Apartment buyers in New South Wales are set to gain a decade of insurance-backed protection against major building defects, after the NSW Parliament passed the Fair Trading and Building Legislation Amendment Bill 2026.&nbsp;

The Bill establishes decennial defect insurance, known in the market as Latent Defects Insurance (LDI), as an alternative to the existing two-year strata building bond. It cleared the Legislative Council with amendments on Tuesday evening (August 4, 2026), with the Legislative Assembly agreeing to those amendments shortly after.

Under the reform, eligible developers can satisfy their statutory bond obligation by taking out an approved decennial-style policy that gives owners 10 years of cover for major structural defects from completion, claimable directly, without first having to pursue developers or builders through costly legal action.&nbsp;

The change forms the final tranche of amendments arising from the 2021 statutory review of the Strata Schemes Management Act 2015 and related legislation.

Resilience Insurance, which originated the cover in Australia and has delivered it in NSW since 2022, welcomed the passage and credited the NSW Government for delivering it.

“This is protection apartment buyers have needed for a long time, and the credit for delivering it belongs to the NSW Government,”&nbsp;said Corey Nugent, CEO of Resilience Insurance.

“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into. Reform like this is what good, evidence-based regulation looks like.”

Resilience has delivered LDI in NSW since 2022, protecting thousands of apartments, giving the State, and now the country, real-world evidence of how decade-long, no-fault protection works in practice.

The reform also places NSW within a wider national shift.

NSW is the third jurisdiction to put decennial cover into law. The ACT legislated for it in 2024, with the scheme taking effect in late 2025, and Victoria passed its own framework on 17 June. Between them, the three cover the majority of Australia's apartment market.

The reform commences once the legislation is proclaimed, which is expected in the coming weeks. From that point, developers of Class 2 residential apartment buildings can meet their statutory obligation with an approved decennial policy in place of the bond.

Buyers who purchased into projects that took out the cover early are among the first in the country to take keys to apartments carrying decade-long structural protection.

“With the legislation passed, the focus now turns to making it work for buyers,”&nbsp;Nugent said.

“There are already thousands of apartments in NSW covered by this insurance, bought by developers who moved early. The question every buyer should be asking in a display suite is a simple one: does this building come with 10-year defect cover, and who stands behind it?&nbsp;

“We look forward to working with the Government and the Building Commission in coming weeks as the framework moves to implementation, and to sharing what we have learned over the past four years so the protection reaches owners as smoothly and quickly as possible.”

Other states are working through their own reform programs. Western Australia has indicated that decennial cover is within consideration a later stage of its reform sequence, and Queensland has been examining the settings as it looks at the development pipeline ahead of the 2032 Olympics.

Resilience Insurance acknowledges the NSW Government’s continued focus on strengthening consumer protection while supporting housing delivery across the State.

Fast Facts: What the reform means

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Proven at scale:&nbsp;Decennial cover has operated in NSW since 2022, protecting thousand of apartments.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">10 years of cover:&nbsp;Protection for major structural defects runs for a decade from completion, claimable directly and with no legal action required.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">An alternative to the bond:&nbsp;Eligible developers can meet their statutory obligation with an approved decennial-style policy in place of the 2% strata building bond.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Part of a national shift:&nbsp;The ACT has had decennial provisions in force since 2025 and Victoria passed its framework in June. NSW now joins them.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">No-fault, first resort:&nbsp;Owners corporations claim directly from the insurer without first having to establish who is liable for the defect.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost-competitive:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the 2% bond while offering broader, longer protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market position:&nbsp;Resilience originated LDI in Australia and has delivered it in NSW since 2022.</li>
</ul>

Fast Facts: What is Resilience LDI?

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Resilience Latent Defects Insurance (LDI):&nbsp;Covers major structural defects for 10 years from completion.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Consumer-first:&nbsp;Direct claim access, no need for lengthy legal action.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost advantage:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market leader:&nbsp;&nbsp;Resilience Insurance originated LDI in Australia and is the national market leader.</li>
</ul>

Joel Robinson

NSW parliament passes 10-year defect insurance laws for new apartment buyers

Builder-developer <a href="https://www.apartments.com.au/developers/mcnab-developments">McNab</a> has wasted little time reshaping one of South Brisbane's most significant undeveloped apartment sites after acquiring the property earlier this year.&nbsp;

McNab has lodged plans to scrap an existing approval for two 30-storey towers and instead deliver a single 28-storey residential building, preserving part of the site for a future development opportunity.

