<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.

Joel Robinson

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

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

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The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

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

<html><body>
Mortgage lender RAMS is offering all its home loans until the end of January with no application fee at a time when it says many Australians are reviewing their finances and when first-home buyers are more proactive about considering entering home ownership.
The offer will save borrowers $595 on fees, including the valuation fee.
RAMS has variable rate home loans starting from 5.54% and a three-year fixed rate home loan starting from 5.39%.
In order to be eligible for this promotion, home loan applications need to be received by RAMS by 5 pm on January 31, 2013.
The RAMS campaign is similar to successful marketing campaigns it has run in the past few years.
Currently, some lenders charge in excess of $800 in mortgage application fees.
Westpac, which owns RAMS, charges total mortgage fees of $600.
“We find the new year is a popular time for Australians to review their finances and look at ways they can save money,” says RAMS spokesperson Melanie Monico.
“Many people also take more proactive steps towards their goal of moving into a home of their dreams in the new year.
 “Often people are on holidays and have more time to research properties and start their property search."
Details of the offer can be found in the new <a target="_blank" href="https://www.youtube.com/watch?v=O0gvh8r1NDU">RAMS advertising campaign</a>.
RAMS is particularly focused on <a target="_blank" href="https://www.rams.com.au/home-loans/buying-your-first-home/">providing loans to first-home buyers.</a>
Housing figures released by the ABS yesterday show that first-home buyer numbers fell from 18.7% of all mortgage commitments in October to 15.8% in November.
</body></html>

lschlesinger-FZcF9M3vE6

RAMS waives application fee for new home loan borrowers

<html><body>
The number of owner occupier housing loans taken out in November fell 0.5% to 46,199 driven by a drop in first-home buyers taking out mortgages, according to the latest seasonally-adjusted ABS statistics.
This was below market expectations of a 0.5% rise and despite the cash rate falling from 3.5% to 3.25% on October 3 - an indication that lower rates are not encouraging borrowers to take on new debt.
The biggest fall was recorded in South Australia where the number of owner occupier loan commitments fell by 6% followed by Tasmania (-3.3%), NSW (-2.7%) and Queensland (-1%).
Gains were led by the ACT (+3.5%), followed by the Northern Territory (2.3%), Western Australia (1.1%) and Victoria (0.9%).
The national fall in November follows four consecutive months of growth in the number of owner-occupier mortgage commitments.
In October there was a 0.1% rise in the number of owner-occupier home loan commitments, following a  0.9% rise in September and a 1.8% rise August.
Westpac points that excluding refinancing, new lending declined by 1.3% in the month with the headline result "driven by a sharp pull back in the first-home buyer (FHB) market.
In original terms, the number of first-home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 15.8% in November 2012 from 18.7% in October 2012.
"We estimate that lending to FHBs fell 16.7% in November, following a 2.9% fall in October. Lending to FHBs jumped 19% in the six months to September," says Westpac.
"Beyond these timing distortions, the FHB market is expected to advance in response to improved housing affordability associated with lower interest rates.
Westpac also notes that the upgrader market improved in November, with lending up 4.5% in the month and 10.4% higher over the four months to November.
And while there was a 3.3% in lending to investors in November. over the most recent three months lending to this sector is up 11.7%.
The number of loans to buy or build new homes both fell over November, indicating continued weakness in this sector.
Loans for the purchase of new dwellings fell a noticeable 10.3% over November to 2,380 while the number of construction loans fell 1.8% to 4,809.
In value terms, the aggregate value of owner occupier mortgages taken out in November rose by 0.6% to $13.94 billion.
The value of fixed interest investment house loans fell by 3.3% over November to $7.52 billion with taking the value of owner occupier and investment lending down 0.8% for the month to $21.46 billion.
In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 0.8%.
</body></html>

