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Australia’s baby boomers and retirees will have a little less to worry about this Christmas, as Australia’s superannuation funds are on track to achieve their highest returns since the global financial crisis.
According to research released yesterday from independent agency SuperRatings, superannuation funds had solid returns in October. The agency predicts when the November and December results are added in, the average Australian superannuation balance will have grown 14.1% over the calendar year.
Balanced funds gained, on average, 1.8% in October. Since July, superannuation funds have risen on average 6.9%, and since October 2012 have risen 16.9%.
The big driver of this is shares, with both Australian and international share markets enjoying a bull run in recent months.
But returns across all asset classes were positive in October – even cash options returned 0.2%.
Last year, superannuation returns on balanced funds rose an average of 11.7%. That was an <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/30460-what-the-big-mac-index-says-about-the-aussie-dollar-five-things-you-need-to-know-about-the-economy">unusually good year</a>. Superannuation balances declined 1.9% in 2011, rose 4.6% in 2010, and 12.9% in 2009 after falling 19.7% in 2008.
Over the past 10 years, superannuation funds have returned 7% per annum on average – just less than half of this year’s expected figure.
The past few years have been a rollercoaster ride for investors, with the bull market of the early 2000s spectacularly crashing in 2008. But SuperRatings founder Jeff Bresnahan says superannuation investors still ended up ahead.
“Australian superannuation funds have continued to deliver returns of 7% per annum, some 4% above prevailing inflation,” he says. “For members who have some time until retirement, this history of longer term performance should provide comfort that fund’s continue to meet their long term objectives.
“For members nearing retirement, however … the actual risk achieved in the lead up to retirement takes on greater significance. The most important planning decision for older members is to ensure that their strategy reflects both their goals and capacity to bear risk.”
A hypothetical $100,000 balance invested in a balanced fund in 2003 would now be worth $195,265, a 95% gain over 10 years. It would have risen rapidly until 2007, before starkly declining to just $124,627 in 2009 before making up the lost ground and then some in the years to 2013.

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This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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mrobin-TVRYiru7si

For second year running super funds will break post-GFC record: SuperRatings

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While iron ore, coal, gold and natural gas have been Australia’s biggest commodities for the past decade, industry experts say the exporting landscape is evolving, with new industries coming to the fore.
Food manufacturing, oil and gas extraction, beer manufacturing, education services and legal services have been ranked by IBISWorld analysts as Australia’s best chances to support the nation’s economy in the next few years.
In 2013-14, Australia is expected to generate $317.6 billion in export revenue and IBISWorld industry analyst Sebastian Chia told SmartCompany in a statement macroeconomic factors will favour exporters in the next five years.
“It’s mainly been driven by the growth of the Asia Pacific region and the demand for our food products and our education services which are viewed as higher quality goods in the region,” he says.
As the value of the dollar softens, Australian exports are expected to become increasingly price competitive against the currencies of Australia’s major trading partners.
Businesses in the food manufacturing sector are positioned well for the next five years, as Australia’s high food standards are attractive to foreign markets.
IBISWorld figures show revenue for Australia’s baby food manufacturing industry is forecast to grow by 2.9% per year over the next five years to reach $206.7 million. The dairy industry is also expected to grow, with revenue anticipated to grow by 2.1% to reach $12.8 billion.
The demand from south-east Asian markets is likely to be behind the dairy sector’s growth, with this a likely motivating factor in the current <a href="https://www.smartcompany.com.au/growth/economy/34058-bidding-war-emerges-between-saputo-and-bega-over-warrnambool-cheese-and-butter">bidding war for the Warrnambool Cheese and Butter Factory</a>.
Chia says overseas companies have twigged that Australia is in a favourable geographic position to Asia.
“They’ve realised we have an advantage in this sector because we’re so close to these countries where the middle class is booming and there is a great demand for our food services.”
Dairy Australia industry analyst John Droppert previously told SmartCompany dairy processors with exporting links are leading the market.
“At the moment there is tremendous growth in south-east Asia and this year the export story is very strong. There have been a few tough years for many of the key exporters, but there have been supply shortages in China this year and there have been exits among the smaller producers there, which is driving up commodity prices to levels we haven’t seen very often.”
The Australian education services sector, like the food sector, is considered to be of high quality in the Asian markets, and the sector is predicted by IBISWorld to grow at 3.7% over the coming years.
“International students are a major market for this sector, accounting for 24.9% of total enrolments this year,” IBISWorld general manager Karen Dobie said in a statement.
“Following annual growth of 7% prior to 2009, industry growth has cooled off somewhat because of the high Australian dollar, but the anticipated decline of the dollar in the next five years will boost enrolments from foreign students once again.”
While the education and food industries are already attracting demand from overseas, whether or not Australian beer companies are successful overseas is yet to be told.
Chia says beer manufacturers are expected to place an increased focus on exports, as sales in the local market have declined over the past five years.
“Faced with that stagnant or falling demand, particularly for the traditional brands, they’re looking to export markets for growth,” he says.
“They see there being more growth by going overseas. It’s too early to tell whether or not they’ll be successful, but brands like VB are seen as quintessentially Australian and people will pay a premium.”
Chia says one way businesses can succeed in <a href="https://www.smartcompany.com.au/leadership/strategy/31265-exporting-made-easy-a-guide-for-small-business-exporting-to-asia">expanding overseas</a> is to consider merging with a brand in that market.
“Looking at the legal services sector, this is a good case and point, there have been a lot of mergers recently which have seen business start to align themselves to different regions like the UK, US and Asia,” he says.
“A lot of that has been to take advantage of the push into the Asia Pacific region.”
This article first appeared on <a target="_blank" href="https://SmartCompany.com.au">SmartCompany</a>.
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Australia’s top five exporting opportunities revealed

