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GUEST OBSERVER
Tourists from greater China (China and Hong Kong) totalled 108,400 in February (mainland China 89,100, Hong Kong, 19,300), ahead of New Zealand (102,600).
Tourist arrivals from mainland China and Hong Kong rose to a record 1,326,076 over the past year (up 23.5 percent over the year) and just shy of tourists from New Zealand (1,326,851 visitors over the past year).
Migration: Over the past year, net permanent and long-term arrivals to Australia totalled 259,710 – the lowest level in nine years (February 2007).
Tourist arrivals fell by 2.7 percent in February. And departures fell from fresh record highs down by 3.3 percent. The tourism data is important for airlines, travel groups, transport companies and retailers.
<a href="/images/2016/04/7/Screen%20Shot%202016-04-07%20at%202.38.48%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/7/Screen%20Shot%202016-04-07%20at%202.38.48%20PM.png" alt="">
What does it all mean?
The China tourist boom continues to pay dividends. The number of tourists to Australia from China and Hong Kong combined exceeded well over 1.3 million in the past year – and is closing fast on the visitors from New Zealand. In fact the difference is only 775 tourists. And with China and Hong Kong tourist numbers continuing to grow at a 23 percent plus annual rate, there are more landmark results likely to be recorded over the next few months. It is even more remarkable when you consider that just over four years ago Chinese tourist numbers were around half those of New Zealand.
Clearly our number one tourist group is up for grabs with China and Hong Kong likely to take the top spot within a month. The new winners from the China boom are tourist operators and retailers rather than mining companies that benefitted in the first stage of the China boom.
Tourists from mainland China is fast closing in on 1.1 million in the past year, up 24 percent over the past year.
While some may fret about the slowdown in the Chinese industrial sector, the more forward-thinking analysts are focussing on the boost to Australian retailers from increased spending by Chinese consumers and the growing number of Chinese tourists.
The rebalancing continues to be taking place across the economy. No doubt the weaker Aussie dollar is helping to alleviate some of the pressures for the weaker investment story. And from the Reserve Bank’s standpoint there is nothing to do but to monitor the transitions to ensure that the process moves as smoothly as possible.
What do the figures show?
Overseas arrivals &amp; departures
Tourist arrivals  fell by 2.7 pe cent in February. And departures  fell from fresh record highs down by 3.3 percent. Arrivals are up 5.9 percent on the year with departures up 1.7 per cent.
In February, tourists from greater China (China and Hong Kong) totalled 108,400 (mainland China 89,100, Hong Kong, 19,300), ahead of New Zealand (102,600). Greater China passed NZ for the first time in September.
Over the past year a record 1,076,800 tourists came to Australia from China, up 23.6 percent over the year. Tourists from China and Hong Kong rose to a record 1,326,076 over the past year, up 23.5 percent over the year. Tourists from New Zealand totalled 1,326,851 visitors over the past year, but were up just 6.6 percent.
Over the past year, net permanent and long-term arrivals  to Australia totalled 259,710 – the lowest level in nine years (February 2007).
What is the importance of the economic data?
The Australian Bureau of Statistics releases data on overseas arrivals and departures  is produced monthly and is an indicator of the health of the tourism sector. The figures are also useful in understanding spending trends and tracking migrant numbers – an indicator with widespread implications for employment, housing and spending.
What are the implications for interest rates and investors?
Looking forward, not only will the fall in the Aussie dollar drive further tourism inflows, but it should provide an additional degree of support to the domestic tourism sector. Over time, the cheaper currency should make it more attractive to travel within Australia rather than overseas. Tourism has potential to join housing as a key driver of the Australian economy over the coming year, especially if the Aussie dollar falls further.
In-bound migration is holding just shy of the lowest levels in nine years, meaning that there is greater scope for unemployment to fall in the short-term before businesses have to start looking abroad for suitable staff.
The Reserve Bank will remain on the interest rate sidelines over the next few months.
<a href="/images/2016/04/7/Screen%20Shot%202016-04-07%20at%202.47.23%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/7/Screen%20Shot%202016-04-07%20at%202.47.23%20PM.png" alt="" width="1129" height="366">
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a> 
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Chinese tourism boom, migration at nine-year lows: CommSec's Savanth Sebastian

Open letter to Bill Shorten - don’t touch negative gearing or the capital gains tax: Gavin McPherson

