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Suggestions that young and naïve investors are rushing to set up self-managed super funds have been debunked by figures from the Australian Taxation Office.
Graeme Colley, director of technical and professional standards at SMSF Professionals' Association of Australia (SPAA), told SmartCompany that despite an increase in <a href="https://www.smartcompany.com.au/finance/superannuation/35704-younger-generation-interest-in-smsf-on-the-rise">popularity with the younger generation</a>, the latest statistics show SMSFs are still very much the heartland of the wealthy and the mature.
“From what we see, it’s still the 50 plus category,” says Colley.
The September ATO figures show the greatest proportion of SMSFs are funds of between $200,000 and $2 million. The number of funds within this range has risen from 63.9% in 2009-10, to 65.7% in 2012-13.
In contrast, funds under $150,000 have been in a decline over this four-period from 20.5% to 17.2%.
Colley says there has been unfounded media speculation young people were rushing into setting up SMSFs.
“What the industry didn’t want to see happen was people brashly going into SMSFs without seeing if it was the right option for them. But we are not seeing that from these figures,” says Colley.
Colley says while the popularity of SMSFs is certainly on the increase, there has been a “steady as she goes” approach to SMSF investment.
“It’s more of a ‘look before you leap’ situation, we don’t want a runaway freight train,” he says.
Colley believes there has recently been a considerable focus given to the education and training of SMSF managers, in the wake of <a href="https://www.smartcompany.com.au/legal/politics/44700-fofa-changes-scrapped-by-senators-as-financial-planners-plead-for-certainty" target="_blank">changes to the financial planning industry.</a>
He says the ATO statistics also put to bed the myth that SMSFs with low balances have an "unhealthy" concentration of their assets in residential property.
“That doesn’t seem to be the case. Funds with property investment seem to be in the $300,000-$400,000 plus range. It is a common sense investment, rather than people with massive mortgages.”
"The notion that SMSFs are piling into residential property with their ears pinned back is simply not supported by the ATO figures,” says Colley.
The SPAA expects another 20,000 SMSF will be created in 2015.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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SMSFs still the heartland of the mature and wealthy 

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Self-managed super fund trustees are being put off from seeking financial advice by the slew of <a href="https://www.smartcompany.com.au/finance/44332-public-register-for-dodgy-financial-planners-aims-to-clean-up-industry">recent scandals in the financial planning sector</a>, according to taxpayer advocate group Taxpayers Australia.
Reece Agland, superannuation products and services manager at Taxpayers Australia, said the organisation has considerable anecdotal evidence to suggest trustees are being spooked by recent events, such as the Commonwealth Bank scandal.
“Talking with our member and SMSF clients, they are saying they are scared to go to a financial planner now because of all bad news and they are concerned they’ll receive bad advice,” says Agland.
Susie Salmon, head of superannuation and SMSF financial services at Crowe Horwath, said while she has not seen any evidence of this herself, SMSF trustees are generally more cautious than others with their super.
“SMSF trustees are more wary than other superannuants. They want to make sure they know how their investments are going,” says Salmon.
She says trustees are also more concerned with their independence, and the recent scandals have shown some financial planning institutions have a lack of independence.
Agland says a lack of trust in financial advice may lead trustees to miss out on investment opportunities or products. He says trustees must seek as much knowledge as they can to ensure the health of their SMSF.
“Even if [trustees] are scared to go to a financial planner, they should educate themselves to make better decisions.”
Meanwhile, the fears follow good news for Australian super, as a global superannuation index this week announced Australia as the number two global superannuation system.
The Mercer World Pension Index places Aussie super just behind Denmark in an annual survey of 25 superannuation systems, due in large part to our superannuation guarantee.
Salmon agrees the super guarantee and forced contributions have landed the country such a high ranking.
“The number one reason why we are so big and will become much larger is because we are forced,” she says, pointing out Australia is the only county in the world to institute such involuntary contributions.
“I’d expect we’d be number one soon. We are seen as one of the leaders in superannuation. They [the rest of the world] always look towards the Australian market.”
She also says Australians feel more invested in their super than other countries because the money is “our own personal” money instead of the government’s.
Salmon says because of their strong interest in controlling their own investment, SMSF trustees are key contributors to the strength of the Australian superannuation system.
Graeme Colley, director of technical and professional standards at the SMSF Professionals' Association of Australia, said he agrees the SMSF sector is a major factor behind the ranking, given SMSFs are the fastest growing segment of Australian super and the funds, on average, hold about $1 million each.
“They are contributing, not only by the amount they’ve got in the funds, but from an investment point of view, they are certainly doing their part,” says Colley.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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Will financial scandals push SMSFs to go it alone?