Mortgage lending falls in November despite October rate cut: ABS

<html><body>
HSBC Australia chief economist Paul Bloxham has taken a lonely stand against the economists' cabal by tipping the cash rate to rise to 3.25% by year-end.
Just as Westpac’s Bill Evans went out on his own in July 2011 tipping the RBA to start cutting rates when all other economists thought the opposite, Bloxham is the only bank economist who expects a higher cash rate (and hence higher mortgage rates) by the end of the year.
Evans' bold mid-2011 forecast was spot on the money (the RBA began cutting rates in November 2011) – only time will tell if Bloxham’s more bullish economic outlook is as accurate.
Bloxham’s view stands in stark contrast to his distinctly bearish rivals –<a target="_blank" href="/news"> led by the University of Western Sydney's Steve Keen</a> - who says the cash rate could fall to as low as 2% by the end of the year and who last year was spot on with his forecast that the cash rate would fall to 3% by the end of 2013.
Keen is not the only economist tipping a series of rate cuts in 2013, with both Macquarie’s Richard Gibbs and ANZ's Ivan Colhoun also tipping a year-end cash rate of 2%, alongside Stephen Anthony of consultants Macroeconomics.
Just last week <a target="_blank" href="/news">NAB chief economist Alan Oster </a>announced the bank had readjusted its rates outlook to tip three rate cuts over 2013 (in February or March, May and then August), having previously only forecast one rate cut this year.
Oster said the main reason for this change was the weaker economic outlook, with NAB now forecasting GDP growth of just 2%  (compared with earlier forecasts of 2.5%) and unemployment forecast to rise to 5.75%.
Bloxham, who joined HSBC in September 2010 after 12 years as an economic analyst at the RBA, tells Property Observer his expectation of the cash rate rising to 3.25% (most likely in the fourth quarter of the year) is made “with a recovery in Chinese growth in mind in 2013”.
“[The Chinese economy] has already lifting from 7.8% to 8.6% growth, which should be supportive to the international environment and for the commodities sector in Australia,” says Bloxham.
Bloxham also says earlier cash rate cuts are starting to come through and “provide support” to sectors like the housing market (he forecasts single-digit growth in house prices in 2013) and retailing.
And while he expects the Australian economy to grow close to trend this year, he is says the “mining story” is not yet over.
Bloxham acknowledges that other economists have a very different outlook and that it is “very hard to call rates in advance”.
“We are probably more bullish on the China story and in terms of monetary policy, still believe that interest rates still have an effect on the economy,” he says.
"At this stage there are only modest signs that loosened monetary policy is supporting the Australian economy. But with the RBA's cash rate already at a record low (3%) and mortgage rates around 100 basis points below average, we expect that there is more support from the current policy settings yet to flow through to the economy," he says in his latest economic note.
"Keep in mind that the last 50 basis points of cuts has only occurred in the past three months and that monetary policy acts with a lag."
While Bloxham is the only economist tipping a rate rise, he is not the only one with an optimistic outlook with ANZ senior economist Justin Fabo telling the Australian Financial Review his gut feeling is that "things might be better this time".
However, this has caused ANZ to only push back its next rate cut from February to March – the bank still its expects the cash rate to fall.
 
<hr class="system-pagebreak">
 
Property bear Steve Keen expects demand conditions to remain subdued in Australia this year, sticking to his “heretical” argument that Australian mortgage debt has remained in excess of 85% of GDP while in the US, mortgage debt has fallen from 85% to about 65%.
“So they copped pain whereas we didn't; but the catch now is that, for our households to start borrowing again and stimulating demand, they'd need to take on even more debt than they ever have before.
“Since I don't see that happening, I expect demand conditions to remain subdued in Australia this year- whereas in the USA (if it weren't for the government's insane focus on reducing its own debt (a repeat of the debacle of 1937) households could borrow without pushing into utterly new debt-level territory.
“This subdued growth will mean that inflation remains below the RBA's target band, and the economy is more sluggish than they expect.
Keen says the RBA will respond by cutting rates to try to revive the economy, which he says will stop households deleveraging, but “won't inspire them to take on more debt”. 
“So our rates will slowly deflate towards parity with the rest of the developed world.”
Keen expects the average standard variable mortgage rate to fall to about 5.5% - 5.75% with banks continuing to “claw back some of the margin they gave away in the mad scramble for market share when the mortgage boom was on”.
“But not quite back to the 4% that used to rule when lending was less bubble driven,” he says.
As for Bill Evans, he is currently tipping just one rate cut in 2013.
According to comparison website ratecity.com.au, the average standard variable rate as of January 7 2013 was 5.98% compared with 7.31% in October 2011, before the RBA began cutting the cash rate.
</body></html>

