The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

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?

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

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According to home loans database <a target="_blank" href="https://mozo.com.au/">Mozo.com.au</a>, 20 lenders have cut their interest rates since the start of 2014.
Despite <a target="_blank" href="/news">predictions that the RBA will leave rates on hold</a>, lenders including NAB and Westpac have cut their rates in the past month, perhaps signalling a new level of competition in the lending market for 2014.
Out-of-cycle rate movements have been confirmed by loan comparison website <a target="_blank" href="https://www.ratecity.com.au/">Ratecity.com.au</a>, which noted a number of rate hikes by lenders late last year. Ratecity.com.au chief executive Alex Parsons said that  since October 2013, 73 variable home loan rates have increased by as much as 0.52 percentage points, with 550 fixed rates increasing in that time.
Parsons agrees that rate cuts early this year signal aggressive competition. “Home loan lenders are competing aggressively for business and rates are at historical lows,” he said.
“Five smaller lenders have dropped some of their variable home loan rates in the past month, and 66 variable rates have been lowered since October,” said Parsons.
news@propertyobserver.com.au
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jrichardson-uRX5hFdKfN

Lenders make out of cycle rate cuts ahead of RBA announcement

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The Reserve Bank of Australia (RBA) has announced that the <a target="_blank" href="https://www.propertyobserver.com.au/news/reserve-bank-keeps-rates-on-hold-in-first-meeting-of-the-year/2014020467523?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">cash rate will remain unchanged this month</a>.
Ahead of the first RBA board meeting of the year, we asked a team of experts to predict the RBA’s decision. They all came back with the same answer – in February, the cash rate will stay put. Citing the economy’s shift from the resources sector to housing, historically low interest rates and the weakening Australian dollar, our experts all had it right.
<a target="_blank" href="https://www.propertyobserver.com.au/news/february-statement-by-glenn-stevens-governor-monetary-policy-decision/2014020467526?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=newsplus">RBA governor Glenn Stevens said</a> that "since the Board's previous meeting, information on the global economy has been consistent with growth having been a bit below trend in 2013, but with reasonable prospects of a pick-up this year."
Shane Oliver – Head of investment strategy and chief economist, <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> <img style="float: right;" width="125" height="150" src="/images/stories/2013/10/25/shane-oliver-profile.jpg" alt="shane-oliver-profile">
<img src="/images/stories/2014/02/04/green-tick-small.jpg" width="33" height="35" alt="green-tick-small" style="float: left;">WE’VE SEEN CLEAR EVIDENCE THAT INTEREST RATE CUTS HAVE STARTED TO GAIN TRACTION
I think they’ll leave the rate on hold – and there are several reasons. Firstly, the last rate cut was now back in August – it’s been about six months with rates on hold. Given that the Reserve Bank has already cut interest rates to record lows, it’s unlikely that they’ll like to drop them further.
I think the reality is that over recent months, we’ve seen clear evidence that interest rate cuts have started to gain traction. Housing prices picked up in the last quarter of last year, and there’s now evidence that interest rate cuts have flowed through to housing construction activity.  Consumer and business confidence has also bottomed out, while retail is beginning to pick up. The strong Australian dollar was a concern, but we have seen that weaken – in fact, last week we saw the Australian dollar drop below US 88 cents, for the first time since 2010. That coupled with strong indicators in the economy will leave the Reserve Bank feeling confident.
We might see rate hikes in the December quarter, perhaps around October. Right now, the economy is still probably not strong enough for an interest rate increase. We’ll be looking at at least 12 months of rates on hold.
 
Angie Zigomanis – Senior manager, residential, <a href="https://www.bis.com.au" target="_blank">BIS Shrapnel</a> <img style="float: right;" alt="Angie-Zigomanis--porfile" height="150" width="125" src="/images/stories/2013/10/25/Angie-Zigomanis--porfile.jpg">
<img style="float: left;" alt="green-tick-small" height="35" width="33" src="/images/stories/2014/02/04/green-tick-small.jpg">UNDERLYING INFLATION IS STILL LIKELY TO BE AT A COMFORTABLE LEVEL FOR THE RESERVE BANK
We do not expect the Reserve Bank to change interest rates at its February meeting. Headwinds still face the Australian economy. Resource sector investment is estimated to have peaked and is now tapering off, while growth in other sectors of the economy is not yet picking up at a pace to sufficiently offset this decline in the short term.
Nevertheless, there are signs that the current levels of interest rates are doing their job. After declining in 2011 and 2012, house prices have stabilised and have been growing in some cities in 2013. This is encouraging new dwelling activity, with an upturn in residential construction nationally now appearing to be entrenched.
While inflation for December was a little higher than most analysts expected, there were some “one-off” factors that helped to drive the numbers, and underlying inflation is still likely to be at a comfortable level for the Reserve Bank. As a result, we expect the cash rate to be held at current levels for now.
Article continues on next page. Please click below.
 
<hr class="system-pagebreak">
Cameron Kusher – Senior research analyst, <a href="https://www.rpdata.com/" target="_blank">RP Data</a> <img style="float: right;" alt="cameron_kusher_new" height="156" width="125" src="/images/stories/2014/01/28/cameron_kusher_new.jpg">
<img style="float: left;" alt="green-tick-small" height="35" width="33" src="/images/stories/2014/02/04/green-tick-small.jpg">WE COULD SEE AN INCREASE IN THE INTEREST RATE LATER THIS YEAR
Obviously [the other week] we had some pretty confronting results. I think inflation is a lot higher than people expected. But I think generally rates will be on hold for the next few months. The RBA will want further evidence that inflation is growing, and that the economy is picking up.
They’ve said all along that what they’ve wanted to see from interest rate cuts is a handover from the resources boom to the housing sector, which they’re getting. We’re seeing higher home values.
So the likelihood is that rates will stay still for the next few months. But we could see an increase in the interest rate later this year. The RBA are pretty concerned with just how quickly Melbourne and Sydney have been growing over the past year. If home values continue to accelerate, that could move them to increase rates.
At the moment we’re seeing 2.7% annual inflation. If that starts heading up to the higher end of their target band, that would also impact interest rates. And with the Australian dollar dropping, we might start importing inflation from overseas.
Any increase in the interest rate won’t happen til the second half of the year at the absolute earliest – most probably late in the year.
 
