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LF Economics duo Lindsay David and Philip Soos have lobbed their submission, titled The Great Australian Household Debt Trap: Why Housing Prices Have Increased as the first presentation to the House of Representatives Standing Committee on Economics 2015 Inquiry into Home Ownership.
But at the same time they claim this latest housing inquiry is a "transparent political ploy" to avert implementing a raft of genuine policies that would impinge upon the government-supported ability of the FIRE sector to siphon record-breaking profits from the economy and labour through the extraction of economic rents, primarily usury and land rent. 
"Given that very few, if any, recommendations from previous inquiries have been implemented, there was little need to hold the recent inquiry into the housing sector," <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/Home_Ownership/Submissions" target="_blank">the submission says</a>.
"There is no need, therefore, for this inquiry to take place at all, especially considering it has been known since 1879 with the publication of the world’s most popular economics book, Henry George’s Progress and Poverty, what the most effective approach is in terms of efficiency and equity in dealing with the issues that afflict Australia’s real estate market. 
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"The Australian public would be far better served if an alternate inquiry were to be held that investigated ways to democratise the clearly malfunctioning political system which regressively only assists Australia’s army of private monopolists, usurers, speculators, rent seekers, free riders, financial robber barons, control frauds, inheritors and indolent rich.
"It is high time the nation’s politicians, political parties, public executives, top-level public economists, regulators and bureaucrats have their power over policymaking significantly restricted by and for the benefit of the public and common good.
"It is this self-interest that has helped to perpetuate the largest debt-financed real estate bubble in Australia’s history."  
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They argue in the 9000 word submission that since 1996, property prices have outpaced inflation, incomes, rents and GDP, making it difficult for potential first home buyers (FHBs) to enter the market while lower income households and marginal groups struggle to afford decent shelter.
They add the Australian housing market shares similarities with countries that experienced real estate bubbles, such as the United States, Spain, Denmark, the Netherlands and Ireland.
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"Government, the FIRE sector (finance, insurance and real estate) and the mainstream economics profession predictably deny the existence of a housing bubble, but Australia’s economic history demonstrates they occurred during the 1830s, 1880s, 1920s, mid-1970s and late 1980s. 
"The bursting of these bubbles invariably caused economic recessions and depressions. 
"Contrary to the analyses of the vested interests, the data clearly establishes Australia is in the midst of the largest housing bubble on record. 
"Policymakers are caught between a rock and a hard place, as implementing needed reforms will likely burst the bubble, causing severe financial and economic fallout as residential land prices revert to mean."
<a href="/images/2015/06/19/figure7.jpg" target="_blank">Click to enlarge</a>
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They argue governments have worsened market inefficiencies by cynically enacting and maintaining policies to inflate housing prices. 
"The inertia regarding housing and tax reform is due to the recognition from the first Rudd government onwards that the nation is in the midst of its largest housing bubble on record. 
"The tolerance of housing policies that maintain bubble-inflated prices, ignore objective evidence, contradict the recommendations of earlier inquiries and erode housing affordability are entirely predictable. 
"Property ownership and speculation has been elevated to the status of religion in Australia, compounded by a perverse culture of homeowner entitlement driven by a degenerate taxation system that penalises work and effort while rewarding unearned wealth and income."
<a href="/images/2015/06/19/TAble2.jpg">Click to enlarge</a><img src="/images/2015/06/19/TAble2.jpg" alt="" style="line-height: 1.3em;">
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The researchers noted previous inquiries into the housing sector in 2004, 2008 and 2015 identified both supply and demand-side variables as contributing to high housing prices: availability of finance, lower nominal interest rates and inflation, preferential taxation treatment for all land owners, developer charges and levies, the composition and rate of employment, demographic change (population growth, household size and age structure), cash grants to FHBs, rezoning policies and the returns from other investments.
"Current housing prices cannot be explained by these fundamental factors, however, as both the nominal rent to inflation and rent to income ratios have remained steady over the course of the housing price boom."
It is argued there are two primary causes for the housing bubble: a rapid acceleration in mortgage debt and perverse taxation policies encouraging speculation.
The duo make 15 housing market recommendations, (published below) and some 23 banking recommendations too.
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Recommendation #1: More efficient use of the State Land Tax (SLT). 
The SLT is an ideal tool to moderate both land price bubbles and their subsequent devastating busts, and is already in the toolkit of state and territory governments. Unfortunately, this tax has been rendered comatose by a host of exemptions and concessional treatments. The SLT requires broadening to include owner-occupied housing and agricultural land, calculated on a per-square-metre value basis. The narrow existing base and progressivity of the SLT incurs only a small deadweight loss; the complete removal of exemptions and concessions would reduce this deadweight loss to zero. 
On the other hand, the federal government could take charge by imposing a comprehensive Land Value Tax (LVT) on all land. An increasing marginal rate schedule taxes the least valuable land at 0 per cent, with rising rates calculated on a per-square-metre value basis. Land taxes apply per land holding, but not on an entity’s total holdings, to encourage development. 
Recommendation #2: Changes to municipal rates calculations. 
Municipal rates should be levied using site value (SV) rating, taxing the underlying land only. Under the capital improved value (CIV) or net annual value (NAV) system, construction is taxed, suppressing building activity and imposing widespread deadweight losses.32 Use of Minimum Rates provides a direct subsidy to those owning more valuable sites. Ratepayers should oppose this wealth transfer - an impost on their capital values as well as annual charges. Rates should not be capped to the rate of inflation given residential land prices have far outstripped inflation.
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Recommendation #3: Reform stamp duty tax. 