HSBC’s Paul Bloxham the lone rider tipping interest rates to rise 2013 

<html><body>
Last week, NAB adjusted its interest rate forecast from one cash rate cut in 2013 to <a target="_blank" href="/news">three rate cuts over the course of the year</a>, with the first one expected on February 5.
As the countdown begins to the first RBA monetary policy meeting of the year, the question borrowers and first-home buyers will be asking is whether banks will continue to pass on only about 80% of official rate reductions of if they will be more generous.
There’s even been talk of the big four banks cutting their mortgage rates outside of RBA decisions as the competition for mortgages in a slow growth market heats up.
The major banks account for around 80% of all mortgage lending in Australia (three out of every four loans), and their loan books and deposit balances dwarf those of their lending rivals.
According to the most recent APRA banking stats (November 2012), the Commonwealth Bank has an owner-occupier mortgage book worth $215 billion, followed by Westpac ($168 billion), NAB ($136 billion) and ANZ ($125 billion).
Putting this into context, the fifth biggest mortgage lender is ING Direct, with an owner-occupier loan book worth $28 billion.
These are the current lowest fixed and variable rate offerings of the major banks:
(Where the advertised rate is the same, the loan with the lower comparison rate is ranked higher.)
Lowest variable rate offerings:
<table width="470" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td width="134" valign="top">
Provider
</td>
<td width="124" valign="top">
Loan name
</td>
<td width="97" valign="top">
Rate
</td>
<td width="116" valign="top">
Comparison rate*
</td>
</tr>
<tr>
<td width="134" valign="top">
CBA
</td>
<td width="124" valign="top">
One year guaranteed rate
</td>
<td width="97" valign="top">
5.34%
</td>
<td width="116" valign="top">
6.43%
</td>
</tr>
<tr>
<td width="134" valign="top">
NAB
</td>
<td width="124" valign="top">
Choice Package ($250K+)
</td>
<td width="97" valign="top">
5.68%
</td>
<td width="116" valign="top">
6.05%
</td>
</tr>
<tr>
<td width="134" valign="top">
ANZ
</td>
<td width="124" valign="top">
Simplicity PLUS
</td>
<td width="97" valign="top">
5.70%
</td>
<td width="116" valign="top">
5.75%
</td>
</tr>
<tr>
<td width="134" valign="top">
Westpac
</td>
<td width="124" valign="top">
Rocket repay with 0.7% discount
</td>
<td width="97" valign="top">
5.81%
</td>
<td width="116" valign="top">
6.64%
</td>
</tr>
</tbody></table>
Lowest one-year fixed-rate offerings
<table width="470" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td width="137" valign="top">
Provider
</td>
<td width="123" valign="top">
Loan name
</td>
<td width="95" valign="top">
Rate
</td>
<td width="114" valign="top">
Comparison rate*
</td>
</tr>
<tr>
<td width="137" valign="top">
NAB
</td>
<td width="123" valign="top">
Choice Package
</td>
<td width="95" valign="top">
5.34%
</td>
<td width="114" valign="top">
6.11%
</td>
</tr>
<tr>
<td width="137" valign="top">
CBA
</td>
<td width="123" valign="top">
Package rate
</td>
<td width="95" valign="top">
5.34%
</td>
<td width="114" valign="top">
6.21%
</td>
</tr>
<tr>
<td width="137" valign="top">
ANZ
</td>
<td width="123" valign="top">
Fixed rate
</td>
<td width="95" valign="top">
5.54%
</td>
<td width="114" valign="top">
6.37%
</td>
</tr>
<tr>
<td width="137" valign="top">
Westpac
</td>
<td width="123" valign="top">
Fixed Option Home Loan
</td>
<td width="95" valign="top">
5.69%
</td>
<td width="114" valign="top">
6.56%
</td>
</tr>
</tbody></table>
Lowest three-year fixed-rate offerings
<table width="470" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td width="132" valign="top">
Provider
</td>
<td width="131" valign="top">
Loan name
</td>
<td width="96" valign="top">
Rate
</td>
<td width="111" valign="top">
Comparison rate*
</td>
</tr>
<tr>
<td width="132" valign="top">
NAB
</td>
<td width="131" valign="top">
Choice Package
</td>
<td width="96" valign="top">
5.39%
</td>
<td width="111" valign="top">
6.04%
</td>
</tr>
<tr>
<td width="132" valign="top">
CBA
</td>
<td width="131" valign="top">
Package rate
</td>
<td width="96" valign="top">
5.39%
</td>
<td width="111" valign="top">
6.12%
</td>
</tr>
<tr>
<td width="132" valign="top">
ANZ
</td>
<td width="131" valign="top">
Fixed rate
</td>
<td width="96" valign="top">
5.54%
</td>
<td width="111" valign="top">
6.23%
</td>
</tr>
<tr>
<td width="132" valign="top">
Westpac
</td>
<td width="131" valign="top">
Fixed Option Home Loan
</td>
<td width="96" valign="top">
5.59%
</td>
<td width="111" valign="top">
6.38%
</td>
</tr>
</tbody></table>
*A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.
For information on refinancing, watch our free webinar <a target="_blank" href="/news">Refinancing and the Interest Rates Riddle</a>
 
</body></html>

The lowest mortgage rates from the big four banks

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A more bearish outlook on the economy has seen NAB revise its interest rate expectations to forecast three rate cuts in 2013, taking the cash rate to a new record low of 2.25% by year-end.
The bank had previously forecast just one rate cut in 2013.
It expects the first rate cut in the first quarter of the year (either February or March) and has tentatively penciled in further rate cuts in May and August.
“With the economy continuing to weaken and unemployment set to rise noticeably through 2013 the RBA will need to cut significantly further than previously expected in 2013,” says NAB chief economist Alan Oster.
The bank has downgraded its 2013 GDP forecasts from 2.5% to 2% with unemployment expected to rise to around 5.75% by late 2013.
“That would see, on a no policy change basis, a budget deficit in the $10 billion to $15 billion range for 2012/13," says Oster.
Oster says the weaker activity outlook will also help contain inflation to below 3% (within the RBA target band) “even including the carbon tax impact”.
“Nor do we see the Australian dollar offering much relief to a struggling economy,” he says.
NAB expects the dollar to track lower over the course of the year to reach parity with the US dollar in late 2013. 
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More bearish NAB now expects three interest rate cuts in 2013