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The growth in Australian average wages has slowed, in some sectors to the lowest rate since 2000, as the mining boom tapers off and the new government puts the squeeze on public servants.
According to the RBA’s Statement on Monetary Policy released yesterday, wages in the June quarter rose 0.7%, bringing yearly wage growth to 2.9%.
This is 0.75% below the average annual growth over the past decade, and while it’s been led by declines in mining and the public service, the slowdown has been broad based.
“Over the year to the June quarter, wage growth was below its decade average in all industries and the dispersion in wage growth across industries was at its lowest level since at least 1998,” the RBA <a href="https://www.rba.gov.au/publications/smp/2013/nov/pdf/price-wage-dev.pdf">said in its report</a>.
“Wage growth in the mining industry has slowed particularly sharply since the beginning of the year, consistent with the decline in the demand for labour in that industry.
“Wage growth in the business services sector (which accounts for around one-fifth of total employment) has also declined markedly, in part reflecting the decline in mining-related demand for business services, and has accounted for a large part of the slowing in aggregate wage growth over the past year.”
Wage growth slowed in all Australian states over the year. In New South Wales, Queensland and Tasmania, wage growth is the slowest it’s been since the early 2000s.
James Morley, a macroeconomist at the University of New South Wales, says slowing wage growth feeds into the RBA’s views about likely future inflation, and makes them less likely to raise interest rates.
But on its own, this isn’t necessarily good news for business, he said.
“Over the past decade, <a href="https://www.smartcompany.com.au/growth/economy/33195-meet-australia-s-most-cashed-up-people-wa-miners-win-the-wage-lottery">wages have grown faster than inflation</a>. You would expect that in a growing economy where workers are becoming more productive.
“The basic economic theory is that wage growth is related to productivity growth. So when you see declining wages, you could worry that it would reflect declining productivity growth, which isn’t good for anyone.
“That means real wages going up isn’t always a bad thing,” he says.
“But if it reflects inflation rather than productivity growth, that is a bad thing.”

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This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
 
 
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Wage growth slows to lowest rate in decade: Why interest rates could stay low

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More than a quarter of those aged 17 to 24 in Australia are not in full-time work or full-time study, according to a Council of Australian Governments (COAG) report released today.
In some states, like Queensland, South Australia and Tasmania, that figure edged closer to one in three. And among young people from disadvantaged backgrounds, that figure was above 40%.
The findings, gleaned from a report on education outcomes across Australia’s states and territories, reveal a difficult transition from school to employment.
The number of young people in full-time work or employment has declined 1.2% since COAG last looked at the issue in the relative boom-times of 2006. Even then, however, the figures showed 26.1% of young people in that age bracket were not in full-time work or education. Now 27.3% of Australia’s young people fit into this category, which the report states puts them at a greater risk of an insecure future.
The falling labour force participation by young people was partially offset in COAG’s figures by a rise in young people in full-time education. The proportion of 17 to 24 year olds engaged in full-time study increased from 28.6% in 2006 to 32% in 2011.
<a target="_blank" href="https://theconversation.com/coag-education-reports-show-early-childhood-and-year-12-are-key-19611">Speaking to The Conversation,</a> Greg Craven, deputy chairman of the COAG reform council and vice-chancellor at Australian Catholic University, said this was of concern.
“What happens to young people when they leave school is crucial to how we meet the future demands of our economy – and to the quality of their lives,” he said, crediting the worsening situation, in part, with the lingering effects of the global financial crisis.
The Australian Chamber of Commerce and Industry said the release highlights “the immediate need for a concerted effort by both state and national governments to boost youth employment and put skills development integrated with work for young Australians back on the national agenda”.
The employer body pointed to the <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/33180-Stop-cutting-apprenticeships,-industry-groups-tell-politicians">removal of government incentives around apprenticeships</a> as having caused a drop in apprenticeship numbers. “The apprenticeship has been neglected by government and needs to be revived so we do not create a lost generation of Australians who missed out on opportunities to develop skills that enable them to secure sustainable employment.”
Young unemployment is regularly higher than Australia’s overall unemployment rate. According to the <a target="_blank" href="https://www.theaustralian.com.au/national-affairs/high-rate-of-youth-unemployment-will-hurt-future-productivity/story-fn717l4s-1226733071548">Australian Bureau of Statistics figures</a>, which measure the number of young people 15 to 19 years old who are not studying and are actively looking for work, 25.5% of young people are unemployed. Total unemployment in Australia is 5.7%.
The issue of youth unemployment came up in the recent federal election campaign. The then-government considered forcing young job seekers into <a target="_blank" href="https://www.smh.com.au/national/alp-eyes-youth-dole-boot-camps-20130727-2qrmk">army-style youth boot camps</a> before giving them the dole, while the Liberal-National coalition went to the election with <a target="_blank" href="https://www.dailytelegraph.com.au/tony-abbotts-message-clean-up-your-acts-or-do-without-dole/story-e6freuy9-1226589493861">a policy</a> to suspend dole payments for those under 30 if unskilled work is available in their area.