Unlike most recommendations regarding stamp duty, it is a tax worth keeping. Theoretical studies on the deadweight losses of taxation will indicate stamp duty is an inefficient transactions tax, but this only holds on the unrealistic assumption that the housing market is efficient. As Australia is at the peak of its largest housing bubble on record (revealing the housing market is not efficient), stamp duty instead acts similarly to a Tobin tax: it reduces both prices and volatility. Evidence demonstrates stamp duty in Australia reduces housing prices equal to or greater than the value of the stamp duty, rather than increasing prices as is commonly believed.33 This is precisely why the housing lobby seeks to reduce and eliminate this tax. 
Given the inefficiencies currently wrought in the housing market, stamp duty is likely to be welfare-enhancing, and thus should be retained. A reformist approach would be to increase stamp duty on the more speculative transactions, for instance, owner-occupier and investment property purchases with a loan to value (LVR) ratio above 80%, rising further if interest-only loans are used, while reducing stamp duty for transactions with lower LVRs and amortizing principal and interest mortgages. If a sufficiently large, broad-based LVT proved it could quell an inefficient housing market, stamp duty could be gradually reduced. It should also be noted that the incidence of stamp duty results in a portion falling on the dwelling structure, which results in inefficiency as with council rates based on the CIV or NAV system.
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Recommendation #4: Reform housing tax expenditures. 
The capital gains and land value tax exemptions for owner-occupiers and the capital gains tax discount for investors should be removed.34 Owner-occupier mortgage interest deductibility is ruled out because it is the equivalent of the negative gearing benefit for investors, and therefore likely to encourage larger private debt burdens. 
SMSF tax concessions should be modified by bringing them into line with the benchmark treatment for property investment.35 Provisions allowing SMSFs to borrow for investment purposes are removed to limit risk and losses during future real estate corrections. 
Recommendation #5: Quarantine negative gearing. 
Negative gearing is a Ponzi-amplification mechanism that provides incentive to increase mortgage debt to speculate on the movements of future capital prices. The ability of property investors to write off net rental income losses against labour income tax should be disallowed. The ability of investors to claim depreciation on buildings should be reviewed, as it allows income that otherwise would have been taxed at the full rate to be converted into capital gains that are only taxed at 50 per cent of the nominal rate. 
Recommendation #6: Removal of all first home buyer subsidies. 
The FHB grant and boost, including the first home savers accounts, should be removed. These housing subsidies act as a demand-side stimulus that further erodes affordability. When combined with highly-leveraged mortgages, the result is rapid housing price inflation that substantially outstrips the size of the grant. These grants are a gift to vendors, not FHBs.
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Recommendation #7: Prevent superannuation lump-sum withdrawals. 
Disallow the use of lump-sum withdrawals from superannuation accounts to finance purchases of owner-occupied property or to prevent foreclosure (while allowing SMSF purchases as noted above). The former acts like a FHB grant, while the latter is another gift to bankers. 
Recommendation #8: Increase the Commonwealth Rent Assistance (CRA) scheme. 
The CRA should be increased to assist low and moderate income tenants, and index it to nominal rental price growth. The CRA is better targeted than NG and the NRAS because it provides direct cash assistance to tenants. The program may place upwards pressure on rental prices as it increases eligible tenants’ purchasing power. 
Recommendation #9: Greater investment in public housing. 
A substantial increase in funding for public housing would assist long-term, low-income individuals and families reliant on social welfare to exit the private rental market, ameliorating their financial stress. We have an obligation to look after those who have difficulty managing their affairs. 
Recommendation #10: Tenancy law reform. 
Australian tenancy laws should adopt the higher standards enjoyed by other Western nations. Tenants’ limited rights include less stability and security in tenure due to shorter lease terms (6 to 12 months on average), lower rental vacancy rates favouring landlords during contractual negotiations, termination of leases for no reason, and requisite landlord permission for minor alterations and pet ownership. 
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Recommendation #11: The adoption of ‘right to build’ laws. 
This policy encourages timely development of residential property. Planning delays and uncertainties may raise land costs, thus, this effect is negated by a right (positive presumption) for developers and home builders to undertake activity, within specified local and state government guidelines. If a development is opposed, then the onus is upon the aggrieved party to take the developer to the civil tribunal to modify or prevent construction. 
Recommendation #12: Elimination of state/local government infrastructure charges and levies. 
Governments should reverse its preference for imposing direct charges on developers, instead financing local infrastructure directly. Governments can either adopt the Texan Municipal Utility District (MUD) model or return to the original system of issuing municipal bonds to finance local infrastructure and paying down debts through council rates. 
It should be noted that developer levies and charges do not feed through into higher housing prices as is commonly believed; rather, developers subsume the levies and charges through lower profit margins which explains why they oppose them. Regardless, those who benefit from local infrastructure should finance its provision through the benefits-pays system: landowners through council rates and SLT/LVT. 
Recommendation #13: Streamlining of zoning processes.
 Land subdivision and zoning vacant land for residential use in capital cities takes too long, generating considerable costs, uncertainty and reducing developer competition. Comprehensive betterment taxes should be applied to agricultural land that is rezoned for commercial and residential purposes.
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Recommendation #14: Removal of most urban growth boundaries (UGBs). 
Except for ecologically or culturally sensitive regions of land, there is no sound rationale for UGBs, as only a tiny fraction of Australia’s land mass is urbanised. Building further out on the fringe may lower housing costs, but this will likely be more than offset by the rise in transportation costs. 
Recommendation #15: Establish the ‘Right to Rent’ program. 
The Right to Rent program allows any household in danger of foreclosure to remain in their home for a period of 5 to 10 years (or longer), paying the market rate of rent to the new owner (the bank). This policy helps protect owner-occupiers from the injurious effects of lenders’ control frauds. The plan does not bailout the banks or home owners, can be implemented straight away, does not create more bureaucracy and protects property from theft, squatting and vandalism. It also gives owner-occupiers more power in working through mortgage modifications, potentially reducing the number of delinquencies, insolvencies and foreclosures.
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jchancellor-FAypfDUnLy