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Demand for fixed-rate home loans tapered off in December following four consecutive months of gains, according to new home loan approval data from Mortgage Choice.
Fixed-rate home loans accounted for 20.14% of all new home loan approvals in December, down from 22.37% in November.
The reduced appetite for these more conservative lending products follows the 25-basis-point RBA cash rate cut on December 5, taking the cash rate to 3% and expectations of further rate cuts in 2013.
Furthermore, the latest mortgage rates <a href="https://www.propertyobserver.com.au/news/more-rate-cuts-likely-in-2013-a-guide-to-the-lowest-rate-home-loan-offerings-as-of-january-7/2013010658623" target="_blank">published on mortgage comparison websites</a> suggests that borrowers can source variable mortgage rates that are only a few basis points off fixed-rate offerings, with the added benefit of greater flexibility and not being locked into a rate should rates fall further.
Demand for fixed-rates has now fallen below the 12-month average of 21%, with the popularity of fixed-rate loans decreasing in the majority of states, by an average of 4.26 percentage points.
Demand for fixed-rate home loans rose by 4.12 percentage points in Queensland.
Over the same period the percentage of variable-rate loans rose to 79.86% from 77.63% in November, with increased appetite for no-frills basic variable home loans rising by 1.75 percentage points to 17.71%, and ongoing discount home loans remaining the most popular at 41.16% of all new home loan approvals in December.
Demand for standard variable rates was relatively steady, dipping by only 0.12 percentage points to 16.78%. Demand for line-of-credit loans, popular with investors, rose slightly to 3.26%, while introductory rates dropped marginally to 0.95%.
“Our data shows that fixed rates have fallen out of favour in December for the first time in five months as recent variable rate cuts gain the attention of the majority of new borrowers,” says Mortgage Choice spokesperson Belinda Williamson.
“While fixed rate home loans continue to offer piece of mind with a steady repayment level, a variable rate home loan that has the potential to shift down in price is proving more attractive. In fact, four in every five new borrowers say they would opt for this type of loan,” says Williamson.
“Borrowers may also be heeding the advice that there may be more cuts to come, particularly as recent media reports suggests some lenders may cut their home loan rates out of cycle with the Reserve Bank of Australia’s cash rate setting and as soon as next month.”
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Appetite for fixed-rate home loans falls in December following rate cut: Mortgage Choice

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Mortgage holders should not take their home loan for granted in 2013 after lenders passed on only 133 out of 175 basis points cut from the cash rate since November 2011 on the average variable home loan, according to mortgage comparison website<a target="_blank" href="https://www.ratecity.com.au/"> RateCity.com.au</a>.
This figure is based on RateCity.com.au’s analysis of the more than 100 mortgage lenders listed on its website.
The major banks and their subsidiaries, which dominate the home loan market, have in the last few years adopted a policy of not passing on rate cuts in full – on average they pass on between 75% and 80% of cash rate cuts.
Research by Property Observer shows that the Commonwealth Bank currently offers the lowest variable rate at 5.34%, an introductory rate for the first year of the loan, after which the loan reverts to the “relevant variable rate”.
NAB’s online offering UBank offers the lowest fixed rates (5.03% for one-year and 5.13% for three-year) and the second lowest variable rate (5.37%), but these rate only apply to borrowers who are refinancing into a UBank loan.
Bankwest currently offers an advertised variable home loan offering of 5.38% – but restricted to new borrowers only.
These are the lowest fixed and variable offerings of the major banks and their subsidiaries (where advertised rates are the same, the lender with the lower comparison rate gets preference):
Lowest variable rate offerings:
<table border="1" cellspacing="0" cellpadding="0" width="470"><tbody>
<tr>
<td width="134" valign="top">
Provider
</td>
<td width="124" valign="top">
Loan name
</td>
<td width="97" valign="top">
Rate
</td>
<td width="116" valign="top">
Comparison rate*
</td>
</tr>
<tr>
<td width="134" valign="top">
Commonwealth Bank
</td>
<td width="124" valign="top">
1 Year Guaranteed Rate
</td>
<td width="97" valign="top">
5.34%
</td>
<td width="116" valign="top">
6.43%
</td>
</tr>
<tr>
<td width="134" valign="top">
UBank (NAB)
</td>
<td width="124" valign="top">
UHomeLoan Refinancing
</td>
<td width="97" valign="top">
5.37%
</td>
<td width="116" valign="top">
5.30%
</td>
</tr>
<tr>
<td width="134" valign="top">
Bankwest (CBA)
</td>
<td width="124" valign="top">
Online Home Loan
</td>
<td width="97" valign="top">
5.38%
</td>
<td width="116" valign="top">
5.38%
</td>
</tr>
</tbody></table>
Lowest one-year fixed-rate offerings
<table border="1" cellspacing="0" cellpadding="0" width="470"><tbody>
<tr>
<td width="137" valign="top">
Provider
</td>
<td width="123" valign="top">
Loan name
</td>
<td width="95" valign="top">
Rate
</td>
<td width="114" valign="top">
Comparison rate*
</td>
</tr>
<tr>
<td width="137" valign="top">
UBank (NAB)
</td>
<td width="123" valign="top">
UHomeLoan Refinancing
</td>
<td width="95" valign="top">
5.03%
</td>
<td width="114" valign="top">
5.36%
</td>
</tr>
<tr>
<td width="137" valign="top">
NAB
</td>
<td width="123" valign="top">
Fixed rate package
</td>
<td width="95" valign="top">
5.34%
</td>
<td width="114" valign="top">
6.11%
</td>
</tr>
<tr>
<td width="137" valign="top">
Bankwest
</td>
<td width="123" valign="top">
Fixed Rate Home Loan
</td>
<td width="95" valign="top">
5.39%
</td>
<td width="114" valign="top">
6.24%
</td>
</tr>
</tbody></table>
Lowest three-year fixed-rate offerings
<table border="1" cellspacing="0" cellpadding="0" width="470"><tbody>
<tr>
<td width="132" valign="top">
Provider
</td>
<td width="131" valign="top">
Loan name
</td>
<td width="96" valign="top">
Rate
</td>
<td width="111" valign="top">
Comparison rate*
</td>
</tr>
<tr>
<td width="132" valign="top">
UBank (NAB)
</td>
<td width="131" valign="top">
UHomeLoan Refinancing
</td>
<td width="96" valign="top">
5.13%
</td>
<td width="111" valign="top">
5.26%
</td>
</tr>
<tr>
<td width="132" valign="top">
NAB
</td>
<td width="131" valign="top">
Fixed rate package
</td>
<td width="96" valign="top">
5.39%
</td>
<td width="111" valign="top">
6.04%
</td>
</tr>
<tr>
<td width="132" valign="top">
Commonwealth Bank
</td>
<td width="131" valign="top">
Fixed rate package
</td>
<td width="96" valign="top">
5.39%
</td>
<td width="111" valign="top">
6.12%
</td>
</tr>
</tbody></table>
 *A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.
Initially banks blamed the higher cost of raising funds on international money markets brought on by the GFC for not passing on rate cuts in full and in some instances have lifted variable mortgage rates out of cycle with the RBA.
More recently banks have blamed the need to fund a greater share of their lending from the competitive retail deposits market for their inability to pass on rate cuts in full.
This is primarily due to <a href="https://www.propertyobserver.com.au/news/banks-have-pushed-up-their-lending-margins-but-funding-costs-have-risen-rba/2012060154943" target="_blank">introduction of Basel III</a>, the new international banking guidelines, which raise the amount of capital and liquid assets banks must hold. Banks now compete aggressively for retail deposits.
However, as noted by ANZ today, the Basel Committee has agreed to change previously proposed rules over bank liquidity requirements, loosening and expanding the criteria for securities that are eligible to meet a bank’s ‘liquidity coverage ratio’.
Under the revised rules, liquid bank assets can now include corporate bonds rated as low as BBB-, certain blue-chip equities and certain mortgage-backed securities rated AA or above.
ANZ also notes that the committee delayed the implementation of the proposed rules to 2019 from 2015.
 