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This article first appeared on <a target="_parent" href="https://www.smartcompany.com.au">SmartCompany</a>.
 
 
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Youth unemployment stats: one in four young Australians not in full-time work or study

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Six small far-north Queensland-based steel manufacturers have come upon a novel solution to compete with the larger companies that dominate construction, mining and infrastructure in their area.
Recently, number of large projects in the area have gone to overseas companies to meet their steel capacity, despite this adding to the regulatory and management risk of projects. But currently, the six companies that formed joint venture Australian Steel Fabricators do not have the capacity to bid for the state's largest projects.
So, in Townsville yesterday, Industrial Laser Cutting, Total Fabricators, APG, Fitzroy Steel, Thomas Steel Fabricators, and Cairns Steel Fabricators announced a new joint venture, that'll see the six companies join together to bid and deliver major infrastructure projects in far-north Queensland.
“We've got major projects that are happening in our backyard, but are getting manufactured either overseas, or from some of the bigger southern companies,” Australian Steel Fabricators director Marcel McLeod said.
“We want to compete in that marketplace, so that's why we've come together.”
Coming up with the solution wasn't easy. The companies involved in the venture compete the rest of the time.
It took eight months from first approach to yesterday's launch. McLeod said a lot of the effort pre-launch went into building the relationship between the leaders of the firms, many of whom hadn't had much to do with each other before.
“We'd crossed paths at conferences and the like, but the relationship had to be built, and is still being built.”
A lot of time went into choosing the companies that would be involved in the joint venture.
“There's always a mindset that you are competitors. But when you're focused on the goal, and on the vision, the conversation itself is quite easy to have.
“In the past, there have been other attempts to get something happening along these lines, but that competitiveness... stepped in, and it didn't eventuate. We're one of the first companies to do this in this industry, and it does take a special group of people. You need common values, common goals and common interests.”
The way the joint venture will work is through having a director of each of the representative companies on the board, with an independent chairman. Australian Steel Fabricators will tender bids for major projects, but if it wins one, the parent companies best able to deliver the service will then form a new joint-venture specifically for that project. This is intended to resolve situations where not all the companies involved can commit to working on a particular project.
“We want to show companies it can be done,” McLeod says. “Competitors can come together for a larger cause.”

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This article first appeared on <a target="_blank" href="https://www.smartcompany.com.au">SmartCompany</a>.
 
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Six small Queensland steel manufacturers band together to compete for major projects

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Australia’s wealthiest suburbs have been revealed.
According to a new Australian Bureau of Statistics publication, residents of Toorak in Melbourne’s inner-east made an average total income of $150,548 each from wages and salaries, investments, businesses, and superannuation.
Toorak was followed by three Sydney suburbs. Mosman residents were on $142,773 a pop, Double Bay/Bellevue Hill’s wage-earners took home $141,544 on average, while residents of Hunters Hill/Woolwich sat on $138,007.
Rounding out the top five wealthiest suburbs was Cottesloe in western Perth, where residents made $125,441 on average.
The report also broke down average incomes by state, finding that residents of the Australian Capital Territory had the highest incomes in Australia, with an average of $61,608 per annum.
This was followed by Western Australia where average incomes stood at $58,291, followed by the Northern Territory, with $54,794, with New South Wales close behind on $54,110 and Victorian residents on $51,398.
Residents of Queensland on average made $49,853, South Australians made $47,853, while Tasmanians made $44,018 on average.
Residents in Australia’s cities tended to record substantially higher incomes than those in regional Australia.
If metropolitan areas are stripped out, the highest-paid regional workers were those in the mining centres of Karratha and Port Hedland in Western Australia, who earned $86,826 and $86,079 on average.
Between 2005-6 and 2010-11, average incomes in Australia grew 4.9%.
Western Australia and the Northern Territory recorded the highest levels of income growth, with 6.7% and 5.3% growth respectively.
Incomes in Queensland and South Australia were just above the national average, both growing 5% per annum over the period.
Residents of the Australian Capital Territory and Tasmania saw their income grow at levels just below the national average – 4.8% per year and 4.7% per year on average.
 
