<a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> has lodged plans for a $750 million, three-tower mixed-use precinct that would complete the long-running redevelopment of Carlton's former Carlton United Breweries site.

The proposal at <a href="https://www.apartments.com.au/new-apartments/185-195-queensberry-street-carlton-vic-3053">46-78 Bouverie Street and 185-195 Queensberry Street</a> spans a 6,468 sqm site, the last remaining undeveloped parcels within the former brewery's 2007 masterplan.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the development will comprise two purpose-built student accommodation towers and a third build-to-sell apartment tower above a shared commercial podium and basement.

Across the three towers, SP Setia is proposing 606 build-to-sell apartments and 1,499 student accommodation units containing 2,009 beds.

The apartments will sit in the tallest tower, which will rise nearly 200m and 55 storeys. It will become&nbsp;one of the more substantial new build-to-sell apartment projects at the northern edge of Melbourne's CBD.

The apartment mix is weighted toward smaller inner-city product, with 188 studios, 206 one-bedroom apartments, 192 two-bedroom apartments and 20 three-bedroom apartments

<img alt="First look: SP Setia plans three-tower finale for Carlton’s former CUB precinct" data-entity-type="file" data-entity-uuid="8271bc87-1b0a-41b7-ac73-a425ee375261" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/3_2.png?VersionId=G4lw23o90B1boX4k4dj7rdz2ZEajS9wy" />

Part of the precinct will be a large-scale&nbsp;3,684 sqm supermarket and a further 2,198 sqm of speciality retail, creating close to 5,900 sqm of new commercial space within the precinct.

But one of the biggest components of the proposal is what sits between the buildings.

Around 4,650 sqm, or roughly 72 per cent of the site, will be publicly accessible open space, incorporating plazas, pedestrian connections, landscaped laneways and retail spill-out areas.

The ground plane is intended to finally complete pedestrian connections envisaged when the CUB masterplan was first approved nearly two decades ago, stitching together Victoria Street, Queensberry Street, Bouverie Street and Swanston Street through the former brewery precinct.

Urbis said the development would "complete the CUB precinct", with the public realm providing important north-south and east-west connections through what is currently the final undeveloped portion of the masterplanned site.

SP Setia is also exploring a new linear park within the Bouverie Street road reserve, with the concept to be developed further with the City of Melbourne through the planning process.

The proposal is being pursued through the Victorian Government's Development Facilitation Program under Clause 53.23 for significant residential development with affordable housing.

The planning report acknowledges the proposed heights exceed those contemplated under the original Comprehensive Development Plan and masterplan, but argues the built-form context has changed considerably over the past two decades.

Urbis said the three towers would instead create a stepped transition between Carlton and the Hoddle Grid, rising progressively from the 94.1-metre Tower One along the Queensberry Street edge to the 199.44-metre Tower Three closer to the established CBD-scale buildings to the south.

<img alt="SP Setia" data-entity-type="file" data-entity-uuid="e885a07a-592c-40fc-bf82-e6dbaf32da54" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.52.24%E2%80%AFAM.png?VersionId=7s_ErUkSKAdY1mAWp3GRZgMNCGtwhk5m" />

SP Setia plans to deliver the development across three stages.

Stage One would deliver the basement, podium and retail areas for the entire precinct alongside the first student tower. Tower Two would follow in Stage Two, before the 606-apartment Tower Three is delivered as the final stage.

If approved and delivered, the project would close out a redevelopment process that has been underway since the former brewery masterplan was approved in 2007, adding more than 2,600 student beds and apartments to a precinct already home to Swanston Central, the Barak Building, RMIT Design Hub and several large student accommodation developments.

&nbsp;

&nbsp;

Joel Robinson

SP Setia plans three-tower finale for Carlton’s former CUB precinct

Melbourne developer Lowe Living is seeking to add to its growing bayside apartment pipeline, filing plans for a boutique eight-residence development in tightly held Middle Park.

Lowe Living, which has built much of its development portfolio across Melbourne's affluent bayside and south-east suburbs, is behind the plans for the 730 sqm site at <a href="https://www.apartments.com.au/new-apartments/123-125-erskine-street-middle-park-vic-3206">123-125 Erskine Street</a>, just off Armstrong Street and within the Armstrong Street Neighbourhood Activity Centre.

The developer is seeking approval for a five-storey residential building above two basement levels, with just eight large-format apartments and 18 car spaces.

“This is a deliberately very different proposition for us,"&nbsp;Tim Lowe, Co-Founder of Lowe Living, said.

"Eight residences is exceptionally boutique, but that's precisely what this site calls for.

“There is a strong community in Middle Park and the surrounding suburbs who have spent decades building a life here. They no longer want the maintenance of a large period home, but they aren't prepared to compromise on space, quality or location. We think there is a real opportunity to capture that hyper local market. A site like this rarely comes to market.”

<img alt="Lowe " data-entity-type="file" data-entity-uuid="875fe572-0f14-4d90-9e11-55b28dd07731" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.42.49%E2%80%AFAM.png?VersionId=GDNQRv9BfpR9r1zkZ5UDyUM4ZvpIksut" />

The low-density proposal has been designed by Cera Stribley and is being progressed through the Victorian Government's Great Design Fast Track pathway, having already secured eligibility from the Minister for Planning.

The Office of the Victorian Government Architect supported its eligibility after finding the proposal demonstrated consistency with the program's seven design principles, while the project's financial feasibility has also been independently confirmed by Invest Victoria.

The project is targeting the downsizer market, with the planning documents describing the homes as larger-format residences and noting the two penthouses could otherwise have been configured as four separate apartments.

<img alt="Lowe 2" data-entity-type="file" data-entity-uuid="60ab0987-2da6-4175-adac-315dcf6053c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.15%E2%80%AFAM.png?VersionId=bOCPH0B2MFwlmaRW.TTCF9TzyifgVoQI" />

The site has dual frontage to Erskine Street and Canterbury Place and currently comprises a collection of commercial buildings used as offices, including a former heritage bakehouse, a former stable, a later gabled addition and a central courtyard.

It sits within the Commercial 1 Zone and the Armstrong Street Commercial Precinct heritage overlay, with the existing property classified as a contributory heritage place.