<hr class="system-pagebreak">
 
According to RateCity.com.au, borrowers with a $300,000 mortgage would have saved extra $80 per month if lenders matched RBA cash rate cuts.
RateCity.com.au spokesperson Michelle Hutchison says this research should be a wake-up call for borrowers.
“Even though variable home loans have been falling for more than a year, which has saved borrowers $264 in monthly repayments for a $300,000 mortgage, many borrowers missed out on further savings because most lenders didn’t pass on rate cuts in full.
Hutchison expects the trend to continue this year where lenders move rates independently of the Reserve Bank.
“While further relief may be in sight, borrowers need to concentrate on the actual rate they are paying. Keep track of your home loan, compare it online to the rest of the market and renegotiate or switch to a better deal.”
At the same time that RateCity.com.au highlights banks and other lenders inability to pass on rate cuts in full, there are rumours circulating that the major banks may be considering doing the seemingly unthinkable, cutting their mortgage rates outside of the RBA rate cycle – a sign that competition in mortgage lending is heating up.
After News Ltd paper weekend reports, Brokernews.com.au reports that Westpac is considering a six-basis-point rate cut in February, regardless of whether the RBA cuts the cash rate at its February 5 monetary policy meeting.
This is subject to the out-of-cycle rate cuts not falling foul of <a href="https://www.accc.gov.au/content/item.phtml?itemId=1056925&amp;nodeId=cdc7bcede8d5f280ca1577e18e024825&amp;fn=Anti-competitive%20price%20signalling%20and%20information%20disclosures.pdf" target="_blank">anti-competitive new price-signalling</a> and information disclosure rules, introducing by the ACCC (and only applying to the banking sector) in June last year.
Analysts are also expecting the banks to move out of cycle, with TS Lim of Bell-Potter Securities telling news.com.au that he’s expecting one of the big four banks to cut rates by March.
Another analyst, Stephen Walters from JP Morgan, said lower global funding costs would enable banks to make out-of-cycle rate cuts.
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The lowest mortgage rates from the big four banks and their subsidiaries