Alex Parsons – Chief executive officer of <a href="https://www.ratecity.com.au/" target="_blank">RateCity</a> <img style="float: right;" alt="alex-parsons-profiel" height="150" width="125" src="/images/stories/2013/11/15/alex-parsons-profiel.png">
<img style="float: left;" alt="green-tick-small" height="35" width="33" src="/images/stories/2014/02/04/green-tick-small.jpg">A CUT IS OFF THE CARDS
I hate to be boring, but there will be no change in February. I think based on the inflationary figures that just came out, coupled with the property market, particularly in Sydney, a cut’s off the cards.
If we do see any movement, it’ll be a rise, but it’s too early for that – that will happen towards the end of the year. But obviously a lot can happen between now and then, in Australia’s economy and internationally.
For now though, the interest rate will stay put. Especially if we see the positivity in the market continue, and now that the dollar’s back in the range they’d like to see. Interest rates are at record lows – the RBA won’t be making any cuts over the next six to eight months.
But overall, consumers shouldn’t worry about RBA changes – they aren’t always passed on by the institutions anyway. Get out there and find out what rate you’re on, and compare it with what else is out there. You can save yourself some money, both on the borrowing side and the lending side.
And if you don’t have a four in front of your home loan interest rate today – get out and get a better one.
Article continues on next page. Please click below.
 
<hr class="system-pagebreak">
Andrew Wilson – Senior economist, <a href="https://apm.com.au/" target="_blank">Australian Property Monitors  <img style="max-width: 480px; float: right;" alt="AndrewWilson-profile" height="150" width="125" src="/images/stories/2013/10/04/AndrewWilson-profile.jpg"></a>
<img style="float: left;" alt="green-tick-small" height="35" width="33" src="/images/stories/2014/02/04/green-tick-small.jpg">THE IMPROVEMENT TO ECONOMIC ACTIVITY REMAINS A WORK IN PROGRESS
Interest rates settings have been a critical element driving the ongoing revival of Australian housing markets over the past year. Cuts to interest rates in May and August 2013 to the lowest levels in 60 years fuelled home buyer and investor activity with prices growth accelerating in all capital city markets over the second half of the year.
The easing of interest rates over the past two years has been a monetary policy initiative designed to stimulate economic activity in the face of the decline in the construction phase of the mining boom that has underscored economic growth in recent years.
Easier interest rate policy was also designed to reduce the relatively high value of the Australian dollar and increase the competitiveness of Australian goods and services in export markets.
Although lower interest rates are typically a catalyst for house price growth through improved affordability,  this is designed to be offset by an increase in dwelling construction to ameliorate short-term supply-demand imbalances that adds to prices growth – and also to add to economic activity.
The improvement to economic activity through lower interest rates remains very much a work in progress which leaves further scope for another easing in monetary policy through lower interest rates.
Employment in the major states of New South Wales and Victoria continues to deteriorate. Latest ABS data reports that the number of people with jobs in both those states has declined disturbingly over the past year and continues to trend downwards.
Dwelling construction as expected has improved recently although most of the increase in activity has been in planned apartment construction in Sydney and Melbourne which will not add to the stock of housing or economic activity in the short-term. The number of new houses approved remains underwhelming considering the level of stimulus in the market.
The Reserve Bank will likely wait until more data becomes available on the unfolding underlying nature of the economy in 2014 so an interest rate cut is unlikely in February. Although interest rates are likely to remain stable over the short-term the risks remain for another easing in monetary policy particularly if the New South Wales unemployment rate climbs above 6%.
There is certainly no realistic prospect in the foreseeable future of a rise in official interest rates despite the emergence of rising inflation.
<a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
 
 
 
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Interest rate stays on hold: Did our experts get it right? 

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In an ideal (and economically efficient) world, tax policy would not influence the investment or consumption choices taxpayers make. In reality, this neutrality is rarely achieved.
External factors influence choices, which then fail to conform to rational economic models; or the tax system may be deliberately used to intervene in the market to counteract inefficiencies.
In Australia owner occupiers compete with investors for housing property; and there is also competition within these groups. A small increase in the number of superannuation funds and foreign investors purchasing property can have a significant impact on demand; while first home owners are finding it increasingly difficult to enter the market. Each of these groups is impacted differently by the tax system.
Owner occupiers in front
Owner occupiers are the <a href="https://grattan.edu.au/publications/reports/post/renovating-housing-policy/" target="_blank">major beneficiaries</a> of tax concessions on housing.
The latest <a href="https://treasury.gov.au/PublicationsAndMedia/Publications/2013/TES-2012" target="_blank">tax expenditure statement</a> costed the capital gains tax (CGT) exemptions on owner-occupied housing at A$30 billion, on a par with concessional taxation of superannuation at A$30.25 billion.
The Henry Review <a href="https://www.taxreview.treasury.gov.au/content/Content.aspx?doc=html/pubs_reports.htm" target="_blank">acknowledged</a> that these tax expenditures can be justified as both contribute to people’s living standards in retirement.
However the CGT main residence exemption distorts the market as owner occupiers invest more in their residence, diverting capital from other more productive investments in the expectation of tax free capital gains.
Investors also benefit from the CGT discount, but negative gearing has a more immediate benefit. Negative gearing is the product of two of the basic design principles of our tax system.
Muddying the waters
Firstly, expenses are deducted from income in calculating the income or loss from an activity, and secondly we apply a global system under which income from all sources is aggregated to determine a taxpayer’s income for a year. Therefore, in the absence of any specific restrictions, losses from one activity can be applied to reduce the tax payable on income from other sources.
The <a href="https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Tax-statistics/Taxation-statistics-2010-11/?page=8#Individuals__tax" target="_blank">tax statistics for the 2010-11 year</a> show that 2.5 million rental property schedules were lodged by individuals, showing nearly A$30 billion of rental income received during the year.
The deductions claimed against this income amounted to A$37.8 billion, of which A$22 billion was interest on loans. A further A$1.8 billion was claimed as capital works deductions, which allows a write down for the capital cost of a building used to earn rental income.
There is no particular bias in the tax system to make negative gearing more beneficial for real estate than other investments: the drivers for that decision come from outside the tax system.
For example, lenders may be prepared to lend a higher proportion of the purchase price on real estate when compared to other forms of investment, thus the purchase can be more highly leveraged and the eventual capital gain will represent a higher return on funds invested. However this does presume the investor has the cash flow, often from other sources, to service the loan.
The role of CGT
Negative gearing would be less attractive if the capital gain on the sale of an investment was taxed in full.
Negative gearing is a negative cash flow, but it produces an annual tax benefit that would be clawed back if the capital was taxed when the property is sold. But CGT is generally only paid on half of the capital gain as a discount is applied when calculating how much is included in taxable income. Therefore there is an asymmetry as the full amount of any mortgage interest is allowed as a deduction when incurred, but only half of the capital gain is included as income.
The Henry Review recommended (Recommendation 14) that a 40% discount should be applied across all forms of non-business investment income, including capital gains, with a corresponding reduction in the amount of interest that could be claimed each year. This would reduce both the bias to investments that produce capital gains over income, and the incentive to leverage off negative gearing deductions.
First home owners and renters miss out
The group of prospective purchasers that is most affected by housing prices is notably absent from the discussion of tax incentives.
First home owners don’t have access to tax deductibility to subsidise interest payments, and without a windfall on the sale of another property they may have difficulty accumulating a deposit.
The effect of first home owner subsidies, however, is mixed: although it boosts the deposit the subsidy can itself be inflationary as vendor price expectations rise to take account of the subsidy.
The remaining group, renters, also face increased rents as the owners of rental properties seek a return on the capital they have invested in the property.
It has been argued that any changes to negative gearing would result in increased rents, based on rental increases between 1986 and 1988 when the Hawke government quarantined negative gearing deductions. But this is largely discredited as the <a href="https://www.asb.unsw.edu.au/research/publications/ejournaloftaxresearch/Documents/paper4_v3n1.pdf" target="_blank">evidence</a> shows there were other issues that increased demand in the Perth and Sydney markets over this time.
These current policies all affect demand, resulting in increased housing prices as investors and cashed up owner occupiers bid up the cost of housing.
What is needed is a set of policies that would stimulate the supply of housing, for example the <a href="https://www.dss.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme" target="_blank">National Rental Affordability Scheme</a> which provides tax incentives on new housing development.
Ultimately tax reform in relation to housing will require the government to make some hard decisions.
The two issues that need to be reformed are the main residence CGT exemption and removing the ability to offset investment losses against other income. Such reform will not be successful without public support, and neither the Labor nor the new Coalition governments have been prepared to act on these proposals.
Helen Hodgson is senior lecturer, School of Tax and Business Law at the University of New South Wales.
Helen was a Member of the Legislative Assembly in WA from 1997 to 2001. She has no current affiliation with any political party.
This article was originally published at <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/explainer-why-negative-gearing-is-bad-policy-21882" target="_blank">original article</a>.
 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/21882/count.gif" width="1">
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hhodgson-WTYf8w7F7q