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GUEST OBSERVER
After a series of well publicised instances of developers exercising their rights of contract rescission under ‘sunset’ provisions – the NSW state government moved to tighten guidelines restricting the ‘out clauses’ and were duly reinforced by the NSW Supreme Court’s first common law ruling under the new legislation.
Sunset clauses are common place in off the plan contracts of sale – being the contract of the sale for as yet unregistered lots (mostly new strata apartments or land sub-divisions). Often off the plan sales are agreed prior to the commencement of construction of a new development project and may even form a pre-requisite for funding of the project.
The sunset provisions are included in the contract to essentially protect both vendor and buyer from being potentially locked into an agreement ad infinitum -  that is; should there be a substantial delay in the developer being able to deliver the completed product; a date is agreed in the terms of the contract as the ‘sunset date’ and thereafter either party is able to rescind the contract and walk away from the agreement rather than being contracted to sell or purchaser forever.
In principle, the notion of a sunset clause seems reasonable; however certain cases involving developers exercising their rights to rescind following delays in completion have received waves of negative press which then have been viewed cynically by the NSW Government – in particular Victor Dominello, Minister for Innovation and Better Regulation.
In particular there has been scrutiny of the Kaymet Corporation development in Wolli Creek and the Samadi Developments project in Surry Hills. In each instance, there were delays in completion and the developers each attested that rising costs had forced them to rescind their current contracts with a view to re-selling the same lots at higher prices. Their premise was that they could not afford to settle the off plan sales at the ‘old prices’ and needed to achieve the improved realisable values to cover their unforeseen inflated costs.
Whilst legal challenges were mounted by the off plan purchasers – the prevailing provisions relating to sunset clauses were deemed to be in favour of the developers. In the matter of Wang v Kaymet Corporation Pty Ltd [2015] NSWSC 1459 – 34 of the 94 off plan purchasers launched a major class action against the developers. The original sales were entered into between November 2009 and April 2010 with Kaymet issuing rescission notices March 2013.
The matter was heard in the NSW Supreme Court by Justice Stevenson and ruled upon October 2015. Estimates show that a Wolli Creek 2 bedroom unit was worth around $500,000 in 2009/10 and had appreciated to around $900,000 by late 2015. On this basis – Kaymet Corporation stood to increase its bottom line by some $13,000,000 by re-selling the apartments in 2015. Justice Stevenson found that the plaintiffs had failed to show Kaymet had been deficient in its duties. The net result was that Kaymet was allowed to rescind and the plaintiffs were burdened with around $1,000,000 in total legal costs. At the time of writing, Plaintiffs are ongoing with their class action against Samadi Developments.
To a large degree – the exposure to genuinely unforeseen costs or losses and extended delays were why the sunset clauses were originally created; however unhappy purchasers, and evidently Victor Dominello, view in certain instances the exercising of the sunset provisions as a grab for further profits by developers in a rising market. The suggestion is that off plan buyers have been exploited by some developers to get their projects ‘off the ground’ only to unceremoniously dump the sales when there is a big lift in profits available.
And so – what has occurred in response to Mr Dominello’s distaste for this scenario?
On November 17, 2015 the NSW Government passed the Conveyancing Amendment (Sunset Clauses) Act 2015 to provide further protections in favour of the purchasers in off the plan property contracts. The Act inserts Division 10 into the Conveyancing Act 1919 – “Off The Plan Contracts”. Whilst most property-informed parties are familiar with sections 66P to 66Y of the Act (dealing with definition of Residential Property and cooling-off provisions); Division 10 – 66ZL deals with the new rules for the exercising of a sunset clause by a Vendor and can be quickly outlined by reading subsection (3):
 A vendor may rescind an off the plan contract under a <a href="https://emarketing.multiarray.com/_r/c.cfm?l=45055&amp;c=59667&amp;m=23921&amp;b=42687">s</a>unset clause if the subject lot has not been created by the sunset date, but only if:
(a) each purchaser under the contract, at any time after being served with the notice under subsection (4), consents in writing to the rescission, or
(b) the vendor has obtained an order of the Supreme Court under this section permitting the vendor to rescind the contract under the sunset clause, or
(c) the regulations otherwise permit the vendor to rescind the contract under the sunset clause.
Subsection (4) outlines that the Vendor must provide notice of at least 28 days written notice to each Purchaser of their proposal for rescission and reasons why they need to rescind and what has created the delay in completion. Should an agreement be reached with a Purchaser – all is good. If the Purchaser declines to accept the request for rescission – the Vendor must apply to the Supreme Court to rule on the merits of its application. The Act outlines: 
(7) In determining whether it is just and equitable in all the circumstances the Court is to take the following into account:
(a) the terms of the off the plan contract,
(b) whether the vendor has acted unreasonably or in bad faith,
(c) the reason for the delay in creating the subject lot,
