The Gold Coast economy has grown by 25 per cent since 2020/21 to surpass $55 billion, but perhaps the more significant story is what sits behind the headline number.

For decades, the Gold Coast has been viewed through the lens of tourism, lifestyle and population growth. The latest State of the City Report suggests that perception is increasingly out of step with reality.

Released by Invest Gold Coast, the report ranks the Gold Coast as Australia's largest non-capital city economy and, perhaps more notably, second nationally behind Sydney for Economic Complexity, a measure that assesses the diversity and sophistication of an economy.

It's a result that places the Gold Coast ahead of Melbourne, Brisbane, Perth and Adelaide, highlighting the extent to which the city's economic base has broadened beyond its traditional industries.

Today, the Gold Coast supports more than 350,000 jobs, is home to over 83,000 businesses and generates $19 billion in annual exports. Manufacturing now accounts for 62 per cent of international export growth, while sectors including health, education, advanced manufacturing, technology and professional services are becoming increasingly important contributors to the local economy.

[smartcode_project:default project_id=150017 project_image_fid=372547]

Gold Coast Mayor Tom Tate said the report confirmed the city's evolution into one of Australia's most significant economies.

"The Gold Coast economy continues to grow at an incredible pace. This is no surprise to those of us who have watched the evolution up close," Mayor Tate said.

"As one of the most entrepreneurial, investment driven and opportunity focused economies in the country our ambition has been realised and possibilities are endless.

"The Gold Coast has built a reputation as the city that says yes. We say yes to investment, yes to opportunity and yes to people who want to build something.

"It's this mindset helping us drive major growth across health, advanced manufacturing, screen production, marine, technology and the knowledge economy."

[smartcode_project:default project_id=149670 project_image_fid=360975]

While population growth has been one of the defining stories of the past decade, the report points to a broader economic transformation taking place.

The city's knowledge economy now contributes $7.9 billion annually and supports around 31,000 jobs, while the health and wellbeing sector contributes $5.2 billion and employs more than 42,000 people. Together, the six priority sectors identified in the report account for almost $24 billion in economic output and more than 145,000 jobs.

One of the strongest examples is the Gold Coast Health and Knowledge Precinct at Southport. The 200-hectare precinct now contains more than $5 billion worth of health, education, research and innovation infrastructure and supports over 16,000 jobs.

The report also highlights the growing role of advanced manufacturing, particularly in aerospace, defence and modular construction.

Gold Coast-based Gilmour Space Technologies recently became the first Australian commercial company to attempt an orbital launch, while companies including Modscape and ModnPods are helping establish the Yatala-Stapylton corridor as one of Australia's fastest-growing advanced manufacturing hubs.

The city's entrepreneurial culture is also translating into business growth.

Since 2019/20, the number of businesses operating on the Gold Coast has increased by 22 per cent, while firms employing more than 200 people have grown by 80 per cent. The report suggests the next challenge is converting more local start-ups and medium-sized businesses into nationally significant companies.

Development activity remains another key indicator of confidence.

There are currently more than $23 billion worth of major projects underway across the Gold Coast, supported by a record 75 active cranes, a figure that now exceeds Brisbane and represents a 150 per cent increase since 2016.

[smartcode_project:default project_id=112024 project_image_fid=343235]

Importantly, the report notes the next phase of investment will need to extend beyond residential development.

While 93 per cent of crane activity is currently tied to housing, Invest Gold Coast argues future investment will increasingly need to focus on cultural, civic, infrastructure and industry-enabling projects that strengthen the city's long-term economic resilience.

Invest Gold Coast Chair Will Hodgman said the city was now benefiting from years of economic diversification.

"What is happening on the Gold Coast is the result of the city's economic base broadening, fuelled by industries with long-term, high-growth potential," Mr Hodgman said.

"This is no longer a secondary Australian economy, the Gold Coast is becoming a globally connected city with deeper capability across health, knowledge and creative industries, advanced manufacturing, technology and exports."

[smartcode_project:default project_id=108274 project_image_fid=365786]

Looking ahead, the Gold Coast's population is projected to exceed one million residents by 2046.

For a city that was once largely defined by tourism and lifestyle, the latest figures suggest the Gold Coast is becoming something more significant, one of Australia's most diverse and economically sophisticated urban economies, and increasingly one that national and international investors can no longer afford to overlook.

Joel Robinson

75 cranes, $23 billion pipeline and a $55 billion economy: Inside the Gold Coast economic boom

Ron Bakir's Homecorp has sold more than 75 per cent of the apartments in its wellness-driven Florence Residences in Surfers Paradise following its first weekend release.

The <a href="https://www.apartments.com.au/new-apartments/florence-residences-24-monte-carlo-avenue-surfers-paradise-qld-4217">26-storey project on Monte Carlo Avenue</a>, which commenced construction earlier this year, has seen a flurry of buyers secure their slice of the Gold Coast's latest wellbeing-focused offering in one of the nation's most competitive property markets.

Since the pandemic, the Gold Coast's population has grown by more than 11 per cent, a rate approximately four times faster than Sydney's, driven largely by lifestyle changes and interstate migration. While buyer activity has moderated in some markets nationally, demand for newly built dwellings on the Gold Coast continues to gain momentum as purchasers increasingly prioritise lifestyle, amenity, wellbeing, liveability and long-term investment potential.

&nbsp;

[smartcode_project:default project_id=150414 project_image_fid=372743]

Homecorp CEO Ron Bakir says buyers today are looking for more than just a home.

"What we are seeing is a shift in how people define value in property," Bakir says.

"What attracts residents to new developments is a desire for more than just a residence. They are looking for a place that complements their lifestyle, supports their wellbeing and reflects the way they want to live into the future.

"Lifestyle, longevity, proactive health, wellbeing, connection and a sense of community are increasingly shaping purchasing decisions, particularly on the Gold Coast, where these factors continue to be a major drawcard."

[smartcode_project:default project_id=150414 project_image_fid=372744]

Bakir says Homecorp is responding to this shift through an approach that places greater emphasis on design, amenity and experience working together to create places that feel considered, connected and enduring in value.

Inspired by Eastern European design, Florence Residences will comprise 120 apartments alongside a private residents-only wellness club featuring a resort-style rooftop pool, hot and cold plunge pools, a spa retreat, contemporary gymnasium, and a spacious yoga and Pilates studio.

The development will also feature a residents-only lounge with private dining facilities and a rooftop bar, premium outdoor entertaining areas, a hotel-style lobby lounge, generous bike parking, and pet-friendly amenities including a heated dog wash.

[smartcode_project:default project_id=150414 project_image_fid=372742]

A limited number of apartments remain available, with an exclusive collection of four-bedroom sub-penthouses set to be released in the coming months.

Florence is one of the latest additions to Homecorp's expanding multi-billion-dollar property portfolio, which also includes plans for a <a href="https://www.apartments.com.au/news/qld/homecorp-lodges-plans-for-260-million-moroccan-bathhouse-inspired-tower-in-budds-beach">$260 million development in Budds Beach</a> tailored to the growing wellness market.

A development application has been lodged for a 27-storey, 156-residence tower at 8–10 Acacia Avenue and 25–27 Oak Avenue, featuring a residents-only Moroccan spa-inspired sanctuary.

Apartments at Florence Residences are priced from $1,249,000, with construction expected to be completed by late 2027.

[smartcode_project_cta:default project_id=150414]

Buyers rush to Homecorp's Florence Residences as Gold Coast wellness trend gains momentum

The NSW Government has expanded its $1 billion Pre-sale Finance Guarantee program, broadening access for affordable housing providers and smaller residential developments as it seeks to accelerate housing delivery across the state.

The Minns Government says the program has already helped bring forward more than 600 homes across Sydney and regional NSW since launching in September 2025, with similar models now adopted in South Australia and Western Australia.

The latest changes, announced by Treasurer Daniel Mookhey and Minister for Planning and Public Spaces Paul Scully, are designed to improve access to finance for projects that have planning approval but are struggling to secure funding.