The proposal, lodged over <a href="https://www.apartments.com.au/new-apartments/64-peel-street-south-brisbane-qld-4101">64 Peel Street and 9 Cordelia Street</a>, is for a residential-led mixed-use development comprising 124 apartments above a landscaped podium, alongside a boundary realignment that preserves part of the land for a future residential project.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="743bf564-3f8f-45fc-b8d3-bbf18f5b628f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20Peel%20st%20podium.png?VersionId=EhCxGrVn_VFH3qTbKnI4WppGwaMnOn0t" />

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a>, the development will deliver 119 two-bedroom and five three-bedroom apartments across 23 residential levels. A five-level podium will accommodate 135 car spaces, while the ground floor will include a 66 sqm commercial tenancy, an activated residential lobby with work-from-home spaces, and a publicly accessible landscaped plaza linking Cordelia and Peel streets.&nbsp;

Communal amenities will span Level 6 and the rooftop, including indoor and outdoor recreation spaces, a swimming pool, barbecue facilities, kitchen and dining areas, lawn space, sauna, steam room and yoga facilities.

The application also proposes a boundary realignment to create a standalone 1,290 sqm development lot while retaining an adjacent parcel for future redevelopment, allowing the balance of the site to contribute additional housing over time.

Hayball said the architecture has been shaped by the site's elevated corner position at the intersection of Peel and Cordelia streets and Brisbane's subtropical climate.

The design incorporates generous landscaped setbacks, a masonry podium wrapped with planting, large north-facing balconies, and a slender tower profile intended to maximise natural light, cross ventilation and long-range views. The rooftop has been conceived as a wellness-focused retreat overlooking Brisbane, with amenities positioned to capture views towards Mount Coot-tha and the CBD.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="c5f99e84-6ad8-4a87-82d1-869685b754d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20tower%20perspective.png?VersionId=Gw0IuJaSAlk.tvGBxInhZOcQAdIB..2b" />

The planning submission positions the proposal as a response to both changing market conditions and Brisbane's Kurilpa Sustainable Growth Precinct planning reforms.

McNab acquired the site after the previous approval was granted, with the existing scheme no longer reflecting current residential market demands, economic conditions, construction challenges, construction efficiencies or the quality of development outcome now being pursued, the planning report noted.

McNab continues to expand its residential development pipeline across Brisbane and the Gold Coast. The developer recently launched The Tannery in West End, securing more than 60 per cent of apartments before the project's public release. It is also delivering Elements Budds Beach in Surfers Paradise and Lucia Highgate Hill, an eight-apartment boutique development overlooking the Brisbane River.

McNab resets decade-old South Brisbane approval with 124-apartment tower

A steeply sloping Bellevue Hill site is set to accommodate a new mid-rise apartment development, with plans lodged for 20 homes that respond to the site's dramatic topography.

The proposal for the consolidated land at <a href="https://www.apartments.com.au/new-apartments/138a-140-bellevue-road-bellevue-hill-nsw-2023">138A-140 Bellevue Road</a> has been designed by Sydney architecture practice Common Office, which has used the site’s substantial fall to distribute the building’s scale and unlock 20 apartments without presenting the full height to the street.&nbsp;

“The unique design strategy leverages the site’s substantial topographical fall to facilitate increased density, presenting a seven-storey profile to Bellevue Road while rising to 10 storeys at the rear,” Common Office said in its architectural design report.

The apartment mix spans one, two, three- and four-bedroom residences. Four two-bedroom apartments are designated as affordable housing, while the plans also include two adaptable dwellings. The mix is majority three-beds, with the typical three-bed apartment offering around 144 sqm internally, with balconies of around 15 sqm.

The affordable housing component represents 15 per cent of the residential floor area and allows the project to access additional height and floor space under the NSW Government’s in-fill affordable housing provisions. The site also falls within the inner area of the Low and Mid-Rise Housing Policy because it is within 400 metres walking distance of Double Bay Town Centre.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="b1230d0f-3bfa-4a11-abaf-0928c66ef345" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da.png?VersionId=dZeMK3P.OutGjN8ycjsxm8uNsj_QFWQv" />

Common Office has arranged the building around a masonry podium and a lighter upper volume, drawing on two recurring elements of Bellevue Hill’s established architecture: sandstone bases and the vertical proportions of local Inter-war Art Deco apartment buildings.

