orientation and your home: Secret Agent

<html><body>
Former Newscorp Australia boss and ex-RM Williams chairman Ken Cowley is having another attempt at selling Peppers Convent, the boutique Hunter Valley hotel he bought with his family for $6 million in 2010.
The <a href="https://jurds.com.au/listings/rural_sale-795610-pokolbin/" target="_blank">17-room boutique hotel in Pokolbin</a>, as well as the renowned Roberts Restaurant – now called Circa 1876 – has been listed by Alan Jurd of Jurd's Real Estate alongside Rob Cross of CBRE Hotels.
Peppers Convent was last on the market in 2013 as part of the Tower Estate portfolio of rural retreats in the Hunter Valley by the Cowleys and a group of high-profile investors.
The Tower Estate winery and luxury lodge sold to Karen and Michael Hope of Hope Estate, but the hotel failed to sell.
The convent dates to the 1870s when it was built for the Brigidine nuns in Coonamble, NSW. In 1990 it was dismantled, relocated and rebuild in Pokolbin by media magnate James Fairfax in collaboration with restaurateurs Robert and Sally Molines. The former home of the Brigidine Order of nuns, which was transported to Pokolbin was restored as a five-star guesthouse.
Current occupancy sits at about 70 per cent with room rates around $350 a night on weekend. 
Peppers Convent is up for sale as a going concern with a 10-year licence agreement with Peppers, part of the ASX-listed hotel operator Mantra Group.
The Peppers brand dates back to 1984 when Mike and Suzi O'Connor opened Peppers Guest House in the Hunter Valley.
</body></html>

Peppers Convent hotel relisted for sale in Hunter Valley

<html><body>
It might be a cliched marketing claim, but the former Carlton tavern supposedly frequented by the legendary Squizzy Taylor sold at its weekend auction.
The 1850s property on Barkly Street (above), which had a <a href="https://www.realestate.com.au/property-house-vic-carlton-122523038" target="_blank">price guide of between $2.25 million and $2.5 million</a>, fetched $2.6 million through Nelson Alexander agent James Keenan.
The two level, five bedroom home renovated by architect Shane Murray last traded for $478,000 in 1989.
Sydney's went without its equivalent, Henry Lawson slept here cliched offerings.
But a Glebe property with a fascinatingly disturbing past did go to auction without initial success.
However the 1833 Georgian Regency villa, Lyndhurst in Glebe which had $7 million plus hopes sold soon afterwards.
It was the home designed by esteemed architect John Verge as a marine villa for the colonial surgeon James Bowman, the husband of the iconic pastoralist John Macarthur's daughter, Mary. 
Lyndhurst colourful history saw it briefly as the headquarters of an Australian neo-Nazi party in the late 1960s.
Regarded as one of the inner Sydney’s most <a href="https://www.realestate.com.au/property-house-nsw-glebe-122459534" target="_blank">historically significant homes</a>, it last sold at $3.3 million in 2005 to stockbroker Tim Eustace and his partner Salvatore Panui.
Eustace and Panui are bound for Darlinghurst, where they bought another historic inner city landmark, Iona, for $16 million from entertainment industry couple Baz Luhrmann and Catherine Martin.
The top result under the auction hammer of the weekend was in Strathfield, in Sydney's inner west where Dr Vipin Goyal sold his seven-bedroom home for $6.83 million through Devine Real Estate.
The nation's top weekend private treaty result was secured by actress turned author Sophie Lee and her husband, advertising agency boss Anthony Freedman.
Their Bronte home, <a href="https://www.bronteshellhouse.com/" target="_blank">Shell House</a> sold Friday evening through private treaty having $10 million plus expectations through D'Leanne Lewis of Laing + Simmons Double Bay.
Lee appeared as an actor in roles including Muriel's Wedding, Holy Smoke and The Castle, but she is now better known as an author.
Anthony has founded two agency groups, Host and One Green Bean.
The other big coastal offering, the Tamarama home of the pioneering former Oxford Street fashion retailer Robby Ingham and his wife Sarah was pulled from auction.
Its listing with $12 million plus hopes came as they have finished construction of their new home just around the corner.
<a href="https://www.goodyer.com.au/1P3163" target="_blank">The Gaerloch Ave property</a>, listed through Pauline Goodyer of Goodyer Real Estate, has point blank ocean vista and views back to beach given its position above the iconic coastal walk.
The national clearance rate across the combined capital cities rose this week, up from 69 percent the previous week to 70 percent.
The level of activity across the capital city auction market was similar to the previous week, with 1,863 auctions held this weekend, compared to 1,876 last week.
Auction activity remains well below the comparable week last year, however, when 2,599 capital city auctions were held and 79 percent cleared.
This week, there were 825 auctions held in Melbourne, down from 871 last week, and also lower compared to one year ago (1,162).
Preliminary results show that 70 percent cleared this week, falling from 71 percent last week and well below the 82 percent one year ago.
CoreLogic RP Data noted over the past seven weeks, Melbourne has maintained a clearance rate above 70 percent.
The most auction activity this week happened in Melbourne’s inner sub-region, where 172 auctions were held and preliminary results show a 72 percent clearance rate.
Mlebourne's strongest clearance rate across the cit was in the outer East region at 80 percent.
Melbourne's top reported sale was $3.9 million in <a href="https://www.realestate.com.au/property-house-vic-brighton-122513630" target="_blank">Brighton on Champion Street</a>.
The four bedroom house on 840 sqm had last sold in 2006 at $2 million.
Sydney’s preliminary clearance rate was 74 percent this week, retaining its status as the nation's strongest property market.
The best performers were the city and inner South (86.5 percent) and North Sydney and Hornsby (83.0 percent).
Brisbane results showed a strong 55 percent, compared to 49 percent last week, and the strongest clearance rate in twelve weeks.
Adelaide's clearance rate sat in equal second place at 70 per cent. The nation's cheapest sale was in Adelaide's Rostrevor.
The one bedroom <a href="https://www.realestate.com.au/property-unit-sa-rostrevor-122565842" target="_blank">Radnor Avenue villa</a> offering fetched $209,000. It had sold at $166,500 in 2008. It was a $235 a week rental.
</body></html>