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The Australian Tax Office has sent caution letters to the operators of 2,000 SMSFs about illegal ‘divided washing’ practices, as trustees are again being told to take heed of warnings or risk facing tough new penalties.
The advice follows a string of <a href="https://www.smartcompany.com.au/finance/investment/42864-smsf-trustees-warned-not-to-take-financial-advice-from-real-estate-agents">recent warnings about SMSF trustee obligations</a> and the introduction of <a href="https://www.smartcompany.com.au/finance/superannuation/42422-eight-things-you-need-to-know-to-get-your-smsf-ready-for-the-end-of-the-financial-year">weighty new penalties brought in</a> at the start of this month.
In a <a href="https://www.ato.gov.au/Media-centre/Speeches/Other/Update-from-the-ATO-on-recent-compliance-activity,-areas-of-concern-with-SMSFs-and-the-ATOs-future-priorities/">speech</a> given at the CPA Conference yesterday, ATO assistant commissioner Matt Bambrick revealed the tax office had sent around 2,000 self-amendment letters to SMSFs it identified as having potentially implemented a share trading strategy known as dividend washing.
The warning cautioned SMSF trustees that such a practice was a breach of tax rules.
Crowe Horwath tax director Tim Holloway told SmartCompany dividend washing, which is based on a specific tax ruling, is a strategy to gain double franking credits on shares.
“It occurs where you have any type of entity that owns shares in a company, which then sells those shares ex-dividend,” says Holloway.
“Which means, when the shares go to a new owner, the new owner does not have the entitlement to get the franking credits. Even though they’re selling the shares, the previous owner still has an entitlement to the franking credits.”
Holloway explains that when an entity then buys the same number of shares in the same company, on what is called “special market”, which trades on a different basis to the normal market, they are effectively buying shares that still have an entitlement to the franking credit and therefore doubling their credits, despite owning the exact same amount of shares.
“They have the credits attaching to the shares they sold, and they have managed to actually get credits because they bought on this special market,” says Holloway.
“The ATO holds the view that the only reason you’ve done this, is to get that benefit of the double franking credits, because if you didn’t get that benefit the transactions would not be commercial,” he says.
Holloway says while it is hard to tell how common the practice is, the fact the ATO sent out 2,000+ letters implies it has seen incidences of dividend washing, or what look to be dividend washing.
“Clearly they are a few of these incidences and the ATO are acting upon it,” says Holloway.
Holloway says the penalty the ATO might impose on an SMSF found to be dividend washing would depend on whether the actions were found to be done on purpose.
“If they feel that it’s deliberate, then you can get hit with pretty significant penalties,” says Holloway.
In his speech, Bambrick highlighted additional “emerging risks” for SMSFs to be aware of, including: the potential to contravene purposes tests by attending overseas SMSF conferences; dividend stripping, where a company distributes retained earnings to a member just as they retire; and illegal early release of super benefits.
Bambrick said the new penalty regimes allowed the ATO to impose penalties that were more in line with a breach than it previously could.
“The accuracy and independence of SMSF auditors has always been critical to our compliance monitoring but now we’ll be relying even more on these auditors to identify and rectify minor breaches,” said Bambrick.
“In dealing with non-compliance by SMSF trustees, we may take one or several courses of action, depending on the seriousness of the contravention and the circumstances involved.”
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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ATO cracks down on dirty SMSFs, warning against ‘dividend washing’ 

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Self-managed superannuation fund experts have hit back at claims SMSFs are getting a tax-free ride through franking credits and tax exemptions, saying these tax minimising tools are available to all super funds.
As reported by <a href="https://www.afr.com/p/national/how_almost_smsfs_avoided_tax_bOEp84dAnoopreCGMKkE0J">Fairfax</a>, statistics from the Australian Tax Office show almost 300,000 SMSFs were able to eliminate or minimise tax on their super and net $2.5 billion in franking credits in 2011-12.
In that year, 424,360 self-managed funds generated gross taxable income of $32.9 billion, but $15 billion of that was entirely exempt from income tax because the funds were in the pension phase, according to Fairfax.
But two SMSF experts have said those claims are largely sensationalised and trustees were working within tax rules that have been in place for a long time.
“This is nothing new,” says Kathy Evans, principal of superannuation and SMSF at Crowe Horwath.
“[SMSF trustees] are just working with rules, and they are no different to other structures that help taxpayers minimise their tax.”
Because SMSFs invest in shares, they are credited the tax paid by the companies they invest in the form of franking credits. They are essentially subsidised on their 30% tax rate by the company, because otherwise the ATO would receive two lots of tax on the same investment.
But Graeme Colley, director of technical and professional standards at the SMSF Professionals’ Association of Australia, says most of the large super funds also invest in shares and are also entitled to these franking credits.
“If you a shareholder – it doesn’t matter who you are… you are entitled to them,” says Colley.
Colley says there are no further tax exemptions offered to SMSFs that are not also offered to other super funds.
“There are no words in the legislation that say, ‘this is how SMSFs get taxed and this is how the big funds get taxed’. They’re all taxpayers,” he says.
Evans says these tax rules have been in place since the 1990s and SMSF trustees are just working within the rules to get the most of out their retirement funds.
She says suggestions SMSFs are purely for the wealthy are inaccurate, and she sees many trustees who could not be classified in that category.
“These people have worked hard all their life, they’ve paid their tax and have got plans in place to assist with their retirement. They are working within the legislation,” says Evans.
Both Colley and Evans say calls to get rid of franking credits or to change the dividend imputation system of taxation should be viewed with caution.
“It may become a disincentive. If they mess with the rules, people will lose interest and I don’t think that’s a good thing,” says Evans.
“We need more people saving for their retirement.”
Colley says if you change legislation for SMSFs, then it will need to be reconsidered across the board.
“Picking on one set of taxpayers is unfair,” he says.
This article first appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
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SMSFs don't get a free tax ride, experts say