“The proposal is governed by a holistic design language that reconciles the solid horizontal masonry of the neighbourhood’s podiums with the elegant verticality of its Art Deco heritage,” the architect said.

“The building maintains a consistent rhythmic logic utilising deep recesses and a sophisticated material transition to break down the 10-storey scale into a series of articulated, human-scale volumes.”

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="0147f503-1af1-4d51-97fb-c2f1cba63a9d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20bldg.png?VersionId=GoW7q3NlK67OpnePXhk7zvklrlKb72Qc" />

Large-format sandstone tiles will define the lower levels, establishing a robust base that negotiates the change in elevation from Bellevue Road. Above, red-tinted precast concrete frames, recessed balconies, anodised aluminium screens and expanded metal details will create a more vertically expressed façade. Integrated planter beds will introduce greenery across balcony edges and recessed sections of the building.

The elongated northern façade has been divided into three recessed vertical masses to reduce its perceived length. Triangular window elements and metal privacy screens reference the geometry of nearby Art Deco buildings while controlling overlooking toward surrounding homes. The southern elevation will incorporate further privacy screening, landscaped edges and deep balconies to maintain light and ventilation.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="e8679cf1-18bc-4447-8a0f-0052b94ab83c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da%20rooftop.png?VersionId=5SQqQqRFf76rvE2p1TbxJSweMN70AIbc" />

Private and communal landscaping is distributed throughout the development. A landscaped garden apartment is positioned within the lower portion of the site, while a communal terrace on Level 5 will include a central timber deck, barbecue facilities, resident planting plots and areas for outdoor dining and informal gatherings.

Common Office described the terrace as an elevated sanctuary designed to capture district views and sunlight. Its planting strategy incorporates endemic species associated with the Eastern Suburbs Banksia Scrub, extending the landscape vertically through the building and providing habitat for local flora and fauna.

A second communal outdoor area is proposed at roof level, with built-in seating, paved gathering areas and perimeter planting.

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction. Positive Investment Enterprise is delivering the 16-apartment Kew Palm House on Birriga Road, while Chanine Developments is also under construction at Florian, a 36-apartment project on Banksia Road.

&nbsp;

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction.

First Look: Apartment development pitched for Bellevue Hill, Double Bay fringe

South Brisbane's apartment pipeline continues to build momentum, with <a href="https://www.apartments.com.au/developers/trk-property-group">TRK Property Group</a> lodging plans for a 161-apartment tower on Montague Road as developers accelerate investment across the Kurilpa Sustainable Growth Precinct.

The proposal for 176–186 Montague Road would replace an existing office building with a 20-storey residential tower designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, adding to a growing pipeline of high-density projects reshaping one of Brisbane's fastest-evolving inner-city precincts.

The project has been conceived as a "living building", featuring a flowing tower form, extensive vertical landscaping, and generous communal spaces that respond to the evolving Kurilpa Sustainable Growth Precinct.

TRK Property Group Development Director Matt Kan said the project reflected the confidence developers have in South Brisbane's long-term future.

"South Brisbane is entering an incredibly exciting period, and we see Montague Road sitting right at the heart of that evolution," Kan said.

"With the former Visy site directly opposite us and significant investment planned throughout the broader Kurilpa precinct, there is a real sense of momentum around this part of the city and what it will become over the coming years.

"For TRK, this is an opportunity to be part of that next chapter and deliver a project that responds to where the precinct is heading, while contributing to the continued evolution of Brisbane's river edge."

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="590fe1ad-f892-4446-a679-80e33a16d029" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20tower%20facade.png?VersionId=uOJStrcKpyHFcPE1w6_9SMAFzVMCcZll" />

The scheme includes a mix of one, two, three and four-bedroom apartments, incorporating multi-purpose rooms in selected residences to provide additional flexibility for home offices or expanded living areas. The proposed mix comprises 15 one-bedroom, 13 one-bedroom plus MPR, 73 two-bedroom, 26 two-bedroom plus MPR, 30 three-bedroom, and four four-bedroom apartments.

Rather than adopting a conventional rectilinear tower, COX Architecture has developed a sculpted form inspired by the movement of the Brisbane River.