The Great Australian Household Debt Trap: LF Economics lobs first submission into HoR housing bubble inquiry

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Australia has boosted its prime residential price index, with Sydney and Melbourne boosting their international status as number 10 and 11 respectively on the latest Knight Frank Prime Global Cities Index.
The index enables investors and developers to monitor and compare the performance of prime residential prices across key global cities, with prime property corresponding to the top five per cent of the wider housing market in each city.
The Knight Frank Prime Global Cities Index increased by 3.9% globally in the year to March 2015. North American cities occupy three of the top four rankings for annual price growth, while luxury properties are, on average, 46% more expensive than in Q2 2009 when the index hit its financial crisis low.
 
Out of the 56 markets monitored by Knight Frank, only 14 locations registered price declines.
The worst performing was war-torn Ukraine, showing a 15.5 percent drop in rates, followed by Cyprus, where values fell by 8.2 percent and China, falling by 6.4 percent.
 
The index, which is compiled on a quarterly basis using official government statistics or central bank data, indicated that Hong Kong is currently the top performing market today in terms of growth in property values, registering an increase of 18.7 percent.
 
The second top performing market is Turkey, where values accelerated by 18.6 percent, followed by Ireland in the third place (16.8 percent), Luxembourg (12.1  percent) and Estonia (11 percent).
According to Knight Frank’s Associate Director for Residential Research in Australia, Michelle Ciesielski, Sydney and Melbourne have increased on the index by 7.4% and 7.2% respectively over the past 12 months.
“Despite the mainstream market in Sydney over the same time achieving growth of 16.5% for houses, and 12.9% for apartments, those purchasing prime properties in Sydney have preferred to wait for the right opportunity, at the right value.
“The two years following the introduction of the Significant Investor Visa in 2012, we saw more Chinese-based purchasers in the prime residential market.
“However, over the past 18 months we’ve witnessed more local purchasers, with many expats returning to Sydney and Melbourne.
 “We expect growth to continue in the top five per cent of the residential market with the current low-interest rate environment, steady business confidence and a weaker Australian dollar than we saw when the Significant Investor Visa was first introduced.
“Attracting more net worth individuals to Australia, from July 1, the Government will be offering a more expeditious, 12-month pathway to permanent residency for those meeting an AUD$15 million threshold under the Premium Investor Visa,” said Ms Ciesielski.
According to the report, globally the index showed a mixed picture. Previous strong performers such as London slipped back, whilst cities such as San Francisco, Vancouver and Sydney climbed the rankings.
The report found the ongoing tussle between globalisation (wealth creation, improved connectivity) on the one hand and protectionism (including foreign buyer restrictions, capital controls) on the other is set to dominate purchase decisions for luxury buyers and hence market performance going forward, as explored in this year’s <a href="https://www.knightfrank.com/wealthreport" target="_blank" style="line-height: 1.3em;">Wealth Report</a>.
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Sydney and Melbourne boost international status: Knight Frank Prime Global Cities Index

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Janusz Hooker, the grandson of the founder of Australia's real estate brand LJ Hooker, is poised to take control of the franchise group.
The Australian Financial Review reports Janusz Hooker and a big international backer are finalising negotiations to buy out the other partners in the 700 office network business.
The current chairman Greg Paramor along with high-profile investors, including RAMS founder John Kinghorn, bought the business from Suncorp in 2009 for $67 million.
With plans for a turnaround, repricing and possible float, it all took longer than expected with the business then up for sale nine months ago.
Hooker is its non-executive deputy chairman who controls a 10% stake. 
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The 700 office LJ Hooker network, launched by the legendary Sir Leslie Hooker in 1928, remains one of the nation's best-known brands.
Mr Hooker is a medal-winning Olympic rower. He was the founder of TiNSHED before returning to the family firm which he describes as a forward-thinking real estate agency enhanced by his grandfather's persistence, determination and success that "remains a foundation stone of the LJ Hooker philosophy".
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Janusz Hooker poised to buy back the family agency

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Raine &amp; Horne has appointed its chief operating officer, Brian Reid as CEO of the international real estate group.
Mr Reid assumes the position of CEO from Angus Raine, who will focus solely on his role as the firm’s executive chairman.
Angus Raine has been the CEO since 2006, recently concentrating on expanding the business in Australia and overseas.
“We opened an office in Dubai early this year, and are fielding interest from local and overseas parties keen to secure a relationship with a well-known, established Australian real estate Superbrand which is regarded as a market leader in the provision of efficient IT systems, training and marketing,” said Mr Raine.
“Brian has an impressive and extensive real estate franchising resume, and over the past 12 months has been implementing a number of exciting initiatives around our IT platforms, and is driving the delivery of a new responsive design website, which will be launched very soon.”
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Brian Reid appointed Raine & Horne CEO