<hr>
 This article first appeared on <a target="_blank" href="https://www.smartcompany.com.au">SmartCompany</a>.
<img style="float: left;" alt="jc-insight" height="210" width="150" src="/images/stories/2013/10/30/jc-insight.jpg">PROPERTY INSIGHTS
<a href="https://www.propertyobserver.com.au/residential/income-correlates-to-prestige-house-price-with-mining-towns-the-major-abs-blow-ins/2013102965985?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=jonathanchancellor'spropertyinsights" title="Income correlates to prestige house price, with mining towns the major ABS blow-ins">Income correlates to prestige house price, with mining towns the major ABS blow-ins</a>
"The enduring global financial crisis fallout means many of these well-heeled residents aren’t actually any the wealthier from house price gains given the top end property market still hasn’t recovered."
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Toorak tops list of country's wealthiest suburbs

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This month’s widespread bushfires in New South Wales are likely to end up costing all Australians more in insurance premiums, an expert has warned.
Mark Sherris, a professor of Actuarial Studies at UNSW’s Australian School of Business, said that insurance premiums for homes and businesses have been rising steadily across all Australia over the past few years, and tend to rise even more in areas prone to disaster.
“Businesses and houses in bushfire-prone areas will see an increase in premiums because of this, as has been the case in previous disasters,” he says.
“Insurance companies take losses in times of disasters like this. Some will be covered by their reinsurance, but quite a bit will go towards reducing their profitability. That tends to encourage them to look at their premiums across their business, especially with high-risk areas.”
Even areas not directly at risk have seen higher premiums, because insurance companies try to average losses among all policyholders.
But insurers can differ widely in how they assess risk, which means savvy small businesses can avoid large premium increases by shopping around for the best deal, Sherris adds.
“There are always other alternatives you can look at, through comparison sites or by trying to book a policy online, for example.
“Also, it’s worth looking at the excess on the policy. Often you can limit your costs by agreeing to bear small claims, where you bear the first part of the loss, and then the insurers come in only after a certain point. That can make insurance much cheaper. So it might be worth re-examining your excess.”
Insurance rates in Australia have tended to increase by 5-10%, a figure well above the rate of inflation. In disaster-prone areas, some homeowners and businesses see increases of 30% per year, as happened recently to places burnt down in the Tasmanian bushfires.
Insurers have received around 900 claims to a value of more than $100 million in losses due to the bushfires sweeping across NSW, according to the Insurance Council of Australia. Many more claims are expected.
“Bushfires are a regular event in Australia major fires in the past producing significant losses of property,” Sherris says. “Although floods in recent years and other natural disasters, such as the Newcastle earthquake in 1989 and the Sydney Hailstorms in 1999 have been more substantial in terms of losses, bushfires are regular natural disaster events in Australia.”

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This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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NSW bushfires will result in insurance premium rise

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“I ‘heart’ the Grattan Institute,” Peter Verwer told the room.
At a forum in Melbourne on Thursday night, the CEO of the Property Council of Australia said the Institute was thought-provoking and open to discussion. “But that’s where the good news ends.”
The forum was an opportunity to discuss the findings of <a href="https://www.smartcompany.com.au/finance/tax/34232-government-policies-favour-wealthy-property-owners">this week’s Grattan Institute report</a>, which found that many government policies did little to make housing more affordable for those who do not already own home.
The Institute invited along the body most likely to be critical of such a view. The match-up did not disappoint. Verwer and the report’s author, Grattan Institute Cities Program director Jane-Frances Kelly, clashed over many of the report’s key findings.
Verwer, who jokingly claimed he was at the forum representing “the dark side of the force”, took issue with the report’s claim that homeowners received a $36 billion subsidy from the government.
“That figure is a load of cobblers,” Verwer said. “The report moves from talking of theoretical taxes, then calls them subsidies, then outlays. There are no subsidies. But that line is fed to the media.”
Kelly, however, defended adding up the “generosity of the taxpayer”.
“The numbers are on government budget papers,” she said. “Sure they’re theoretical, but they are counted in the economic accounts.”
Both Verwer and Kelly agreed the tax system surrounding housing was badly designed, and both said the lack of housing supply was a crucial issue keeping home ownership out of the reach of many.
“The relationship between housing supply, economic growth and population grown has been moving out of sync,” Verwer said.
The warring duo also agreed that taxes like stamp duty made little sense, and discouraged people from selling up and moving homes to dwellings more in tune with their needs.
However, they clashed on the issue of negative gearing.
Kelly said that the policy, which allows investors to offset the loan repayments not covered by a rental income against their taxable income, acted to increase the demand for housing stock, pushing prices up, creating a “zero sum game” with taxpayers and those outside the housing market being the losers.
Verwer strongly disagreed, saying that negative gearing, while doing little to create new housing stock, did create new rental stock.
“The earnings from rent are not desirable,” he said. Faced with yields of around 4%, he argued, small and medium-sized investors needed negative gearing to make the ownership of rental stock desirable.
The tax break was used by small investors, he said, claiming that just 10% of those using negative gearing to minimise their tax earn more than $180,000 a year. Because of that deduction, there were 1.8 million homes available relatively cheaply for rent that would otherwise not be available.
“It’s not a monumental benefit anyway,” he said. “On the Grattan Institute’s numbers, it works out to $25 a week in most cases.
“Frankly, it’s the deal of the century [for the government]. If you didn’t have negative gearing, you’d have to invent it.”
But Kelly questioned whether having a high proportion of the population renting was a good thing.
For the past few decades, she said, home ownership had hovered around 70%. It’s only 68.5% overall now, she said, but the figure had plummeted among those under 45 and those on low incomes.
Today, a quarter of Australians rent. The median age of renters is 37.
Despite this, she said, there persisted an attitude that renters were layabouts and vagrants.
“The thought of renting as only a transitional thing is out-dated. People are renting further into their lifetime, and there are more children in rental households.”
Despite this, she said renters here have few rights, with Australia having some of the shortest lease terms in the world and the shortest mandated notice periods.
“Kids benefit from stability,” Kelly said. “And we restrict how much renters can have a sense of creating a home. Things like hanging up pictures, or having pets, are often not allowed.
“That’s the effect of this capital gains culture. We treat tenants almost as an accident of people using that investment instrument. But renters want to be treated with respect. They’re not just an income stream for real people living elsewhere.”