Among the key changes is an expansion of support for community housing providers. The program will now support up to 100 per cent affordable housing projects valued at up to $30 million when delivered by not-for-profit providers, while support for larger affordable housing developments will increase for projects worth up to $80 million.

The government says the changes will help accelerate the delivery of housing for low-income workers, older people, people living with disability, and those at risk of homelessness, while reducing reliance on direct grants or subsidised loans to bridge funding gaps.

The eligibility criteria for smaller residential developments have also been broadened. The previous $5 million minimum project value threshold has been removed and replaced with a requirement that projects deliver at least four homes.

Support has also increased for projects delivering fewer than 20 homes, with the guarantee now able to cover up to 75 per cent of dwellings in a development, capped at $30 million per project.

The changes are expected to particularly benefit smaller-scale and regional developments, which often face greater challenges meeting pre-sale requirements imposed by lenders.

Treasurer Daniel Mookhey said the scheme demonstrates how government can use its balance sheet to stimulate housing supply without relying solely on taxpayer-funded grants.

"The Pre-sale Finance Guarantee shows how this Government is using its balance sheet to reduce risk and unlock private investment, enabling new homes to move from design to construction faster," Mookhey said.

"This landmark reform allows us to deliver homes for working families at a lower cost to taxpayers, while also maintaining strong financial discipline."

Planning Minister Paul Scully said the program had already proven effective in bringing stalled projects to market.

"The Pre-sale Finance Guarantee has already proven it can unlock stalled projects and accelerate housing delivery by giving lenders the confidence they need to back good developments," Scully said.

"These changes will allow more affordable housing and smaller developments to access support so more homes can be built faster where communities need them most."

Housing Minister Rose Jackson said the expansion would help community housing providers overcome financing barriers that often delay projects.

"We know community housing providers are ready to build more homes, too often they're held back by barriers to finance," Jackson said.

"Expanding the Pre-sale Finance Guarantee helps remove those barriers so more affordable homes can get off the ground sooner."

The announcement was welcomed by the Property Council of Australia, which has long advocated for measures aimed at improving project feasibility and access to finance.

Property Council NSW Executive Director Katie Stevenson described the expansion as a practical intervention that addresses one of the most immediate constraints on housing delivery.

"This is exactly the kind of practical intervention we need right now, focused on getting projects out of the ground, not just approved," Stevenson said.

"It builds on a model the Property Council has worked closely with government to develop following calls for such a scheme ahead of last year's NSW Budget, so it's great to see it being expanded."

Stevenson said the reforms would help unlock projects that are ready to proceed but have been delayed by financing challenges. However, she noted that broader feasibility issues remain a significant barrier to increasing housing supply.

"The biggest challenge in NSW housing today is delivery. Too many projects have planning approval but are simply not financially viable to proceed under current settings," she said.

Speaking at the Property Council's NSW Housing Summit, Housing Minister Rose Jackson acknowledged that feasibility and financing pressures continue to constrain housing delivery, while reaffirming the government's commitment to work with industry on solutions.

Stevenson said the government's recognition of those challenges was encouraging ahead of next week's state budget.

"It's positive to see the government clearly recognising that feasibility pressures are now a binding constraint on supply," she said.

"With the Budget just days away, the focus must be on backing delivery, making sure projects stack up, finance can flow, and more homes can move from approval to construction."

The expanded Pre-sale Finance Guarantee forms part of the NSW Government's broader housing agenda, which also includes planning reforms, the NSW Housing Pattern Book, and a series of rezonings intended to increase housing capacity across the state.

NSW expands Pre-sale Finance Guarantee to unlock more affordable and regional housing

Design-led developer-builder Lowe Living has unveiled its latest residential development, Jardin House, marking its first foray into Melbourne's blue-chip City of Boroondara.

Located a short walk from Camberwell Junction, <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House</a> has been designed to appeal to affluent local downsizers and established families seeking a low-maintenance alternative to the large homes that have long defined Camberwell and surrounding suburbs.

The project will comprise a collection of two and three-bedroom apartments ranging from 92 sqm to 280 sqm, alongside a limited number of penthouse residences featuring rooftop terraces spanning more than 100 sqm, with optional private pools.

&nbsp;

[smartcode_project:default project_id=146717 project_image_fid=372212]

Lowe Living Co-Founder and Managing Director Tim Lowe said Camberwell represented a natural next step for the developer as it expands into some of Melbourne's most tightly held residential markets.

"Jardin House is an important project for our team as it marks the next evolution of our portfolio into different well-established blue-chip pockets of Melbourne," Lowe said.

"Camberwell, with its incredible walkability, family-led neighbourhood feel and superb access to education and transport, makes it a natural choice for us."

[smartcode_project:default project_id=146717 project_image_fid=372227]

Designed by Tristan Wong Architects, with interiors by Hecker Guthrie and landscaping by Acre, the development takes inspiration from the Art Deco architecture that remains a defining feature of many of Camberwell's established streets.

A curved facade, arched openings, textured brickwork and sculpted forms reference the suburb's architectural heritage, while extensive landscaping softens the building's presence and creates a strong connection to the surrounding tree-lined streetscape.

The project will be set behind a secure gated entrance, with residents arriving through landscaped gardens designed to create a transition between the public realm and private residences.

Inside, the residences feature natural stone and timber finishes, full-height glazing, Miele appliances and generous open-plan living areas designed for long-term owner occupation.

[smartcode_project:default project_id=146717 project_image_fid=372225]

While the apartments themselves have been designed to attract discerning owner-occupiers, it is the amenity offering that sets Jardin House apart from many other boutique projects currently launching across Melbourne.

The centrepiece is a 350 sqm private bathhouse curated in partnership with Aurora Spa &amp; Bathhouse founder Lyndall Mitchell.

The wellness precinct includes mineral pools, hydrotherapy experiences, a Himalayan salt room, sauna, steam room, cold plunge pools and dedicated relaxation spaces, creating what Lowe Living describes as a private wellness retreat exclusively for residents.

[smartcode_project:default project_id=146717 project_image_fid=372222]

The collaboration follows Lowe Living's recent partnership with Aurora at Maison Savoy in Brighton, although Jardin House is the first project to incorporate both indoor and outdoor wellness experiences.

Emma Lowe, Co-Founder and Managing Director of Lowe Living, said wellness was becoming an increasingly important consideration for apartment buyers.

"Collaborating with Lyndall Mitchell from Aurora Spa &amp; Bathhouse for a second time is an intentional nod to creating residences that are more than just homes, but a way to enrich the lives of our residents through wellness and longevity," Lowe said.

The amenity offering is complemented by a Technogym fitness studio, residents' lounge, private dining spaces and concierge services.

The launch comes as developers increasingly target Melbourne's established eastern suburbs, where rising land values, ageing housing stock and growing downsizer demand are creating opportunities for boutique apartment projects.

Lowe said the company expects significant generational wealth transfer across suburbs such as Camberwell in coming years, creating further demand for luxury apartment living.

"Camberwell is a blue-chip suburb where homes regularly transact for multiple millions of dollars," he said.

"The generational change of wealth in these locations expected in the coming years is significant, so we see an opportunity to create exclusive residences that appeal to older families and downsizers in order to meet this demand."

Apartments at Jardin house start from $1,195,000. The project forms part of Lowe Living's near-$1 billion portfolio of new developments across Melbourne.

[smartcode_project_cta:default project_id=146717]

Lowe Living launches Jardin House in Camberwell

As <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> continues its transition from a commercial centre into a more layered residential and lifestyle precinct, a new generation of apartment developments is reshaping expectations around scale, amenity, and long-term liveability.

Improved transport connections through the Victoria Cross Metro, continued investment in dining and public spaces, and a constrained supply of new luxury apartments have sharpened demand for homes that combine proximity to the CBD with the privacy and outlook traditionally associated with harbourside houses.

At 177 Walker Street, <a href="https://www.apartments.com.au/developers/aland">ALAND</a>’s new apartment development <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> enters the market with a distinctly residential approach to high-rise living. The 30-level tower will deliver 161 residences, ranging from one-bedroom apartments through to sub-penthouses and a full-floor penthouse, all oriented to capture uninterrupted views across Sydney Harbour, the Opera House, and out toward the Pacific Ocean.