Who are the real winners and losers from housing tax concessions?

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All too often, real estate slanted commentary on interest rate decisions follows a line something like: "With dwelling prices in 'X' doing 'Y', then interest rates should fall..."
Which would be all well and good if we had a dwelling price targeting central bank. But we don't. We have an inflation targeting central bank.
The most recent inflation print from the Australian Bureau of Statistics at last showed what some commentators have been fearing of flagging for a while: signs of higher inflation.
In particular, some experts believe that a lower Australian dollar will be reflected in higher prices at the fuel pump, which is clearly bad news for motorists; we might see a petrol price of well above $1.50 per litre through 2014, although that remains to be seen.
The headline consumer price index (CPI) print was 0.8% for the quarter and the 'core' inflation came in at 0.9% for the quarter and 2.6% over the past year.
The Reserve Bank's own chart pack has shown for some time shown a notable split on where the inflation is coming from (non-tradables being items which are not readily exported or important - such as medical services or housing). Note the 'imported' tradables deflation, largely brought about by the rapidly climbing exchange rate at the end of 2011 and in 2012.
<img 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;" width="320" height="284" src="https://www.rba.gov.au/chart-pack/images/4-au-gdp-growth/4br-tradeinf-small.gif?accessed=2014-01-30-13-49-30" alt="Non-tradables and Tradables Inflation graph">
While there will no doubt be some discussion about 'looking through' the inflation to allow the economy to grow, there are a few reasons why a subsequent strong inflation print could cause interest rates to be hiked.
The challenge as ever facing the Reserve Bank, is to keep inflation under control while allowing the economy to flourish. Who'd be a central banker?
1) RBA policy
The Reserve Bank has a policy of targeting inflation and keeping CPI to within 2-3% over the medium term as part of its approach to price stability. In fact, here is the RBA's monetary policy in full:
"The Reserve Bank is responsible for Australia's monetary policy. Monetary policy involves setting the interest rate on overnight loans in the money market (‘the cash rate’). The cash rate influences other interest rates in the economy, affecting the behaviour of borrowers and lenders, economic activity and ultimately the rate of inflation.
"In determining monetary policy, the Bank has a duty to maintain price stability, full employment, and the economic prosperity and welfare of the Australian people. To achieve these statutory objectives, the Bank has an ‘inflation target’ and seeks to keep consumer price inflation in the economy to 2–3%, on average, over the medium term. Controlling inflation preserves the value of money and encourages strong and sustainable growth in the economy over the longer term."
So, in effect, the bank's hands are to some extent tied. If we want a Central Bank which overlooks inflation, then we need a new policy.
Interestingly, Australia's policy of a 2-3% target range of inflation reflects a higher target than our major trading partners. The US Federal Reserve has an inflation target of 2% and so does the Bank of England (not that the BoE has had much success in hitting its target in recent years!).
2) Credibility
I think the key point is credibility. It's all well and good a central bank attempting to imply that "we'll get tough on inflation next time around" but, like the boy who cried wolf, credibility can be quickly lost.
Therefore it is important that announcements are followed up with appropriate future policy. When credibility is lost, monetary policy may no longer have the desired effect and the system breaks down.
Moreover, where businesses don't believe policy announcements are credible, they tend to expect higher inflation and behave accordingly - wage-setting behaviour is adapted, wages tend to rise with inflation to follow, in all likelihood with little or no benefit from increased output.
Despite having 'missed' the inflation target band on occasions since 1993 as the chart below shows, the RBA notes that the inflation target is a medium term average of 2-3%. At times, CPI will inevitably run outside the target band, but broadly speaking markets seem to believe that the Reserve Bank is serious about its inflation target.
<img 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;" width="320" height="280" src="https://www.rba.gov.au/monetary-policy/images/inflation-long-run.gif">
As a result of this the Reserve Bank retains some power in its '<a target="_blank" href="https://petewargent.blogspot.co.uk/2012/10/jargon-busting-v-to-jawbone">jawboning</a>' - comments made in interviews concerning bringing the level of the Australian dollar down, for example, can have an effect while markets believe in the credibility of the central bank and its board.
Of course, one of the challenges for a central bank is that in order to continue to meet a medium term average inflation target of 2-3%, the board needs to look "out of the windscreen" and "not out the window". Not a great analogy, but one that is frequently applied in this case.
3) Human nature
Perhaps a slightly less important point, but although we tend to think of central bankers as aloof, like you and I they are human, and by and large they probably do care about what people think of them.
On any board, it stands to reason that some members will hold more sway than others (particularly the Governor, one would assume), leading some to suggest that central bankers can gain reputations for being 'tough' or 'soft' on inflation (or 'hawkish'/'dovish' as it is sometimes labelled).
This is led some academics to spend (too) much time discussing whether there should be some kind of automated monetary policy system i.e. "If X happens to inflation, then interest rates should be Y". I'm not even sure this is a good idea in theory, but it's certainly a terrible idea in practice.
In reality, economies are complex and human experience must play a part in attributing importance to the various sectors of the economy and the way in which they will interact with one another.
Summary
Of course, housing markets, and particularly dwelling construction, will be one element considered by the Reserve Bank at its meetings in 2014. Further, the financial crisis has shown the central banks would be foolish to turn a blind eye to asset price bubbles in order to concentrate solely on an inflation target.
If you take a read of the <a target="_blank" href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2013/05112013">Minutes of a Monetary Policy meeting</a>, you will see that a broad range of issues are considered under the broad headings of 'International Economic Conditions', 'Domestic Economic Conditions' and 'Financial Markets'.
An inflation targeting Reserve Bank must consider the current and future trajectory of the inflation rate, and therefore if we have another strong core inflation print on April 23, one would have to assume that the top of the inflation target band would be in danger (the most recent prints are following an upwards trend) and therefore interest rate hikes may follow.
It will be interesting to see how 2014 pans out. Future markets seem torn, and on balance, suggest that perhaps a cash rate stuck at a generational low of 2.50% is the most likely outcome for some time to come yet.
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>' is out now.
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Three reasons why the RBA can't overlook signs of higher inflation