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This article first appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
 
 
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The Property Council strikes back: negative gearing not just for the wealthy council claims

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It’s been just over a year since Airbnb <a target="_blank" href="https://www.propertyobserver.com.au/https://www.smartcompany.com.au/growth/growth-strategy/airbnb-to-launch-australian-site-as-ashton-kutcher-buys-in/201106012776">first started operating in Australia</a>, and already it has generated $214 million in economic activity throughout Sydney from 30,480 guests, according to a BIS Shrapnel study released today.
The economic forecaster teamed up with Airbnb to scrutinise the impact of a year’s worth of visitors to Sydney.
<a target="_blank" href="https://www.smartcompany.com.au/technology/31943-taking-part-in-the-sharing-economy">Airbnb is an online marketplace</a> that connects people who have a spare room or empty house with those seeking a place to stay. One of the surprising things to come out of the study was that tourists who used Airbnb were far from cheap students unable to afford the standard hotel rate.
Instead, people who used Airbnb, an online marketplace that lets homeowners ‘rent out’ their room for a few nights to tourists, tended to be affluent, with 77% holding a university qualification and 75% coming from another country.
They weren’t young either. The average age of Airbnb users was 42, and 42% were visiting Sydney for the first time.
One of the effects of Airbnb’s growth has been a large tourist spend outside the areas where it’s traditionally goes to.
Four in five stayed outside the local tourist areas, and 98% of hosts suggested their guests visit local cafes, restaurants, bars and shops.
“Airbnb is helping more people see Sydney in a whole new light, by visiting new suburbs they may have never seen before," Airbnb Asia-Pacific Regional Director Ole Ruch said.
This is driving the tourist dollar to places it doesn’t traditionally go, an effect that’s strengthened by the high spend of the average Airbnb user.
According to BIS Shrapnel, Airbnb guests spend, on average, $1822 over the course of their trip, compared to the average tourist spend of $1071.
The major winners from Airbnb, apart from the hosts, were cafes, restaurants and bars, BIS Shrapnel economist Kurt Lemke said.
“Almost 30% of every dollar spent went towards those sorts of businesses.
“Following that, retail was the second largest winner – gaining a quarter of the total spend.”
Overall, the percentage of visitors to Sydney using Airbnb was very, very small. But comparing to other major cities that have had Airbnb for a number of years, such as Paris, the economic impact was far larger.
“The economic impact of Airbnb in Paris was ten-fold that of Sydney, and Sydney’s twice the size of Paris,” Lemke said. “We’re operating from a very low base here. There’s still a lot of room to grow.”

<hr>
This article first appeared on <a target="_blank" href="https://www.smartcompany.com.au">SmartCompany</a>.
 
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Airbnb generated $214 million in economic activity in first year: BIS Shrapnel

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The Australian dollar hit a four-month high of $US0.9539 overnight, as the US debt ceiling approaches and credit ratings agency Fitch puts the US on a negative watch warning.
Tomorrow, the United States is scheduled to breach its debts ceiling, which would force the US Treasury to default on its debt.
This would have a dampening effect on the value of the US dollar, which would make the Australian dollar more expensive by comparison, UNSW economist James Morley said.
“An exchange rate back above 97 US cents for the Australian dollar is in theory possible – indeed, if there is a default, it is quite easy to imagine that the Aussie and greenback would hit parity once again.”
Since the start of September, the Australian dollar has appreciated nearly 6% against the greenback. A lot of this could be thanks to American policy, Morley says.
“We were in a situation where financial market expectations about Australian interest rates were the biggest driver of the Australian dollar, which had fallen about 20% off its peak last year.
“Now, however, US monetary policy is driving its rise again.”
But it’s not the only factor. The RBA has had an influence too.
“The RBA had been in an easing cycle, but expectations have shifted away from any further cuts,” Morley says. “The data out of China is stronger than expected, and the RBA is making sounds that they’re not going to ignore big increases in house prices if the economy is weak. They don’t want to fuel an asset-price boom.”
This morning, Fitch warned the US could lose its top-grade AAA credit rating.
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default," Fitch said in a statement.
Morley says the ratings agency is reflecting the “very obvious”, but any move towards a downgrade by it is consequential, as it affects the borrowing costs for the US government.
Overnight, House Speaker and Republican Jon Boehner tried twice to get government funding bills through the lower house, but both bills failed to get enough support to pass.
White House spokesman <a rel="nofollow" href="https://www.reuters.com/article/2013/10/15/us-usa-fiscal-whitehouse-idUSBRE99E0PH20131015">Jay Carney said</a> while progress was being made, “we’re far from a deal at this point”.
An American default would have catastrophic global consequences, but Morley is expecting a deal at the last minute.
“There’s not a lot of incentive for Obama to negotiate at this point, as he’s not going to pay a political cost for what the public sees as a responsibility of Congress. The Republicans don’t want this on their hands, so they’ll leave it until the last moment to back down.”
The Australian dollar pulled back slightly this morning – at 11am, it was buying $US0.95.
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This article first appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
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Dollar hits four-month high as Fitch puts USA on downgrade warning