Squizzy Taylor Carlton offering finds buyer

<html><body>
<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Like millions of Australians, I am an owner-occupier with a mortgage debt several multiples of our family’s annual household income.
Having bought in the last five years, I am on several Estate Agent’s email lists. This week past, I was accordingly surprised to receive an email from one of these Agents. The email concerned negative gearing, in 2016 a live election issue. It advocated against changing the existing policy, accordingly a vote for the incumbent government.
Australia is a democracy, and it is a privilege individuals and groups enjoy to be able to advocate for what policies they please. We are also a market economy, in which private interests are encouraged to pursue their private good within the limits of the Law.
Nevertheless, such direct advocacy by an Industry to its clients and everyone who will listen of one of the two major Parties' platforms is still novel or unusual. A precedent was set by the Mining Industry’s $22 million opposition to the Superprofit’s Tax.
Wise policy-making in a democracy or “common-wealth” should consider all the different interest groups affected, and different voices in the mix. It should orient itself towards a balanced, inclusive assessment of the general, as well as particular—and the medium and long-term, as well as short-term—good.
So let me put some considerations the email did not raise.
<h2>Some things the email did and did not raise</h2>
This email’s positive argument was familiar to anyone who follows the news cycle in Australia.  Negative Gearing is the ability of investors to claim any moneys lost on an investment property as reduced taxable income.
This effective subsidization of property investment may or may not have artificially inflated property prices by artificially boosting demand. This wasn’t mentioned.
Negative gearing may or may not place first home buyers aiming to own and occupy their little piece of Australia, against investors or consortiums buying 2nd, 3rd, or 4th properties, with much greater acquired wealth, economic capacity and even—with Negative Gearing—an artificial incentive to take on greater mortgages, but no intention to live on the property. This also was passed over.
But negative gearing stimulates property investment. And more investment properties means more rental properties. This keeps rental prices down. The beneficiaries of negative gearing are thus not only wealthy investors or developers, despite first appearances. The policy also benefits the (growing) 30 percent or so of Australians who presently rent: mostly the younger and least wealthy. It is an exercise in “equity”, as well as wealth creation.
Higher property prices also bring higher commission yields to Real Estate Agents. This was also not mentioned in my email.
<h2>The house prices (and unprecedented household debt) in the room</h2>
Also unmentioned were several relevant, larger pieces of economic information which affect how we should assess the wisdom of negative gearing, reintroduced by the ALP under Hawke-Keating in 1987.
By any accepted measure, the period of negative gearing in Australia has coincided with extraordinary rises in property prices. They have risen at disproportionate rates relative to the consumer price index. They have risen disproportionately relative to the median income.
In the year 1975 in which I, a Gen-Xer, was born, the average house price in Sydney was $28000.  To put things in perspective, the average Australian earned something just shy of $8000 in that turbulent year.
By early 2015, the median Australian income had become $72000, something like a tenfold increase, reasonably closely tracking the increase in the prices of most consumer goods.
House prices have however multiplied by something around thirty times in Sydney, Melbourne, Adelaide and Perth, and over twenty times in the other capitals.
In February of 2015, the average house price in Sydney came in at around $850000, well over ten times median annual income; Melbourne’s median house price (where we earn a bit less, to be fair) was about $615000.
As of August last year, Australian homes rated the third-least affordable of OECD countries. Only New Zealand, our neighbours across the ditch, and Canada, our commonwealth cousins North of our closest allies, have a higher house-price-to-income ratio.
The US itself suffered a grave financial crisis in 2007-2008 initially triggered by large numbers of defaults on household mortgages.