Heritage has subsequently played a significant role in Cera Stribley's design.

The front section of the former bakehouse facing Erskine Street will be retained, including its return walls, street-facing hipped roof and chimneys, while the Erskine Street façade and part of the western return wall of the former stable will also be incorporated into the new development.

Levels four and five will be set back five metres from the retained stable façade, while bricks removed through demolition are proposed to be salvaged and reused within the new building where possible.

<img alt="Lowe 3" data-entity-type="file" data-entity-uuid="e97927a9-a2de-4a0f-83b6-65451238abfa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.06%E2%80%AFAM.png?VersionId=VR44AChLrX9q1XPB9GvVQV.ALXXbe4gC" />

Rather than presenting as a single five-storey building to Erskine Street, Cera Stribley has broken the development into a series of distinct forms.

A three-storey infill element will sit between the retained bakehouse and stable façades, with the upper levels recessed behind the heritage fabric. Canterbury Place will similarly feature two three-storey podium forms, separated by a central pedestrian accessway, before the upper two levels step back from the street.

A pedestrian through-link will run through the centre of the project between Erskine Street and Canterbury Place, creating entrances from both sides of the site and introducing landscaping and communal areas through the ground plane.

Landscape architect Acre has designed planting across the ground level, private terraces and upper levels, including a feature canopy tree at level three and integrated planting and arbours across the level four terraces. Five existing Erskine Street trees are proposed to be retained.

Sustainability is also a significant component of the Great Design Fast Track application. The apartments are targeting an average eight-star NatHERS rating, with no residence below 6.5 stars, while the project has achieved a 75 per cent BESS score. Seven of the eight apartments are designed for cross-ventilation, with the remaining residence using mechanically assisted natural ventilation.

The plans also incorporate an 8kWp rooftop solar system, a 5,000-litre rainwater tank and infrastructure allowing future electric vehicle charging for every residence.

Lowe has a strong portfolio across Melbourne's blue-chip suburbs. They recently launched <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House by Lowe Living</a> in Camberwell, their first development in the Stonnington LGA.

Lowe Living unveils Middle Park apartment development

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

<a data-end="327" data-is-only-node="" data-start="250" href="https://www.apartments.com.au/developers/norus-projects" rel="noopener" target="_new">Norus Developments</a> has lodged plans for a new apartment development in Clayton that would add further momentum to the suburb's emerging Green Street corridor.

Plans have been lodged for the consolidated site at <a href="https://www.apartments.com.au/new-apartments/1359-1365-centre-road-clayton-vic-3168">1359-1365 Centre Road</a>, where Norus is seeking approval for 218 apartments across a 12-storey apartment building designed by <a href="https://www.apartments.com.au/architects/life-architecture-and-urban-design">Life Architecture</a>.

The proposal sits within the Clayton Major Activity Centre at the threshold of the planned Green Street corridor, a landscaped pedestrian connection intended to improve links through the precinct towards Clayton Railway Station.

The development would replace the site's existing collection of low-scale residential and commercial buildings with a single consolidated building, introducing significantly greater housing density to this part of Centre Road.

A retail tenancy is proposed at ground level to activate the Centre Road frontage, accompanied by transparent street interfaces and landscaping intended to create a more pedestrian-focused edge to the development.

<img alt="First look: Norus Developments plans landscape-led apartment project for Clayton’s emerging Green Street" data-entity-type="file" data-entity-uuid="0a5a763a-d9e9-4253-af2f-88008de27ebf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Clayton%20a.png?VersionId=S2WJJbat1XVkZwB9SnYtygirXgWHiklX" />

The building has been designed with stepped massing and upper-level setbacks to manage its transition towards surrounding residential properties. The planning report describes the approach as one that integrates the building into the landscape rather than treating landscaping as a secondary element.

"A strong landscape and public realm strategy underpins the proposal," Urbis states in the planning report.

"Public benefits include an affordable housing contribution, a new pocket park, generous landscaped setbacks, deep soil planting and integrated Water Sensitive Urban Design."

The report adds that these elements are intended to create "a permeable, pedestrian-focused ground plane that enhances walkability, supports urban cooling and reinforces the emerging Green Street character."

Biophilic and passive design principles extend through the residential levels, with planting, daylight, natural ventilation and views towards landscaped areas forming part of the amenity strategy.

Parking would be concentrated away from the public realm, with 145 car spaces proposed from the rear laneway rather than dominating the Centre Road frontage.

The proposal follows an extensive pre-application process with the City of Monash. Three formal meetings were held between the project team and Council from December 2025 to March 2026, with the scheme evolving through several concept iterations before the current design was lodged.

The project arrives as Clayton prepares for substantial change around its established activity centre and the wider Suburban Rail Loop precinct. Its position on Centre Road places the development within an existing concentration of shops, services and public transport, while the Green Street connection is intended to strengthen pedestrian access towards Clayton Railway Station.

First look: Norus plans landscape-led apartment project for Clayton’s emerging Green Street

<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> has officially commenced construction on Bronze on Chevron, celebrating the sod turning of its first-ever Gold Coast development and marking a significant milestone in the company's continued expansion across South East Queensland.&nbsp;

Following the successful delivery of premium residential developments throughout Brisbane and the Sunshine Coast, <a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-chevron-island-qld-4217">Bronze on Chevron</a> represents Gardner Vaughan Group's entry into the Gold Coast market. Bronze will deliver 119 one, two, three and four-bedroom apartments above two ground-level retail tenancies.

[smartcode_project:default project_id=107520 project_image_fid=367193]

The recent sod turning ceremony was attended by Deputy Mayor Mark Hammel, President of the Surfers Paradise Surf Life Saving Club, Cassandra Sedgman, project consultants, purchasers, project partners and invited guests to celebrate the commencement of construction.&nbsp;

Gardner Vaughan Group Chief Executive Officer Simon Betteridge said Bronze on Chevron represented an exciting new chapter for the business.&nbsp;

"We've spent almost four decades building homes that respond to the way people want to live, and we're excited to bring that experience to <a href="https://www.apartments.com.au/developments/chevron-island-qld-4217">Chevron Island</a>," Betteridge said.