(d) the likely date on which the <a href="https://emarketing.multiarray.com/_r/c.cfm?l=45056&amp;c=59667&amp;m=23921&amp;b=42687">s</a>ubject lot will be created,
(e) whether the subject lot has increased in value,
(f) the effect of the rescission on each purchaser,
(g) any other matter that the Court considers to be relevant,
(h) any other matter prescribed by the regulations.
The Vendor may also be liable for any costs incurred by the Purchaser(s) attributable to the application to rescind.
These changes came into effect  and will apply to any off the plan contracts entered into on or after 2 November 2015. In addition any off the plan contracts that have not completed, but were entered into before 2 November 2015 will also be captured. 
Having addressed the essential drafting of the new legislation – focus then immediately turns to the common law/court interpretation and application of 66ZL(7). That is – how will the Supreme Court react to new applications for rescission?
The first test case has been Jobema Developments Pty Limited v Zhu &amp; Others[2016] NSWSC 3.
The facts in brief are that a Purchaser (one of the Plaintiffs) contracted in December 2013 to buy an apartment off the plan in a new Hurstville development of 72 units offered by developer, Xycom. The sunset date for the registration of the strata plan (which occurs following completion and the granting of the project’s Occupation Certificate) was 31 December 2015. The Vendor’s right to rescind was qualified by the requirement to ‘use all reasonable endeavours to have the Strata Plan registered by the sunset date’. The court heard that Xycom, despite having DA consent, carried out very little construction work after entering into the off plan contract(s).
In October 2014, Xycom on-sold the development site to Jobema Developments and this sale was settled in January 2015. The sale was subject to existing off plan sales – which were novated to Jobema. Some, but not all, of the off plan contracts had their sunset date extended. Jobema took an active approach to construction and by December 2015 the project was well progressed. 
A new estimate for completion was set for mid-2017. Prior to the 31 December 2015 (ie sunset date); Jobema approached the Plaintiffs offering to extend the sunset date in return for agreeing to new, higher prices (on the basis of escalated construction costs). The Plaintiffs rejected the offer and Jobema duly issued Notices of Intent to rescind (in accordance with the new 66ZL(4) of the Act).
The matter was presented to the Supreme Court’s Justice Black who ultimately found in favour of the Plaintiffs (the Purchasers). Probably the largest factor weighing against Jobema as developer was that despite their own best endeavours since acquiring the site – they were also burdened by Xycom’s apparent breach of the best endeavours covenant. Jobema had assumed all of Xycom’s obligations under the sales contracts. Justice Black was also concerned that only some Purchasers were offered an extended sunset date and others not. 
This practice brought doubt as to the legitimacy of the application. The court also responded to Jobema arguing that construction funding terms had deteriorated and that the new legislation had not been in effect when Jobema acquired the site by suggesting that each should be considered a “business risk”. 
BCE’s COMMENTS
My own view on this is that the statute has not been fully tested in Jobema v Zhu as the project was adopted by Jobema following Xycom’s extended lack of endeavour to progress the site. The specifics of this matter are not generally applicable. It will be interesting to witness the court’s view in instances of genuine endeavour incurring serious and reasonably unforeseen negative circumstances.
Further, the NSW Governments new legislation has gone some way to endorse sunset clauses. The opportunity existed for sunset clauses to be outlawed altogether; however the passing of the statute in itself conveys that there is deemed a legitimate place for Vendor rescission. We now await a judgement in favour of rescission to provide more clarity on the judicial application of the legislation. 
It will be interesting to see how the court views the Samadi matter given the heightened levels of negative publicity and new legislation. Whilst I remain impartial in any debate on ethics; it would seem to me that the ratio decidendi in both the Kaymet and Jobema decisions would suggest that Samadi had acted within the laws as they existed at the time. Kaymet reinforces this and Jobema’s application was denied partly on the basis that potential changes in legislation should be an assumed “business risk”. Surely this logic is a double-edged sword.
I will also be intrigued to watch whether clever legal minds devise some form of off plan ‘put and call’ style of agreement that operates outside of the Conveyancing Act and therefore may be drafted to essentially re-instate a form of sunset provision. Any such legal pact will also need to satisfy funders as being sufficiently binding.
Finally, whilst the new legislation will undoubtedly afford heightened protection for Purchasers and ideally elevate their confidence to commit to off the plan contracts – there may also become a subcutaneous penalty to Purchasers. Developers may simply factor in an additional margin of risk as insurance against unforeseen negative circumstances – that is that off the plan sale prices may simply become more expensive under the Sunset Clauses Law.
Brad Caldwell-Eyles is principal, 1st City and can be contacted <a href="https://www.1stcity.com.au" target="_blank">here</a>.
This piece first appeared in <a href="https://eliteagent.com.au" target="_blank">Elite Agent</a>.
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Has the sun set on a developers' window to rescind? Brad Caldwell-Eyles