As of the turn of this year, some authorities suggest we have the second least affordable homes anywhere, following only Hong Kong.
So Australia is not alone in enjoying a property boom of historic proportions. Other countries have experienced broadly comparable rises in the price of property as against income and other consumer items.
Nevertheless, the rise of capital city house prices in the last four decades, as of last year,<a href="https://www.theguardian.com/business/2016/jan/15/how-australian-households-became-the-most-indebted-in-the-world"> </a>pushed Australia past Denmark as the most privately indebted nation, with a ratio of 123.08% debt to GDP. The International Monetary Fund (IMF), hardly crusted-on Labor voters anywhere, sent an economic team to Australia to examine “the risks posed by property speculation and record-high household debt as part of a broad health check-up of the sagging domestic economy.”
We Australians love a winner, and it is an Olympic year. But we should take no pride in the fact that, reaching the podium for a bronze in income-house-price ratios, we presently take the gold in private household debt.
<h2>X’s, Y’s, booms and boomers</h2>
Public debate around elections turns largely around budgets—what the government does with the money we provide the state in taxation, and who, how and what the government taxes or subsidizes. Less debate has turned over several recent elections on how Australia is now, after two decades of celebrated economic growth—and after a decade of being the economic envy of many another country globally—the most “negatively geared” population in the world.
But perhaps, since the ALP, Mr Turnbull and the Real Estate industry have made negative gearing an issue of public debate, now is the time we should be talking more—if not for our own sakes, then for those of the next generations. For the distribution of the household debt burden between different age and income groups is also not cause for celebration, alongside extant intergenerational data concerning who owns what in the lucky country.
Let me explain what I mean.
Since owning property requires greater wealth, everywhere the young and the less wealthy own less and, if this is possible (it hasn’t always been), lend more. The young have not had the time to accumulate wealth; the poor have had the time, but not the ability, opportunity or fortune.
There is nevertheless something historically exceptional about the present Australian situation. Anyone my age or younger, particularly those of us who teach and talk with Yers and “Nexters”, will know the frank resignation many young Australians feel about ever being able to own their own cut of the pie, except through aid from their parents.
As a Gen-Xer, I belong to the most indebted generation (35 to 44 year olds), when it comes to mortgages ($140000 average, as of 2011-12, including the growing proportions of us who do not own a house to be paying back). But my generation is followed by the Gen-Yers, 25 to 34 years (c$110000 average, for the same period). The Nexters must wait their turn.
In 1981<a href="https://grattan.edu.au/wp-content/uploads/2014/03/800_Renovating_Housing.pdf">,</a> more than 60 per cent of 25 to 34 year olds owned their own home in this country. By contrast, by 2011, only 48 per cent did so. The decline over the same period was 10 percentage points for those aged 35 to 44, from 75 percent to around 65 percent.
Home ownership rates stayed relatively stable only for Australians over 55 (born before 1960) in the decade of 2003-2013. In contrast to their children and grandchildren, the baby boomers remain the principal beneficiaries of the property boom.
<h2>We’re all in this together</h2>
Negative gearing is not solely responsible for this growing gap between income and house prices, Australia’s global leadership in household debt, and as such, the growing intergenerational wealth gap. The increased availability of credit, continually low interest rates, continuing population growth, and other factors have also contributed.
Illustrating all the old gags, economists disagree as to the effects of ending the regime of negative gearing in Australia. There will foreseeably be some decline in property investment, relative to other possible markets for capital. This may, in the shorter term, affect the availability of said properties to renters. Thus rental price increases are likely, at least in the short term.
But how steep the investment decline and how high the rental rise is debatable, should negative gearing be rolled back. Also debatable is how long these effects would last before the interconnected rental and ownership markets rebalance themselves.