"Bronze on Chevron is particularly significant because it marks Gardner Vaughan Group's first development on the Gold Coast following many successful projects across Brisbane and the Sunshine Coast."

[smartcode_project:default project_id=107520 project_image_fid=367183]

Betteridge said the ground breaking is a proud moment for the&nbsp;team and their purchasers, who can now see their future homes beginning to take shape.&nbsp;

"As both developer and builder, we're able to oversee every aspect of the project from design through to construction, ensuring the quality and attention to detail Gardner Vaughan Group has become renowned for."&nbsp;

Designed by acclaimed architectural practice <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, Bronze on Chevron has been thoughtfully designed to complement Chevron Island's evolving streetscape while embracing its relaxed coastal lifestyle.

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029.&nbsp;

[smartcode_project_cta:default project_id=107520]

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029

Gardner Vaughan Group breaks ground on first Gold Coast development, Bronze on Chevron

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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Demand for fixed-rate mortgages soared to a four-year high in March as customers took advantage of an extremely competitive market and low fixed rates on offer.
Analysis of ABS housing finance data by CommSec shows that nearly 15% of home loans taken out in March were on fixed-rate terms, the highest proportion since April 2008, when fixed rate mortgages accounted for 19% of all home loan commitments.
CommSec chief economist Craig James says “home loan buyers clearly are shopping around for the best deals, and that may mean more cocktail loans – part variable, part fixed (known as a split loan)”.
Borrowers are also taking advantage of fixed rates that are currently, on average, lower than variable-rate mortgages.
According to research by mortgage comparison website RateCity.com.au, the average three-year fixed rate is 6.24%, compared with the standard variable mortgage rate average of 6.74%.
RateCity.com.au lists IMB Building Society’s three-year fixed rate product, which has an interest rate of 5.89% as the lowest rate in the market, followed by the Greater Building Society at 5.95%.
Lenders to have cut their fixed-rate mortgages recently include ME Bank, which cut its three-year fixed rate on the Super Member Home Loan to 5.99% on May 7.
Towards the end of April Westpac brands Rams, Bank of Melbourne and St George all cut their three-year fixed-rate products to 5.99% (the two banks for a limited time).
The growing appeal of fixed rate mortgages was foreshadowed in March Mortgage Choice figures (released in April), which found that the popularity of fixed-rate loans among its borrowers had jumped to a four-year high. Fixed-rate loans accounted for 26% of approved home loans written by Mortgage Choice mortgage brokers in March, up from 20.6% in February and well above the 12-month average of 17.7%.
At the time, Mortgage Choice spokesperson Belinda Williamson attributed the increase in demand for fixed-rate mortgages to concerns over that the Reserve Bank might increase the cash rate or lenders moving their interest rates independently of the central bank.
“Borrowers’ appetites for fixed-rate loans may have also been spurred on by competitive lender pricing,” Williamson added.
In April 2008 borrowers locked in fixed rate mortgages as the cash rate climbed to 7.25%, the highest rate since December 1994, following six years of incremental rate increases.
However, borrowers that switched to fixed-rate products in April 2008 were severely stung as the RBA entered into a big rate cutting cycle soon after  (starting in September 2008) to counter the effects of the GFC, reducing the cash rate from 7.25% to a record low of 3% by April 2009.
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lschlesinger-FZcF9M3vE6