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Sydney's recent growth is polarising investors, according to property adviser Jacob Field at Ripehouse, which supplies research and analysis tools for DIY investors.
"It is either encouraging current Sydney investors who have made recent capital growth to diversify into other markets or for those investors that have not yet entered the Sydney market, and now priced out, they are looking out into other markets.
Jacob Field told Property Observer some 80% of his clients were currently targeting <a href="https://www.ripehouse.com.au/blog" target="_blank">Brisbane</a>, which according to his metrics, was in the mid-recovery phase of cycle.
"With great upside," he said.
"We are seeing strong market growth signals and investor interest in the Logan LGA, the Wynnum area and the inner Northern Quadrant of Brisbane extending out to Nundah, Chermside area.
"Due diligence and using information and research to become local area experts in unfamiliar locations can help the investor have clarity, confidence in decision making and a higher likelihood of achieving the upside in their personal strategy."
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"Moving into Q2 2015 Brisbane is exhibiting a very strong and consistent recovery story - firmly placing it mid-phase, he said. 
"The only indicator lagging slightly behind in the Brisbane market is the seasonally adjusted sales volume figure, which in isolation, would suggest Brisbane is transitioning from the trough to the recovery phase. 
"However, Brisbane is now perhaps the strongest buy recommendation in the nation and should not be overlooked for growth, all the way through the recovery and growth phases of the cycle."
The South East region of Queensland is also exhibiting indications that it is firmly in the mid recovery phase of the cycle. 
"South east is positioned in alignment with the investment story of Brisbane, however it to a small degree, further along in the recovery process (so the upside may be slightly lower)."
Earlier this year Jacob Field reported <a href="https://www.ripehouse.com.au/Q2_2015_QLD_region_by_region.pdf" target="_blank">Brisbane and the South East regions of Queensland</a> were firmly in the recovery stage.
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"We have seen some small incremental growth in these two markets to kick off 2015, expect this to escalate and start moving much faster as we progress throughout the year."
He says Ripehouse gauges market performance, as an aggregate, from only those suburbs that qualify as  “investment grade”. 
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Sydney investors turn towards Brisbane: Ripehouse

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The former longtime ANZ chief John McFarlane has secured $4 million for his Mermaid Beach duplex apartment.
McFarlane spent $4.2 million on the <a href="https://www.realestate.com.au/property-duplex+semi+detached-qld-mermaid+beach-118767483" target="_blank">Hedges Avenue, Mermaid Beach</a> purchase in 2009.
The Ray White marketing said the vendor had relocated to London. The former long-serving ANZ chief executive, now chairman of Aviva which ranks as one of the world's largest insurers, quit Australiain 2012. The Scottish born, but a naturalised Australian, had lived in Melbourne since 1997. His Walsh Sreet townhouse fetched $4.8 million in 2012.
There had been $5 million Mermaid Beach hopes on its early 2015 listing, then $4.3 million after its unsuccessful March auction. It sold through Ray White Prestige Surfers Paradise agents Nick Baxter and Robert Graham. 
In 2009 McFarlane upgraded to the beachfront after he secured $1,675,000 for his 19th-floor Aria penthouse at Broadbeach through the then Ray White Broadbeach agent, Michael Kollosche having paid $1.3 million for the three-bedroom, 285-square-metre unit in 2002.  
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Former ANZ chief John McFarlane takes Mermaid Beach millionaires' row minor loss

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Johnson Property Group anticipates work to start later this year on its Trinity Point project after approval last night from the Hunter and Central Coast Joint Regional Planning Panel.
The green light has been given to the $8 million first stage of <a href="https://www.trinitypoint.com.au" target="_blank">the $388 million Trinity Point Marina</a> project after it was recommended for approval by Lake Macquarie City Council. 
The approval means that the marina’s first 94 berths, along with a building, carpark and landscaping can now be built at the site.
“It’s fantastic. It’s good not only for Johnson Property Group, it’s good for Lake Macquarie and it’s good that everyone can move on,” said Johnson Property Group’s founder Keith Johnson.
Keith Johnson first envisaged Trinity Point in 1999.
“Council made it clear that they wanted a true tourist destination and an employment hub, not just a new residential estate at the site,” Mr Johnson said.
The next phase of Trinity Point will see 250 luxury tourist and residential apartments, a luxury hotel, restaurant, function centre, day spa and infinity pool built at the site.
The former Miss Universe Jennifer Hawkins is the marketing face of the marina project at Lake Macquarie.
"As a local girl, I think Trinity Point is going to be really special," the brand ambassador Jennifer Hawkins, who grew up at Holmesville, said last year.
Her parents had bought at Holmesville in 1972 for $2300, and she she had spent time on the shores of Lake Macquarie where her “pop” had kept a house on the lake with jetty in her youth.
"The product is going to be top notch," she said. 
Johnson hopes the project will offer a combination of the vibrancy of Noosa or Port Douglas, along with the prestige and grandness of the Fairmont Banff Springs in Canada.
Trinity Point is accessed via the M1 Morriset motorway turnoff.
The Morriset Park project was first announced in 2006 for the site formerly known as the St John of God holding.
The NSW government approved a concept plan five years ago for the 23 hectare site which is around an hour and a half from Sydney and 30 minutes from Newcastle.
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Renowned marina designer and operator Les Binkin has curated the project since the earliest days.
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Johnson Property Group has partnered with the architectural practice Squillace.
It is being marketed through the sales and marketing director, Braden Johnson.
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Lake Macquarie Trinity Point Marina gets planning approval