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Trustees of self-managed super funds are being warned about the legal implications of accepting advice from real estate agents when investing their funds in property.
The warning comes as <a href="https://www.smartcompany.com.au/finance/superannuation/42422-eight-things-you-need-to-know-to-get-your-smsf-ready-for-the-end-of-the-financial-year" target="_blank">hefty new penalty regimes that punish trustees misusing their SMSFs</a> came into place at the start of July.
Australian Securities and Investments Commission commissioner, Greg Tanzer, raised the issue yesterday when he spoke at the annual CPA Australia Self-Managed Super Funds Conference.
“ASIC is aware that there has been a sharp rise in promoters recommending that investors either set up or use an existing SMSF to invest in property,” Tanzer said in his <a href="https://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Regulators-perspective-on-the-regulation-of-SMSFs--speech.pdf/%24file/Regulators-perspective-on-the-regulation-of-SMSFs--speech.pdf" target="_blank">speech</a>. “These promoters may not be complying with the law.”
Tanzer said ASIC was concerned that, with the increased popularity of SMSFs and property investment, real estate agents and property advisers may not have realised they may be providing financial product advice and may need an Australian Financial Services (AFS) licence, or authorisation under an AFS licence.
“Specifically, we are concerned about advertisements claiming that consumers can use their superannuation to purchase a property using the NRAS and receive ‘$100,000 tax free’,” said Tanzer.
“These advertisements do not provide a balanced message about the features, benefits and risks of investing in NRAS property through an SMSF,” he said.
Graeme Colley, director of technical and professional standards at the SMSF Professionals’ Association of Australia, told SmartCompany a trustee cannot seek advice which is regarded as financial product advice from anyone without an Australian financial service licence or authorisation of one.
“If you seek advice, make sure it is from are a licenced financial planner,” says Colley.
Colley says it is likely that most real estate agents are unaware that what they are doing could be illegal. He says agents frequently give advice about investing in personal property, but should be aware that there are different laws concerning SMSFs.
“The same rules don’t apply as investing in personal property,” says Colley, who says even a ‘barbecue conversation’ regarding where money should be invested is considered financial advice.
Colley and the SMSF Professionals’ Association of Australia are calling for legislation to be put in place to give ASIC further control over the type of advice given and by whom.
He warns SMSF trustees to “get a second opinion” if advised to roll over their superannuation to set up a SMSF fund and invest in property.
Colley also warns anyone nearing retirement age about the potential danger of investing their SMSF in property. He says for those near retirement who invest in real estate – and who then find that they can’t get a tenant or need cash flow – contribution age rules may stop them from putting money back into the fund.
“The older you are the more careful you need to be,” he says.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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SMSF trustees warned not to take financial advice from real estate agents

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The corporate watchdog has deregistered 440 self-managed super fund auditors who did not undertake or pass the competency exam necessary to be registered.
The move to have stricter controls over the industry comes as the <a href="https://www.smartcompany.com.au/finance/superannuation/31900-smsfs-continue-to-grow-reaching--22-billion">SMSF sector continues to gain popularity </a>in Australia.
The Australian Securities and Investments Commission said of the 440 auditors whose registration was cancelled, 373 did not attempt the exam and 67 did not pass the exam.
SMSF auditors, of which there are around 7,000 in Australia, are given up to two attempts to pass the competency exam.
ASIC said 1,421 auditors were required to sit the exam before July 1 this year, but the regulator extended the cut off to August 31, 2014.
Graeme Colley, director of technical and professional standards at the SMSF Professionals' Association of Australia, said the matter had been referred on to ASIC by the Australian Taxation Office after the ATO cross-checked the number of audits each auditor was declaring and undertaking.
Colley says auditors, many of whom would be accountants, had declared they only undertook a handful of audits a year to escape sitting the competency test, but the ATO figures had caught up with them.
“The ATO has crosschecked the actual with the theoretical,” says Colley.
“They’ve realised, wait a minute, these people are telling porkies. They haven’t done the test and they are not meeting the qualification requirements.”
Colley says many small accountants would have tried to avoid the exam out of fear or embarrassment.
“Would you want to go do an exam if you haven’t done one in ten years?” he says.
Colley says the move to cancel the registration is a positive outcome for the SMSF sector because it will make sure auditors adhere to the highest standard of education.
“It means those that are there now to look after self-managed super funds are making sure audits are done properly,” he says.
Deregistered auditors have 12 months to re-apply for registration and pass the competency exam in no more than two attempts.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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440 SMSF auditors deregistered after failing or not sitting the exam