[smartcode_project:default project_id=134323 project_image_fid=6395]

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project takes advantage of the site’s natural topography and elevated position above the harbour. Rather than relying on density alone, the architecture focuses on outlook, orientation, and spatial flow, with every apartment occupying a corner position to maximise natural light and cross ventilation.

Rothelowman says the site itself shaped much of the architectural response.

“The site has a long history in terms of its inevitable transformation and when we came in, we took inspiration from the idea of reestablishing a sense of the site’s natural terrain and fall. Our scheme aims to integrate with the terrain and the landscape, using the undulating site to slowly reveal glimpses and views of the harbour. The rotation of the tower off grid means every apartment has a view and is naturally cross ventilated. The building's colour palette is quintessentially Sydney, with bronze and sandstone and a luminescent green colour in the glass, making it very earthy and grounded in its location.”

[smartcode_project:default project_id=134323 project_image_fid=6399]

Inside the residences, the emphasis moves toward larger-format living typically associated with standalone homes. Kitchens sit at the centre of the apartments, connecting directly to open-plan dining and living areas before extending outward into expansive winter gardens and balconies. Calacatta marble, bespoke joinery, integrated appliances, and custom metal detailing are used throughout, while three distinct interior palettes, Terrace, Opera, and Harbour, allow buyers to personalise the spaces without compromising the architectural consistency of the project.

The larger residences place particular attention on separation between entertaining and private zones. In many apartments, master suites occupy the outer corners of the floorplates, allowing bedrooms to benefit from floor-to-ceiling glazing and harbour outlooks independent of the living spaces. Dressing rooms and ensuites continue the material palette through fluted detailing, freestanding baths, and layered stone finishes.

Rothelowman says the design intent centred on creating homes that feel enduring rather than transient.

“Our philosophy is all about the way people live in these spaces, and we wanted to create homes that reflect the quality of life in this unique Sydney location. The apartments showcase expansive living spaces that are generous, sophisticated, and bold, with the ability to connect with views throughout each apartment.”

[smartcode_project:default project_id=134323 project_image_fid=353235]

A separate four-storey amenity building known as The Pavilion expands the residential offering beyond the apartments themselves. Positioned alongside the tower, the building consolidates wellness, recreation, and social spaces into a dedicated resident retreat. Facilities include a 20-metre rooftop pool and sundeck, sauna, spa, ice bath, wellness studio, gymnasium, concierge service, wine cellar, residents’ lounge, private dining spaces, and dedicated co-working areas with meeting rooms and boardroom facilities.

The amenity mix reflects the buyer profile emerging in North Sydney, where owner-occupiers and downsizers are increasingly prioritising convenience, apartment scale, and long-term usability over purely investment-driven decisions.

The Walden also represents a significant milestone for ALAND, marking the company’s first major move into Sydney’s inner-city luxury apartment market after more than two decades delivering large-scale residential communities across Greater Sydney. Founder Andrew Hrsto says the Walker Street site stood apart because of both its positioning and its rarity.

[smartcode_project:default project_id=134323 project_image_fid=6390]

“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic.”

At launch, The Walden recorded more than $103 million in sales, with buyers drawn to the project’s harbour positioning, apartment scale, and proximity to the Metro, which now connects North Sydney to Barangaroo in three minutes and Martin Place in five.

ALAND has commenced construction, and is expecting a completion date in 2028.

[smartcode_project_cta:default project_id=134323]

The Walden pairs house-scale living with North Sydney connectivity

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

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

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It's rare to see the Left and the Right reaching consensus, but it appears nothing can pull Australians together as much as the threat posed by Chinese property buyers.
Today Paul "Magic Water" Sheehan offered his take on the impact of Chinese buyers on the Sydney residential property market. He <a href="https://www.smh.com.au/comment/cashedup-chinese-are-pricing-the-young-out-of-the-property-market-20140309-34f9k#ixzz2vVe3TEVC" target="_blank">warned darkly in today's Sydney Morning Herald</a>:
"The growth of the Chinese middle class has been so explosive, and on such a scale, that it has the capacity to affect Australia in ways that will need to be controlled if some trends continue to accelerate. Notably home buying."
Sheehan, it seems, is was most worried about young people:
"First-time buyers, young buyers, are now caught in a pincer movement between superannuation and Chinese investment."
A pincer movement. Wow. But Sheehan was merely echoing Clive Hamilton, who recently <a href="https://www.theguardian.com/commentisfree/2014/feb/18/wealthy-chinese-buyers-are-making-sydneys-housing-problem-worse" target="_blank">wrote an article for The Guardian</a> originally headlined "Wealthy Chinese buyers are making Sydney’s housing problem worse". Hamilton's piece commenced:
"Every weekend in Sydney, young Australian couples are turning up at auctions excited at the prospect of finally owning their own home, only to find that other bidders are wealthy foreign buyers with money to burn."
"Cash pouring in from China" was responsible, Hamilton claimed -- a "flood of unregulated investment". It touched on the same themes as Sheehan's piece later would: young people priced out of the market, official indifference, how Hong Kong doesn't let the same thing happen.
But the headline on Hamilton's piece was changed to "Foreign demand is making Sydney’s housing problem worse" after an outcry from readers. The Guardian offered an apologia almost as long as the article itself admitting a number of problems with Hamilton's article, although "the author stands by his opinion".
Hamilton and Sheehan aren't the only ones, though. This "flood" of unregulated money from China is becoming a staple of media real estate coverage, especially in Fairfax papers, which have carried articles about the Chinese property "splurge" as real estate prices, especially in Sydney, have soared.
Well, let's try some facts, courtesy of the Foreign Investment Review Board's <a href="https://www.firb.gov.au/content/Publications/AnnualReports/2012-2013/_downloads/FIRB-Annual-Report-2012-13.pdf" target="_blank">2012-13 annual report</a>, which has data on who is buying residential property. Total foreign investment in residential property in Australia fell in 2012-13, from $19.7 billion to $17.2 billion. That was because of a fall in "off the plan" purchases; purchases of existing dwelling stock increased to $5.4 billion (it had fallen in 2011-12), and purchases of vacant land had more than doubled to $1.4 billion. Victoria and New South Wales dominate as destinations for foreign investment in residential property, garnering around $5.8 billion and $5.5 billion respectively.
But importantly, foreign residential real estate investment skews toward new dwelling construction: in 2012-13, despite the fall-off in off-the-plan purchasing, $8.64 billion in foreign investment was for new dwellings, with a further $2 billion for other development, while investment in existing dwellings was $6.4 billion. The predominance of new dwelling investment in foreign residential investment is dramatically at odds with the rest of the market, where new dwelling investment is a fraction of housing finance.
Where does the investment come from? Residential property investment from China is substantial. Chinese buyers are the biggest foreign real estate investors: in 2012-13 they purchased just under $6 billion in real estate -- but that includes commercial real estate, which is twice as large a target for foreign investment as residential real estate. But Canada and the United States aren't far behind the Chinese; Canadians invested just under $5 billion in Australian real estate, and Americans $4.4 billion. Singapore was next with $2 billion, then Malaysia with $1.6 billion; in between were the British, on $1.7 billion.
So, even arbitrarily and xenophobically combining all Chinese, Singaporean, Hong Kong and Malaysian real estate investment under a "Chinese" stereotype means "China" is only just ahead of North American real estate investment (and again, remember that these figures include commercial real estate). And if you lump in the Brits and the Kiwis, investment from "white" foreigners exceeds that from "Chinese" foreigners.
Read many stories about white people driving up Sydney real estate prices? Of course not. Hard to get a good anecdote about white people showing up to an auction and bidding successfully for a property. "Chinese" buyers, even if their families have lived in Australia for a century, are easier to spot and complain about.
But let's assume that all "Chinese" property investment -- just over $10 billion of it in 2012-13 -- was for residential property, which we know isn't true. How much of an impact does that have? The total value of housing finance commitments (which isn't all housing purchases anyway) was $264 billion in 2012-13, so our "Chinese" stereotype is investing less than 4%.
And even if you think 4% is too high and is placing too much pressure on prices, ask sellers in Sydney and Melbourne what they think of foreign residential buyers. Chances are they're perfectly happy to be getting higher prices.
There are legitimate grounds for concern about housing affordability, but they've got little to do foreign property buyers, whether Chinese, Canadian or any other ethnicity. They're related to land supply, planning laws, development approval processes, NIMBYism, the balance between local councils and developers financing the necessary infrastructure for new housing, and tax expenditures that encourage investment in existing housing stock. The best way to improve housing affordability -- assuming that's what you really want to do, given ultimately that will reduce the rise in value of the key asset of most voters -- is to create incentives for investment in building new housing stock.
And oddly enough, at the moment it's foreign investors who are doing that, not the rest of us.
This article first appeared on <a href="https://www.Crikey.com.au" target="_blank">Crikey</a>.
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bkeane-XQ2u7CA6bB