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The 28ha hectare Birriwa estate near Dubbo has been listed at $2.8 million.
The property is at 3894 Castlereagh Hwy in Dunedoo.
The 1907 sandstone <a href="https://www.realestate.com.au/property-house-nsw-dunedoo-122283810" target="_blank">Birriwa Homestead</a> has been listed by Mary and Keith Salvat who have meticulously restored the property.
It is for sale through Nicolette van Wijngaarden of Unique Estates with the owners now moving overseas.
Birriwa Homestead is 361km northwest of Sydney and about an hour from Dubbo.
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Sandstone Birriwa Homestead at Dunedoo for sale

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GUEST OBSERVER
Landmarks identify and define cities. Town-planning instruments usually protect these landmarks from development that does not respect the setting.
But inappropriate development is placing one of Brisbane’s most important landmarks in danger. A proposed 47-storey tower threatens Customs House, on Queen Street, from being seen as it was intended to be.
Such developments are neither a new problem nor unique to Brisbane. The “Toaster” apartment building has compromised the view of the Sydney Opera House. In Melbourne, the proposed shards of Federation Square threatened the view of St Paul’s Cathedral from St Kilda Road at Princes Bridge. The impacts of both of these actions were very much an afterthought.
In London, it was realised as the Shard Tower was being constructed that it would affect the view of St Paul’s Cathedral. Lord Mayor Boris Johnson thus moved to protect views of the cathedral from specific vantage points with a clear viewshed diagram to ensure the dome can still be seen from identified locations. This demonstrates how best to pre-empt what may happen in the future, prevent unsuitable outcomes and protect views of landmarks.
<h2>The Customs House case study</h2>
Brisbane’s city plan has prescribed a heritage precinct around Customs House and the adjoining land to the north to ensure views of it are protected.
However, the Brisbane City Council late last year approved the tower, which is to be built immediately to the north of Customs House. This proposed building is to replace a four-storey block that was already too large.
By approving this development, the council has ignored its own regulations. These were put in place to protect not only views of Customs House from the northern end, but also to allow views across the site to the Brisbane River and the Story Bridge from Queen Street in the other direction.
The design of Customs House, completed in 1889, was unusually accomplished. It responded to its particular site at the bend in Queen Street, which is the closest point to the river.
Views of the building from various points in the city and river are possible and intended. The most important view, however, is of the northern end, from Queen Street and the open space to the north.
 The building has a dome placed over its Long Room, positioned eccentrically at one end. This was intentional and informed by Customs House’s setting: the oblique views made it difficult to determine that the dome was not central.
In this way, the building is quite different to other landmarks, such as the General Post Office, where the main view to be protected is the front elevation, seen perpendicular to Queen Street. The city plan should include a diagram of the protected viewshed for each landmark in the city to prevent unsuitable developments that could have a detrimental impact on a landmark’s setting.
It is common practice to protect a landmark’s principal view. For Customs House, however, this is not the street elevation or the river elevation, but the various oblique views from further away, particularly the northern end with its semi-circular projection.
Although Customs House occupies part of a heritage precinct, no specific viewshed diagram has been made that would be able to prevent the current proposal. Nevertheless, that a precinct had been identified for Customs House and its adjoining lands should have been enough to protect it.
The existing building to the north, built in 1987 before the Queensland Heritage Act existed, is already too large. It did not comply with the Australian Heritage Commission’s determination that was given before it was built. The council made the mistake of approving it then, and will compound its error if the current proposal is allowed to proceed.
The federal Australian Heritage Commission has long been dismantled as state heritage controls were established. The Queensland Heritage Act followed similar legislation in other states but came considerably later and only after public outrage at demolitions such as the Bellevue Hotel and Cloudland. That was in the Bjelke-Petersen pro-development era – a time that now seems to be repeating itself.
If we care about Brisbane and its landmarks, this development should not be allowed to proceed.
Robert John Riddel is adjunct professor in Architecture, The University of Queensland and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/robert-john-riddel-236135" target="_blank">here</a>.
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Development placing Brisbane’s Customs House in danger