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An ageing population, distrust in the super system and a dependency on foreign debt will put significant strain on Australia’s retirement income system over the next 40 years and will potentially leave Aussies without enough super to retire on, according to a panel of industry experts that included David Murray, the head of the <a href="https://www.smartcompany.com.au/finance/42840-what-the-murray-financial-industry-report-means-for-your-business" target="_blank">Financial System Inquiry</a> (FSI).
Murray told a breakfast in Melbourne the superannuation system needed clearer objectives in the coming years.
"We need to make sure the objective of the system is clear. If it’s not, and we don’t make some improvement, we will increasingly have to ask the question: Would we have been better off without this system?” said Murray.
“It’s not clear that we’ve made an overwhelming strong start in the superannuation system. There are a lot of people that start at 3% that won’t have adequate outcomes in retirement.”
The panel, which was hosted by the Self Managed Super Fund Association, also included former Keating government advisor Don Russell, economist and former Reserve Bank board member Warwick McKibbin, and SMSF Association chief Andrea Slattery.
Ageing population
McKibbin, an economic modeller, argued while <a href="https://www.smartcompany.com.au/finance/superannuation/31367-smsf-experts-say-ageing-population-a-concern-for-industry" target="_blank">Australia’s ageing population</a> was not facing as much pressure as some countries, such as Japan and certain areas in Europe, we are still at the mercy of an increasing rate of old age dependency.
“Demographics is always destiny,” said McKibbin, who pointed to research showing while world economies would continue to grow, work participation rates will conversely decline.   
“Just from demographics alone, we can see there will be a fundamental slowdown in the world economy,” he says.
“The people who are working can’t support the number of old age people.”
Superannuant apathy
Russell, who was one of the architects of compulsory superannuation system, argued the public is becoming increasingly apathetic about super, and the superannuation industry was guilty of not having done enough to convince people to lock away their money for 40 years.
“Unless we can continue to convince people it’s a good deal to have their money locked, people will start saying, ‘I’ll have my money now’,” said Russell.
He said the failure of the industry to speak with one voice had discredited it in the eyes of many people and had strengthened criticism of compulsory super.
Foreign reliance
Murray, the former chief of the Commonwealth Bank, used the analogy of Australia as a bank customer to illustrate our reliance on foreign debt, saying the country could be classed as “a prolific borrower”.
He said while the country is generally “a style of borrower that does prefer to pay their debts”, it was now at risk of <a href="https://www.smartcompany.com.au/growth/economy/42017-australia-s-aaa-credit-rating-at-risk-we-ask-three-economists-does-it-matter">the consequences of irresponsible budgetary management</a>.
“Well, what [does Australia] do when things are crook? Generally they have managed the budget fairly responsibly. Well we’ve reached a point where we don’t anymore,” said Murray.
Russell agreed Australia was too reliant upon other economies and was at risk of “being run over” if it slowed down reform to the super system.
“The US is of such a size, if it sits in the middle of the road, everyone goes round it. If Australia stops in the middle of the road, it gets run over. It’s not an option for us to be stopping,” he said.
SMSF sector
Meanwhile, the two-day conference also canvassed the condition of the self-managed super fund sector, with Slattery saying a growing number of people were “taking responsibility” for their super in the face of the challenges on the system.
In her keynote address, Slattery said recent reports, including the FSI, had given the SMSF sector “a clean bill of health”.
“We all know the figures. Of $1.85 trillion invested in superannuation at 30 June 2014, $560 billion is in SMSFs,” said Slattery.
“That’s 31% of all superannuation funds, with SMSFs now representing the majority of those that are self-sufficient in their retirement with 93% of members drawing income streams in the retirement phase.”
Slattery also pointed to “sobering” statistics that show approximately 84% of Australians are currently retiring on $21,000 or less a year through APRA-regulated funds.
SMSF investors making growth a priority
While concerns remain clear for the superannuation system as a whole, the conference also drew attention to research showing “green shoots” for SMSF investments.
The SMSF Investor Product Needs Report released on Tuesday shows trustees are now swinging away from cautious investments and are beginning to make growth a priority.
“For the past few years, the pendulum has been on the fear side; it was moving back towards optimism, but a lot of caution has emerged in 2014,” said the report.
The survey of 2681 investors with an SMSF, which examines investment trends in the six-year period from 2009 to 2014, says SMSF investors are in a period of “cautious optimism”, and while maximizing income remains important, trustees are focusing more on growth.
Slattery said in a statement the study “put to bed” the myths that SMSF investors don’t like making decisions, are apathetic, and basically sit on large cash reserves.
“As the report says, SMSF investors tend to lead the general investor population in investing behaviour and, as such, it’s critical to watch what they are doing,” she said.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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The future of the super system and how your SMSF will fare

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A Tasmanian real estate agency has fronted up to the Hobart Magistrates Court over allegations it falsely advertised properties as being on the ‘waterfront’, including one home that was separated from the water by a highway and two other pieces of land.
<a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2015-04-09/tasmanian-realtor-accused-of-falsely-advertising-properties/6381194">The ABC reports</a> Tasmanian Private Realty yesterday pleaded not guilty to three counts of false or misleading representations about the location of land.
The legal action was launched after Consumer Affairs Tasmania received a number of complaints about three properties in the Huon Valley in southern Tasmania, which were allegedly advertised as being “waterfront” or “riverside”.
The court heard one property in the township of Franklin was advertised as “riverside” when it was actually set back behind Huon Highway and two other properties.
Another two properties in the town of Dover were allegedly falsely advertised as “waterfront” homes, including one house where any access to the water would have only been through crown land and a fish factory.
Tasmanian Private Realty’s defence lawyer Roger Baker argued the properties met the general public's understanding of the term waterfront.
"They don't abut the water directly but you see they are in the waterfront district," Baker told the court, according to the ABC.
"It's a descriptor of a general location rather than a specific point in space."
But Andrew Parlour, principal at Russell Kennedy Lawyers, said there is a significant difference between claiming a property is “waterfront” or “riverside” and claiming it is found in a “waterfront district”.
“Most normal, reasonable people are likely to think ‘waterfront’ is on the water, where ‘waterfront district’ can be within an area close to water,” says Parlour.
Parlour says consumer law makes it very clear a business cannot make false or misleading representations about the sale or grant of an interest in land, including price, location and characteristics.
“The question is if it is likely to mislead or deceive,” he says.
“I would have thought in this instance it is just untrue to say it’s a waterfront property. If it’s set back behind a couple of blocks, it is clearly not riverside and any reasonable person would see that,” he adds.
Parlour says Tasmanian Private Realty could face penalties of up to $220,000 for an individual director and $1.1 million for a body corporate, which could potentially include a real estate agency. The company could also face injunctions and damages.
“I would think they would be hit with penalties and an injunction to stop them from making similar representations in the future,” he says.
The court will hear closing submissions next Tuesday.
SmartCompany contacted Tasmanian Private Realty but the company declined to comment. 
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Tasmanian real estate agency in court over misleading ad for ‘waterfront’ property located behind a highway