Is there a Chinese real estate invasion? Not according to the data, fellas

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This weekend the Western Australian property developer launched Toccata (pictured), the latest development in its four building Symphony City project in East Perth.
The new development from Finbar is located on Terrace Road in East Perth, one street back from the waterfront along the Swan River. Finbar’s Symphony City comprises so far of the newly completed Adagio and Toccata, both residential developments.
The site will also include the yet to be launched mixed-use Concerto and Harmony developments. Finbar paid $37.48 million for the former ABC site in 2008, obtaining a minor town planning amendment scheme in a joint venture with Ventrade Australia, a subsidiary of the Singaporean Chuan Hup Holdings.
Last week, the City of Perth’s Assessment Panel approved plans for the $220 million Concerto development on the site. Concerto is set to become Western Australia’s tallest apartment building upon completion, with 226 apartments over 38 levels. The ABC’s former administration building will be converted into 17 studio and one bedroom apartments as part of the development.
Toccata, which is now selling, comprises 45 three bedroom, two bathroom residences. The new residential complex includes a heated lap pool, a gymnasium and an in-house private theatre. Each of the development’s 22 floors has a maximum of two apartments, which are priced from $1,298,000.
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jrichardson-uRX5hFdKfN

Finbar launches Toccata, latest stage in Perth’s Symphony City

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Over recent months we have seen a number of high profile residential projects going to market and achieving spectacular sales results, with entire buildings or releases quickly sold out. The market is responding to strong demand driven by a major shift in demographics, local and off-shore investor appetite for property and a market that is still characterised by undersupply, in some markets chronic under-supply. However as a result of this strong demand matrix one group, the first home buyer (FHB), appears to be missing out.
This is not only apparent in many off the plan markets, but is also a stark factor for established homes and in NSW the FHB market is down to 9% of activity, and so the question is should we be doing more to help first time buyers into the market?  In particular at a time of low interest rates these buyers should be more active, but despite some limited help and concessions they are not.
Tough times for the FHB are not only confined to the Australian market, there have been similar concerns in the United Kingdom, where a new range of measures to help have recently been introduced and the big change was to extend assistance beyond the new build buyer. The UK’s so termed Help to Buy schemes now include established homes. As our government appears to be shying away from almost any sort of assistance for anyone, the UK example heads in the opposite direction with a package of assistance.
Mortgage guarantee
Here’s how it works, since October this government scheme was extended from only newly built homes to include established homes up to a value of £600,000 (that’s about A$1,003,000). In part this shows you how unrealistic the current local concessions at a ceiling price of $650,000 are. Buyers need a minimum 5% deposit, they have to borrow from a participating lender and it must be the buyer’s only property.
The government for its part guarantees repayment of the mortgage to the lender, and the scheme is expected to run for some three years. With many local suburbs (185 plus in Sydney) now looking at median prices of $1m this sort of package would be welcomed in the Sydney market.
Equity loan
This government helping hand in the UK is very different and nothing like this has been seen here, apart from a very small number of ‘one-off’ housing co-operatives around in the 1970s. Here’s how these equity loans work. They are limited to homes, new homes valued to £600,000 being purchased by first time buyers, who must have a 5% deposit. The government then kicks in 20%, and here’s the interesting point, the loan is interest free for five years. So the first time buyer then only has to find 75% of their loan.
After five years the ‘equity loan’ attracts a fee of 1.75% of the loans value, which is adjusted each year to the UK equivalent of our CPI. The 20% loan has to be paid back when you sell, but that’s 20% of the sales price, not the original loan – hence the government and the UK taxpayer share in the capital growth of the home. Here such equity loans, possibly linked to superannuation have been ‘talked’ about, but that’s it.
Sometimes I do question the rigid instance that personal superannuation is locked up away from home buyers. Yet via self-managed funds, some super can be invested in real estate, which possibly compounds the plight of some first time buyers. In the UK these equity loans have been around since April last year.
New buy assistance
This is another scheme linked to new builds and involves co-operation between private lenders and some major builders. The scheme is limited to new homes valued to a maximum of £500,000 and is open to buyers with a minimum 5% deposit.  The basic idea is to make available to these buyers more attractive loan rates, which are usually only accessible to buyers with big deposits. This is a private not government backed idea.
Shared ownership
This is another idea floated locally, but is not common. The idea is that via the participation of private developers and housing associations, the FHB buys a percentage of their new home; usually 25% and then they ‘rent’ the rest at below market rates. As more money is available by a process known as ‘staircasing’ buyers then increase the percentage of the home they are buying and over time own more of the home and pay less rent.
To be eligible the rules are that you must be a first time buyer, or someone who used to own a home, they can no longer afford to buy that home and you need to earn less that an average of £60,000 – a little more if you live in London.
More imagination needed
These few ideas look like someone applied a lot of imagination to the problems of the first home buyers. Here we have failed to do so.  Our banks make huge profits, they could afford to be a lot more innovative, and why do we not use superannuation savings more in this area? The social benefits of home ownership are obvious and the benefits of a big boost in home building construction would as is already evident, help the economy even more to move from the mining boom, so why are we not doing more?
 
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pchittenden-eLqUUC8TWW

What can we do to help out first home buyers?

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I recall over a decade ago venturing into Docklands with camera, thinking what wondrous experience could those in charge create over time - how times change.
Peddle Thorp recently released a swag of new designs on show for the first time via their website. One of which is a concept for the Docklands Aquatic Centre which sees an integrated facility located between Etihad Stadium and Victoria Harbour.
As a stand alone concept, the sinuous facility looks great although when in situ one thought sprung to mind. Does Docklands really need another large, isolated structure that has little by way of interaction with passers-by? Etihad Stadium, parts of Yarra's Edge and AXA's 750 Collins Street amongst others already take that mantle, serving as Dockland's Achilles heel.
<a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/Image20_0.jpg" rel="gallery-all" title="Concept for the Docklands Aquatic Centre. Image © Peddle Thorp"><img alt="" class="image-article-full-width-580px" height="274" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/Image20_0.jpg?itok=9BG0QAiH" title="Concept for the Docklands Aquatic Centre. Image © Peddle Thorp" width="580"></a>
Naturally the question becomes, what does Docklands really need? This question is asked in respect to advancing the precinct in the eyes of the common person who for lack of interest or experience, tend to dismiss the area out of hand.
Up until recently I would have thought community facilities were a must, yet they tend to serve the wants and needs of a vocal, local population - and fair enough. The most recent planning application for Lend Lease's Victoria Harbour is a Boating and Family Services Hub, seen below. Designed by Hayball, this odd duo will meld under the same roof providing services such as consulting rooms, workstations, playgrounds, function areas and boat storage/rigging spaces.
As part of Victoria Harbour's civic precinct, two more development lots have been set aside for human services buildings. These are all great initiatives located in one pocket of Docklands but they won't generate markedly increased foot traffic through the precinct.
<a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/Image24_1.jpg" rel="gallery-all" title="Boating and family services complex. Image © Hayball"><img alt="" class="image-article-full-width-580px" height="336" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/Image24_1.jpg?itok=fOsYBser" title="Boating and family services complex. Image © Hayball" width="580"></a>
What does Docklands really need? Intimacy... pure and simple.
When so many of Docklands' buildings are large, independent and isolated, the result is a rather sterile, disconnected experience. The intimacy of the CBD's laneway network is a success because the average person is confronted with sensory overload. Sights, smells and constantly changing shop fronts stimulate and entice, coaxing the average person into an enjoyable experience. The generic aluminium-framed, street level glazed facades of Docklands simply disappoint.
It's no coincidence that NewQuay's waterfront and Lend Lease's Merchant Street area are the most frequented as the pedestrian experience is dynamic, green (Merchant Street at least) and interesting. Some may say Harbour Town Docklands pursues the model of intimacy and diversity. Yes it tries to, but it also succeeds at being cheap, isolated and dare I say gimmicky - no authenticity there.
<a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/100-Things-To-Do-Before-You-Die-79-Melbourne-Laneways-Featured-Image.jpg" rel="gallery-all" title="Image © Australian Traveller"><img alt="" class="image-article-full-width-580px" height="339" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/100-Things-To-Do-Before-You-Die-79-Melbourne-Laneways-Featured-Image.jpg?itok=8wuVpx89" title="Image © Australian Traveller" width="580"></a>
Can Docklands generate intimacy? Mmmmm... no.
So much has been spoken about what could and should be done to enhance the Docklands experience, nothing tangible has eventuated. The cost to retrofit massive swathes of inactive street frontage is prohibitive and I just can't help but feel Docklands will retain the feel of a large suburban office park at the foot of the CBD.
The solution - aside from demolishing a few buildings and starting over, better luck with Fishermans Bend!
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silvermb