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Melbourne-based property developer BPM has paid $8.2 million to purchase its sixth development site in Brisbane's Toowong.
But tougher financing requirements for investors has turned the group focus towards the owner-occupier market. 
The Young Rich lister Jonathan Hallinan's newly acquired properties, combining two sites at 15 Archer Street and 628 Coronation Drive, required agreements with 10 separate vendors and took almost 11 months to negotiate, he said.
Current BPM projects in Brisbane include its 60-apartment White Dawn project, in which 15 apartments remain unsold, and a 273-apartment project in Fortitude Valley, on the 358 Wickham Street site it purchased in 2014, which is due to be released to the market in May. 
The deal comes after BPM sold a 5984-square-metre site with permit for 742 apartments on Gladstone Street in Melbourne's Fishermans Bend to Singapore-listed developer Chip Eng Seng for $52 million. 
Hallinan told The Australian Financial Review that finance equity requirements are much greater.
"But that is being drive by the financial markets, not the property market. 
"The larger-scale developments are much more difficult to finance at this time."
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Property developer BPM pays $8.2 million for Brisbane site

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The chairman of the realestate.com.au website, Hamish McLennan, has listed his Mosman home after the pre-Easter auction spike.
The Sandberg Schoffel designed home overlooking Middle Harbour has been home for almost eight year for McLennan and his wife, Lucinda who runs the e-commerce site, GoCraveRave, a lifestyle website where fashion meets travel with chic style tips.
The power couple, their two children and labrador, Billy are off to Lavender Bay, where they have bought tech guru Daniel Petre's home, Alta Mura following his purchase of the nearby Villa Medusa.
Alta Mura, the five-bedroom Victorian manor house, that sits on a 720sq m block with inground pool, was snapped up after being on the market for two weeks. The 1886 Alta Mura, meaning "high walls", sits in Peter Fudge-designed parterre gardens. 
<a href="https://www.realestate.com.au/property-house-nsw-mosman-122252994">McGrath agents Nigel Mukhi and Michael Coombs</a> are expecting bids between $7 million and $7.7 million at the April 23 auction of the redundant Pearl Bay Ave offering.
The privately positioned home, with direct access to the waterfront reserve, has three bedrooms, two bathrooms. The master suites terrace overlooks the awning-shaded loggia with mosaic tiled heated pool and spa.
Surrounded by Joanna Green designed gardens on the 632 sqm block, the three bedroom home features a temperature controlled, 2,600 bottle wine cellar with adjoining bar area. There's also a large custom designed home office that looks onto the central courtyard in the 2006 built home.
The News Ltd backed REA chief, who stepped down from the Ten Network last year, began his working life in advertising working working for George Patterson Bates while Lucinda was a lawyer.
Over at Fairfax David Housego, the chief financial officer of Fairfax Media which runs the second placed Domain website, and his Christine, who co-owns the East Coast Lounge in Mosman, sold their Hamptons-style Colloray home pre-auction for $5.55 million through Belle Property Dee Why’s Brendan Pomponio and Kirsten Bertram.
This article was first published in the Sunday Telegraph. 
 
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REA boss Hamish McLennan lists in Mosman