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The GST laws can apply to a weird and wonderful range of things, and some fine distinctions are often sought to be made by the Tax Office in applying those laws.
Feeling sleepy already (at the mention of distinctions in tax law)? I can't blame you, but a recent decision by the Administrative Appeals Tribunal showed how the law can work in favour of a business, although not as it may have thought.
The Tax Commissioner had made a decision that a sleep positioning system produced by a company which assists users to control sleep apnoea was subject to GST. The company objected and the matter came before the AAT.
The AAT set aside a decision by the Tax Commissioner and held that the system was GST-free under provisions of of the GST Act as it was a medical aid. This is good news for customers who won't have to pay GST on the item. But the way the AAT reached its conclusion is interesting.
The company in this case, Snugfit Australia, is registered for GST and supplies a sleep positioning product known as "SnoreBeGone", which assists users to control sleep apnoea. The product is designed to support the body when a person is sleeping in such a way as to prevent the person snoring. It is made of foam with a fabric cover, and is designed to be used in conjunction with a mattress to encourage side sleeping.
The Tax Commissioner issued a private ruling, sought by the company, which found the product was subject to GST. The company's objection to the ruling was disallowed. Before the AAT, the company argued that the product was GST-free as it was covered by Items 82 ("night-time positioning equipment modifications"), 64 (bed restraints), 67 (backrests, leg rests and footboards for bed use), or 87 (cushions specifically designed for people with disabilities) of Schedule 3 to s 38-45(1) of the GST Act. That's enough technicalities for the moment!
According to the AAT, it is the modifications to "night-time positioning equipment" (ie a mattress) that are exempted under Item 82, not the equipment itself. It said from the marketing material and from an examination of the product, it was clear that it was designed to be used in conjunction with another sleeping surface, thereby modifying it.
Therefore, the AAT held the product came within the description contained in Item 82 as the product modifies the shape of a mattress to accommodate the requirements of a person with a disability and is GST-free.
The Tax Office considers that the AAT's decision that the product modifies a mattress turned solely upon the facts of the case, and the description of the product forming part of the scheme set out in the private binding ruling made by the Commissioner. The ATO considers the AAT decision does not have any broader impact on the meaning of the term "modification" in other contexts.
However, the ATO said it is reviewing its view, given in a 2002 Interpretative Decision about the GST treatment of contoured pillows to determine whether it ought to be revised or withdrawn in light of the AAT's decision. The ATO noted that, in order to be GST-free under the GST laws, the relevant product must also be specifically designed for people with an illness or disability, and not widely used by people without an illness or disability.
As I said at the beginning, the GST laws deal with some weird and wonderful things. But it's not difficult to argue that the GST law itself is at times a weird and wonderful thing. The GST law, and the old sales tax that preceded it, were full of "fine line" distinctions on whether various products and services were or were not subject to tax. Those calling for simplification of tax and GST laws have a point.
Terry Hayes is the editor-in-chief of tax news reporting at <a target="_blank" href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
 
 
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The weird and wonderful applications of the GST law