Any such negative effects, that is, should be balanced against the effects removing negative gearing would have in moderating the rise and rise of Australian house prices relative to income. These are effects which will be relevant not only to Mr Turnbull’s “largest asset class”<a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2016-05-13/real-estate-industry-attacks-labor's-negative-gearing-policy/7412458">,</a> in whose name he has called down havoc on Mr Shorten’s “reckless and dangerous experiment”. They will also have impacts for the next generations, increasingly a class or classes with a longer future and fewer assets.
Most Australian parents I wager would prefer that the around $100-200,000 their child will spend in renting in a capital city throughout their twenties would go to paying down a mortgage of their own in the suburbs, rather than paying down the mortgage on someone else’s investment—particularly an investment whose losses (above what their child’s rental outlays pay down) are deducted from the investor’s taxable income.
They would also rather that when their child and her/his partner wishes to bid at auction for their own small place in the housing market, they were not competing with investors who already have theirs; who have no intention of living in this new property; and who, to boot, intend to claim any costs unmet by rental income as the means to minimize their tax share.
So boomers too, who are also parents and grandparents, have compelling reasons to listen to more voices on this issue than the Real Estate lobby.
<h2>Future proofing</h2>
One of the stronger criticisms of electoral democracy is that, by focusing politicians on winning the next three-four year term, it blinds deliberation to longer term trends and problems. In complex economies like Australia’s, increasingly intertwined with global economic forces, many trends that shape the way we live, the prices of our goods and availability of our services develop over decades.
The property boom, relative to income, and accompanied by unprecedented private Australian debt, is not the product of Mr Turnbull’s term in government, nor of Mr Abbott’s, nor Rudd-Gillard-Rudd’s, or even Mr Howard’s economic miracles.
It takes courage to challenge such a three-decade policy with so many beneficiaries. “Whatsoever is new is unlooked for; and ever it mends some, and [im]pairs others”, someone said. For “what is settled by custom, though it be not good, yet at least it is fit.” But just as the institution of negative gearing has aided some, it has impaired the young, and solely-wage-earning Australians who typically earn less than others, but must be taxed on it all.
Just so, by scrapping negative gearing, we shall be impairing investors and Real Estate agents, but aiding the next generations of Australians. At worse, if rental prices do rise, this will provide an incentive for the young to enter the property market earlier, bucking existing inequitable trends.
Scrapping negative gearing may help avoid a more damaging “correction” in property prices that more bearish commentators have long been prophesying, and the IMF felt concerned enough about to come visiting down under.
For by scrapping negative gearing, make no mistake about it, any new government shall be making a small step towards reducing Australian house prices. This, and its effects on their commissions, is the red raw motive behind the Real Estate lobby’s wounded advocacy.
But looking forwards, at some point Australia is going to have to confront the growing wealth disparity between the generations, and the gap between what people earn and what they owe. While it is just that older people be rewarded for their labours, this consideration needs to be balanced against the right of younger generations to feel like they can and do own a stake in the commonwealth, rather than facing longer and longer periods of paying down others’ mortgages or world-leading mortgages of their own.
So a vote against negative gearing, no matter which Party proposes it, is a vote to minimize the increasingly huge debt burden the younger generations need to take on to own, if not their quarter-acre block, then a quarter of the land most middle-class Australians could comfortably afford two generations ago.
Just as the email said, this is urgently important.
Matthew Sharpe is associate professor in Philosophy, Deakin University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/matthew-sharpe-125260" target="_blank">here</a>.
 