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A Surry Hills warehouse residence has been sold for around its listed $7.5 million plus hopes.
It was one of Sydney's earliest residential industrial conversions.
Title Tattle recalls the 1970s conversion undertaken by Gordon Youett and Kerry Yates was used as fashion company Espirit's headquarters for many years.
It still has its heart-shaped, blue-tiled swimming pool.
In 1987 <a href="https://sydneysothebysrealty.com/4943912/4-Davies-Street-Surry-Hills" target="_blank">4 Davies Street</a> attracted the eye of fashion designer Stuart Membery who bought it in 1987 for $750,000.
It sold 16 months later for $1.16 million to Membery's ex-business partner Michael Watson. 
It sold again in 1998 for $1.25 million to Tim Evangelinidis, who resold it 20 months later for $1.92 million to Michael Robinson.
The warehouse last sold in 2004 at $2.5 million to Michael Hayes. The record stood at $5.71 million when businessman Neville Miles and his wife Beryl sold their Surry Hills warehouse to artist Melinda Marshman and her husband Dr David Marshman in 2012.
"As warehouse homes go, this could be Sydney's pinnacle," the initial BresicWhitney marketing suggested.
Last weekend the nearby converted warehouse of Kay Lanceley, widow of the late artist Colin Lanceley sold pre-auction for around $5 million. 
 
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Surry Hills $7.5 million warehouse trophy home with heart-shaped pool sold

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SPONSORED POST
Investing in rental property through a self-managed superannuation fund offers tax advantages which, for many people, will be even greater than the tax benefits of investing in property directly. 
The first advantage stems from the fact that money going into superannuation is taxed at a low rate. 
Most people receive 9.5% of their employment income as contributions to superannuation. In addition to these employer contributions, individuals can voluntarily add up to $30,000 in pre-tax wages to their super fund through a salary sacrifice arrangement.
These types of contributions are taxed within the super fund at 15%, rather than the marginal tax rate that applies to income taken outside of the fund.
Say your annual salary is $120,000 plus 9.5% superannuation, which comes out at $11,400. 
In the 2014-15 financial year, the marginal tax rate on an income of $120,000 is 39.5% including the Medicare levy. You will pay tax of $33,347 on your salary.
The $11,400 contributed to superannuation is taxed at 15%, so the fund pays $1710 in tax. 
The total bill for income tax plus tax the superannuation fund pays is $35,057. 
If you were to salary sacrifice $30,000 of your pay into superannuation, leaving you with $90,000 outside of the fund, you’d pay $21,497 in income tax and the superannuation fund would pay $4500 in tax on the $30,000 salary sacrifice contribution. Add that to the $1710 on the $11,400 compulsory contribution and the total tax bill is $27,707.
That’s a tax saving of $7350 a year, giving you more to invest.
Tax in the fund
Earnings and capital gains made inside a superannuation fund, like contributions, are taxed at 15% while the fund is in its accumulation phase, where members are adding to its balance. 
Capital gains are also taxed at a discounted rate if the property has been held for more than 12 months. While a 50% discount applies to capital gains made on directly-owned property, the CGT discount for property owned through an SMSF is lower, at one-third of the gain. However, the total tax bill may end up being less as the following example demonstrates.
If an SMSF sells a property it has held for five years and makes a $150,000 capital gain, it would have to pay tax on $100,000 of the gain. At the 15% SMSF tax rate, the CGT tax bill is $15,000. 
The same property held outside superannuation would qualify for a 50% discount on the capital gain, so tax would be payable on $75,000. If the owner earned more than $80,000 in the tax year, putting their marginal tax rate at 39.5%, tax on the gain would be $29,625. That’s $14,625 more than the fund had to pay. 
Where SMSFs have the biggest advantage over holding property in your own name is when the property is sold after retirement. 
Capital gains and other earnings are tax-free when the SMSF members have retired and are drawing a pension from the fund. 
If the SMSF member whose property made the $150,000 capital gain above had sold the property after they retired, the fund would have paid no tax on the gain. 
In contrast, a retiree who sells a property held in their own name making a $150,000 capital gain would still have to pay tax on the gain, even if they had no other income. In this case, after the CGT discount, the person’s taxable income for the year would be $75,000 and their tax bill would be $16,682. 
Expenses and deductions
SMSFs can claim the same deductions for property expenses and depreciation as individuals who invest in property in their own name.
Deductible expenses included charges such as agent fees, body corporate fees, council rates and maintenance costs. Draft legislation released in January confirmed that if the property was purchased with borrowed money, the SMSF can also claim interest costs as a tax deduction.
In general, assets valued at over $300 must be depreciated. The fund can also claim depreciation costs for the building itself if it was constructed after July 17, 1985.
To claim depreciation, the SMSF needs to obtain a depreciation schedule, usually prepared by an independent valuer. 
Expenses and depreciation costs are deducted against the income the property generates, reducing the tax liability. 
Property held inside an SMSF can be positively or negatively geared. If it is negatively geared, it’s important to make sure the fund has sufficient cash flow to service the debt without help from outside. This can come from other investment income within the fund, or through member contributions as long as they don’t exceed the maximum amounts.
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Tax advantage in rental investment through SMSF: Forrester Cohen 