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The recent inflation numbers sent the Aussie dollar up and saw most economists advise “forget anymore interest rate cuts”.
But you should never get too carried away with a one-off figure.  It is trends that count.  Also understanding the reasons behind the figures helps.
<a href="https://matusikmissive.com.au/wp-content/uploads/2014/01/CPI-1.png"></a>
 <img alt="matusik_jan_31_one" height="353" width="470" src="/images/stories/2014/01/31/matusik_jan_31_one.png">
 <img alt="matusik_jan_31_two" height="352" width="470" src="/images/stories/2014/01/31/matusik_jan_31_two.png">
 <img alt="matusik_jan_31_three" height="352" width="470" src="/images/stories/2014/01/31/matusik_jan_31_three.png">
<a href="https://matusikmissive.com.au/wp-content/uploads/2014/01/CPI-2.png"></a>
Domestic inflation surprised on the upside.  Yet it remains well within the RBA target range of between 2% and 3%.  At present the cash rate is 2.50%.
Housing-related things drove much of the recent inflation result.  This was followed by food; recreation and transport.  Much of the housing inflation has come from taxes, charges and utility bills.  Also, recent house price rises (measured here via new dwelling sales excluding land) factor in.  Fruit and vegies went up due to the weather; holiday travel/accommodation prices rose as did the cost of petrol.
A significant component of the current inflation was due to the government tax increases including the carbon tax.  Using housing as an example – property taxes and charges rose 7.9% last year; the cost of water/sewerage rose 9.3%; the price of electricity lifted 6.3% and the cost of gas/other household fuels went up 5.6%.  Remember CPI, overall, was just 2.7%.
Interest rates remain low.  The standard variable rate is below 6%; discounted rates below 5%.  Three-year fixed rates remain well below the standard variable rate averaging 5.3%.  But fixed rates are now rising, up from 5.1% three months ago.
All long-term rates now exceed the cash rate.  A year ago the opposite existed.  At the time of writing, the 90-day bank bills were around 2.6% and 180-day bills 2.64%.  Three-year government bonds were 2.96% and ten-year Aussie bonds 4.24%.
<ul></ul>
So interest rates look set to remain benign for some time to come.  But are they low enough?  Again, I think no.  Inflation is tame.  In fact, much of the current inflation is caused by unnecessary taxes and charges, which are helping stop consumption and lowering consumer confidence (which fell last week).  Lower interest rates would help.
Yet maybe now (or soon) is the time fix your interest rates.  I would like the talking heads to be wrong on this one (no more rate cuts) but I doubt it.
Michael Matusik is the founder of <a style="font-size: 14px;" href="https://www.matusik.com.au/" target="_blank" rel="nofollow">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.
Read <a href="https://www.matusikmissive.com.au/" target="_blank" rel="nofollow">Michael’s Blog</a> or follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts" target="_blank" rel="nofollow">Facebook</a> and <a href="https://www.twitter.com/michaelmatusik" target="_blank" rel="nofollow">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik" rel="nofollow">LinkedIn</a>.
 
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Lower interest rates would help, but I doubt we'll get them

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All investment and development properties incur a land tax liability annually. The annual land tax liability for a property is derived from the value of the land only and doesn’t include the value of any improvements. In brief, anyone can object to the valuation which is provided by the NSW Valuer-General, however there is only a 60-day window in which this can be done. In some instances there are significant savings to be made.

Property developers and owners of major investment properties are the most likely to be hit with excessive land lax assessments.
What property types incur land tax?
Land tax is paid on most properties that are not a principal place of residence or not used for primary production. Development sites and land banks, retail and commercial investment properties, vacant land, land improved with a dwelling or apartments, a holiday home and many other property types incur land tax.
There are various concessions/exemptions from land tax such as a primary place of residence, the property is intended to be a primary place of residence, some boarding houses, a new residence is acquired while the previous one is yet to be sold, you have a home office but the majority of business is done elsewhere, absence from principal place of residence (e.g. move overseas) or a deceased estate.
How much is land tax and how is the amount calculated?
Land tax is payable over a certain threshold. For 2014 the threshold is $412,000. Land tax is calculated at $100 plus 1.6% of the land value up to the premium rate threshold ($2,519,000) and 2% thereafter.
The amount payable is based on the average of the last three years’ assessments. It is possible to object to any of the three assessments. If you are objecting to a value that has previously been objected to, new information must be provided.
In most instances it is too time-consuming to lodge an objection for a small investment property, as a successful objection may only reduce the burden slightly. However, with major development sites and investment properties land tax liabilities can be reduced by many hundreds of thousands of dollars.
Residential strata buildings and land tax
In order to determine the land value for individual residential apartments the Valuer-General assesses the land value of the site on which the apartment building is erected. The total land tax liability for the building is allocated to each apartment based on its unit entitlement under the strata scheme. Some owners will incur a liability and others will be exempt for reasons detailed previously.
How is land tax assessed and what difficulties impact the assessment process? Why might the assessment be wrong?
To arrive at the land value of a property the valuers working for the NSW Valuer-General analyse recent comparable sales. The opinion of value is arrived at after comparing the identified sales to the subject property based on their various characteristics, such as location, site conditions, zoning, development approval, scale, floor space ratio, view profiles, aspect and proximity to employment bases and infrastructure.
Although this method is the simplest way to determine land value, there are often points of contention as how the characteristics are compared (and ultimately land value assessed) is a matter of opinion. Small oversights in the valuation process can change an assessment greatly.
Ideally a valuer will use sales of vacant land to determine the land value (unimproved value) of the subject property; however in most built-up areas vacant land sales are not available and sales of properties with improvements (units, houses, offices) need to be used. In this instance the valuer will deduct the value of the buildings from the sale price to arrive at the land component of the sale price. This process includes a number of assumptions and a large margin for error, particularly as the buildings are given a value without having been internally inspected.
In addition, sales of properties such as development sites and major commercial office buildings often do not transact under standard/basic conditions. Often sales include conditions such as extended settlement periods, various types of options, rental guarantees, lease backs or staged payments and these conditions can allow a purchaser to pay more for a property for any number of reasons. The value for land tax purposes assumes unconditional sale so it can’t be compared to a conditional sale without making the necessary adjustments. If these adjustments have not been made by the valuer then the identified sale might be contributing to an inflated land value assessment.
Next page: Considerations and tips for making an objection.
 