Fixed-rate mortgage demand reaches four-year high: ABS

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When the GST came along on July 1, 2000 there was the "promise" that lots of other taxes, duties and charges, in particular state taxes would be abolished or at least reduced. But in the intervening years changes have been minimal and only at the margins, for example mortgage duties have been abolished in most states.
A policy change to remove or reduce the payment of stamp duty applied to real estate post-GST was and still is an illusive target. Today there are few indicators that any big changes are coming our way in the near future.
This is not to suggest that change will never come, in fact just the opposite. Various state governments are happy to use stamp duty concessions to stimulate various sectors of the market. They have become very comfortable with the idea of making concessions that are in reality no different from a promotion that a developer might offer.
Common incentives on offer can frequently target first time buyers, or older buyers or aim to stimulate construction activity. Sometimes these target groups are seen as disadvantaged and stamp duty savings can then be promoted in combination with other grants, like the FHB grant to directly stimulate activity.
However, this on-again, off-again approach can create market distortions and when the central idea is for example to stimulate the construction of new homes, it’s hard to argue why this application of stamp duty should not be removed permanently.
And I would have to suggest that such a change would need to be a national initiative. New construction is a major driver of economic activity and it has a huge flow on affect that runs deeply into many sectors of the economy and so the benefits appear obvious.
A national approach is desirable, to avoid different states simply chasing policy so their local market is not disadvantaged. Lets change the rules in this or that state so that an adjacent state does not gain all the advantages, appears to be a common theme. A national policy would also present a uniform market for international buyers looking at Australia, and avoid a major influx into any particular state. Again with the possibility of creating a local distortion.
The under supply of dwellings in almost all major markets is further reason to consider this permanent change to duty and with a predicted national undersupply of 170,000 forecast for 2013 (Source: BIS Shrapnel) removing stamp duty would hopefully kickstart the resources necessary to overcome this shortage.
Older buyers have a role to play
But this is not a simple area of policy, the predicated undersupply of new homes also needs to be compared with the already established housing stock, and there are some very interesting trends here that are for instance being impacted by older homeowners.
A study in 2010 by the Australian Housing and Urban Research Institute found that 84% of homes occupied by people over 55 were living in a home with one or more spare bedrooms. And while some of this spare capacity would be used for family or lifestyle reasons, downsizing was possibly being restrained by the impact of stamp duty.
In NSW there is an existing concession, where the Senior’s Principal Place of Residence duty exemption applies to people between 55 and 65 years of age buying a new house before 1 July 2012 when the concession is set to end.
Stamp duty concessions for older people downsizing would see more homes in established areas released onto the market and this would also have the impact of better utilising of existing infrastructure, as many of these homes would be in established areas.
Here I can see good reason for such a policy as funding new infrastructure is almost always sighted as one of the main reasons that high council levies apply in new residential development areas. But could I also suggest that this type of ‘recycling’ of existing homes and local infrastructure could be a solid argument to collect less stamp duty.
Such stamp duty incentives do produce structural change in the market as we have seen recently in Sydney. The $600,000 cap on the current NSW Home Builders Bonus has for example seen a big lift in the number of one-bedroom apartments coming onto the market, and they have proved popular with investors and first time buyers.
Post June 30 – what will happen in NSW?
When it comes to the undersupply of housing, I have already highlighted that NSW has the biggest shortfall of more than 101,000 dwelling forecast for 2013, and construction activity has lagged for many years. And this is even with some large land release area’s opening in the cities south-west and north-west.
Activity simply refuses to budge and this is despite what should be a big level of pent up demand, and yet regardless of the shortfall demand has failed to greatly boost construction. The pressure from pent up demand is somehow not materialising.
And while there will never be one simple answer, the impact of stamp duty must be counted among the reasons, and this would suggest that the current concessions for First Time Buyers should be extended across the entire market. The FHB market does not exist in isolation and market-wide activity would benefit.
A more general concession at a realistic price level and possibly over a sliding scale could help generate more extensive market activity.
Some may still argue that this could further dampen affordability if the exemptions for stamp duty was not only limited to first time buyers, but we need to keep in mind that there are other FHB grants and also these same buyers would have access to a wider choice of locations helping to create a deeper market.
The case for change
Stamp duty on real estate transactions is a big source of revenue for every state government. This is essential revenue, but does the burden fall fairly and is the ‘tax’ more complex than it needs to be. Clearly every state and territory government is happy enough to use stamp duty as a form of concession with varied and ongoing schemes, and so there are many precedents of sorts for change.
Australians generally pay stamp duty on all property transfers (accepting that there are varied and ongoing concessions) but on our principal residence we pay no capital gains and in 2012-13 according the Federal Treasury that concession will cost the federal budget $35.5 billion, that’s almost 9.5% of all federal government expenses.
Any move to change this policy would be almost impossible, but it is perhaps the absence of a CGT that permits other high property taxes, including stamp duty to be justified.
Stamp duty concessions are almost always tipped in favour of first-time buyers, and associated with new homes, but questions remain as to what impact this has on building activity. This is also as noted a more complex area because the concessions vary between states and they are almost always transitory.
Stamp duty is an unpredictable tax for the states and despite the cash flowing from the GST the revenue would need to be captured from other structural changes in the economy. But clearly stamp duty remains a barrier to everyone in the housing market, young, old and even those looking for greater flexibility with employment are possibly constrained by its impact, being reluctant to move.
There are, however, some more immediate changes possible that could include greater indexation of rates of duty, including the permanent removal of duty for first-time buyers and some appreciation of the fact that the duty applies to the final price of a new home where there would already be many other layers of taxation. When the duty is paid is also an area where policy could be modified, helping to reduce the up-front costs of buying a residential property.
With the NSW state budget set to be announced in two months' time, will change result with the possible application of duty concessions to the wider market?
However, let's hope that we do not take a lead from Queensland, where from August 1 last year stamp duty for owner-occupiers on property purchases increased. But in contrast at the same time to stimulate the building industry, discounts on stamp duty for anyone buying or building a new home were introduced, leaving existing dwellings to bear the brunt of the increases. That’s a mixed message by any conclusion.
Peter Chittenden is managing director for residential of <a target="_blank" href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx">Colliers International</a>
 
 
 
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pchittenden-eLqUUC8TWW

It's time for a major change to stamp duty

<html><body>
Some signs of life returned to the mortgage market in March, with owner-occupier mortgage commitments rising 0.3% on a seasonally adjusted basis over the month, according to the latest ABS estimates. 
The value of investment housing commitments seasonally adjusted fell 1.0% in March 2012 while the total value of dwelling commitments excluding alterations and additions falling  0.5% on a seasonally adjusted basis in March to $20.18 billion.
The strongest gains were made in the resource-rich states, with owner-occupier mortgage commitments up 3.5% ($232 million) in Western Australia and 2% ($176 million) in Queensland. 
The Northern Territory was the standout among the smaller markets with a 23% ($73 million) increase. 
NSW remained flat with just a 0.1% increase in mortgage lending while there were falls recorded in Victoria (down 79, 0.6%), Tasmania (down 37, 4.5%), the ACT (down 22, 2.6%), and South Australia (down 14, 0.4%).
Mortgage broker Loan Market calculated that national results for the March 2012 quarter were 10% up on the corresponding quarter in 2011 with all states and territories on the mainland on the rise. Only Tasmania bucked the trend.
Western Australia and Queensland had March quarter increases of 25% and 16%  respectively, while the Northern Territory was up 18% and NSW 11%. There was a 4% increase in South Australia, 3% in the ACT and 2% in Victoria. Tasmania had an 8% decrease.
Loan Market corporate spokesperson Paul Smith says the latest figures are "highly encouraging". 
“We are obviously seeing more confidence from consumers so far this year, compared to last, which augers well for the months ahead.”
Smith says this month’s lowering of official interest rates from 4.25% to 3.75% would also have an impact on the home finance market in the coming months.
“With two consecutive months of flat activity, we should see the figures for May and June spike in reaction to the RBA’s rate cut,” he says.
”Even though most lenders held back on passing on the full 50 basis points, they still lowered their variable rates by significant margins in a positive move for home loan customers.
The Housing Industry Association (HIA) noted that the number of loans for the construction or purchase of new homes lifted by 3.5% in March,  "a welcome piece of good news given the existing weak conditions facing the new home building sector", according to HIA senior economist, Andrew Harvey.
“The March figures reflect a period prior to the 50 basis point cut in interest rates which occurred in May, and although the cut was only partiallly passed on by Australia’s banks, this factor should act to spur a further modest improvement in new home lending in the coming months,” Harvey says.
New South Wales was a key driver of the national result with the March 2012 seasonally adjusted number of loans for new housing (construction and purchase of new) up by 13.6%.
Elsewhere, Victoria rose by 1.7%, South Australia by 0.5%, Western Australia by 1.9%, Tasmania by 7.3%, the NT by 19.3% and the ACT by 12.1%. Queensland was the only jurisdiction which saw new home lending fall in the month of March (down by 2%).
The number of first-home buyer loans as a share of total owner-occupied home loans dropped to 16.4% in March 2012 from 17.2% in February 2012.
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Mining states lead rebound in demand for owner-occupier mortgages in March: ABS