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The Melbourne-based Art Series Hotel Group is turning the table on its guests, trialling a program where the hotels scrutinise guests on their behaviour, rather than the other way around.
The novel idea comes as an increasing amount of businesses face negative reviews from online review sites and a dilemma in <a href="https://www.smartcompany.com.au/technology/social-media/43145-would-you-charge-guests-500-for-a-bad-online-review-us-hotel-owner-apologises-for-poor-taste-policy" target="_blank">how to respond to them</a>.
Art Series Hotels, which include Melbourne’s iconic hotels The Cullen and The Olsen, will assess and rank the behaviour and demeanour of its guests using a point system it has called ‘Reverse Reviews’. The reviews will then be published online for everyone to see.
But guests shouldn’t be too concerned: the review system is opt-in only.
Art Series Hotel Group marketing director Ryan Tuckerman said the idea of reverse reviews is to show guests the hotels are aware review sites are out there and are not going away.
“These days everything is reviewed. It’s all online, all in an instant,” says Tuckerman.
“Specifically for hotels, the power of reviews can make or break certain boutique brands. We realise it’s a major part of the hotel industry and it’s not going anywhere.”
“But it’s very important to allow the supplier to have a right of reply,” he says.
Tuckerman admits Art Series Hotels have had their fair share of negative reviews from guests who have found one of the hotels “wasn’t for them”.
“We have had reviews where guests have said we have not met their expectations, but we have handled it in a professional way. We accept that we’re not for everyone and we’re fine with that, ” he says.
Tuckerman believes the campaign is one way Art Series Hotels can engage with its customers while “having a bit of fun”. He says guests have already responded positively to the idea and he anticipates the reviews will be shared on social media channels.
“Knowing the power of digital and social media, having a personalised review really lends itself to sharing,” he says.
Guests with a rating of four or five stars are also offered complimentary stays, upgrades and food and drink as a part of the campaign.
The hotel group recently commissioned a study through Galaxy Research that showed guest behaviour is actually better than what most people expect, which Tuckerman says was another creative way to engage customers.
“The results of the Galaxy poll were amazing. Most of us would think people steal from the mini bar or take a towel, but it showed it’s actually such a small percentage that do that,” he says.
Tuckerman recommends other SMEs consider reviewing their customers.
“The first step is to accept people will review product,” he says.
“<a href="https://www.smartcompany.com.au/marketing/44762-when-customers-attack-10-tips-to-dealing-with-social-media-outrage">The way you handle reviews</a> and the way you reply, that’s what says a lot about your organisation.”
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Art Series Hotel Group turns the tables on customer reviews

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A dilapidated home with soiled carpets and hazard tape hanging across its doorways on Melbourne’s foreshore has sold for $4.51 million, during another strong auction weekend in the city.
<a href="https://www.heraldsun.com.au/realestate/news/run-down-home-sells-for-18-million-over-reserve-price/story-fni0ckoj-1227272835908%5D" target="_blank">The Herald Sun reports </a>the Saturday auction of 208 Beaconsfield Parade, Middle Park, attracted around 80 spectators who watched the home soar $1.8 million above its reserve price of $2.5 million.
Five bidders pushed the sale price to $4.05 million in the first 90 seconds, before a Melbourne couple placed the winning bid. The couple plans to demolish the bay-front home and start again, according to the Herald Sun.
But RP Data Victorian housing market specialist Robert Larocca said the result was “not surprising in the least” given the location.
“Middle Park and Albert Park are on a per square metre basis, the most expensive residential properties in Melbourne,” says Larocca, who believes forking out $4 million for land facing the Port Phillip Bay is “not outrageous”.
Larocca says as a seller of a home found in such a premium location, it may not be worth renovating it or doing much work before listing it for sale.
“In some respects you can easily over capitalise, so you may as well leave develop dream to the next person,” he says.
“For the buyer, if you can afford $4 million for land, building the property will hardly be an issue.”
The Beaconsfield Parade home was one of 1,322 properties that went under the hammer across Melbourne at the weekend, ending in a strong preliminary clearance of 78.1%, according to RP Data.
Larocca says volumes are “a touch higher” than this time last year in Melbourne, but the clearance is 10 points higher than the same period last year.
Melbourne contributed to a solid national clearance rate of 77.4%, alongside the continued strength of the Sydney market, which logged a clearance of 84.7% off 1,042 auctions.
The national clearance has remained in the mid- to high-70s for six consecutive weeks now.
Larocca says lower interest rates have clearly had their desired impact across the market.
“At the end of last year, we were entering a diminishing cycle, and I thought we’d see that trend continue, but quite the reverse has been true,” he says.
“Just interest rates alone have had quite a substantially large impact. An impact all those vendors who have listed their homes for sale will be very happy about.”
“The results just speak to very strong market right across the south-eastern seaboard – Melbourne, Sydney and Canberra, and even Adelaide are seeing excellent outcomes.”
Larocca says this weekend will be another strong weekend in terms of volumes, with more than 1000 properties again listed in both Melbourne and Sydney.
This will be ahead of a slow-down for Easter and the school holidays, which traditionally has a significant impact on the Melbourne market.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Dilapidated Melbourne home sells for $4.5 million during strong auction weekend

<a href="https://www.apartments.com.au/developments/collingwood-vic-3066">Collingwood</a>’s northern edge continues to sharpen its reputation as one of Melbourne’s most compelling cultural precincts, where established creative institutions, leading hospitality, and independent fashion converge within a tightly held inner-city neighbourhood.