<hr class="system-pagebreak">
There are any number of reasons a property owner might disagree with their assessment and these may be reasonable cause for an objection. Any objection needs to have supporting evidence based on analysis of the sales used by the Valuer General or sales not considered. Some reasons to object might be:
<ul>
<li>My development site has been given the same rate/square metre in value as all the comparable sales but it is in an inferior location and with inferior amenity.</li>
<li>There have been a number of sales around my property that have not been used by the Valuer General and I am of the opinion they are the most comparable and they support a lower land value for my assessment.</li>
<li>My land is heritage listed and the valuer general did not take this into account in their assessment.</li>
<li>Two of the sales used by the Valuer-General were between related parties (e.g. family members) and as such cant be relied upon. I have new sales that support a lower value. </li>
</ul>
How long do I have to consider an objection?
A period of 60 days is provided in which an objection can be lodged. This can be lengthened at the Valuer-General's discretion. This is only a narrow time to object and it is in the objector’s best interest to object before the end of the 60 days.
Notwithstanding the above as previously mentioned your land tax liability is based on the average of the previous three years and it is possible to object to any of the three years that appear on the notice. As such, if you miss the 60 day window you will have another chance to object to the value the following year.
Things that ought be taken into consideration before lodging an objection?
<ul>
<li>How much of my time will it take to lodge a professional and well researched objection?</li>
<li>Should I appoint a valuer/property professional to prepare the objection on my behalf? If so, what fee should I expect?</li>
<li>By what amount do I estimate I can reduce my liability by? After considering the time and cost to lodge an objection, is it worthwhile?</li>
<li>Who is a property consultant that can provide some guidance/advice in this?</li>
<li>Do I have the expertise to properly lodge an objection?</li>
<li>The assessment is based on an average of three years and this should be taken into account when deciding what years out of the three can be objected to.</li>
</ul>
What increases the chance of success?
<ul>
<li>Properly analyse the sales identified by the Valuer General so that all details of the sale are known and their impact on the value explored.</li>
<li>Identify any key sales not used by the Valuer General.</li>
<li>Provide a clear and concise objection.</li>
<li>Instructing a qualified valuer and/or land economist to prepare an objection for you.</li>
</ul>
Determining objections and how to appeal. Is it worth appealing?
After an objection is lodged it will be reviewed by an independent valuer appointed by the Valuer-General. Once the objection has been reviewed a notice of determination of the objection is sent to the relevant party. If a notice is not received within 90 days of lodgement then the objection is deemed to be disallowed.
If an objection is not successful then you have 90 days to lodge an appeal with the Land and Environment Court of NSW.
The cost of an appeal can be significant due to the inclusion of lawyers and property valuers. The high cost of an appeal is part of the reason it is important to lodge a professional objection.
Sam Barrow is an Associate Director for <a target="_blank" href="https://www.landsburys.com.au/">Landsburys Property</a> providing strategic advice and property valuation services. Sam has experience in all property types, however specialises in residential and mixed use development projects and master planned communities throughout New South Wales.
 
 
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Land tax 101: Time is ticking on the NSW 60-day objection period - is it worth appealing?

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Picking a mortgage broker can be as tricky as any part in the property buying process and, as they'll be the expert securing you a loan that can often be one of the larger financial stresses around, you'll want to get this part correct.
Think of the role of a mortgage broker to be two-fold. On the one hand, they are there to secure you finance. On the other, they are also there to help you prepare yourself for future decisions and to ensure you understand what you are signing up for. We've previously written about <a target="_blank" href="/news">the importance of shopping around for a mortgage broker</a>.
<hr>
YOU MIGHT ALSO BE INTERESTED IN:
These <a target="_blank" href="/news">Pros and cons of using a mortgage broker</a>: Cameron McEvoy
Tips on how to <a target="_blank" href="/news">maximise the relationship you have with your broker</a>, from Century 21's Charles Tarbey
<hr>
Just like any other expert, their skill and knowledge can vary considerably. If you're a first home buyer, an investor, or an upgrader, you'll want a mortgage broker that deals with the same type of clientele. If, for instance, you are an investor with plans to purchase multiple properties down the track then you'll want a broker who understands how your loans will need to be structured to best prepare yourself for that point. Brokers with most of their experience in the first home buyer area will not be best placed to prepare you.
Firstly, ask for referrals from people who are in a similar situation to you or are in a situation that you aspire to. For instance, if you want to have four properties, then try to find someone who has reached this goal. You should then ask who their broker is, and what their experience has been like with them. Many investors will use the same local expert. Good brokers regularly receive referrals and do not necessarily need to solicit as much for their business.
There are some quick and easy ways to work out if they're going to be a decent broker for you. One quick rule of thumb is to stop talking and just see what they're asking you. If they're interested in your plans for the property, such as your likelihood of selling, of using any equity, of renovating, then they're thinking ahead for you. This is invaluable.
They should be explaining the downfalls as well as the plus-sides of different products, as well as be ready to describe and help you understand how different instruments can work for you (What is an offset account? Why might you need one?). They should also explain where you can trip up, or where you might have difficulties. Find out about some of the more difficult loans they have had to write and how they worked with the problems.
A broker's role often requires their honed negotiation skills to push your loan over the line with the lender, so look out for their communication - if they're struggling to explain things to you, then you might want to reconsider.
Turn over page for the questions you must be asking your prospective mortgage broker (including their licenses, affiliations and access to loan products).
 
 
<hr class="system-pagebreak">
 
Questions you must be asking your prospective mortgage broker 
<ul>
<li>Are you licensed to recommend credit?</li>
</ul>
All mortgage brokers are required to hold an ASIC credit licence (ACL) or operate as a credit representative under a licence holder. Ask to see evidence and do your own checking on the ASIC website using its “professional registers” search engine.
<ul>
<li>Are you a member of the Mortgage and Finance Association of Australia (MFAA) or Finance Brokers Association of Australia (FBAA)?</li>
</ul>
Industry body membership is not mandatory, but all reputable brokers should be a member of one of these organisations. Membership requires higher education benchmarks and other professional and ethical requirements.
<ul>
<li>What lenders are on your lending panel?</li>
</ul>
A broker’s lending panel is the lenders they are accredited with to recommend loans. Get a list of a broker's lenders and do some research. Most reputable brokers would offer a mix of banks, non-banks and mutual lenders. Be wary of broker who only has a few unknown lenders  as the broker may have failed to gain accreditation with some of the bigger lenders.
<ul>
<li>How many lenders are you likely to recommend?</li>
</ul>
Most mortgage brokers will have at least a dozen lenders on their panel and sometimes as many as 30. However, they are unlikely to be able to recommend loans from all these lenders, so you should find out which lenders they are most familiar with and ensure you are comfortable with this selection.
<ul>
<li>How long have you been a mortgage broker for and how many loans have you written?</li>
</ul>
It’s important to gauge the level of experience of your broker. If he's a rookie, his knowledge may be limited and you may feel more comfortable with someone who has more experience. It's also worth asking how business is going and if he's been busy.
<ul>
<li>Which is your favourite lender and why?</li>
</ul>
Brokers are required by lawyer not to recommend unsuitable loans to borrowers. Many, though, will have a lender they recommend more than others, and you should find out why. Valid answers could range from lowest rates and fees to excellent customer service. Brokers are paid by commission and other incentives (such as volume of business), so make sure you’re not just making up the numbers for them.
<ul>
<li>How do you make your recommendations?</li>
</ul>
Many brokers will input your information into some kind of software program to come up with a list of suggested lenders and loans. However, it is also the duty of a mortgage broker to consider your holistic financial needs and your personal circumstances. A broker should have good product and market knowledge and good people skills and should not just rely on their computer software to come up with recommendations.
<ul>
<li>Can I speak to one or two of your clients?</li>
</ul>
This is a great way to assess a broker's performance for yourself and whether previous clients were satisfied with the service they received. You can also check a broker's website for testimonials and do a Google search to see if her name pops up in relation to a dispute or if they have made the news for the wrong reasons. Also consider looking at their testimonials.
<ul>
<li>Do you charge a fee?</li>
</ul>
Most brokers are free as they are paid by lenders, but some do charge upfront fees for their mortgage advice. A broker should disclose these fees upfront, but it’s worth checking. And if they do charge any fees these should be for additional services above and beyond determining a suitable loan for your needs.
<ul>
<li>What service do you provide post settlement?</li>
</ul>
A broker should provide continuing service to her client after the loan has settled. Brokers who “set and forget” will leave you high and dry if you run into problems. Most lenders pay brokers a monthly trail commission as an incentive to provide good post-settlement customer service, but even if they don’t a good broker relies on word-of-mouth referrals and recommendations to grow her  business. You are <a target="_blank" href="/news">legally entitled to know what commissions are received</a>, so it's worth finding this out as well.
Turn over page for the extras that you can look for
 