What Docklands really needs?

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Yesterday morning, I had a coffee at Max Brenner on Margaret Street with a girl I used to work with in the mining industry, then rather fancy tapas lunch at Circular Quay with an old cricket mate turned investment banker, and, not feeling much like cooking in the evening, got a Thai takeaway to watch the rugby league last night.
A neat microcosm of Sydney, that.
My missus tells me that she also had lunch out for a friend's 40th, and bought her mate a present from Tiffany's.
Hmm, so much for this being a blog about finance: spend less than you earn and invest the difference. That little lot adds up to an expensive day.
The odd thing is, I'm pretty sure that two years ago, we'd have felt less inclined towards spending like that. But interest rates are way down. Share markets are way up. Sydney home values are booming, and so too are house prices in London. Even without drawing lines of credit, we're wealthier.
We're not the only ones. Without fail, I make the comment every weekend to my better half that in Sydney at the moment it feels like what it must have been like to live through the US golden age of consumerism in the 1950s. People have got money and by heck they are spending it!
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Incomes
A couple of observations, though.
Firstly, this has not been an income-led phenomenon. Wages are only growing at 2.6% year on year, which is historically the lowest we've seen in the history of of the wages index.
It's mostly been about the massive affordability dividend gifted to home owners since the interest rate easing cycle began in November 2011, since which time we've had the equivalent of another eight interest rate cuts, which frees up a lot of cash to spend each month.
Mortgage arrears are nowhere to be seen in Australia, tracking at just 1.37%, as compared to, say <a target="_blank" href="https://www.reuters.com/article/2014/01/20/fitch-irish-mortgage-arrears-to-peak-in-idUSFit68205820140120">nearly 20% of mortgages</a> being three months in arrears in Ireland.
Another noteworthy point is that while certain profligate people have been shopping at Tiffany's, it's largely been about eating out, restaurants, drinking and similar consumption-based recreation.
Last Tuesday, to celebrate some good news, we tried to go for a Japanese lunch and couldn't even get a seat. Granted, it was close to the large Macquarie Bank office on Shelley Street...but on a Tuesday lunchtime?!
This is Sydney at the moment, the city of takeaways, restaurants, food and drink consumption.
Repeat
Of bad and annoying habits, I have several.
I repeat myself a lot - once I get an idea in my head, I tend to keep banging on about it.
I often get prematurely excited (only with regards to ABS data, mind).
And I repeat myself a lot.
Regular readers will know that <a target="_blank" href="https://petewargent.blogspot.com.au/2013/09/will-rising-house-prices-cause-rise-in">for the past 6 months</a> I've been saying that retails trade is going strong, whatever people might be trying to argue.
It feels like I'm living in a parallel universe sometimes, since even until recently there have been articles talking about a spending recession. I know that Sydney is not Australia, but still, this is definitely not what my eyes have been telling me...
Retail print
And so to yesterday, after prints of 0.7% month on month and 0.5% month on month, yesterday the market expected a Retail Trade print of 0.4%.
<a target="_blank" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/8501.0">And we got 1.2%</a>!
Bears have tried to play this down as a blip or a one-off, but there is no other realistic way to describe that than as a huge beat. And in any case, the prior month was also revised up as well to 0.7%.
The statistics now show that for six months, retail trade has been rising at an annualised pace of 9% (it's been the longest run of monthly gains since 2005-7), and the last three months we now are at double digit speed! We haven't seen anything remotely like this since the stimulus of 2009.
And where are we spending all this money? Well, all over the place, but a huge chunk of it on cafes, takeaways and restaurants:
"The seasonally adjusted estimate rose 2.0%. By industry subgroup, the trend estimate rose for Cafes, restaurants and catering services (1.7%) and Takeaway food services (0.3%). The seasonally adjusted estimate rose for Cafes, restaurants and catering services (2.7%) and Takeaway food services (0.9%)."
<img style="display: block; margin-left: auto; margin-right: auto;" width="320" height="159" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/7db5df17519aa9d4ca257276000d5433/Body/0.33F0!OpenElement&amp;FieldElemFormat=gif" alt="Graph: Cafes, restaurants and takeaway food services">
Source: ABS
Wealth effect
The wealth effect has been well known about in Britain for years. In fact, it's even a <a target="_blank" href="https://www.bankofengland.co.uk/monetarypolicy/Pages/how.aspx">part of the Monetary Policy</a> wording over there, and here's how the Bank of England describes it:
"Lower interest rates can boost the prices of assets such as shares and houses. Higher house prices enable existing home owners to extend their mortgages in order to finance higher consumption. Higher share prices raise households’ wealth and can increase their willingness to spend."
And the data from the Office National of Statistics proves it:
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://1.bp.blogspot.com/-kRwCjnMf7QE/Ujg_hdgaqPI/AAAAAAAAKRY/T91uDuNtYb4/s400/spending.jpg">
Source: Nationwide
Does the wealth effect work in Australia too? Cameron Kusher of RP Data charts the information, so draw your own conclusions (it does):
<img style="display: block; margin-left: auto; margin-right: auto;" width="400" src="https://pbs.twimg.com/media/BiAaqe9CYAEHqzH.jpg:large" height="150">
Source: RP Data
Strong data
Yesterday, we also got reported a <a target="_blank" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5368.0">trade surplus of $1.4 billion</a>, another big beat against a forecast of only $100 million. Resources exports are booming. The economy is heating up. Add to this in the past week:
-a huge <a target="_blank" href="https://petewargent.blogspot.com.au/2014/03/wow">jump in the AIG Services Index</a>
-building <a target="_blank" href="https://petewargent.blogspot.com.au/2014/03/building-approvals-to-decade-high-as">approvals at their highest level in a decade</a>
-the <a target="_blank" href="https://petewargent.blogspot.com.au/2014/03/6-year-high">stock market hitting a six year high</a>
-Coles announced yesterday a massive <a target="_blank" href="https://www.smh.com.au/business/retail/coles-unveils-massive-11b-expansion-plan-20140305-346t1">$1.1 billion expansion plan</a>. The retail sector is set to add 109,000 jobs over the next few years.
Low interest rates are working. Futures markets increasingly believe that the next move in interest rates is up.
Make the most of low rates while it lasts, I say. Max Brenner anyone?
Pete Wargent is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' was released on 1 September 2013.
                                  