South East Queensland developer&nbsp;<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a>’s entry into the Gold Coast apartment market has progressed from pipeline to market, with its Chevron Island project Bronze on Chevron now formally available to purchase ahead of a planned 2029 completion.

The 119-apartment development on Mawarra Street marks the Brisbane-headquartered builder-developer’s first residential play in the Gold Coast, following its expansion south from Brisbane and the Sunshine Coast.

<a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-surfers-paradise-qld-4217">Bronze on Chevron</a> comprises a mix of two-, three- and four-bedroom residences, with pricing starting from just over $1.5 million. The project is being delivered under Gardner Vaughan’s fully integrated model, with the group acting as both developer and builder, a structure it has consistently applied across its South East Queensland portfolio.

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Architecture has been designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jeremy-ferrier-landscape-design">Jeremy Ferrier</a>. The building presents as a single-tower scheme, with a focus on maximising outlook across both the Surfers Paradise skyline and the Nerang River.

Apartments have been planned with open-plan living zones extending to generous balconies, a response to the site’s dual-aspect positioning between river and ocean. Interiors follow a restrained coastal palette, with two colour schemes offered, and an emphasis on natural light and cross-ventilation.

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Resident amenity is concentrated across more than 1,250 sqm and includes a resort-style pool, gym, yoga lawn and rooftop entertaining areas. A function space with catering facilities forms part of the upper-level offering, alongside north- and south-facing outdoor areas.

Ground level will incorporate two retail tenancies, intended to extend the existing village character of the surrounding streets.

&nbsp;

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The project sits within walking distance of Thomas Drive’s established dining strip, while maintaining proximity to <a href="https://www.apartments.com.au/developments/surfers-paradise-qld-4217">Surfers Paradise</a> beach and broader Gold Coast amenity. The location, positioned on Chevron Island between the river and coastline, has increasingly attracted mid- to high-density development in recent years as the precinct evolves beyond its low-rise origins.

Gardner Vaughan’s move into the Gold Coast was first signalled in 2025, with the group identifying the region as a natural extension of its operations. Chief Executive Officer Simon Betteridge described the expansion as both “strategic and natural”, citing demand for well-designed apartments in lifestyle-driven markets.

Construction is expected to complete in early 2029.

[smartcode_project_cta:default project_id=107520]

Joel Robinson

Gardner Vaughan brings Bronze on Chevron to market as Gold Coast debut

One of the penthouses at Lily Lane, the latest stage of Carrington Place by Ellipse Property, has set a new local apartment price record.

The four-bedroom residence, purchased by a local downsizer, sold for $5.75 million—around 75 per cent higher than the previous record of $3.3 million.

Over 40 per cent of the first release of apartments at&nbsp;<a href="https://www.apartments.com.au/new-apartments/lily-lane-at-carrington-place-castle-hill-32-carrington-road-castle-hill-nsw-2154">Lily Lane</a> have already been snapped up just six weeks since it launched to the market.

&nbsp;

Located at 32 Carrington Road, <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a> and designed by award-winning architects <a href="https://www.apartments.com.au/architects/ptw">PTW</a>, Lily Lane is directly opposite the Hills Showground Metro station. It offers a total 213 units over two 12-storey towers - a mix of 67 one-bedroom, 100 two-bedroom and 46 three-bedroom apartments - with a ground-floor retail offering.

[smartcode_project:default project_id=151821 project_image_fid=368352]

Blake Schulze, National Director – Residential at <a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a>, says around 44 per cent of buyers are&nbsp;owner occupiers, with 35 per cent being investors and 21 per cent first homebuyers.

“Developments of this calibre are very rare in the Hills District, and Lily Lane’s sales success demonstrates the depth of demand for over-sized apartments that genuinely compete with freestanding homes," Schulze says.

"We are seeing particular demand from downsizers who want to remain in the area but transition into spacious, high-quality apartment living."

On the penthouse sale, it says it shows buyers&nbsp;are prepared to pay a premium for scale, quality, and direct access to the Metro.