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Mortgage Choice and Aussie Home Loans will be able to continue to require that their mortgage brokers be members of the Mortgage and Finance Association of Australia (MFAA) without the threat of legal action, following a ruling by the Australian Competition and Consumer Commission (ACCC).
Aussie and Mortgage Choice along with Virgin Money and ING Bank lodged applications in 2007 and 2008 known as “third line forcing notifications” seeking protection from legal action for its exclusive arrangement with the MFAA.
The requirement restricted brokers’ choice of industry body membership and did not recognise membership of rival industry body the Finance Brokers Association of Australia (FBAA).
The notifications protected the four organisations until such time as the ACCC made its ruling.
During the course of the review, ING Bank withdrew its notification and Virgin Money advised that it did not engage in the conduct.
Exclusive dealing arrangements such as third line forcing are prohibited under Australian competition rules, but organisations can apply to the ACCC for protection from legal action for these arrangements to continue.
The applications proved highly controversial within the mortgage broking industry.
In making its ruling, ACCC chairman Rod Sims said the consumer watchdog believed the arrangements “continue to deliver a benefit to the public, notwithstanding the commencement of a national regulatory regime for the credit industry in 2010”.
“The MFAA's membership requirements impose higher educational and certain other professional standards on its members than the regulatory regime,” said the ACCC in its ruling.
"The ACCC considers requiring MFAA membership is likely to assist those lending businesses to ensure that their brokers are of a consistent high standard and to meet their compliance obligations under the National Consumer Credit Protection Act.
“The ACCC acknowledges requiring MFAA membership restricts choice of professional association for these brokers, thereby limiting competition from other similar professional associations.  However, given the small number of mortgage brokers currently affected by the notified conduct compared to the overall size of the industry, the ACCC considers that any public detriment is likely to be minimal.
“Further, the MFAA membership requirement is only imposed by two industry participants.  There are a large number of other businesses that individual brokers can work for if they disagree with the MFAA membership requirement.”
 
 
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ACCC allows Aussie and Mortgage Choice to require MFAA membership

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Following Friday’s decision by ANZ to reduce its variable rate by 0.37 percentage points to 7.05% as part of its monthly independent rate decision, just two lenders – both credit unions – have passed on the full 50-basis-point May 1 rate cut to borrowers.
<a href="https://www.unicredit.com.au/" target="_blank">Unicredit WA</a>, which primarily provides loans to staff of WA’s four public universities (and according to its website “was born out of the chemistry department at the University of Western Australia in 1964”), has lowered its standard variable interest rates half a percentage point to 6.1%, making it one of the lowest in the market with<a href="https://www.queenslanders.org.au/"> Queensland Credit Union</a> not far behind at 6.15%
The other lender to pass on the full rate cut is New South Wales-based <a href="https://www.pcu.com.au/" target="_blank">Police Credit Union</a>, which has dropped its Police Value Variable Home Loan to 6.24%.
Borrowers at one of the larger credit unions, Credit Union of Australia (CUA) will perhaps feel the most aggrieved after it passed on only a 25-basis-point cut to 6.47% – half of the official RBA rate cut. However, CUA still has a standard variable rate significantly lower than the major banks.
Of the bigger lenders, ING Direct is offering the lowest standard variable rate of 6.44%.
Here’s a guide to some of the standard variable mortgage rates currently on offer from banks, credit unions and non-bank lenders, starting with the cheapest:
All rates correct as of 9am, May 14.
6.10%
The standard variable bank rate of Unicredit WA
6.15%
The standard variable bank rate of the Queensland Credit Union
6.24%
The standard variable bank rate of Police Credit Union
6.37%
The standard variable bank rate of State Custodians
6.42%
The standard variable bank rate of ING Direct (Mortgage Simplifier) 
6.44%
The standard variable bank rate of ME Bank 
6.47% 
The standard variable bank rate of CUA
6.64%
The standard variable bank rate of Yellow Brick Road 
6.66%
The standard variable bank rate of Newcastle Permanent
6.85%
The standard variable bank rate of Cairns Penny Savings &amp; Loan
6.98%
The standard variable bank rate of People's Choice Credit Union
6.98%
The standard variable bank rate of Bankwest
6.99% 
The standard variable bank rate of Bank of Melbourne
6.99% 
The standard variable bank rate of NAB
7.01% 
The standard variable bank rate of Commonwealth Bank 
7.04% 
The standard variable bank rate of St.George Bank 
7.04% 
The standard variable bank rate of BankSA 
7.05%
The standard variable bank rate of ANZ
7.05%
The standard variable bank rate of HSBC
7.06%
The standard variable bank rate of Aussie Home Loans
7.07%
The standard variable bank rate of AMP 
7.08%
The standard variable bank rate of Bank of Suncorp  
7.09%
The standard variable bank rate of Westpac
7.10%
The standard variable bank rate of Bendigo Bank 
7.11%
The standard variable bank rate of Bank of Queensland 
7.62%
The standard variable bank rate of Citibank (unchanged) 
 
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Just two lenders pass on full rate cut: May 2012 to standard variable mortgage rates