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pwargent-M4siyDbqQY

Retail figures jump and the wealth effect

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Over the many years I’ve been helping people with their property developments, I have uncovered some amazing stories.
To celebrate <a target="_blank" href="https://www.internationalwomensday.com/theme.asp#.UxhaU_mSySo">International Women’s Day</a> – which is tomorrow 8th of March - I thought I’d share with you some of the most inspiring women property investors I’ve come across and who I am proud to call my clients and friends.
These women have achieved great things whilst just getting on with their lives. They are normal, down to Earth chicks; mothers, wives, daughters.
When I met Rachel, she was a part time working mother of four young children all under five. She wanted to development property so she could continue building her existing portfolio but was a little bit busy to manage it herself. She already held what I considered a very impressive portfolio of eight investment properties. When Rachel was 24 years old, instead of a car, she bought her first property and then just kept investing.
Rachel worked in accounting for a company she didn’t much care for.  To put it bluntly, her boss was a pig. But she used to grit her teeth and bear it as she knew she needed the salary income to keep moving forward on her property journey.
Rachel lived near me, so I went to her house to present our property development project management business to her.  We met over the kitchen bench with her husband and the little ones pulling on her skirt. Between distracting the kids, we chatted about property and it was only a few weeks later we’d started on her dual occupancy development. Rachel was decisive; I guess she didn’t get much time to procrastinate.
We completed her dual occ, increasing her property portfolio by two more properties, and then I received the phone call. Rachel excitedly shared with me her news that she was pregnant again and in the same breath she explained that she wanted to get another cashflow positive property under her belt before having to leave work. We discussed a granny flat project and immediately started searching for the right property for her. We found the property and at the same time, Rachel had an announcement to make. The amazing news was that she was having twins!
We completed her granny flat development after her beautiful twins were born twelve weeks premature! Now she owns 10 investment properties. Rachel’s goal is to set herself and her husband up for an early retirement and to help her children with their investments in the future. She is also looking to start a new business helping other investors do the same as she’s done.
My next amazing lady client is Angela who owns a whopping 14 properties including the three villas Property Bloom recently developed for her.  Angela started investing when she was 27. A dynamic single mother who works full time in the corporate sector leading a large operational team in the media industry, she is focussed on building her asset base and wealth, securing the future for herself and her two beautiful children.
Her investment strategies include buy and hold, subdivision, medium density development and build to add value. Angela has also set up her own self-managed super fund.
When we worked together, Angela really impressed me with her attention to detail and focus on exactly what she wanted. I knew her day job was very demanding but the time she dedicated for her family was more important to her. Angela’s biggest driver is to be a great role model for her children and to provide them with a future that will offer them options and choice.
Finally, I’d like to introduce Justine who is possibly better known as a successful, <a target="_blank" href="https://www.smarttrading.com.au/index.php?q=1">professional stock and CFD trader</a>, speaker and best-selling author; but Justine is also a property investor.
Justine was just 23 when she purchased her first property investment. However, before this at the tender age of 18, she invested her savings in the stock market as a hobby. Talk about diversification. This ‘hobby’ then became a full-time career in 2001, when Justine decided to take the plunge and leave her job to become a full time stock trader.
I met Justine a few years after this and she was well on her way to securing her financial freedom.  A wife and mum of two gorgeous children, she engaged Property Bloom to manage a corner block development that included a major house renovation, Torrens Title subdivision and unit development.  This project created a high amount of equity and a solid yield.
Justine has since ventured to the USA to take advantage of the low property prices and strong Aussie dollar and has built up a fantastic portfolio of USA properties. Being the entrepreneur she is Justine’s latest venture is <a target="_blank" href="https://www.smartpropertyinvesting.com/index">Smart Property Investing</a> where she helps others buy into the US property market.
These three women are remarkable in their own ways.  But they are all focussed, work extremely hard and are motivated to make a difference for their futures and for the future of their children.
Most importantly, they are every day women, just like you and I who just get on and do it.
I’m also working with many other fabulous ladies who have taken on the challenge of setting themselves up financially....so here’s a shout out to Liz, Linda, Sandi, Lean, Nikky, Annabel, Jo-anne, Lorraine, Alison, Esther, Karen, Paige and Suzie. Happy International Women’s Day to your all!
Jo Chivers is director of <a title="Property Bloom" href="https://www.propertybloom.com.au/" target="_blank" rel="nofollow" style="font-size: 14px;">Property Bloom</a>, which manages property development.
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jochivers-wq5Bp59R5a

Three women's inspirational property investor stories

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A free trade agreement between Australia and China appears to be a step closer, after Chinese Premier Li Keqiang said his government would seek to “accelerate” an agreement with the Australian government.
Li made the comments during a speech to the Chinese parliament this week, in which he said the Chinese economy will grow at around 7.5% this year, according to reports in <a href="https://www.afr.com/p/world/li_warns_of_china_pc_growth_pains_w8xcQEDh7FTYwSsyDb7aPO" target="_blank">Fairfax</a>.
He also said China will look to speed up free trade agreements with South Korea and the Gulf states.
However, Li give no timeframe for the signing of an agreement, which would allow imports and exports to enter each country without paying duties.
An Australia-China free trade agreement has been in the works for more than nine years and Prime Minister Tony Abbott has previously said he is aiming to secure a free trade agreement with China and Japan <a href="https://www.smartcompany.com.au/growth/export/35043-crossbencher-s-bill-could-scuttle-china-free-trade-agreement" target="_blank">by the end of 2014</a>.
Peter Mace from the Australian Institute of Export told SmartCompany Li’s comments are a “positive sign” ahead of Abbott’s scheduled visit the China in April.
But he says “there is still some water to go under the bridge” before the parties can reach an agreement and it is unlikely that an agreement will be secured anytime soon.
Nevertheless, Mace is “hopeful” a deal can be nutted out by the end of the year.
Mace warns there are “still some sticking points” that will be need to be addressed for an Australia-China free trade agreement to proceed, including improved access to investment in Australian firms for Chinese companies and access to the Chinese agricultural market for Australian exporters.
He says based on the New Zealand experience, where agricultural exports to China rose “exponentially” after the country signed a free trade agreement with China, an Australian agreement presents significant opportunities for Australian companies.
University of New South Wales economics professor Tim Harcourt <a href="https://www.smartcompany.com.au/growth/export/32734-free-trade-agreement-back-on-the-table-with-china---good-news-for-smes" target="_parent">previously told SmartCompany</a> a free trade deal would make trading with China easier for Australian SMEs.
“Small and medium-sized enterprises are now more likely to go to China and south-east Asia than anywhere else in the North Atlantic,” said Harcourt.
“Opportunities exist particularly in regards to the urbanisation in China, which is opening up opportunities for architects and construction and services firms.”
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.     
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cwaters-YrtBR88nBe