 
 
<hr class="system-pagebreak">
 
 Whistles and Bells
It's becoming increasingly common for mortgage brokers to stay in touch with their clients through online services. If this is something you want, ask about how they stay in touch. Some will offer newsletters, while others will provide updates on changing rates via text messages.
You will want to have a regular channel of communication with your broker, particularly as you are waiting for approval, so ensuring they are available is also important. See how easy it is to get them on the phone.
Test them out
Do not be afraid to head online to a comparison tool and look for a better deal. If your mortgage broker has suggested a product and you think there is something better - ask them why they didn't recommend it. Chances are, there will be reasons you haven't even thought of.
MoneySmart recommends heading in to see a broker with a "wish list" of features and hopes for your loan. Ask them what is realistic and achievable and the costs for each - compare the responses between brokers.
Warning signs for investors:
<ul>
<li>
If a broker begins suggesting specific properties to you, then be aware. Are they likely to receive a commission if you buy that property? What is their reason for the suggestion?
</li>
<li>
If they show disinterest in your plans or specific requirements, then you'll never get a loan product that suits your unique needs.
</li>
<li>
When the going gets tough, if the broker suggests that you falsify any information then alarm bells should be ringing.
</li>
</ul>
jduke@propertyobserver.com.au
 
 
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How to: Pick the best mortgage broker

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Ahead of the Reserve Bank of Australia’s (RBA) February announcement, Property Observer asks the experts what they predict will happen to the interest rate – with a single answer across the board.
Shane Oliver – Head of investment strategy and chief economist, <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a>  <img width="125" height="150" src="/images/stories/2013/10/25/shane-oliver-profile.jpg" alt="shane-oliver-profile" style="float: right;">
WE’VE SEEN CLEAR EVIDENCE THAT INTEREST RATE CUTS HAVE STARTED TO GAIN TRACTION
I think they’ll leave the rate on hold – and there are several reasons. Firstly, the last rate cut was now back in August – it’s been about six months with rates on hold. Given that the Reserve Bank has already cut interest rates to record lows, it’s unlikely that they’ll like to drop them further.
I think the reality is that over recent months, we’ve seen clear evidence that interest rate cuts have started to gain traction. Housing prices picked up in the last quarter of last year, and there’s now evidence that interest rate cuts have flowed through to housing construction activity. Consumer and business confidence has also bottomed out, while retail is beginning to pick up. The strong Australian dollar was a concern, but we have seen that weaken – in fact, last week we saw the Australian dollar drop below US 88 cents, for the first time since 2010. That coupled with strong indicators in the economy will leave the Reserve Bank feeling confident.
We might see rate hikes in the December quarter, perhaps around October. Right now, the economy is still probably not strong enough for an interest rate increase. We’ll be looking at at least 12 months of rates on hold.
 
Angie Zigomanis  – Senior manager, residential, <a href="https://www.bis.com.au" target="_blank">BIS Shrapnel</a> <img style="float: right;" alt="Angie-Zigomanis--porfile" height="150" width="125" src="/images/stories/2013/10/25/Angie-Zigomanis--porfile.jpg">
UNDERLYING INFLATION IS STILL LIKELY TO BE AT A COMFORTABLE LEVEL FOR THE RESERVE BANK
We do not expect the Reserve Bank to change interest rates at its February meeting. Headwinds still face the Australian economy. Resource sector investment is estimated to have peaked and is now tapering off, while growth in other sectors of the economy is not yet picking up at a pace to sufficiently offset this decline in the short term.
Nevertheless, there are signs that the current levels of interest rates are doing their job. After declining in 2011 and 2012, house prices have stabilised and have been growing in some cities in 2013. This is encouraging new dwelling activity, with an upturn in residential construction nationally now appearing to be entrenched.
While inflation for December was a little higher than most analysts expected, there were some “one-off” factors that helped to drive the numbers, and underlying inflation is still likely to be at a comfortable level for the Reserve Bank. As a result, we expect the cash rate to be held at current levels for now.
Article continues on next page. Please click below.
 
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Cameron Kusher – Senior research analyst, <a href="https://www.rpdata.com/" target="_blank">RP Data</a> <img style="float: right;" alt="cameron_kusher_new" height="156" width="125" src="/images/stories/2014/01/28/cameron_kusher_new.jpg">
WE COULD SEE AN INCREASE IN THE INTEREST RATE LATER THIS YEAR
Obviously [the other week] we had some pretty confronting results. I think inflation is a lot higher than people expected. But I think generally rates will be on hold for the next few months. The RBA will want further evidence that inflation is growing, and that the economy is picking up.
They’ve said all along that what they’ve wanted to see from interest rate cuts is a handover from the resources boom to the housing sector, which they’re getting. We’re seeing higher home values.
So the likelihood is that rates will stay still for the next few months. But we could see an increase in the interest rate later this year. The RBA are pretty concerned with just how quickly Melbourne and Sydney have been growing over the past year. If home values continue to accelerate, that could move them to increase rates.
At the moment we’re seeing 2.7% annual inflation. If that starts heading up to the higher end of their target band, that would also impact interest rates. And with the Australian dollar dropping, we might start importing inflation from overseas.
Any increase in the interest rate won’t happen til the second half of the year at the absolute earliest – most probably late in the year.
 