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GUEST OBSERVER
The Department of Finance released the February monthly financial statements on March 24, just prior to the Easter holiday period. This note examines the latest data.
Budget improves: In the twelve months to February 2016, the budget deficit stood at $36.1 billion (around 2.2 percent of GDP), down from $44.7 billion in the year to January and the lowest rolling annual deficit in almost two years (since April 2014).
Lower-than-expected spending: The Department of Finance says the underlying deficit for February was $743 million lower than the ‘profile’ forecast and “primarily relates to lower than expected cash payments and net future fund earnings, partially offset by lower than expected cash receipts.”
The monthly Budget figures can provide insights on the broader economy and policy settings. If fiscal settings are tight, the Reserve Bank may allow easier monetary settings.
What does it all mean?
While figures can bounce around from month to month, all analytics suggest that the Federal Budget is on track to meet Government forecasts. Not only are rolling annual aggregates showing improvement, so are the so-called ‘profile’ positions estimated by the Department of Finance.
Revenue remains hard to come by with annual growth rates hovering around 2 percent. Meanwhile growth of expenses or spending is well contained, with expenses barely growing over the year. The Government was projecting a budget deficit near $37 billion and that expectation remains on target.
Looking ahead, if nominal annual growth of the economy continues to hold around 2-3 percent, then the current Government – and the next Government later this year – will find it increasingly difficult to keep spending static and thus chip away at the budget deficit. Aussies want spending maintained on schools, hospitals, defence and public services but at the same time aren’t keen to pay any more in tax. Same for all levels of Government. The hard decisions on tax will become increasingly more difficult the longer that the major parties put off reaching some form of agreement.
GST revenues continue to lift, but for state governments the difficulty – as it is for all businesses – is the absence of inflation to drive revenues.
What do the figures show?
The underlying budget deficit for the twelve months to February 2016 stood at $36.1 billion, down from $44.4 billion in the year to January. This was the lowest rolling annual deficit since April 2014.
Smoothed revenues (twelve months to December) were up 5.9 percent on a year ago, above the average growth of 2.6 percent over the past year. Expenses rose by 0.3 percent over the same period, down on the 1.7 percent growth over the past year.
<a href="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%202.56.24%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%202.56.24%20PM.png" alt="" width="726" height="555">
The Department of Finance noted: “The underlying cash balance for the year to 29 February 2016 was a deficit of $38,719 million, compared to the 2015-16 Mid-Year Economic and Fiscal Outlook (MYEFO) profile deficit of $39,462 million. The difference of $743 million primarily relates to lower than expected cash payments and net future fund earnings, partially offset by lower than expected cash receipts.”
<a href="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%203.03.04%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%203.03.04%20PM.png" alt="">
In terms of the fiscal balance, the Department of Finance noted: “The fiscal balance for the year to 29 February 2016 was a deficit of $35,292 million, compared to the MYEFO profile deficit of $36,719 million. The difference of $1,427 million primarily relates to lower than expected expenses, partially offset by lower than expected revenue.”
“Revenues: Total revenue was $1,223 million lower than the MYEFO profile, primarily due to lower than expected taxation revenue and dividend income.
Expenses: Total expenses were $2,831 million lower than the MYEFO profile, primarily due to lower than expected supply of goods and services, wages and salaries and grants expenses.”
The Government currently expects an underlying deficit of $37.4 billion for 2015/16 (around 2.3 percent of GDP).
Receipts from the Goods and Services Tax stood at $59.6 billion in the twelve months to February, up 7.0 percent on a year ago but affected by the one extra day in the month. The Government has forecast GST receipts of $59.79 billion for the entire 2015/16 year.
Actual GST receipts for the eight months to February stood at $41.367 billion, above the Budget ‘profile’ of $40.734 billion.
What is the importance of the economic data?
The Department of Finance releases the Government Financial Statements (Niemeyer Statement) almost every month. The statement allows investors to track the current budget position and provides insights into the  effectiveness of fiscal policy.
What are the implications for interest rates and investors?
The Federal Budget is on track to meet forecasts. Spending restraint including low public service wage growth (similar trend in private sector) is driving the improvement. The Federal Government and Opposition parties will eventually have to agree on tax reform to address medium term challenges for the economy.
The Government is showing restraint on spending at present, but this is actually constraining stimulus to the economy.
<a href="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%203.04.17%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%203.04.17%20PM.png" alt="" width="731" height="535">
 
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Federal Budget is on track to meet forecasts: CommSec's Craig James 

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SPONSORED POST
Sydney developer Longton Property Group is working on a $300 million Avantra apartment project in Mascot that is designed to imitate a suburban street, but going up instead of a horizontal orientation.
The 328-apartment complex plus ground floor retail has been designed with a sense of community by architects MD+A and interior designer Archer + Wright.
The apartment block will include communal areas such as a shared rooftop area in which residents can swim, barbeque and interact with views of the Sydney skyline.
Covering 8,762 square metres, Avantra is oriented vertically, akin to “streets in the sky”, according to MD+A architect Brent Marvin.  
“We have six metres between front doors which is typical of a small lane, and we have areas at each level where residents can sit in the sun. Within the building we have areas where residents can work or socialise, entertainment zones, a full-scale pool and BBQ areas. Instead of these elements being spread out at ground level we have designed them in the sky,” he said.
Avantra will be centred around a large courtyard garden designed for communal use. The designer, Daniel Baffsky of 360 Degree Landscape Architects, aimed to create a sense that “the whole area is your garden.”
“Our philosophy is to create a beautiful landscape, but also a setting for community, for people to have chance interactions, as well as to have spaces for privacy and to relax.” 
Longton aims for Avantra to be a community unto itself.  
One way it achieves this is through technology: each apartment will come with an iPad and the myiButler app, with which residents will be able to order shopping or house cleaning without leaving their unit.
All Avantra residents will also be part of a single virtual network, or iCommunity, allowing them to share information. Residents will be able to check updates on news, weather or finance, to be accessed either on their phones or iPads, or on an electronic noticeboard in each lobby.
Internal size of studios in Avantra are 60m² to 61m², one-bedroom plus MPR units are 75 m² to 82m², two-bedroom plus MPR units are 100m² to 127m² while three-bedroom plus MPR unit is 154 m². 
The construction work of Avantra project has commenced. Residents are expected to move in by December 2017.
For more information, <a href="https://www.avantra.com.au/" target="_blank">click here</a>.
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Longton Property Group's Avantra development bringing community to Mascot