China seeks to “accelerate” free trade agreement with Australia

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Saving
Household saving ratios have been high since the financial crisis, but data out yesterday from the Australian Bureau of Statistics showed that at last people may be gradually opening their wallets again.
Retail sales data will provide us with more evidence.
There is a bit of a lag in the Reserve Bank's Chart Pack figures, but let's see what we can deduce.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="Household Saving Ratio graph" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/5tr-hhsaving-small.gif?accessed=2014-03-05-20-18-31" height="282" width="320">
Sill elevated, as compared to the levels seen over the last two decades, but low interest rates should see Aussies starting to loose the purse strings a bit.
Building approvals
By the time next month's charts are in the total residential building approvals data will show approvals at their highest level in a decade.
A good thing or a bad thing?
A great thing for the economy.
And for housing prices? Well, we'll get an oversupply in pockets, of course.
But nationally?
The Digital Finance Analytics blog attempts  <a href="https://www.digitalfinanceanalytics.com/blog/how-big-is-the-property-demand-supply-gap/" target="_blank">here</a> to  explain the shortfall in our construction and concludes we need to more than double dwelling construction to meet demand.
I'm not sure about the exact nature of the conclusion, since different cities and regions have different demands and requirements.
But with the population growing at 400,000 per annum and household sizes far lower than they used to be then, yes we desperately need to get more building supply, and quickly.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="Private Residential Building Approvals graph" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/5bl-privbapp-small.gif?accessed=2014-03-05-20-18-31" height="257" width="320">
Household finances
The third chart below on household finance shows the first signs that household debt levels as a percentage of disposable income - which have been flat or falling slightly for the last nine ears - may again be turning up, just a slight notch.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="Household Finances graph" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6tl-hhfin-small.gif?accessed=2014-03-05-20-18-31" height="286" width="320">
Housing loan approvals
Housing loan approvals are by aggregate dollar value are heading to the moon, blasting through the $20 billion barrier and heading well beyond.
It's property market boomtime.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="Housing Loan Approvals graph" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6br-hla-small.gif?accessed=2014-03-05-20-18-31" height="256" width="320">
Dwelling prices
Prices are heading sharply upwards in all major capital cities except for Adelaide.
The red line indicates that some regional markets must have picked up also, although this is best judged on a region by region basis.
Sydney property market commentary over the years has morphed from crash, to bust, to a bull trap and then to a slow melt. But finally there seems to be an acceptance of what we forecast here long ago: we're into a sharp property upturn, with very little stock on the market.
In our estimation the cost of production was too high for this to be otherwise and only now are we at last seeing any meaningful supply response.
In the future I'll look at whether SQM's prediction of 15-20% Sydney price growth in 2014 will play out.
In any case, sweeping city-wide commentary adds very little value to anyone who can read a chart.
I'll have a look in a bit more detail at which sectors of the Sydney market are now risky (plenty of those) and which we consider to be significantly less so.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="Housing Prices graph" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6bl-dwelpri-small.gif?accessed=2014-03-05-20-18-31" height="254" width="320">
Household wealth, household debt
With share markets driving up to a six year high yesterday, Aussies' net worth is now in a pleasing uptrend, while household debt levels have been flat for around a decade, which is good news for Aussie households.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="Household Wealth and Liabilities graph" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6tr-hhwl-small.gif?accessed=2014-03-05-20-18-31" height="278" width="320">
Pete Wargent is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' was released on 1 September 2013.
                                  
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Latest RBA stats show that the property market is in good shape

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Predicting the future or markets is not a science and since some people make bad financial decisions based on spurious predictions, the predictors absolutely deserve to be pulled up for their errors. The world is not linear, and while pulling charts from thin air may look impressive, there is no way to predict markets with such certainty. In any case, you can invent a chart to 'prove' anything. Take our old friend, the good old S-curve. The x axis represents time passing (x to left, y to the sky, remember?), and the y axis cumulative data.
<div style="text-align: center;"><img src="https://www.forecastingnet.com/S-curve.png" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></div>
S-curves can be used for a number of different functions, such as to explain the technology life cycle, or the lifespan of a product. An example? Say, the new users of a website such as MySpace. The number of new users started out slowly (early adopters), then the site became increasingly popular (early majority), then popularity exploded after Lily Allen started posting her recordings publicly on the site (late majority), and then the number of new users slowly flattened (laggards), eventually to close to nil. The MySpace cumulative number of users chart, if anyone has bothered to chart it (which I assume they have somewhere) probably looks something like my S-curve above.
The problem with these books which try to predict the future scientifically is that the world is not black and white, and the number of variables involved is huge. In any case, you can use an S-curve to 'prove' just about anything you want. Let's say, the property crash predictions over the last seven years. Simply add some silly narrative to prove the chart.
<a href="https://4.bp.blogspot.com/-Oba3tBnlDo4/Uw0j2-NEo7I/AAAAAAAALow/G8lYbv_GWcM/s1600/S+curve.jpg" imageanchor="1" style="text-decoration: none; color: #7f7f7f; margin-left: 1em; margin-right: 1em;"><img border="0" src="https://4.bp.blogspot.com/-Oba3tBnlDo4/Uw0j2-NEo7I/AAAAAAAALow/G8lYbv_GWcM/s1600/S+curve.jpg" height="244" width="320" style="border: 1px solid #ebebeb; position: relative; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;"></a>
Point A (2007) - property prices in Australia's main cities have been flat after a boom through to 2004. All is quiet on the crash prediction curve.
Point B (2008) - "40% crash" predictions appear in the press. Bearish sentiment and crash predictions slowly begins to ramp up.
Point C (2009-10) - prices increase sharply in response to low interest rates. Property investors are variously termed as unethical, greedy and evil. The crashniks gain momentum. A price crash is described as inevitable.
Point D (2011-12) - the crash crescendo reaches fever pitch as property prices fall moderately. Anyone who owns a house is an idiot. American commentators say prices will crash by 60%...maybe up to 85% in certain areas. People will be wiped out. There is to be no escape from the unavoidable crash.
Point E (2012-14) - prices start rising again. ANZ Bank forecasts prices will rise by 15-20% by the end of 2015. In early 2014, bears begin to lose interest in the crash, capitulate and buy houses. Some join in and buy investment properties.
Point F (2016) - prices flatten off. We return to Point A on the chart.
Is there such a curve? No, of course not. It's absolutely ridiculous and I just made it up on the spot. But this is exactly the sort of thing that is used to sell books. All I need to do now is trademark it - "The Property Crash Prediction Curve" - and get it out to market.
Trends
In saying all of this, I have witnessed something akin to this more than once in London, and first time buyers are often said to wait until markets are rising before committing to buying.
In the modern era, first time buyers in large, mature capital city markets are likely to be in their 30s. There was a lot of talk about property prices crashing when the technology stock bubble burst around the turn of the century, and while sentiment did soften in some areas, there is only so long that people are prepared to wait for a crash.
It's happening in London again now, with Savills out forecasting <a href="https://www.savills.co.uk/resources/5-year-forecast/" target="_blank">five more years of price gains</a> of around 25% from 2014 to 2019. Plenty of buyers took a step back from 2009, during and after the financial crisis, but since a man's working life is only so long there is a limit to how long people will wait before simply deciding to get on with it and buy a home.
Next page: What S-curves are really used for in property. Please click below.
                    
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What S-curves are really used for in property
Meanwhile back in the real world, and with my bean-counter head on, S-curves do actually have an important role to play in the property world.
When major developers undertake new projects, they are costed using an S-curve model or function, with cumulative labour and construction costs budgeted out through the life of the project. Deviations from the curve are then continuously monitored on an ongoing basis through variance analysis and through using project reporting accounting software packages.
Typically, a major development or construction project has relatively low planning, legal and application costs in its early days, before construction and labour costs ramp up sharply. Then, at the end of the project there will always be a few lagging costs, such as remedial work or disputed contracts, and the project reporting codes are then closed.
Development of new stock
You'd be forgiven for thinking from looking at the price of new apartments that developing companies are making obscene profit margins, but you'd be wrong. Once land, financing, government taxes and charges, labour and construction costs are booked and corporate overheads allocated to a project, developer margins are far from exceptional.
LendLease (ASX: LLC) released its Group Consolidated Results for the half year yesterday, showing a net profit of only $250m, from a colossal revenue of more than $6.5 billion for the half year. The Mirvac (MGR) results present a similar story. Stockland Group (SGP) is generating a Return on Equity (ROE) of well under 6%. Solid enough results, but hardly exceptional margins.
Construction costs
I spent a fair chunk of my career costing out (mining) construction projects and have been responsible for managing budgets that have suffered nasty adverse deviations from the S-curve and painful overruns. It's unpleasant. And if you have to go back to the equity markets for further capital raisings, it's more unpleasant still. For everybody concerned.
The capital expenditure report from the ABS shows that, for all the talk of mining construction having peaked 18 months ago, it is only now beginning to drop. The reason? Overruns, caused by the sharply increasing cost of doing business, variously including labour costs, construction costs and compliance.
The <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2013-12-12/gorgon-gas-project-cost-blowout/5151982" target="_blank">Gorgon gas project in north-west WA will cost $54 billion</a>, possibly even more. The original budget was $37 billion (thankfully, I've never been responsible for an overrun like that monster!). The cause of that? Red tape and compliance. And as our society becomes more litigious, this is only going to get worse not better. You seemingly can't fire anyone these without a dozen written warnings or a large lump sum payout.
Ask anyone who has managed or overseen a construction project in the last decade and they'll tell you the same thing: labour and construction costs in Australia are very painful. It's partly been driven by a surge in wages. We may have an implied inflation target of Australia of 2.5%, but wages growth has outstripped this figure every year since the inception of the Wage Price Index.
But that's only half of the story. Employing people in Australia today is not only a consideration of basic salary. When budgeting for project labour costs, additional provisions of up to 40% are sometimes needed for on-costs such as productivity, the superannuation contribution, Workers Comp insurance, payroll tax, annual leaving loading, long service leave provisions, and so on.
And even this is only part of the story. As my mining engineer friends in the field never tire of telling me: "You can't even take a leak without filling out a form these days". Coarse. But also true.
Article continues on next page. Please click below.
                             