Set within this evolving pocket, <a href="https://www.apartments.com.au/new-apartments/derby-street-by-milieu-collingwood-4-derby-street-collingwood-vic-3066">Derby Street by Milieu</a> draws on a location that balances proximity to some of the inner north’s most influential destinations with the quieter, tree-lined character that defines the streets edging East Melbourne. Positioned just moments from both Smith and Gertrude Streets, the address sits on the periphery of Collingwood’s cultural core, offering immediate access without the intensity of its busiest frontages.&nbsp;

[smartcode_project:default project_id=145576 project_image_fid=355945]

Gertrude Street, in particular, anchors the area’s identity as a destination for Melbourne’s leading food, art and fashion. Within a short walk, venues such as Marion, Cutler &amp; Co, IDES and the Builders Arms Hotel define a tightly curated dining scene with enduring citywide appeal, complemented by a strong fashion and retail presence including Havn, Le Labo and a selection of independent boutiques.

Nearby, institutions such as the Australian Print Workshop and Collingwood Yards sustain a constant rhythm of exhibitions, performances and creative output, embedding art and culture into the everyday fabric of the neighbourhood.

Smith Street, running parallel, extends this offering with a broader mix of hospitality and nightlife, maintaining its status as one of Melbourne’s most active inner-urban strips.

Beyond these high-energy streets, the immediate surrounds shift in tone. Derby Street and its neighbouring blocks are defined by low-rise heritage terraces, mature trees and a settled residential character. Fitzroy Gardens and Carlton Gardens are both within walking distance, alongside the Royal Exhibition Building and Melbourne Museum, bringing together green space and cultural landmarks within minutes of home.

[smartcode_project:default project_id=145576 project_image_fid=355985]

Connectivity remains a key advantage. The CBD sits within easy reach, accessible by tram along Smith Street in around 20 minutes, while also remaining close enough to walk or cycle, supported by the inner north’s established bike network.&nbsp;

<a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a>’s long-standing connection to Collingwood underpins the project’s approach. With a portfolio that includes multiple nearby developments across Bedford, Peel and Napier Streets, the developer brings a sustained understanding of the area’s character and evolution. Derby Street continues this trajectory as a collaboration with award-winning Melbourne-based <a href="https://www.apartments.com.au/architects/studio-bright">Studio Bright</a>, marking the practice’s first multi-residential project in the inner north and reflecting a shared focus on design integrity and contextual response.&nbsp;

Balancing connection to the neighbourhood with a sense of seclusion and refuge, Derby Street by Milieu embodies a level of care and craft typically reserved for single residential projects. Comprising 22 residences across six storeys, with two to four-bedroom configurations priced from $1.15 million, the project is currently under construction with completion expected in late 2027.&nbsp;

[smartcode_project_cta:default project_id=145576]

Joel Robinson

Derby Street by Milieu, at the top end of Collingwood

A rare new apartment development in the Blue Mountains is the latest in a string of State Significant Development Applications submitted through the New South Wales Government's Housing Delivery Authority.

A total of 270 apartments are being proposed for the 1.16-hectare site at <a href="https://www.apartments.com.au/new-apartments/blue-mountains-alpine-retreat-142-150-narrow-neck-road-katoomba-nsw-2780">142–150 Narrow Neck Road in Katoomba</a>, a parcel of land adjoining the former Katoomba Golf Course. The site was acquired for $3.85 million in 2021 by private developer VDM Prime.

The apartments, comprising a mix of serviced apartments, affordable housing, and traditional build-to-sell product, will be spread across eight low-rise buildings, along with a separate building for a new restaurant, arranged around a green spine that leads to a central park.

<img alt="Katoomba" data-entity-type="file" data-entity-uuid="ee9a2072-f465-44f1-9076-80c9c8ecca02" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.20.21%E2%80%AFAM.png?VersionId=4bT0vQ7j_syl65wcrJmHGm3m5pTvwrY_" />

The Urban Design Report by Atlas Urban says the vision is to create a "contemporary mountain precinct that is responsive to its escarpment landscape, heritage character, and community context."

"The development responds to the current housing supply and affordability challenges identified under the NSW Housing Delivery Authority (HDA), providing a balanced mix of standard, affordable, and short-stay accommodation," the report noted.

"By introducing a variety of dwelling types and tenures, the proposal supports intergenerational living, local workforce retention, and greater housing choice within an area constrained by topography, heritage, and environmental protections."

Of the 270 units proposed, 52 will be serviced apartments. The remainder will comprise 54 studios, 121 one-bedroom units, 39 two-bedroom apartments, and four three- to four-bedroom residences.

<img alt="Katoomba" data-entity-type="file" data-entity-uuid="f704508d-1bdf-4170-955d-0256652402a7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.56.49%E2%80%AFAM.png?VersionId=TzarHMO4gTOsblCqsbJQkvMqWj9nu2Au" />

The Design Report, by VDM Prime and appointed architect Antoniades Architects, noted that the design seeks to "provide a built form outcome that is highly considered, respectful and contextually fitting, whilst contributing positively to an evolving precinct."

"The site offers three frontages and the opportunity to provide a meaningful interface with the public domain environment. the design has a sympathetic response to streetscape and the green open space that surrounds the site."