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With the McKell Institute’s recent Homes for All report calling for the removal of negative gearing to make properties more affordable for first-time buyers and Treasurer Wayne Swan effectively ruling this option out, negative gearing is always on the social agenda.
The best way to balance the concerns that negative gearing inflates prices with the need to support investors is to make negative gearing applicable only to new off-the-plan or newly renovated property investments.
Negative gearing was established to alleviate the tax burden experienced by investors in recognition of the important role they play in providing rental accommodation, and there is no denying that investors are a vital cog in the Australian housing landscape.
However, the vast majority of investment properties that are being financed by investors using a negative gearing strategy are existing dwellings. Hence the practice has very little impact on new supply in a market, where rental vacancies remain extremely tight.
Put simply, investors who buy new off-the-plan properties are having a positive impact on society by creating new rental accommodation, whereas investors using negative gearing to finance the purchase of existing properties are not. Instead they are competing for properties directly with prospective owner-occupiers, but from an unfairly advantageous tax position.
It is important to consider the flow-on effects of new construction and renovation on the broader economy, particular in challenging economic times.
New residential construction contributes significantly to the overall economy, from the obvious beneficiaries like developers, builders and other tradespeople, but also including architects, furniture and appliance wholesalers and retailers, home improvement stores - the list goes on and on.
Hence the need to encourage investor demand for new properties to stimulate construction and to unlock the economic benefits of new development down the supply chain. Making negative gearing applicable only to new or newly renovated developments is one strategy to achieve this.
Of course there is always the question of “how new is new?” That is, up until what point in the development lifecycle should an investor be able to access negative gearing to help finance a property purchase?
A model based on the proviso that an investor must be either contributing to demand for – or supply of – new rental accommodation to access negative gearing is necessary.
The fairest way to ensure a negative gearing strategy is being used only by investors contributing to the supply of rental accommodation is to make the practice accessible from an agreed timeframe following the commencement of the initial lease term, with consideration given to the individual investor’s personal circumstances.
In consideration of the ideal timeframe for an investor to access negative gearing, it generally takes five to six years for an investment property to become neutral in terms of income received versus interest payable. While this is influenced by the rental income, the investor’s marginal tax rate and depreciation allowances, a timeline of this duration seems a logical, fair approach. 
Investors building a property portfolio should ideally be looking to reap the long-term benefits of compounding capital growth by aiming to increase annual rental income and use the fixed expenses and compounding rental growth in the short term to create long term positive gearing.
It should be remembered that all types of income producing properties have substantial taxation benefits, over and above negative gearing, that an investor can claim as tax credits.
Every investor should enlist the services of a quantity surveyor to prepare a depreciation schedule, the cost of which is fully tax deductible, while also ensuring items such as body corporate fees, electricity and gas, insurance, land tax and property agents fees are claimed, to name a few.
Neil Smoli is managing director of the <a href="https://aviategroup.com.au/" target="_blank">Aviate Group.</a>
 
 
 
 
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nsmoli-dR5uP4Chwk

Negative gearing should apply to new properties only

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The ANZ has announced it will reduce its variable rate by 0.37 percentage points to 7.05%.
Joining other lenders following last week's rate reduction by the Reserve Bank, it hasn't passed on the full rate cut.
The new mortgage rate will be effective from May 18.
 