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Perhaps signifying the level of uncertainty in the outlook for the 2013 economy and property market, a poll of 23 economists carried out by The Age profers a range in cash rate forecasts at year's end as anywhere between 2% and 3.25%.
Notably, the University of Western Sydney’s professor Steve Keen is one of three economists (the others being Richard Gibbs of Macquarie Group and Stephen Anthony of consulting firm Macroeconomics) forecasting the cash rate to fall to 2% by the end of the year.
While some readers may scoff at Keen’s forecast given his disputed views on house prices, The Age notes that Keen was the only member of the panel to correctly pick the cash rate to fall to 3% by the end of 2012 when the survey was carried out 12 months ago.
“[The RBA] had just cut the cash rate twice from 4.75% to 4.25%. The equivalent of five more cuts was unthinkable, except for Steve Keen,” writes The Age’s economic correspondent Peter Martin.
Martin also notes that Keen was also correct in tipping an inflation rate of 2% by December 2012, with other forecasts of around 2.8% – “not shabby but not keen”.
The average forecast of the 23 economists is for an end-of-year cash rate of 2.7% off the back of modest economic growth (2.7% for Australia, compared with 3.1% across the globe) with a solid 5% pick-up in housing investment following a 6% fall over 2013 – filling some of the gap left by mining.
The weaker economic conditions are expected to push up the unemployment rate to 5.7% by December – seven economists (including Keen and AMP Capital’s Shane Oliver) tip the unemployment rate to rise to 6% or higher in 2013.
The Age survey considered the sentiments of market economists from banks and financial institutions, which make up the bulk of those surveyed (12 economists) along with six university economists, three from economic consultancies and two industry commentators.
Apart from Richard Gibbs from the Macquarie Group, who is tipping the cash rate to slide to 2% over the course of the year, economists from the banks and financial institutions have modest expectations for cash rate cuts in 2013.
Six bank and financial institution economists – including Bill Evans from Westpac, Chris Caton from BT Financial and Saul Eslake from Bank of America – expect the cash rate to fall just 25 basis points over the course of the year to 2.75%.
AMP Capital chief economist Shane Oliver is tipping a cash rate of 2.5% by year-end, with Michael Workman (Commonwealth Bank),  Andrew McManus (ANZ) and Scott Haslam (UBS Australia) expecting the cash rate to be unchanged at 3% by year-end.
HSBC Australia and New Zealand chief economist Paul Bloxham is the most bearish on the cash rate (but arguably most bullish on the economy), expecting the cash rate to end the year higher at 3.25%.
Former economic adviser to the Gillard government Stephen Koukoulas from consultancy Market Economics is tipping the cash rate to fall to 2.5% by year-end, as is BIS Shrapnel chief economist Frank Gelber.
The two industry economists – Julie Toth from Australian Industry Group (AIG) and Brad Crofts from Australian Workers Union – expect further rate cuts in 2013.
Toth is forecasting one more rate cut (2.75%) and Crofts two more (2.5%).
</body></html>

Steve Keen and Macquarie Group tip cash rate of 2% by year-end

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The Reserve Bank is expected to cut the cash rate a number of times in 2013 to support the non-mining sectors of the economy as the mining investment boom reaches its peak.
Currently variable rates are starting from as low as 5.17% – the rate being offered by non-bank lenders Mortgage View and Nationwide Mortgage.
Newcastle Permanent is offering a one-year fixed rate of 4.99% and Resi is offering a three-year fixed rate of 5.09%.
Fairfax finance columnist David Bassanese points out that financial futures markets have a “near certain expectation” of a rate cut when the RBA monetary policy committee meets for the first time in 2013 on February 5.
According to Bassanese, the best the Australian economy can hope from the mining sector is a zero contribution to economic growth in 2013.
“Barring a sudden slump in the dollar, interest rates will need to do most of the work in helping to rebalance the economy,” he writes in the Australian Financial Review.
<a href="https://www.propertyobserver.com.au/residential/residential-property-prices-to-rise-5-in-2013-but-shares-a-better-bet-than-property-shane-oliver/2012121258437" target="_blank">AMP Capital chief economist Shane Oliver</a> is tipping at least two rate cuts in 2013, taking the cash rate to 2.5%, “in order to push bank lending rates down closer to past cyclical lows”.
But he says the cash rate could fall as low as 2% if non-mining sectors like retailing and housing don’t recover fast enough.
“This could occur, for example, if rising unemployment triggers a desire on the part of households to more rapidly reduce their debt levels. This could see the RBA cut the cash rate to 2% or below,” writes Oliver in his outlook for 2013.
Fixed rates are likely to continue to fall as lenders seek to lock in borrowers and circumvent the government’s ban on mortgage exit fees.
These are the lowest advertised mortgage rates based on listings by <a target="_blank" href="https://www.ratecity.com.au/">ratecity.com.au</a>, <a target="_blank" href="https://mozo.com.au/">Mozo.com.au</a> and <a target="_blank" href="https://www.infochoice.com.au/">infochoice.com.au</a> as of January 7:
Lowest variable rate offerings:
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td valign="top" width="134">
Provider
</td>
<td valign="top" width="124">
Loan name
</td>
<td valign="top" width="97">
Rate
</td>
<td valign="top" width="116">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="134">
Nationwide Mortgage
</td>
<td valign="top" width="124">
True Saver Home Loan
</td>
<td valign="top" width="97">
5.17%
</td>
<td valign="top" width="116">
5.18%
</td>
</tr>
<tr>
<td valign="top" width="134">
Mortgage View
</td>
<td valign="top" width="124">
Pro Pack New Year special
</td>
<td valign="top" width="97">
5.17%
</td>
<td valign="top" width="116">
5.19%
</td>
</tr>
<tr>
<td valign="top" width="134">
Pacific Mortgage Group
</td>
<td valign="top" width="124">
PMG Standard Variable
</td>
<td valign="top" width="97">
5.32%
</td>
<td valign="top" width="116">
5.32%
</td>
</tr>
</tbody></table>
Lowest one-year fixed-rate offerings
<table width="470" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="137">
Provider
</td>
<td valign="top" width="123">
Loan name
</td>
<td valign="top" width="95">
Rate
</td>
<td valign="top" width="114">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="137">
Newcastle Permanent
</td>
<td valign="top" width="123">
Fixed Rate Home Loan
</td>
<td valign="top" width="95">
4.99%
</td>
<td valign="top" width="114">
5.98%
</td>
</tr>
<tr>
<td valign="top" width="137">
UBank
</td>
<td valign="top" width="123">
UHome Loan for refinancing
</td>
<td valign="top" width="95">
5.03%
</td>
<td valign="top" width="114">
5.36%
</td>
</tr>
<tr>
<td valign="top" width="137">
My Mortgage Freedom.com.au
</td>
<td valign="top" width="123">
Fixed Rate (LVR 75%-90%)
</td>
<td valign="top" width="95">
5.09%
</td>
<td valign="top" width="114">
5.88%
</td>
</tr>
</tbody></table>
Lowest three-year fixed-rate offerings
<table width="470" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="132">
Provider
</td>
<td valign="top" width="131">
Loan name
</td>
<td valign="top" width="96">
Rate
</td>
<td valign="top" width="111">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="132">
Resi
</td>
<td valign="top" width="131">
Flexi Fix Plus 75
</td>
<td valign="top" width="96">
5.09%
</td>
<td valign="top" width="111">
5.80%
</td>
</tr>
<tr>
<td valign="top" width="132">
UBank
</td>
<td valign="top" width="131">
UHome Loan for refinancing
</td>
<td valign="top" width="96">
5.13%
</td>
<td valign="top" width="111">
5.26%
</td>
</tr>
<tr>
<td valign="top" width="132">
Pacific Mortgage Group
</td>
<td valign="top" width="131">
PMG Fixed
</td>
<td valign="top" width="96">
5.19%
</td>
<td valign="top" width="111">
5.42%
</td>
</tr>
</tbody></table>
*A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.
For information on refinancing, watch our free webinar <a target="_blank" href="/news">Refinancing and the Interest Rates Riddle</a>
</body></html>