The report states that the buildings are broken up to establish an appropriate bulk and scale, emphasised through height and setback strategies and defined through articulation that supports the transition of precinct granularity. It also notes that a central communal open space is established through the site to enhance the social dynamic and access to amenity, including natural ventilation and light to the apartments. The east and west frontages receive solar access during the morning and afternoon, whilst maximising views to the green open space.

The site adjoins the recently completed Yarrabee Katoomba development, comprising 24 duplexes that were completed last year and sold through McGrath Projects.

The relatively new Housing Delivery Authority pathway established by the NSW Government allows developers to submit State Significant Development Applications through a fast-tracked state process, effectively reducing reliance on local council approval pathways and aiming to accelerate housing delivery across New South Wales.

First look: Nearly 300 apartments pitched on former Katoomba golf course site

In Melbourne’s established inner east, the qualities that define a traditional house, width, height, and access to open ground, are increasingly difficult to replicate in new residential developments. Larger landholdings are scarce, and with them, the ability to create apartments that extend beyond compact, internalised layouts.&nbsp;

In <a href="https://www.apartments.com.au/developments/kew-vic-3101">Kew</a>, where the residential fabric is shaped by generous setbacks and mature tree canopies, that tension is especially visible.

<a href="https://www.apartments.com.au/developers/ricdanic-investments-pty-ltd">Ricdanic</a>&nbsp;is bringing forward a boutique collection of just 13 residences across two buildings at 9–11 Wimba Avenue, Kew. Comprising six homes at No.9 and seven at No.11, the project sits on a quiet, tree-lined street just off Cotham Road.&nbsp;

Each apartment has been planned with a level of independence more commonly associated with standalone dwellings, balancing privacy with the efficiencies of apartment living.

Architect Chris Idle, who has been practising for over two decades, says projects like this don’t come along often.

“There are very few opportunities to do these kinds of developments in leafy, established suburbs,” he explains. “To get this level of amenity, natural light, and architectural freedom in such a setting is extremely rare.”

[smartcode_project:default project_id=140755 project_image_fid=366267]

The internal planning begins with width. Living areas extend beyond five metres, allowing furniture, circulation, and glazing to sit comfortably within the same zone without compression. Ceiling heights shift from three metres through to five metres in select areas, changing the sense of scale as you move through the apartment. These proportions are paired with double-glazed windows and fully electric systems, balancing volume with performance, supported by a 7.2 NatHERS energy rating.&nbsp;

From the main living space, the apartments open directly outward. Large sliding doors connect to private gardens averaging 125 square metres, with some residences also incorporating balconies of around 60 square metres. Rather than acting as secondary outdoor zones, these areas sit flush with the internal floor level, extending the usable footprint of the home and allowing for multiple modes of use, whether for quiet daily routines or larger gatherings.&nbsp;

The landscape, led by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>, reinforces this relationship. Across the site, 23 different plant species have been introduced, including a mix of native and established varieties, arranged to maintain privacy while preserving sightlines and light access. Gardens are not treated as decorative buffers but as functional extensions of the apartments, shaped to accommodate movement, seating, and informal use over time.&nbsp;

[smartcode_project:default project_id=140755 project_image_fid=366265]

Architecturally, the project draws from Kew’s historic residential language. Handmade bricks by Krause define the exterior, grounding the buildings within the material palette of the suburb, while interior finishes, stone, timber flooring, and restrained detailing, continue this approach internally. Architect Chris Idle describes the intent as long-term rather than stylistic: “We wanted it to feel timeless.”&nbsp;

This emphasis on durability extends to how the buildings are accessed and secured. Entry is managed through keyless systems, with a double-gated basement incorporating number plate recognition for vehicle access. Each residence is paired with a private lock-up garage accommodating two to three cars, alongside storage, while all entry points are monitored continuously. These measures sit alongside EV readiness and fully electric infrastructure, aligning the project’s operational systems with its long-term design outlook.&nbsp;

The setting remains central to how the development is experienced. Located within walking distance of Kew Junction and close to established schools including Carey Grammar and Xavier College, the address benefits from existing infrastructure while maintaining a residential quietness that is increasingly difficult to find at this scale.&nbsp;

Construction is being delivered by <a href="https://www.apartments.com.au/builders/sinjen">Sinjen</a>, with a 10-year structural guarantee, with completion targeted for mid-2027.

[smartcode_project_cta:default project_id=140755]

Inside Wimba Ave, Kew’s garden-scale residences designed for space and permanence

High-end Sydney developer&nbsp;<a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a> has secured approval for one of its latest Mosman projects, one of the first developments approved by Mosman Council under the NSW Government’s Low and Mid-Rise Housing Policy.

The approval represents an important step in delivering well-considered housing next to established village locations on Sydney’s Lower North Shore, in line with the intent of the Low and Mid-Rise zoning framework. 
&nbsp; 
There are currently 13 other sites lodged within Mosman Council under the policy, with <a href="https://www.apartments.com.au/new-apartments/27-29-heydon-street-mosman-nsw-2088">Heydon Street</a> among the first to receive development consent. 
&nbsp; 
Abadeen Founder and Executive Chairman Justin Brown said the project reflects a considered and appropriate response to its planning context. 
&nbsp; 
“This approval demonstrates how carefully considered, design-led development can align with the objectives of the Low and Mid-Rise Housing Policy," Brown said.