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jchancellor-FAypfDUnLy

ANZ finally reduces rates by 0.37 percentage points to a variable rate of 7.05%

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In an interview a few weeks ago, Sky's Peter Switzer kindly introduced me as a "great friend of the RBA". In light of the many criticisms I have aired over the years, I couldn't help but laugh at this characterisation. I subsequently mentioned it to an RBA executive. Almost as amusingly, this person retorted: "yeah, 60% of the time."
Unfortunately, today may be one of those '40 percenters'. What I am going to write about you will likely never read in an Australian newspaper. The journalists in question cannot report on these issues for fear of breaching confidences given to their sources.
Because I have one foot directly in financial services and another in the media as a public commentator, I am a little different. Unlike most other RBA watchers, I never speak to the bank, its board, or its political masters about monetary policy. I don't get the benefit – or, as we shall see, suffer the costs – of receiving the all-important private telephone and in-person briefings that senior correspondents secure after important RBA statements, and before major decisions.
I do speak to the bank about abstract policy issues, such as whether they should use interest rates to lean against asset prices, or technical data matters, like how house prices movements should be measured.
I've also asked the bank to set me straight if I ever make an objective mis-step. As one example, the bank has a habit of frequently emphasising the "mid-point" of its 2% to 3% per annum inflation 'target' as its policy goal. I've previously written that this can lead one to infer that the RBA's 'implied' inflation target is actually a more specific 2.5%. Core inflation outcomes materially above or below this point estimate could, therefore, be judged as misses.
It was, however, pointed out to me that Guy Debelle and Glenn Stevens had published a paper in 1995 arguing that the RBA's monetary policy aim is a deliberately "thick point", or wide, band most accurately described as "two point something". It is not an artificially precise 2.5%.
Long story short, anywhere in the band satisfies the inflation objective because the RBA knows that it cannot over-engineer its inflation targeting outcomes – the standard errors associated with its forecasts are just too high. That, by the way, is one reason why there is nothing wrong with consistently punching out 2% per annum core inflation, as is currently the case. (Most developed world central banks consider 2% normal.)
The motivation for today's remarks derive from questions I received last Friday. A senior interest rate trader asked me what I thought the RBA's closely-read Statement on Monetary Policy might say (it was to be published that day). I felt the lethargy mount inside me before I mustered a shallow response. All I could offer was, "dovish mate – they've gotta rationalise the 50 points, ex post facto." But then I quickly added that I had not thought about it much.
After the Statement came out – which was dovish – Aussie government bond prices jumped a bit. Another experienced market participant called me and queried my views. I said I hadn't even read it aside from a quick glance at the housing section, which was in line with my priors (ie, the RBA is pushing a stabilisation meme, now couched as a deceleration in house price losses). I said I'd get back to him when I had some thoughts (I still don't).
Over the weekend I started reflecting on why I had so little interest in what is supposed to be the RBA's premier publication. It slowly dawned on me: it was more-or-less meaningless for rates. It would be part exercise in justification of a decision the RBA staff did not recommend, and part hazy and contradictory glimpses of their view of the world.
Rather than telescope in on a central set of projections that the staff actually believed in, the chastened executives would likely be obscuring any sharper messages with insurance and obligatory acknowledgements of how they had purportedly 'misread' the economy. (Yesterday's 4.9% unemployment print combined with the low core inflation over the last three quarters tells us that the RBA had, in fact, set monetary policy almost perfectly.)
As it transpired, the RBA did indeed make its views even fuzzier in this particular Statement by more-or-less giving up on forecasting. The projections the RBA delivered for year-ended GDP growth and core inflation were so wide that any real-world results at the limits of these ranges could have diametrically different consequences for policy. Beyond a year or so, the RBA has now formally embraced Glenn Stevens's 'first rule of forecasting': don't forecast; or, if you do have to forecast, hedge your bets.
My main idea before the last RBA board meeting was that no matter what happened we would learn a lot about how the Bank thinks and operates. You see, after the stunningly low first quarter inflation numbers, the RBA's 50-basis-point cut was not a surprise, per se.
Before the inflation data, I had published a 'cheat sheet' with a table claiming that if core inflation came out at 0.3-0.4% one could expect the RBA to cut by 25-50 points. I also quickly attached a 40% probability to 50 basis points after the release. And by the time the board meeting came around, the financial markets had converged to roughly this same estimate.
To be sure, 50 basis points before the CPI release was very low probability. Only one person in Australia was pulling for it: Stephen Koukoulas (or "Koukie" to friends). And with the benefit of hindsight, Koukie made a majestically timed call. The only wrinkle is that he had also called 25 and 50 basis point cuts in February and April too. So May was more about getting the medium term right, although this week's unemployment data arguably call this into question.
The surprising thing about the RBA's May meeting was that the senior staff only recommended 25 and went to considerable lengths to resist a larger cut. The surprise was that the once all-controlling RBA executive had again had their central recommendation--which would have been strategically hedged--rejected by the RBA's dovish, and increasingly powerful, board.
That's what happens when the "insiders" hold only two of the nine board seats, stakeholders with a vested interest in lower rates dominate all the others, and when the governor is an open-minded consensus builder who has hitched his legacy to enhancing governance and transparency.
On the morning of the board meeting, a very senior economics correspondent for Fairfax, Peter Martin, published the following remarks in the <a href="https://www.smh.com.au/business/former-rba-boss-calls-for-50point-rate-cut-20120430-1xv4c">Sydney Morning Herald</a>:
"The staff recommendation sent to board members on Friday is believed to recommend a cut of 25 points, arguing that the economy is not weak enough to demand anything larger and that rates can be cut again if needed."
As a seasoned journalist with impeccable RBA and Treasury contacts, Martin would never make this statement unless he believed it to be true on the basis of a primary source. The day before, David Uren, another senior and instinctively cautious senior economics correspondent with The Australian, offered <a href="https://christopherjoye.blogspot.com.au/2012/04/uren-australian-people-speculating-on">these predictions</a> on both what would happen at the meeting, and, more curiously, what specific GDP growth numbers the RBA's Statement on Monetary Policy would include:
"People speculating that the Reserve Bank may cut by 50 basis points tomorrow are hyperventilating. The downgrade in the bank's growth forecast is unlikely to be dramatic. National Australia Bank's business survey shows conditions are still in line with the long-term trend and unemployment has remained steady for about two years. The March quarter inflation report was soft, but there is nothing to suggest that the economy is entering a recession. The Reserve Bank's monetary policy statement, which will be published on Friday, will still show growth over 2012-13 of at least 3 per cent. The bank will not be badgered into repeated slashing of rates by those parts of the economy that are on the wrong side of the structural change which the high value of the Australian dollar is forcing. It is unlikely that the bank judges that its cash rate is far from where it needs to be."
Like Martin, Uren would likely never write this and, more pointedly, dismiss the prospect of a 50 basis point cut, unless he had been guided by the RBA staff to do so. While he obviously got the rate call wrong, he was, perhaps unsurprisingly, spot-on with his even more difficult-to-anticipate Statement on Monetary Policy forecasts. Of course, the RBA staff determine the numbers included in the Statement without interference from the board in contrast to the cash rate decision.
Just as the staff are inclined to advocate their positions via preferred media proxies (universally accepted as a common, if awkward, practice), it's possible that some of the seven remaining board members do so too. This may be the reason why News Limited's leading columnist, Terry McCrann, (confidently) missed the RBA's February and April decisions to pause. At both meetings, the staff evidently managed to hold the line against a board agitating for rate relief.
But in May, McCrann was uncannily on-the-money well before any other analyst, or the market, save Koukoulas. On April 25th, after the CPI report <a href="https://www.heraldsun.com.au/business/terry-mccranns-column/rba-set-to-drive-interest-rates-down/story-e6frfig6-1226337531317">but a week before the board meeting</a>, Terry called a 50 basis point cut yet went one step further to, remarkably, describe a standard cut as a "most unlikely circumstance." Terry's smart, but he's not that smart. I am guessing that the reason he could effectively rule-out 25 is because either someone on the board (likely), or someone at the bank (unlikely), told him it wasn't going to happen:
"TWO things are now absolutely beyond doubt. There will be an official interest rate cut next Tuesday, and the official rate will be cut by at least 50 points over the next five weeks. Somewhat less certain, is when the 50 points will be delivered. I suggest in one hit on Tuesday. But in the most unlikely circumstance that Tuesday turned out to be only 25 points, that would simply make a further 25 points absolutely certain at the next Reserve Bank board meeting in June."
On April 29 McCrann <a href="https://www.heraldsun.com.au/business/terry-mccranns-column/tough-budgets-will-be-the-best-medicine/story-e6frfig6-1226341633444">affirmed this projection</a>:
"ON Tuesday, the Reserve Bank will cut its official interest rate...It should start with a 50-point cut and I suggest there's a better than even chance it will."
Now just think for a moment. If it is possible for this information to leak out from the RBA's board, and from senior staff, is it conceivable that there are folks around the world who might seek to profit from it? I would venture so. Indeed, there was some rather unusual trading on the day of the RBA's last meeting.
At exactly the same time the RBA board meeting finished – at 12:30pm – through until the time the policy decision was announced at 2.30pm, the Aussie dollar commenced a slide from circa 1.0422 US cents to as low as 1.0388 cents. There was also a slightly odd spike in 3 year government bond prices, which directionally has the same meaning (Koukoulas tweeted about it), although they pulled back on low volumes just before the release. Maybe it was noise. Maybe not. I honestly don't know.
Bruce Kovner, the founder of one of the world's biggest and most successful hedge funds, Caxton Associates, has said that in the 1980s the best traders of currencies were the Russians because of the KGB's ability to pick up economic intelligence. We have many private companies with intelligence gathering capabilities, and foreign intelligence agencies, functioning in Australia today. It is well documented that soucing non-public economic intelligence, and pro-active industrial espionage, are one of the key aims of any sovereign intelligence entity, including Australia's. I am not saying anything more than that.
As a hypothetical, you've got a full two hours between the 2:30pm release date and the time when seven of the nine RBA board members drift out from its Martin Place headquarters to monitor communications and collect one solid indication of what might have happened. The RBA takes precautions, of course, including sweeping its board-room for bugs. But if you are successful, you could make tens, if not hundreds, of millions of dollars. It is hardly unimanginable. The technology certainly exists. The self-interest is a given.
With this in mind, I would note that Dow Jones's Enda Curran highlighted this ABS <a href="https://www.abs.gov.au/websitedbs/IRDB.NSF/mediareleasesbyCatalogue/EC06EFA1958DD01DCA2579F7001CC6DB?Opendocument" target="_self">media release</a> during the week revealing that the surprisingly strong, and price-sensitive, retail trade data had been leaked to six clients 20 minutes before it was communicated to the market. One assumes this was just a technical glitch.
I have regularly hammered on about the wealth-destroying biases ingrained in our saving system's asset-allocation decisions and the manifold unpriced taxpayer subsidises bequeathed to our too-big-to-fail banks. Yet remedies appear hard to implement when even the nation's political leaders argue in private that the bureaucracy is pathologically resistant to change.
Christopher Joye is a leading financial economist and a director of <a target="_blank" href="https://www.ybr.com.au/savings/index.cfm">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
 
