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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

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

Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

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

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

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

Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest. 
&nbsp; 
The purchaser sold their long-held family home in the area before embarking on a six-month search for the right apartment. After inspecting a range of options across the Lower North Shore, the buyer returned to <a href="https://www.apartments.com.au/new-apartments/alex-willow-crows-nest-82-90-alexander-street-crows-nest-nsw-2065">Alex &amp; Willow</a>. 
&nbsp; 
The buyer profile reflects the project’s broader purchaser mix. <a>Alex &amp; Willow</a> has attracted predominantly local downsizers looking to transition from larger homes without compromising on space or quality, alongside a smaller cohort of upsizers and investors drawn to the project’s location and design credentials. 
&nbsp; 
The milestone sale comes as the project, developed by&nbsp;<a href="https://www.apartments.com.au/developers/perifa">Perifa</a>&nbsp;and delivered by <a href="https://www.apartments.com.au/builders/versatile-made-construction">Versatile Construction</a>, both part of Versatile Group, reaches 60 per cent sold.

[smartcode_project:default project_id=6680 project_image_fid=371325] 
&nbsp; 
Eddie Mansour, Managing Partner of <a href="https://www.apartments.com.au/project-marketer/ray-white-projects">Ray White Projects</a>, said the result demonstrates not only a headline price but also depth of demand. 
&nbsp; 
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.

“We’re seeing a consistent pattern of local homeowners selling family residences and reinvesting into high-quality apartments that allow them to remain within their community. Alex &amp; Willow has resonated strongly with this group because it offers genuine scale, thoughtful design and immediate proximity to the village.” 
&nbsp; 
The sale reflects a broader and consistent trend of local downsizers actively seeking high-quality, low-maintenance residences close to established village centres. Agents report that demand for this product type has remained resilient, particularly where developments offer a rare combination of scale, design quality and walkable amenity. 
&nbsp;&nbsp; 
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project. 
&nbsp; 
“The penthouse sale is a strong endorsement of the quality we have delivered, alongside our partners, and the clear demand from local downsizers for premium, boutique residences in this location,” Perilli said.&nbsp; 
&nbsp; 
“Most importantly, we’re proud to see the Alex &amp; Willow community beginning to take shape. As we move closer to completion, we’re looking forward to welcoming residents and seeing the project come to life.”&nbsp;

[smartcode_project:default project_id=6680 project_image_fid=338516] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/nettletontribe">Nettleton Tribe</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>, Alex &amp; Willow is a boutique collection of generously sized two- and three-bedroom residences in the heart of Crows Nest village.&nbsp;

Completion is slated for early 2027.

[smartcode_project_cta:default project_id=6680]

Alex & Willow, Crows Nest penthouse sells off the plan for $6.5 million

Fresh from launching the first stage of its Wollongong precinct, <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, builder-developer Urban Property Group has unveiled plans for the next phase of the masterplanned community.

Now on public exhibition through the NSW Government's Housing Delivery Authority pathway is a State Significant Development Application for a further 657 homes on the prominent gateway site opposite Beaton Park.

The proposal comprises three buildings, including two build-to-sell towers rising 25 and 30 storeys, delivering 391 apartments, alongside a 12-storey co-living building with 266 residences, making it one of the largest co-living proposals currently planned in regional New South Wales.

Of the apartments proposed in the build-to-sell towers, the majority, 310, are two-bedroom dwellings. The balance comprises 44 one-bedroom apartments and 37 three-bedroom residences. Apartment sizes range from around 50 sqm for one-bedroom homes to approximately 90 sqm for three-bedroom apartments.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="19347059-1612-41a0-9c74-b86a657237f8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%2010.02.18%E2%80%AFAM.png?VersionId=sWXnaCcA.cIC6N8YT1dg5pJ2e1V3Z6z7" />

The submission says the proposal has evolved significantly from its original Housing Delivery Authority application following extensive consultation with the State Design Review Panel and Wollongong City Council.

The final scheme has been designed to align with the emerging vision for the Flinders Street Precinct, an area identified by Council as a future high-density mixed-use neighbourhood capable of accommodating substantial housing growth close to transport, employment and community infrastructure.

According to the design report prepared by COX Architecture, the development aims to "deliver a built outcome consistent with the future character of the Wollongong CBD while responding to the site's unique constraints and opportunities."

"Our vision for the next phase of the site evolution in Wollongong is grounded in three design pillars that guide the design response: place, natural environment and celebration," COX said.

"Inspired by its surroundings and grounded in the stories of place on Wodi Wodi Country, the design proposal acknowledges the established character of its setting while creating a unique and timeless identity that sits harmoniously within it.

"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."

The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.

COX identified views towards Mount Keira and the Illawarra Escarpment as defining features of the site, while the upper levels of the towers will also capture expansive views across the city and out to the Pacific Ocean.

The design team has positioned the tallest buildings closer to the rail corridor, where overshadowing impacts can be better managed while establishing a landmark built form on the northern approach into the city.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="79580d5b-500c-4ebf-9629-797146a4a694" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%209.51.59%E2%80%AFAM.png?VersionId=WbTB1EKSG.KDfsfz0F3wp1QVa2oCMGR5" />

Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.

Construction recently commenced on the first stage of Keira Place, which will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, alongside activated ground-floor retail and commercial space.

Urban Co-CEO Patrick Elias said the commencement of construction marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/groundbreaking-marks-start-of-construction-at-keira-place-in-wollongong-cbd">Groundbreaking marks start of construction at Keira Place in Wollongong CBD</a>

&nbsp;

&nbsp;

&nbsp;

Kirsten Robb

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