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Liberal Party power broker Walter Villatora has sold his luxury Manly home, amidst his pre-selection candidature for the nearby Federal electorate of Mackellar currently represented by Bronwyn Bishop. 
Selling agent Tim Mumford of Stone Real Estate initially expected interest from $4.5 million plus, but this was then revised to $4 million.
Villatora built the property after spending $1.85 million in 2011 to knock the old home down.
The freestanding four bedroom home comes fitted with fingerprint entry.
Villatora, who runs the business advisory firm Outcome Group, has been close to former Prime Minister Tony Abbott and Premier Mike Baird.
This article was first published in the Saturday Daily Telegraph.
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Liberal Party power broker Walter Villatora sells in Manly

An entity directed by HSN's Rafi Assouline and Rebel Property's Allen Linz has filed plans for an impressive new precinct in Woolloomooloo.

The major mixed-use development would transform a prominent William Street site into a new residential village anchored by affordable housing and a large public park.

The proposal, submitted as a State Significant Development Application, covers 164-172 and 174-194 William Street, a 6,398 sqm site between Forbes Street and Dowling Street on the southern edge of Woolloomooloo.

Designed by fjcstudio in collaboration with Bangawarra, Studio Bright and Tribe Studio Architects, the scheme would deliver 227 apartments across four residential buildings ranging in height up to 18 storeys, alongside retail space, public domain improvements and a new publicly accessible park.

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It's another design scheme for Rebel, who took <a href="https://www.apartments.com.au/news/nsw/first-look-rebel-property-group-takes-woolloomooloo-precinct-to-nsw-government">concept plans to the NSW Gov late last year</a>.

The latest plans will be a mix of 167 build-to-sell apartments and 60 affordable apartments, with the affordable housing component representing 15 per cent of the project's gross floor area. The apartment mix includes 12 one-bedroom, 53 two-bedroom, 89 three-bedroom apartments and 13 penthouses, while the affordable housing component would comprise 42 one-bedroom and 18 two-bedroom apartments.

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Rebel Property is seeking to take advantage of the NSW Government's infill affordable housing bonus provisions under the Housing SEPP, which provide additional floor space and height in exchange for the delivery of affordable housing for a minimum of 15 years. The planning pathway allows a 30 per cent increase in floor space ratio and building height where 15 per cent of the development is dedicated to affordable housing.

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At the centre of the development is a 1,356 sqm sunlit public park designed to become a new community gathering space at the gateway to Woolloomooloo. The park would be complemented by a network of pedestrian laneways connecting William Street with the surrounding streets, improving permeability through what is currently a largely impermeable block.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="257af931-a393-4007-8c6d-7219796df58d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.51%E2%80%AFAM.png?VersionId=KAHy94GrhaReFsWTGDKfy39EDJ8gEEv4" />

The design team says the public domain has been heavily influenced by the site's topography and Aboriginal cultural heritage, drawing on the escarpments, gullies and landscape characteristics that historically defined the area before urbanisation. The landscape design has been developed in partnership with First Nations consultancy Bangawarra.

The project would be delivered across four separate buildings. The William Street East and William Street West buildings, designed by fjcstudio, would contain the majority of the apartments. Melbourne-based Studio Bright has designed the Forbes Street building, while Tribe Studio Architects is responsible for the Dowling Street building.

Rebel had secured approval for the concept plans late last year.

Joel Robinson

First look: HSN, Rebel, advances Woolloomooloo precinct plans

A locally heritage-listed furniture showroom on Water Street is set to become the centrepiece of a new mixed-use residential development as local developer&nbsp;<a href="https://www.apartments.com.au/developers/keylin-group">Keylin</a> seeks approval for <a href="https://www.apartments.com.au/new-apartments/lotus-on-water-street-290-water-street-fortitude-valley-qld-4006">Lotus on Water Street</a>, a 15-storey project on the Fortitude Valley side of Spring Hill.