[smartcode_project:default project_id=151821 project_image_fid=368351]

One-bedroom apartments are sized from 50-72 sqm with prices starting at $745,000, while two-bedrooms are priced from $990,000 with sizes from 75 to 132 square metres. Three-bedroom floorplans are sized between 97 and 182 sqm,, with prices starting at $1,395,000.&nbsp;

The three remaining penthouses, spanning up to 262 sqm, are priced from $2.9 million.

Over 75 per cent of apartments include dedicated studies, multipurpose rooms or family rooms, with select layouts offering walk-in pantries and laundries. Apartments are appointed with premium Miele appliances including ovens, washing machines, dryers, gas cooktops and dishwashers, while larger residences also incorporate integrated Miele microwaves, Fisher &amp; Paykel integrated refrigerators and five-burner Miele cooktops.

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Lily Lane will be constructed by award-winning iCIRT-rated builder <a href="https://www.apartments.com.au/builders/decode">Decode Group</a>, with construction to commence in mid-2026 and expected to complete early 2029.

Carrington Place comprises more than 800 apartments and is being delivered across multiple stages, with completion expected in 2032. Integrated with neighbouring bushland, the project will feature over 20,000 sq, of outdoor recreational area, including a one-kilometre boardwalk to Fred Caterson Reserve.&nbsp;

The Hills Showground Metro Station is just a two-minute walk away, offering fast connectivity to Sydney’s CBD, North Sydney, Chatswood, Macquarie Park and Norwest Business Park.

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Ellipse sets Castle Hill apartment record with $5.75 million Lily Lane penthouse sale

Fresh off completing its Delano Crows Nest development, Lindsay Bennelong has lodged plans for its next project, this time turning its attention back to the beach.

The developer, started 20 years ago by Clarendon Homes founder Peter Campbell, is proposing a 37-apartment scheme at <a href="https://www.apartments.com.au/new-apartments/17-25-ashburner-street-manly-nsw-2095">17-25 Ashburner Street</a>, Manly, positioned between the southern end of <a href="https://www.apartments.com.au/developments/manly-nsw-2095">Manly</a> Beach and East Manly Cove.

Lindsay Bennelong called on local architecture firm Platform Architects to design the new building, given their success at Finn, Lindsay Bennelong's current luxury apartment project on North Steyne.&nbsp;

According to the Design Verification Statement by Bridie Gough of Platform Architects, the proposal “relates to the current context but also the desired future character of taller buildings suitable to the new planning controls.”

The site has been identified as a Low to Mid-Rise Housing (LMR) location, given its position within 400 metres of the Manly Town Centre E1 Business Zone. The LMR controls are intended to unlock additional housing supply in well-located areas close to public transport, allowing developers to seek increased height limits to support greater density.

“The proposal seeks to provide this increased level of housing whilst being respectful of some of the smaller scale buildings also nearby,” the statement reads.

Lindsay Bennelong Development Director Leigh Manser said the project has been carefully aligned with the intent of the LMR controls. The proposal will significantly increase housing yield on the site, replacing four houses and 10 apartments, comprising 25 bedrooms, with 37 new apartments delivering a total of 94 bedrooms, whilst remaining compliant with the LMR controls.

“Sydney is in a severe undersupply, and delivering more dwellings and more bedrooms than what currently exists is exactly what the LMR policy is designed to activate,” Manser said, noting that nine of the apartments will be allocated as affordable housing for frontline workers.

“We have already commenced discussions with our community housing provider to determine the rental levels that frontline workers can realistically afford in this location,” he said. “These will need to sit well below the standard affordable housing benchmark of 20 per cent below market rent, and that has been factored into our feasibility and pricing.”

<img alt="Manly" data-entity-type="file" data-entity-uuid="ad03000f-19f9-48b4-b27d-e85ca800a1da" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-30%20at%208.41.59%E2%80%AFAM.png?VersionId=a.txHwCZgbCInlQ6QXbIrI.umvW1T.r8" />

The design of the building incorporates a wave-like indentation running through the façade, referencing the nearby coastline and anchoring the building within its local context.

The&nbsp;Design Verification Statement says careful consideration has been given to the articulation of the building, ensuring the bulk is broken down to a more human scale through a defined four-storey podium."

The scheme includes a mix of one-, two- and three-bedroom apartments, as well as a full-time building manager's office and wellness facilities including a sauna and a gym.

“The design ensures a high level of amenity, with apartments offering generous private open space, many with expansive views, and all with comfortable proportions."

<img alt="Bennelong" data-entity-type="file" data-entity-uuid="6a7f2812-72a1-4959-84b0-997e8cd88aed" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-30%20at%2010.15.50%E2%80%AFAM.png?VersionId=6iMxU3MkXmHVHAoNhYBjnqgka8CUZNbk" />

<a href="https://www.apartments.com.au/developers/lindsay-bennelong-developments">Lindsay Bennelong</a>&nbsp;is currently developing Finn Manly, just four full-floor luxury apartments on North Steyne. They recently welcomed residents to its 81-unit Delano Crows Nest development, a&nbsp;carefully scaled infill project designed to bridge&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a>’s lively village centre with its surrounding heritage streets.