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Figures released by SQM Research this week have six key findings on the state of residential vacancies across the nation in May 2015.
With a vacancy rate of 2.4% posted based on 71,970 vacancies, the national total was up from 2.3% in April when vacancies were 69,295.
SQM Research head Louis Christopher said there was a continued gradual rise in vacancy rates across the country which meant asking rents in many areas had stalled. 
<ul>
<li>Nationally, vacancies rose during May 2015, recording a vacancy rate of 2.4%, up from 2.3% in April, coming to a total of 71,970 vacancies nationally.</li>
<li>During May, vacancy rates climbed the most in Perth, up from 3.0% in April to a high 3.4%.</li>
<li>Vacancy rates in Canberra, Sydney and Darwin remained the same from April 2015 to May 2015.</li>
<li>Darwin recorded the highest vacancy rate of the capital cities at 3.5% in May 2015 based on a total of 992 vacancies.</li>
<li>Darwin recorded the highest yearly increases in vacancies, climbing by 2.1 percentage points from a year earlier.</li>
<li>Vacancy rates in Sydney remained tight in May 2015, and are up a modest 0.1 percentage points from this time last year.</li>
</ul>
<img src="/images/2015/06/18/sqm_rents.jpg" alt="">
SQM’s calculations of vacancies are based on online rental listings that have been advertised for three weeks or more compared to the total number of established rental properties.
 
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Six statistical insights into the May 2015 rental market: SQM

Sydney developer&nbsp;<a href="https://www.apartments.com.au/developers/central-element">Central Element</a>&nbsp;is doubling down in Drummoyne, lodging plans for a boutique apartment development on St Georges Crescent, only one-kilometre down the road from its first Drummoyne development, Bianca.

The new project at 15A-21 St Georges Crescent,&nbsp;a&nbsp;1,701sqm north-facing site overlooking Iron Cove, will have 45 apartmnts across 10 levels. Eight of the units will be dedicated to affordable housing.

The site sits within walking distance of Drummoyne Village, Birkenhead Point, ferry services and the Bay Run, and offers harbour views towards the Sydney Harbour Bridge and CBD skyline.

Designed by MHN Design Union, the development will deliver a mix of one, two and three-bedroom apartments, alongside resident amenity including a gym, landscaped communal open space and three levels of basement parking.

The project has been lodged under the NSW Government's Low and Mid-Rise Housing reforms, with Drummoyne Village identified as a town centre capable of accommodating additional housing supply.

Central Element acquired the site earlier this year as part of its continued expansion across Sydney's eastern suburbs, lower north shore and inner west.

The developer's current pipeline includes luxury apartment projects Pearl Bondi and a separate development on Lamrock Avenue in Bondi, a residential project in Barry Street, Neutral Bay, and a mixed-use seniors living community in Greenwich.

Central Element Managing Director Nathan Chivas said the project would address a shortage of new owner-occupier housing opportunities in Drummoyne.

"While we're seeing a significant shift across Canada Bay as major infrastructure investment, population growth and planning reform drive a new chapter for the region, in suburbs like Drummoyne there remains a genuine shortage of new boutique luxury housing opportunities for owner occupiers," Chivas said.

"Sites of this nature are increasingly difficult to secure, particularly those that combine a north-facing aspect with direct water outlook. Our St Georges Crescent project responds directly to the market demand, offering a level of exclusivity, outlook and lifestyle in the highly sought after suburb."

The development application has been lodged with the City of Canada Bay Council, with the project expected to launch to market in early 2027.

&nbsp;

Joel Robinson

Central Element seeks second Drummoyne apartment development

The NSW Government has unveiled plans that could deliver around 1,300 new homes across Nowra and Kiama, continuing its push to unlock housing in well-located regional centres along the South Coast.

The proposals, now on public exhibition, would pave the way for around 830 homes in Nowra and a further 450 homes in Kiama, while also introducing affordable housing requirements and increased building heights in key locations.

The larger of the two proposals is centred on Nowra, where the NSW Government is seeking to rezone land within the Mandalay and Riverfront precincts.

The Mandalay sub-precinct, located close to Shoalhaven Memorial Hospital, Nowra Library and the city's aquatic centre, could accommodate around 530 new homes. Around 30 per cent of housing delivered on Homes NSW-owned land would be dedicated to social and affordable housing, equating to roughly 100 homes. Building heights would increase from the current two-storey limit to between three and six storeys.

A separate rezoning proposal for the Nowra Riverfront Precinct would unlock a further 377 homes while creating stronger connections between the Shoalhaven River and the CBD. The plans include building heights ranging from five to 12 storeys, floor space ratios of up to 2:1 and a requirement for two per cent affordable housing.

Together, the two proposals would deliver more than 900 homes across the broader Nowra area, reinforcing the city's role as one of regional NSW's key growth centres.

The housing push builds on previous infrastructure commitments in the Shoalhaven, including government funding aimed at supporting thousands of future homes in West Nowra through upgrades to water and wastewater infrastructure.

Further north, the NSW Government is also progressing plans for the former Kiama Depot site, a two-hectare parcel near Kiama's town centre.

The rezoning proposal would transform the former industrial site into a residential community capable of delivering up to 450 homes. Buildings would range between six and eight storeys, with at least 10 per cent of homes allocated as affordable housing. The proposal also includes approximately 600 parking spaces and improved walking and cycling connections.

Planning Minister Paul Scully said the proposals are designed to increase housing supply in locations close to jobs, transport and services.

"For too long, families have struggled to find somewhere to live, and activating underutilised sites allows us to deliver the new homes these families need," Scully said.

"The Minns Labor Government is getting on with the job of unlocking well-located sites close to transport, jobs, and town centres and building the homes our communities need.

"These rezonings are about removing barriers to housing delivery and making sure land is put to better use so more people can find a place to call home within the communities they choose."

The latest rezonings form part of the Minns Government's broader strategy to accelerate housing delivery across NSW, particularly in established centres where existing infrastructure can support additional population growth.