<hr class="system-pagebreak">
Focus on safety
Safety on construction sites is now rightly seen to be of paramount importance - people are more important than profits - and this is coming with a dollar cost attached.
In Sydney recently, we have seen the death of a construction worker in the field at Barangaroo, a horrific scaffolding collapse on Mascot's O'Riordan Street and a crane upended in Chatswood, all of which hit the newspaper headlines.
Rightly or otherwise, the press now sees construction accidents as fair game for news reporting and this brings with it an elevated reputation risk to companies.
Go to the ASX and take a read of any property development company or mining company results presentation - such as that of <a href="https://www.asx.com.au/asxpdf/20140226/pdf/42mzs2x5klxngs.pdf" target="_blank">LendLease</a> - and you will see that after a pretty picture on the front cover and a lengthy disclaimer, the slide we always put as number 1 is: "Safety". It was not always so, but this is now convention is mining and construction circles.
Reserve Bank highlights construction costs issue
One of the benefits of having and independent Central Bank is the independent analysis it brings, and the Reserve Bank in Australia has itself highlighted more than once the impact of higher construction costs on new residential housing stock.
<img alt="Graph 8: Construction Costs" src="https://www.rba.gov.au/speeches/2013/images/sp-so-230413-graph8-small.gif" height="387" width="400" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;">
This might be surprising when you consider how cheap <a href="https://www.clarendon.com.au/" target="_blank">display homes</a> can seem in the glossy magazines. However, operating a construction site is a different matter entirely, and the costs of a major construction project - particularly for multi-storey infill sites of more than 50 apartments, as the RBA clearly shows above - bear no resemblance to those of mass-produced project homes.
The land price for infill sites, even in Sydney is below $100,000 per dwelling. Of course, the land content appears low in the RBA's charts when compared to the median value of lots in the city. And indeed it is, for a couple of reasons.
Firstly, because the RBA has used outdated 2011 figures from <a href="https://www.urbis.com.au/" target="_blank">Urbis</a> as its source. And secondly because the RBA is looking at the lot value of land released for new dwellings as opposed to the median value of all lots, which is clearly going to be materially different, given the likely locations.
Summary
In summary, we are not going to see materially cheaper land or property prices in Sydney because (a) the land for release is frequently on the outer fringe where few people want to live, and (b) as <a href="https://www.urbis.com.au/think-tank/general/sydney-land-releases-fail-to-meet-demand" target="_blank">Urbis itself confirmed</a>, not enough of new land gets released to meet demand anyway, which keeps prices pumped even further.
Rest assured that, expensive as today's new residential projects may seem to off plan buyers, significantly cheaper new stock will not hit the market. Developers will not accept lower margins than they presently are, and since labour and construction costs remain elevated, so too will the price of new housing stock.
In any case, planners are fighting a losing battle against the manic population growth in the capital cities, which is another reason why for all these years I've argued against a price crash. The Sydney population over the last decade increased by around half a million persons - enough people to fill the main <a href="https://d16outft0soac8.cloudfront.net/uploadedFiles/CONCERT%20HALL%20Tech%20Specs_Feb%202011.pdf" target="_blank">Opera House concert hall</a> to its full capacity 187 times over. That's a lot of people.
Population growth at that pace (and <a href="https://petewargent.blogspot.com.au/2014/01/read-matusik-on-population-growth" target="_blank">faster still in 2013</a>) doesn't necessarily equate to higher house prices, but it's hardly the recipe for a crash either.
OK, enough blurb from me. I'm off to trademark my new S-curve model.
Pete Wargent is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' was released on 1 September 2013.
                     
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The property crash prediction S-curve (TM): What it can really tell us

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If you are confused with what’s presently happening within the Australian economy you’re not alone. Already in 2014 we have seen the announcements that motor vehicle manufacturing in Australia is closing down and this week Qantas announced that a further 5,000 jobs will be cut by the carrier. It’s abundantly clear that since the global financial crisis (GFC) Australian businesses are adopting a new mandate: Do something. Either lead, follow, or get out of the way!
Last week we saw another shock announcement with <a target="_blank" href="https://www.businessspectator.com.au/news/2014/2/27/australian-news/capex-drops-dec-quarter" title="CAPEX drops in December quarter">CAPEX dropping in the December quarter</a> which in all probability confirms that Australian businesses are more than cautious in 2014 – which certainly contravenes previous speculation that the markets were upbeat about what 2014 will bring. Whilst this does not spell the end of the world this significantly highlights that consumer sentiment is wavering, which is consistent with what we saw during and since the GFC.
Like most progressive businesses we had a session yesterday with our real estate coach <a target="_blank" href="https://www.activategrowth.com.au/index" title="Daniel Spencer ">Daniel Spencer </a>where the Australian economy was summed up with just the one sentence: “The greatest fear is the unknown”. If you cast your mind back to the GFC businesses’ engagement all but came to a standstill given consumers were distracted looking for answers and signs. What we are seeing today are economic machinations busily at work in stark contrast to <a target="_blank" href="https://www.propertyobserver.com.au/economy/home-prices-are-rising-and-so-is-unemployment-that-s-a-first/2014021867838">what we have seen before</a>.
I have no idea how mainstream media missed an announcement this week that <a target="_blank" href="https://article.wn.com/view/2014/02/25/Kuringgai_Council_to_discuss_the_future_of_Gordon_Golf_Cours/" title="Ku – ring – gai Council resolves to investigate the future of the Gordon Golf Club site ">Ku–ring–gai Council resolves to investigate the future of the Gordon Golf Club site </a>for the purpose of looking at possible future uses. Now this is a big story which in all probability will lead to plenty more councils reviewing their assets with a view to selling out to cashed–up property developers. Ku–ring–gai Council made the announcement last Tuesday that they are looking at a new sporting facility, including options for the first indoor sports centre in Ku–ring–gai (they sort of hid this as second point), a range of residential housing, small neighbourhood shops, local park and other community facilities. The council have another public golf course and rest assured that too will end up on the planning board as councils across the country look to cashing in on community assets.
I hate to say I told you so, however back on April 9, 2010 I wrote: <a target="_blank" href="https://www.rwm.com.au/2010/04/09/record-population-growth-and-possibly-an-even-scarier-outcome/" title="Record population growth – and (possibly) an even scarier outcome.">Record population growth – and (possibly) an even scarier outcome.</a> “So what can we expect? The greatest sell–off of (open space) land for residential development and Mosman (given its abundance of foreshore land) would become a major revenue raiser for funding sustainability. The ‘posh’ will utter, gosh! A strong possibility that Mosman sea scapes could resemble those from Whale Beach to Palm Beach. Of course governments will say ‘it is all in the name of economic progress’. Simply put – we may believe we are the custodians of open space and even though we don’t have title to this lifestyle privilege, money talks and many areas that are untouched could lose their virginity.”
“We now find that one in four NSW councils is on the brink of being unable to pay for essential services. We are already hearing murmurs that some councils are looking at selling off public golf courses and replacing them with housing estates.”
So there you have it – watch this proposal very carefully as it in all probability will open Pandora’s Box.
<img alt="simeon-march-3-one" height="385" width="470" src="/images/stories/2014/03/03/simeon-march-3-one.gif">
<img alt="simeon-march-3-two" height="409" width="470" src="/images/stories/2014/03/03/simeon-march-3-two.gif">
It is succinct and very clear why the Australian economy is experiencing behavioural problems when one closely examines these graphs. So based on this data one should not expect any rebounds anytime soon.
Robert Simeon is a director of <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/" title="RWM" style="font-size: 14px;">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
                                       
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