Designed by&nbsp;<a href="https://www.apartments.com.au/architects/ajc-architects">AJC Architects</a>,&nbsp;<a href="https://www.apartments.com.au/new-apartments/delano-crows-nest-27-57-falcon-street-crows-nest-nsw-2065">Delano</a>&nbsp;is arranged across three low-rise buildings, incorporating a mix of one, two, and three-bedroom apartments alongside a limited number of townhomes addressing Hayberry Lane. The architectural approach drew on the area’s Art Deco lineage, reinterpreted through contemporary detailing and framed by landscaped communal gardens.

The developer also has a development site in Maroubra.

First look: Lindsay Bennelong's new Manly apartment development revealed

Fifty-nine residences across 37 levels. No more than two per floor. With 80 per cent now sold, what remains at <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-broadbeach-22-mary-avenue-broadbeach-qld-4218">Madeline by Mosaic</a> is a short list.

Madeline was always conceived at a scale that sits outside the normal register of Gold Coast apartment living. The residences are half- and full-floor configurations, with the largest spanning more than 400 sqm, dimensions that place them closer to the penthouse end of the market regardless of where they sit in the building.

That scale is the organising principle of everything else: how the floorplans are laid out, how the materials read, how the connection between inside and outside works.

[smartcode_project:default project_id=150135 project_image_fid=355941]

The interiors were developed in collaboration with <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a>, the architecture practice&nbsp;<a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic</a> brought in as design partner for the first time on this project. The palette runs to natural stone, textured timbers, and soft metallics, materials chosen as much for their tactile quality as their appearance.

Light cleverly shifts across surfaces through the day, and the design is explicit about wanting that to be noticed. Full-height glazing runs across the primary living areas, and where the building faces east toward the ocean, those walls of glass are doing real work: framing a view corridor that the site's position directly opposite Broadbeach State School's playing fields keeps permanently open.

That outlook is the site's most consequential asset. In a suburb where new towers continue to rise, a protected view line is genuinely rare, and the Mary Avenue address secures it. Residents at Madeline will look out over open parkland rather than the rear of another building, a distinction that becomes more meaningful with each new development approved nearby.

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The private outdoor spaces are sized to match the residences themselves. Terraces on the upper levels frame uninterrupted ocean panoramas, and the planning ensures that living areas extend into those outdoor zones rather than treating them as separate attachments. The flow between the two is part of the design intent, not an afterthought.

Inside, the finish specification reflects the same approach. Rich stone benchtops, warm timber joinery, bespoke hardware, each element specified to hold up over time rather than read as a moment in a particular trend cycle.

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Beyond the residences, the amenity offering extends that register. A lap pool and sun deck anchor the outdoor space, alongside a magnesium pool, cold plunge, steam room, and sauna.

A commercial-grade gymnasium, residents' lounge, library, and boardroom round out a programme that functions more like a private members club than a standard building amenity floor.

Construction has commenced under Mosaic's in-house building arm, with completion scheduled for late 2028.

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Madeline by Mosaic delivers penthouse-level living across every apartment

Developer Fortezza Group is the latest to take its new apartment development, <a href="https://www.apartments.com.au/new-apartments/the-belvedere-5-7-church-street-nelson-bay-nsw-2315">The Belvedere in Nelson Bay</a>, to the NSW Government.

Fortezza, predominantly a South East Queensland developer, is the latest to apply for State Significant Development&nbsp; status through the NSW Government's Housing Delivery Authority, a pathway becoming favoured by developers to speed up the approval process.

They are planning 57 two- and three-bedroom apartments across 5-7 Church Street and 42 Donald Street, near d'Albora Nelson Bay Marina. The diverse apartment mix has sizes from just over 80 sqm to the largest three-bedroom penthouses that reach nearly 200 sqm.

<img alt="Fortezza" data-entity-type="file" data-entity-uuid="090360e1-66d7-43ad-b686-aba81f173bf2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-29%20at%2010.22.40%E2%80%AFAM.png?VersionId=DMqF96eBZolqSAAAcugX0l66ueWng66m" />

Fortezza calls the project a "piece of Istria in Nelson Bay,"&nbsp;referring to the largest peninsula in the Adriatic Sea, shared by Croatia (90%), Slovenia, and Italy, which is known for its Roman history, Venetian-style coastal towns and inland hilltop villages.

They say the The Belvedere is strategically positioned at the apex of Nelson Bay, offering unrivalled views of the ocean, the bay and captivating topography of the area.

"Our commitment to maintaining the integrity of every view and sight line has been relentless," Fortezza Group says.

"Through extensive modelling and analysis, we ensure that each apartment enjoys the natural beauty of Nelson Bay, regardless of future developments. Each design element is carefully curated to harmonise with our European heritage, drawing profound inspiration from the Roman architectural marvels in Istria. The arches, the cascades of greenery and the stonework that define our project pay homage to the structures that once exemplified Roman grandeur."

Residents will have access to a pool, communal green spaces, an office and a coffee shop.

Myriam Robin

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