"The scheme has been designed to respond sensitively to its village setting, with a built form, scale and level of amenity appropriate to its local context. The determination reflects a balanced and considered planning outcome, with Council recognising the capacity for this site to accommodate additional housing within a well-located and established precinct.”

<img alt="Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman" data-entity-type="file" data-entity-uuid="92811ce3-02e8-44fc-996e-c61ae039bd3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Heydon%20Street%20Aerial.jpg?VersionId=ZHJVuWQT64QcdrFJx963pFWFzTX7lI2I" />

The Heydon Street approval followed extensive consultation with Mosman Council, with Abadeen working closely with Council throughout the assessment process.

The approved scheme comprises 27 residences, with only four per floor, creating a low-density living environment. The building will include four half-floor penthouses designed to capture views across Middle Harbour, Sydney Harbour and the surrounding district.&nbsp;

The project is expected to appeal to downsizers and owner-occupiers seeking house-like proportions, privacy and local convenience. There will be north-facing Middle Harbour views from the second level upward. It is also just a flat 100-metre walk to Bridgepoint Shopping Centre, which will appeal to owner-occupiers and in particular downsizers.

Two-bedroom residences are expected to be priced from $1.99 million when sales launch later this year. 
&nbsp; 
Joe Tack, CEO at Abadeen, said the outcome reflects both the quality of the site and the broader need for well-located housing. 
&nbsp; 
“This is a highly considered site within a highly established local setting, offering elevated views and strong connectivity. The project has been designed to respond to that context, delivering a scale and quality of housing aligned with both the planning framework and evolving market demand.” 
&nbsp; 
“This approval is particularly significant in the context of Mosman, where new housing supply has historically been limited. While it represents the first approval of this scale in Mosman to be achieved in over 50 years, it is importantly located within a well-established residential location, in close proximity to the established commercial amenity of Spit Road and Mosman Village. It reflects strong confidence in Abadeen’s approach to design, delivery and community integration, while contributing to the delivery of much-needed housing in a highly constrained market.”

Abadeen has an established track record across Sydney’s Lower North Shore, with recent completions including KOYO in Crows Nest and ENSO in Neutral Bay.

In Mosman, Abadeen recently completed The Hampden, with Mosman Residences on the corner of Spit Road and Clifford Street scheduled for completion later this year. Construction has also commenced at Burran Residences, comprising three full-floor ultra-premium homes positioned just 50 metres from Balmoral Beach, with residences expected to achieve prices in excess of $20 million. Two further projects are also progressing through planning within the local government area.

Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman apartment development

Apartment developer <a href="https://www.apartments.com.au/developers/martello">Martello™</a> is one of the latest entrants to the Gold Coast development market, with its debut project set to be one of the most boutique offerings on Chevron Island in recent years.

Martello has unveiled <a href="https://www.apartments.com.au/new-apartments/aere-chevron-island-18-20-mawarra-street-chevron-island-qld-4217">Aere Chevron Island</a>, a collection of 33 large-scale two-, three-, and four-bedroom apartments across an 18-storey building on Mawarra Street.

[smartcode_project:default project_id=143932 project_image_fid=367517]

The developer has placed a strong emphasis on wellness, briefing architecture firm Raunik Design to embed this philosophy into the project. It is a direction <a href="https://www.apartments.com.au/developers/martello">Martello™</a> plans to carry through its future developments along the coast.

<a href="https://www.apartments.com.au/developers/martello">Martello™</a> has positioned Aere as a continuation of its human-centric development approach, with a focus extending beyond amenity to the fundamentals of layout, natural light, and spatial planning. Promax Construction has already been appointed to deliver the project, with construction expected to commence in the coming months as part of the group’s broader expansion into South East Queensland.

Rising above the low-rise fabric of Chevron Island, Aere’s design emphasises generous internal proportions and uninterrupted outlooks, with residences oriented to capture coastal, skyline, and waterway views. Interiors prioritise open-plan living, with large-format glazing and carefully considered transitions between indoor and outdoor spaces.

[smartcode_project:default project_id=143932 project_image_fid=367508]

The upper levels are dedicated to larger-format homes, including four-bedroom residences designed as half-floor offerings. These layouts prioritise separation between living and sleeping zones, along with increased privacy and storage, features more commonly associated with detached housing than traditional apartment product.

Aere’s private resident amenity spaces centre on wellness. A rooftop level will incorporate a heated swimming pool, sauna and spa, alongside a residents’ lounge, dining areas and barbecue spaces, while additional shared facilities throughout the building include a gym.

The inclusion of both social and quieter retreat spaces reflects a broader shift in higher-end apartment design on the Gold Coast, where developers are increasingly responding to owner-occupier demand for buildings that support long-term living rather than short-stay use.

[smartcode_project:default project_id=143932 project_image_fid=367814]

Aere is positioned within walking distance of Chevron Island’s village centre along Thomas Drive, as well as the HOTA cultural precinct via the Green Bridge, connecting residents to parklands, galleries, and event spaces.

For <a href="https://www.apartments.com.au/developers/martello">Martello™</a>, Aere represents the first in a series of planned Gold Coast developments, with the group also exploring opportunities in other coastal precincts, including Kirra and Palm Beach.

The move north comes as sustained population growth and infrastructure investment continue to reshape South East Queensland, with developers increasingly targeting boutique, design-led projects in established lifestyle pockets. Aere’s relatively small scale and emphasis on spatial quality position it within this emerging segment of the market.

[smartcode_project_cta:default project_id=143932]

Kirsten Robb

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