Community consultation on the proposals is now underway, with feedback set to inform the final planning controls before the rezonings are determined.

Around 1,300 new homes earmarked for Nowra and Kiama as NSW Government pushes housing supply

<a href="https://www.apartments.com.au/developers/mrcb">MRCB International</a> has commenced construction on its latest Gold Coast apartment development, Maris, on the site of the former Sundale Motel in Southport.

The start of construction by <a href="https://www.apartments.com.au/builders/binah-constructions">Binah</a> follows an exceptionally strong sales campaign, with more than 90 per cent of apartments sold since launch. Every purchaser has been local, an&nbsp;indicator of confidence in both the development and Southport's evolution into a thriving CBD.

<a href="https://www.apartments.com.au/new-apartments/maris-southport-20-queen-street-southport-qld-4215">Maris</a> will deliver 192 residences across 20 levels. The project forms part of MRCB's Australian and New Zealand development pipeline now exceeding $1.6 billion in gross development value, alongside a growing portfolio of projects globally.

[smartcode_project:default project_id=134403 project_image_fid=350663]

The company also commenced construction on its $600 million 26 Vista residences in Surfers Paradise last year, following strong sales momentum, with over 70 per cent of residences sold.

Maris has been designed to meet evolving buyer demand, offering architecturally designed layouts suited to long-term liveability. The approach reflects a growing preference for quality and adaptability among Gold Coast buyers.

Positioned next to the Broadwater in the <a href="https://www.apartments.com.au/developments/southport-qld-4215">Southport</a> CBD, Maris sits directly opposite the Broadwater Parklands light rail station and within easy reach of retail, dining and lifestyle precincts, placing residents at the centre of one of the Gold Coast's most connected and rapidly maturing urban centres.

[smartcode_project:default project_id=134403 project_image_fid=372756]

Maris will offer a full suite of resort-style residential amenities, including a pool, gym and sauna, along with a rooftop level featuring decks, lounges and dining and yoga areas that command sweeping views across the Broadwater and out to the ocean.

Binah, a New South Wales headquartered company co-founded by Amen Zoabi and Khalil Hafza in 2008, has expressed its excitement at establishing its first partnership with MRCB.

Binah's Managing Director Khalil Hafza said partnering with MRCB on Maris is a significant moment for Binah.

"MRCB's financial strength and a track record that speaks for itself give this project a solid foundation, and this marks the beginning of what will be a long and successful relationship.

"With the right people, systems and partnerships behind it, Maris is set to become a significant addition to the Gold Coast's premium residential market."

[smartcode_project:default project_id=134403 project_image_fid=350664]

MRCB International CEO Ravi Krishnan said the project's progression to construction reflects both sustained demand and tightening conditions across the apartment sector, as well as MRCB's continued confidence in the Gold Coast market.

"Commencing construction at Maris is a significant step and reflects the depth of demand for quality apartments in well-connected urban locations," said Krishnan.

"Across Southeast Queensland, new apartment supply remains constrained, particularly in established precincts with infrastructure and amenity already in place. Projects like Maris are increasingly critical in meeting that demand, especially on the Gold Coast and in the city's CBD precinct."

[smartcode_project:default project_id=134403 project_image_fid=372761]

Krishnan said Southport's ongoing transformation, supported by infrastructure investment and long-term planning, was underpinning renewed buyer confidence.

"We're seeing a clear shift back towards well-located urban centres where infrastructure, connectivity and amenity are already established," said Mr Krishnan. "Southport is evolving into a more mature CBD environment, and that is being reflected in buyer behaviour."

Construction at Maris is anticipated to be completed in 2029.

[smartcode_project_cta:default project_id=134403]

Construction commences on MRCB’s $200m Maris Residences in Southport

Moonee Valley Park’s latest residential release <a href="https://www.apartments.com.au/new-apartments/the-eveline-at-moonee-valley-park-moonee-ponds-100-thomas-street-moonee-ponds-vic-3039">The Eveline</a>, has achieved a new benchmark for off-the-plan apartment sales in the suburb, with the sale of The Alexandra penthouse selling for $5,435,000.

Positioned on the top floor of a 16-level residential building, the three-bedroom, three and-a-half-bathroom penthouse features uninterrupted city skyline views across the future Valley racetrack.&nbsp;

The landmark sale comes as momentum at the precinct continues to build, with the Moonee Valley Racing Club progressing works on its new racetrack ahead of the 2027 Cox Plate. The transformative development will see MVRC reimagine the beloved Valley as a vibrant year-round entertainment and lifestyle destination.

Alongside a world-class racing experience, the historic precinct will be activated with events, hospitality and public green spaces designed to attract broader audiences, while breathing new life into one of Melbourne’s most iconic destinations.&nbsp;

[smartcode_project:default project_id=142519 project_image_fid=372786]

Development partners <a href="https://www.apartments.com.au/developers/hamton">Hamton Property Group</a> and Hostplus have delivered five residential stages over the past four years, the most recent in November 2025 with Trackside House and Stonepine House. The flourishing community is now home to almost 500 families.&nbsp;

The latest residential release, The Eveline, has recorded strong demand since launching publicly last July, securing more than $200 million in sales to date, satisfying its pre sales hurdle for construction to commence.&nbsp;

Hamton Founder and Executive Chairman, Paul Hameister OAM said, the sales&nbsp;team have been overwhelmed by demand for these unique homes in this unique project.

"Buyers continue to be predominantly hyperlocal and attracted by the 40 hectare botanic masterplan in Melbourne’s inner north west," Hameister said.