The proposal spans 290 Water Street and 137-141 Warry Street, combining several properties into a 2,869 sqm site that sits between Fortitude Valley, Spring Hill and the rapidly evolving Victoria Park precinct. Keylin's plans would deliver 132 apartments alongside new retail, hospitality and commercial space, while retaining and repurposing the historic Brunswick Home Furnishers Showroom that fronts Water Street.

Designed by <a href="https://www.apartments.com.au/architects/jackson-teece">Jackson Teece</a>, Lotus on Water Street comprises a 12-storey residential tower rising above a three-storey podium and communal rooftop terrace. The development includes 76 apartments classified as multiple dwellings and a further 56 units proposed as short-term accommodation, designed to be flexibly used as either accommodation or permanent residences. The apartment mix comprises six one-bedroom, 54 two-bedroom and 16 three-bedroom homes.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="9822bb79-6c49-49c9-95ba-319e8c8d81c3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20front.png?VersionId=ioW8zbN4UVebbLetTFuv92t.HkdgfR5e" />

Residents would have access to an extensive rooftop recreation level spanning more than 1,200 sqm of communal open space. Plans include a pool, gym, sauna, infrared sauna, yoga area, library, private dining room, barbecue facilities and landscaped entertainment spaces, making the rooftop the project's largest shared amenity offering.

At street level, the proposal focuses on the adaptive reuse of the heritage buildings along Water Street, where 518 sqm of retail and commercial space is planned across shop, office and food and drink outlet uses. A permeable residential lobby would be positioned between the retained heritage buildings, creating a pedestrian connection between the historic streetscape and the new tower behind.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="269cf3e0-7d13-48bf-a318-05a00deb5c10" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20podium.png?VersionId=DLXmTCLsp6GOcLpQ0h.0z7wKCw59EhN_" />

The heritage retention strategy is central to the scheme. The development application notes that the Brunswick Home Furnishers Showroom and adjoining heritage buildings will remain, with only non-significant structures on the site earmarked for removal under a previously issued Heritage Exemption Certificate. Levels one and two of the new podium are recessed behind the heritage façades to maintain their prominence within the streetscape.

Jackson Teece has drawn inspiration from the site's manufacturing history when designing the podium. The planning documents state that the façade incorporates perforated metal screening that references the woven and rattan furniture historically produced on the site. Cascading and climbing plants are integrated throughout the podium to soften the building's presentation and screen parking levels behind. The landscape strategy also informs the project's name, Lotus on Water Street, drawing on the historic Spring Hollow waterholes that once ran through Spring Hill and the blue water lilies associated with Meeanjin, Brisbane's traditional name.

The proposal also incorporates the neighbouring property at 141 Warry Street, currently occupied by a healthcare service. The existing building would remain, with nine dedicated parking spaces allocated within the new development to support its ongoing operation. In total, Lotus on Water Street proposes 117 car spaces, including 110 resident spaces and seven visitor bays, alongside 100 bicycle spaces.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="70cf07bc-4fd8-4e70-92dd-be8b21c4e4f0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20site.png?VersionId=txlxrJImM0Sm_vTzHVKh5DDUkyL_CiiA" />

The site sits within the Spring Hill East Precinct of the Spring Hill Neighbourhood Plan and is positioned around 650 metres from both Fortitude Valley Station and Exhibition Station. It is also within walking distance of the King Street precinct, Royal Brisbane and Women's Hospital, Herston Quarter and Victoria Park, which is earmarked to become a major venue precinct ahead of the Brisbane 2032 Olympic and Paralympic Games.

Planning documents describe the location as a key gateway between Spring Hill and Fortitude Valley and highlight the area's increasing importance as new transport infrastructure and Olympic-related investment reshape Brisbane's inner north. The development team argues the project will contribute additional housing supply while activating a section of Water Street that has historically received less investment than other parts of the Valley.

Keylin has become increasingly active across Brisbane and southeast Queensland, assembling sites in strategic inner-city locations. They are currently selling and delivering <a href="https://www.apartments.com.au/new-apartments/oria-spring-hill-447-gregory-terrace-spring-hill-qld-4000">Oria Spring Hill</a>, just over 140 apartments due for completion in 2027.

Keylin plans heritage-led Lotus on Water Street apartment development in Fortitude Valley

Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Jonathan Chancellor

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