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chrisjoye-JYhJsTrNRC

The RBA’s secrets still surprise some of us: Christopher Joye 

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It is interesting to observe the differences between the RBA and Treasury's assumptions about future interest rate changes when making forecasts of economic growth. The RBA and Treasury have near-identical real GDP estimates for the years 2012, 2013 and 2014, although the RBA allows – wisely – for much more uncertainty in its projections. They both settle at "around 3%". They also have the same/similar peak unemployment rate forecasts of about 5.5%.
In making its forecasts, the RBA says: "The exchange rate is assumed to remain at its current level over the forecast period (A$  at US$1.03, TWI at  76), which is around 3 % lower than assumed in the February Statement [CJ: even lower today!]. The price of Tapis oil is assumed to remain at US$125 per barrel over the forecast period, similar to the assumption in February [CJ: lower again!].The cash rate is assumed to be unchanged over the forecast period at 3.75%." In contrast, Treasury adopts a different assumption – one that the RBA dropped a while back because it was simply too volatile: the financial market's expectations for future rate changes.
This seems to imply that Treasury is relying on another 50 basis points worth of RBA rate cuts (confirmed by the AFR's diligence) to hit its surplus targets.
Treasury even goes on to jaw-bone the RBA that this is appropriate monetary policy (jaw-boning the Aussie central bank seems to work, so that's not dumb either – especially when the Treasury Secretary sits on the RBA's board): "The outlook for trend growth in the economy over the next two years is consistent with the fiscal consolidation being undertaken by the Commonwealth and state governments. As is standard practice, the forecasts assume policy interest rates move broadly in line with market expectations at the time that the forecasts are finalised, with the market expectation at that time being that policy interest rates would be lower over the coming year. The planned fiscal consolidation should continue to provide scope for monetary policy to be eased, if appropriate, without generating price and wage pressures. The impact of the fiscal consolidation, particularly in 2012?13, should be more than offset by growth in private demand, particularly from the resources sector, with the aggregate economy growing around trend."
Christopher Joye is a leading financial economist and a director of <a href="https://www.ybr.com.au/savings/index.cfm" target="_blank">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
 
 
 
 
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The RBA assumes the cash rate will stay at 3.75%, but Treasury forecasts another 50-basis-point cut: Christopher Joye

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The government announced in the budget that it would not be proceeding with a tax break for energy-efficiency upgrades of commercial buildings – a loss of $405.2 million over forward estimates and $1 billion over the life of the program.
This program would have enabled businesses that upgraded buildings from two stars to four stars or higher a bonus tax deduction of 50% of the cost of the eligible assets or capital works.  The government argues that the institution of the carbon price, support available from Low Carbon Australia and also potentially the Clean Energy Finance Corporation (CEFC) makes this program redundant.
This program was always a relatively clunky way of incentivising upgrades in energy efficiency of existing buildings, that would be far better dealt with through an energy efficiency credit trading scheme. However it is the only meaningful program for driving upgrades in the energy efficiency of existing commercial buildings. Unlike new buildings, the far more numerous stock of existing commercial buildings were never subject to any form of minimum energy efficiency standards. Therefore upgrading their energy efficiency represents a large opportunity for cost-effective abatement.
Low Carbon Australia and the CEFC are not really equivalent replacements. Low Carbon Australia’s funding falls well short of a billion dollars. Also the CEFC is an unknown quantity and could represent an administratively onerous and inconsistent model for incentivising energy efficiency. Plus the carbon price impact on electricity prices will not overcome split incentive problems in the sector.
Hence the displeasure of the CEO of the Energy Efficiency Council, Rob Murray-Leach who said: “The government justified this budget cut by saying that the Tax Breaks would have been a more expensive way of cutting emissions than the carbon tax. This is absolute rubbish. This program would have helped building owners save energy and save money, which means that it would have lowered the cost of meeting Australia’s greenhouse gas targets.”
Murray-Leach continued noting that: “The government knew they were going to introduce a carbon price last year, but they didn’t cut the tax break for green buildings in May 2011. This cut is nothing to do with a carbon price, and all about the government saving money at the expense of business”.
To drive rapid improvement in the energy efficiency of Australia’s building stock requires a straightforward, transparent, rules-based qualification model; rather than reliance on project by project selection processes that rely strongly on the individual judgement of program administrators. The loss of the tax break is a backward step in this regard, and disappointing for the energy-efficiency sector.
Hopefully the property sector will now come to their senses and get behind a National Energy Savings Initiative instead of lobbying for tax breaks.
This article originally appeared on <a target="_blank" href="https://www.climatespectator.com.au/">Climate Spectator.</a>
 
 
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