[smartcode_project:default project_id=142519 project_image_fid=372788]

Hamton’s Sales and Marketing Director Fergus Humphries said the team has achieved more than 70 sales over the past eight weeks, including the penthouse purchase by a local buyer.

"These results reinforce that, even in a challenging market, purchasers continue to be drawn to quality projects that offer more than just a home, they offer a lifestyle.”

Designed by Cera Stribley, the penthouse has been created with entertaining in mind, spanning close to 400 sqm of indoor and outdoor living space, including multiple terraces designed to capture sweeping views across Melbourne’s skyline, the new Valley racecourse and sunset views over Moonee Ponds.

Moonee Valley Park is one of Melbourne’s largest urban renewal projects, transforming the iconic racecourse site into a vibrant mixed-use neighbourhood integrating homes, parklands, retail, racing and community amenities.

[smartcode_project_cta:default project_id=142519]

Moonee Valley Park penthouse sets suburb record as sales surge clears construction benchmark

A company linked to one of Australia's largest privately owned cattle businesses has lodged plans for a new residential tower in <a href="https://www.apartments.com.au/developments/newstead-qld-4006">Newstead</a>, continuing the rapid transformation of one of Brisbane's most sought-after, inner-city precincts.

Bottletree Holdings, an entity associated with Stanbroke Managing Director Brendan Menegazzo, has submitted a development application for a 28-storey mixed-use tower at <a href="https://www.apartments.com.au/new-apartments/9-longland-street-newstead-qld-4006">9 Longland Street</a>, a site that made headlines last year when it changed hands in an off-market transaction that reportedly set a benchmark land rate for the suburb.

The proposal would replace an existing two-storey commercial building on the 1,510 sqm corner site with a Bureau Proberts-designed tower comprising 76 apartments, ground-floor retail, office space and a suite of resident wellness amenities.

<img alt="9 Longland" data-entity-type="file" data-entity-uuid="c710a836-568e-4382-bc91-3c34b8e80a8b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-22%20at%209.41.45%E2%80%AFAM.png?VersionId=Vy.mQWBc7GA_a.vIBdxKqRC9XGjWalo2" />

According to planning documents lodged with Brisbane City Council, the development would comprise a mix of 36 two-bedroom apartments, 24 three-bedroom apartments and 16 four-bedroom residences, positioning the project firmly at the premium end of the market. The apartments would sit above a podium containing retail and commercial space, with three levels of communal recreation facilities spread throughout the tower. The proposal also includes 198 car spaces and 95 bicycle spaces.

Bureau Proberts has drawn heavily on Newstead's industrial heritage in developing the architectural response.

"Occupying a prominent corner in the heart of Newstead, the proposal draws from the area's industrial lineage of robust brick warehouses to deliver a distinctly contemporary response," the architects said in the design statement.

"It is conceived as a subtropical sanctuary and elevated private retreat embedded within one of Brisbane's most vibrant lifestyle precincts."

The design seeks to reinterpret the traditional Queensland vernacular through wraparound verandahs, deep shading elements and permeable facades that respond to Brisbane's subtropical climate.

<img alt="9 Longland" data-entity-type="file" data-entity-uuid="25524f59-395c-4825-8fad-9b639822fa8a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-22%20at%209.42.09%E2%80%AFAM.png?VersionId=dlWlbpCc_g3Y6yTLGqRVKvGJvO2ubMJ3" />

Planning documents describe the building as embodying the principles of "buildings that breathe", a design approach increasingly favoured in Brisbane's apartment market as developers focus on natural ventilation and outdoor living spaces.

The tower itself would rise above a heavily landscaped podium designed to reference the woolstore architecture that helped define Newstead and neighbouring Teneriffe for generations. At ground level, fine-grain retail tenancies would activate Longland Street, Wyandra Street and the existing Wyatt Street laneway, further extending the pedestrian network that has become a hallmark of the Gasworks precinct.

The application notes that more than 54 per cent of the site would be dedicated to landscaping and deep planting, while approximately 1,750 sqm of communal recreation space would be delivered across multiple levels.

<img alt="Planning" data-entity-type="file" data-entity-uuid="fed3b189-1054-4b68-af5f-b0befc4a66e5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-22%20at%209.42.19%E2%80%AFAM.png?VersionId=gqeE3cjsbnLAfeTUKA1HtPZfqDs6S4Xa" />

Bottletree paid $22 million for the 1,510 sqm development site, equating to more than $14,500 per sqm, a reflection of the strong demand for development opportunities in Newstead. The suburb continues to attract both developers and buyers, underpinned by the ongoing evolution of the Gasworks and Teneriffe precincts into some of Brisbane's most sought-after lifestyle destinations.

Brisbane City Council's Sustainable Growth Strategy and Inner City Strategy both identify Newstead as a priority growth precinct capable of accommodating additional housing density due to its proximity to employment hubs, public transport and lifestyle infrastructure.

The proposed tower joins a growing pipeline of high-end apartment developments in the suburb. Fortis recently launched <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a>, a 65-apartment owner-occupier-focused development on Kyabra Street, while Consolidated Properties Group is preparing to launch <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a 227-apartment waterfront project on Skyring Terrace.

Meanwhile, builder-developer BPG is planning its own Newstead project on Maud Street, comprising just over 100 apartments and more than 1,380 sqm of dedicated wellness and resident amenity spaces, further highlighting the shift towards lifestyle-driven apartment developments in Brisbane's inner-city market.

Jonathan Chancellor

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