More rate cuts likely in 2013: A guide to the lowest rate home loan offerings as of January 7

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Property investors believe that the criticisms I made of negative gearing in a <a href="/news">recent article</a> on Property Observer were unfounded. Indeed, the mainstream perspective, put by <a href="https://www.propertyobserver.com.au/news/wednesday-feature-ytc-room-for-debate-negative-gearing/2012121058393/Page-2" target="_blank">Melanie Stott in a Property Observer blog</a>, is firmly wedded to the idea that negative gearing is a sound element of the Australian tax system and should thus remain in place. Government, financiers, property industry lobbyists and investors overwhelmingly support negative gearing, but there are good reasons to think otherwise. 
Some of the best work on negative gearing and associated policies is by University of Sydney economist Judith Yates (Peter Abelson and Nigel Stapledon also deserve attention). In 2009, Yates wrote a report for the Brotherhood of St Laurence, published by the Australian Housing and Urban Research Institute (AHURI), called <a href="https://www.bsl.org.au/pdfs/Yates_tax_expenditure_and_housing_2009.pdf" target="_blank">Tax expenditures and housing</a>.
This report provides an overview of the many tax expenditures relating to residential property in Australia. These tax expenditures “arise when departures from the generally accepted or benchmark tax structure produces a favourable tax treatment of particular types of activities or taxpayers”. Examples abound; the immense tax code provides many exemptions, concessions, deductions, preferential rates, allowances, rebates, offsets, credits, and deferrals.
Negative gearing allows an investor to deduct net losses from rental property against their income tax liability at their marginal tax rate even though the loss was generated separately to those income streams. Accordingly, negative gearing arises as one such defect in the tax structure. Yates recommends quarantining any losses made to the activity that produced the loss, that is, disallowing negative gearing. Economists Saul Eslake and Leith van Onselen have likewise criticised negative gearing as an unjustified subsidy. The Henry Review recommended that 40% of net rental income remained untaxed, making negative gearing less attractive.
Yates shows that the relatively wealthy tend to benefit more from negative gearing than those within the lowest or middle income quintiles. The reason is obvious: they own proportionately more investment properties, generate bigger net losses and have higher marginal tax rates, thus allowing for larger deductions via negative gearing. Interestingly, 76% of all investment properties were owned by those earning $80,000 or less in 2009-10, with the majority owning only one property. The tax benefits that accrue to this cohort of middle class property investors are proportionately smaller, though this had not prevented those less wealthy from benefiting from a tax structure that is designed to advantage the rich.
While property investors benefit from negative gearing and the capital gains tax discount, owner-occupiers by far and away are the largest beneficiaries of the current tax system. In 2005-06, $53.2 billion in tax expenditures were extended to the residential property market: owner-occupiers ($45 billion), investors ($5.4 billion) and renters ($2.8 billion). Most property investors are also owner-occupiers, benefiting from the bias towards the latter. It is unsurprising that renters receive the least assistance.
Even though negative gearing is an unjustified tax expenditure and should be removed, this concern should be considered separately from another – whether negative gearing functions as intended. The theoretical arguments are tenuous at best, with empirical evidence lacking outright. Some 92% of property investment purchases are from the existing stock of dwellings, resulting in simply shuffling owner-occupiers and tenants around without expanding the rental stock. This misdirection peaked at 96% in 2010.
Theoretically, negative gearing makes property investment more attractive than it otherwise should be, increasing demand relative to supply and therefore leading to higher prices. The financial benefits of negative gearing are capitalized into housing prices, as has occurred with the first-home owners' grant/boost. It is doubtful that negative gearing reduces costs to investors, and hence can not be passed down to tenants (as if landlords would want to do so).
Housing prices have recently experienced the largest run-up in history: 130% between 1996 and 2010, adjusted for inflation and quality. Higher prices require larger savings deposits and/or mortgages, leading to increased net losses. During this period, capital values of properties have often escalated by $50,000 to $100,000 annually, dwarfing any increased net income loss that would have occurred if negative gearing provisions had not been made available. Accordingly, it is doubtful that property investors would abandon the market en masse if negative gearing were quarantined or removed altogether.
As housing prices have boomed, so have mortgages, leading to increased current net income losses. If this does not scare away investors during a boom, there is no reason to believe that a further net income loss from removing negative gearing would result in investors exiting the market en masse. If investors did decide to do this, it would not necessarily result in an adverse outcome. Housing prices would fall, enabling many on the sidelines who currently rent to purchase, reducing pressure on the rental market, and mitigating rental price pressure.
Given the theoretical difficulties in establishing that negative gearing functions as claimed, it is none too surprising that empirical evidence is also lacking. The best retort that the housing lobby has fabricated is that rents surged when negative gearing was quarantined during 1985-87. The evidence shows that real rents increased in only Sydney and Perth, while remaining stagnant or falling in all the other capital cities. The reintroduction of negative gearing did not lead to a discernable decrease in rents either.
 