</body></html>

Negative gearing not solely responsible for growing gap between income and house prices

<html><body>
The 10,000 ha Western Riverina station, Oxley has been sold the pioneering McFarland family to Ian McLachlan, the Adelaide-based pastoralist.
He already owns a large aggregation based on the former Tyson property, Tupra, just across the Lachlan River from Oxley.
The McLachlans have also bought much of Geramy, an adjoining property owned by Bob McFarland’s brother Graham, leaving Graham retaining a block of about 1600ha.
Their cousin, Derek McFarland, still holds the historic homestead of Thelangerin, bought in 1873 from Alexander McVean, The Land's columnist Peter Austin said.
Oxley last traded in 1909, then held by AML and F, who had taken it over from the trustees of Thomas Darchy in about 1890. 
</body></html>

Ian McLachlan buys Oxley in Western Riverina 

The Victorian Government has secured the passage of the Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026, introducing a suite of reforms aimed at improving consumer protection and confidence in the apartment market.

Resilience Insurance, Australia’s leading Latent Defects Insurance (LDI) provider, has welcomed the move.

The LDI elements of the Bill passed with bipartisan support and now moves to the Legislative Council where debate and passage are expected later this month. It represents a significant milestone in the national shift toward stronger, longer-term protection for apartment buyers.&nbsp;

The reform would deliver practical benefits across the housing system. Apartment owners will have stronger protection if major defects emerge, developers and builders will have a clearer quality framework to work within, and the State will reduce the risk of serious building failures becoming a long-term financial and social burden for households, communities and government.&nbsp;

LDI helps support apartment delivery while providing stronger protection for buyers and encouraging better construction outcomes.&nbsp;

Resilience LDI provides apartment owners with 10 years of insurance-backed cover for major structural defects from completion, with direct claim access to the insurer. This means owners are not required to first pursue developers or builders through costly legal action before accessing protection.&nbsp;

Resilience Insurance has been operating in Australia since 2022 and has already insured hundreds of development projects covering many thousands of apartments across Australia.&nbsp;

At approximately 1.8 per cent of build cost, it is a cost-competitive alternative to the traditional two per cent Strata Bond, bond while delivering significantly broader and longer protection.&nbsp;

“The Victorian Lower House vote shows that reforms like this succeed when they are practical, evidence-based and supported by industry," says Corey Nugent, CEO of Resilience Insurance.

"Victoria is moving quickly on a reform that will make a real difference for apartment buyers, while supporting better building outcomes and greater confidence in apartment delivery.

“This is step one. We look forward to the Bill completing its passage through the Legislative Council and to working with government and industry to implement the framework effectively.”&nbsp;

Fast Facts: What is Resilience LDI?&nbsp;

<ul>
	<li>Resilience Latent Defects Insurance (LDI): Covers major structural defects for 10 years from completion.&nbsp;</li>
	<li>Consumer-first: Direct claim access, no need for lengthy legal action.&nbsp;</li>
	<li>Cost advantage: At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.&nbsp;</li>
	<li>Market leader: Resilience Insurance is the first approved LDI provider in NSW.</li>
</ul>

The Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026 has passed the Victorian Lower House, putting Victoria on track to become the first state to legislate an industry workable LDI framework as a formal alternative to the Strata Building bond. 

Joel Robinson

10-year Latent Defects Insurance for new apartment buyers set to land in Victoria

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

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.

Jonathan Chancellor

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News