Alex Parsons – Chief executive officer of <a href="https://www.ratecity.com.au/" target="_blank">RateCity</a>  <img alt="alex-parsons-profiel" height="150" width="125" src="/images/stories/2013/11/15/alex-parsons-profiel.png" style="float: right;">
A CUT IS OFF THE CARDS
I hate to be boring, but there will be no change in February. I think based on the inflationary figures that just came out, coupled with the property market, particularly in Sydney, a cut’s off the cards.
If we do see any movement, it’ll be a rise, but it’s too early for that – that will happen towards the end of the year. But obviously a lot can happen between now and then, in Australia’s economy and internationally.
For now though, the interest rate will stay put. Especially if we see the positivity in the market continue, and now that the dollar’s back in the range they’d like to see. Interest rates are at record lows – the RBA won’t be making any cuts over the next six to eight months.
But overall, consumers shouldn’t worry about RBA changes – they aren’t always passed on by the institutions anyway. Get out there and find out what rate you’re on, and compare it with what else is out there. You can save yourself some money, both on the borrowing side and the lending side.
And if you don’t have a four in front of your home loan interest rate today – get out and get a better one.
Article continues on next page. Please click below.
 
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Andrew Wilson – Senior economist, <a href="https://apm.com.au/" target="_blank">Australian Property Monitors  <img alt="AndrewWilson-profile" height="150" width="125" src="/images/stories/2013/10/04/AndrewWilson-profile.jpg" style="max-width: 480px; float: right;"></a>
THE IMPROVEMENT TO ECONOMIC ACTIVITY REMAINS A WORK IN PROGRESS
Interest rates settings have been a critical element driving the ongoing revival of Australian housing markets over the past year. Cuts to interest rates in May and August 2013 to the lowest levels in 60 years fuelled home buyer and investor activity with prices growth accelerating in all capital city markets over the second half of the year.
The easing of interest rates over the past two years has been a monetary policy initiative designed to stimulate economic activity in the face of the decline in the construction phase of the mining boom that has underscored economic growth in recent years.
Easier interest rate policy was also designed to reduce the relatively high value of the Australian dollar and increase the competitiveness of Australian goods and services in export markets.
Although lower interest rates are typically a catalyst for house price growth through improved affordability,  this is designed to be offset by an increase in dwelling construction to ameliorate short-term supply-demand imbalances that adds to prices growth – and also to add to economic activity.
The improvement to economic activity through lower interest rates remains very much a work in progress which leaves further scope for another easing in monetary policy through lower interest rates.
Employment in the major states of New South Wales and Victoria continues to deteriorate. Latest ABS data reports that the number of people with jobs in both those states has declined disturbingly over the past year and continues to trend downwards.
Dwelling construction as expected has improved recently although most of the increase in activity has been in planned apartment construction in Sydney and Melbourne which will not add to the stock of housing or economic activity in the short-term. The number of new houses approved remains underwhelming considering the level of stimulus in the market.
The Reserve Bank will likely wait until more data becomes available on the unfolding underlying nature of the economy in 2014 so an interest rate cut is unlikely in February. Although interest rates are likely to remain stable over the short-term the risks remain for another easing in monetary policy particularly if the New South Wales unemployment rate climbs above 6%.
There is certainly no realistic prospect in the foreseeable future of a rise in official interest rates despite the emergence of rising inflation.
<a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
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February's RBA rate decision: The experts make their predictions

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Yesterday’s shock inflation figure makes further interest rate cuts unlikely, and lays the groundwork for the Reserve Bank to hike interest rates in 2014.
The 0.8% quarterly rise in the consumer price index surprised the nation’s markets on the upside – most had been factoring in a 0.5% rise.
It’s also above the RBA’s own Statement on Monetary Policy, released in November 2013, which forecast 2013 would end with inflation at 2.5%. Inflation for the year is now at 2.7% – heading towards the top of the RBA’s 2-3% target band.
“The magnitude of the increase this quarter surprised us,” Westpac chief economist Justin Smirk says.
This is despite the bank expecting to see some inflation arising from the <a target="_parent" href="https://www.smartcompany.com.au/growth/export/528-">weaker Australian dollar</a>, which makes imports more expensive.
It puts a stop to speculation that the RBA could cut interest rates – <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/34437-breaking-news-cash-rate-left-unchanged-at-2-5">already at record lows</a> – to stimulate the economy and ease its transition away from the mining boom.
“If the numbers are a true reflection of inflation, rate cuts from here now look extremely unlikely, especially given the lower currency and momentum gathering in some areas of the economy,” said ANZ senior economist Riki Polygenis.
She added that most commentators have previously figured the RBA isn’t too concerned with inflation at the moment. “At first glance, these figures do question [that assumption].”
The only way the RBA can fight inflation is through raising interest rates. Commentators are divided on whether yesterday’s inflation figure is enough to see the RBA push the brakes.
One economist who thinks a rate hike is now on the horizon is Market Economics’ Stephen Koukoulas. Prime Minister Julia Gillard’s former economic adviser said Australia wouldn’t have an inflation problem, provided the RBA “does its work and adjusts interest rates according to this new information”.
“A rate hike in March, with more through 2014, looks the best policy approach,” he said.
Driving the increase was a rise in non-tradable inflation, which refers the rise in price of things that aren’t imported such as fast food and utilities. Non-tradables rose 0.8% in the quarter, taking their yearly rise to 3.7%. Such goods comprise 60% of the weighting of the Consumer Price Index, so the rise was a large contributor to December’s increase.
Despite the lower Australian dollar, tradable inflation was more subdued, rising 0.7% in the quarter. That takes tradable inflation to 1% in the twelve months to December.
The fastest-rising individual category was recreation and culture, which represents holiday travel, where prices rose 2.1%. Food and beverages also rose 1.6%, communication services rose 1.2%, while housing rose 0.5% in the quarter.
Alcohol and tobacco rose 1.6%, but the main contributor to this was a rise in the federal excise tax on tobacco that kicked in from December 1, 2013.
Perhaps due to the end-of-year-sales, clothing and footwear actually saw price deflation of over 1% in the December quarter. Also falling were health and transport costs, while education costs remained steady.
A higher CPI can mean automatic wage hikes for many of the country’s employers, as contracts typically stipulate annual wage increases in line with inflation as a bare minimum.
Smirk doesn’t think employers will get much relief from this.
“Without a significant further dip in the [Australian dollar], we still see inflation peaking around 3.0% in early 2014,” he said.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany.</a>
 
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