<hr class="system-pagebreak">
 
Rents have surged since 2006 across Australia, though no evidence is provided to show that rents would’ve been even higher if negative gearing provisions had not been made available. It is important to note that when comparing historical prices, inflation should be taken into account. Adjusting prices for inflation allows for a proper apple to apple comparison rather than an apple to orange comparison that occurs when dealing with nominal prices only.
Further, it is unclear why the government should promote investment into the residential property market. Although assertions can be bandied around that benefits outweigh costs, two hurdles should be met: that intervention is necessary and that the proposed intervention is the most efficient and effective relative to alternatives. Given that surging rents in recent years have caused increasing financial stress among many renters, policymakers may believe that intervention is necessary as a social and economic objective to assist those in need. It is farfetched, however, to assume negative gearing is the best policy available, especially with the obvious alternatives of the National Rental Affordability Scheme (NRAS) and the Commonwealth Rent Assistance (CRA) program.
Much of what is written by supporters of negative gearing is in terms of assisting renters for the social good rather than admitting that it is simply an unjustified handout to property speculators. Anyone who understands the basic principles of the marketplace sees that investment is made solely in for the investors’ self-interest for profiteering. This, of course, does not prevent investors from trumpeting the wonder and selflessness of their actions, whether they believe it or not (witness Goldman Sachs CEO Lloyd Blankfein claiming to carry out <a href="https://www.businessinsider.com/lloyd-blankfein-says-he-is-doing-gods-work-2009-11" target="_blank">god’s work</a>). The conservative individualism and self-interest that guides participants in the marketplace are strangely absent when negative gearing is discussed.
Given that private investment is done solely on the basis of profit, a curious contradiction arises: if eliminating negative gearing did cause rents to rise, as is commonly claimed, investors would certainly not oppose this outcome. This contradiction can be explained by realising that the housing lobby and investors recognise (never publicly) that negative gearing has little, if any, effect upon market rents. Removal of it would simply hurt their bottom line, but not that of renters. If rents did rise, the well-targeted CRA can be easily boosted to compensate accordingly.
Those who do support negative gearing, unsurprisingly, have conflicts of interest. It would help the case for negative gearing if arguments were made by those who could legitimately claim to be objective, that is, not have a stake in the policy they support. Whether it be the housing lobby or so-called “mum and dad” investors, it is difficult  to accept that conflicted individuals and organizations can legitimately claim they know what is best for others when their self-interest dictates their pubic stance (imagine tobacco executives claiming to know what is in the best interests of public health). It is difficult to find an objective and conflict-free commentator willing to consider the necessary theoretical and empirical evidence to show that negative gearing is an efficient and effective policy.
Philip Soos is a researcher at the School of International and Political Studies at <a target="_blank" href="https://www.deakin.edu.au/">Deakin University.</a>
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