"The proposal has been designed by COX Architecture as a 'living building' that responds to the site's riverine setting, floodplain history and evolving urban context within the Kurilpa Sustainable Growth Precinct," the planning report states.

"The architectural form draws from the fluid nature of the Brisbane River, with a curved and undulating tower form that creates a varied architectural edge and avoids a conventional rectilinear tower expression."

The podium has also been designed as an architectural feature rather than a conventional parking structure, with cascading planting, screening and natural-toned materials softening its appearance. Resident parking is elevated above ground level to address the site's flood constraints, while habitable apartments sit above flood planning levels. Upper-level communal facilities are designed to accommodate shelter-in-place arrangements during major flood events.

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="01fa15d0-90df-46c7-9555-7941fc45373c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20podium.png?VersionId=mHyua.w1pHGBt9qEdWzrlsv.leztUCwO" />

Communal amenity is a major focus of the proposal. Around 1,815 sqm of shared resident space is proposed across the ground floor, level 19 and the rooftop, including co-working areas, indoor and outdoor recreation spaces, wellness facilities, dining and gathering areas, lawn spaces, a rooftop pool and spa, and extensive landscaping. At street level, a landscaped forecourt and approximately 345 sqm of publicly accessible open space along Montague Road are intended to improve the pedestrian experience while activating the building's frontage.

The development will provide 163 car spaces, including 152 resident bays and 11 visitor spaces, together with 144 bicycle spaces incorporating resident storage, visitor parking, bicycle maintenance facilities and e-mobility charging infrastructure.

The site sits within one of Brisbane's fastest-changing inner-city precincts, less than two kilometres from the CBD and within easy reach of South Bank, West End, the Queensland Cultural Centre and extensive public transport connections. The Kurilpa Sustainable Growth Precinct planning framework is encouraging higher-density residential development to help meet Brisbane's housing supply targets while supporting walkable, transit-oriented neighbourhoods.

TRK Property joins South Brisbane apartment surge with Montague Road tower plans

Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

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?

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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Buyers’ agent <a href="https://bryceholdaway.com.au/free-reports/" target="_blank">Bryce Holdaway</a> shared <a href="https://propertymentorblog.wordpress.com/2013/07/17/sold-top-3-tips-for-buying-property-at-auction/" target="_blank">three strategic auction bidding tips</a> at the weekend Sydney Home Buyer &amp; Property Investor Show.
The co-host of Location, Location, Location Australia and a director of <a href="https://propertymentorblog.wordpress.com/2013/07/17/sold-top-3-tips-for-buying-property-at-auction/empowerwealth.com.au" target="_blank">Empower Wealth</a> will also speak  at the Melbourne <a href="https://melbourne.homebuyershow.com.au/visitor" target="_blank">Home Buyer &amp; Property Investor Show</a> in August.
 
<a href="https://twitter.com/homebuyershow" target="_blank"><img src="/images/stories/2013/07/tweetofthedayjuly22.gif" width="470" height="78" alt="tweetofthedayjuly22"></a>
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How to win at auction: Location, Location Australia's Bryce Holdaway

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Most home owners who are seeking to sell their property have the goal of selling their home quickly and at a price equal to or above market value.
The reality is that in many instances, homes don’t sell at the list price and there is a level of negotiation on the price.
Given this fact, many vendors will ponder whether to accept early offers or wait it out for buyers with higher price offerings.
If you wait longer will you get a better price or is an initial offer going to be the best one you get? This week’s analysis suggests that the latter is generally the better option.
Based on private treaty sales on a month-to-month basis, RP Data has looked at the average discounting level for homes sold across a number of time frames: less than 30 days, 30 to 59 days, 60 to 89 days, 90 to 119 days and 120 days or more.
As the first chart shows, if a home sells in less than 30 days, it has consistently recorded the lowest level of discounting by vendors. On the other hand, homes that sell after 120 days on the market have consistently recorded the highest level of discounting by vendors.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_disc+by+tom_national.jpg" alt="RP Data Property Pulse - research article">
Over the past five years, homes selling in less than 30 days have recorded an average vendor discount of -3.9% on a monthly basis.
In comparison, home selling between 30 and 60 days have recorded an average of -5.2% followed by: 60 to 90 days (-6.5%), 90 to 120 days (-7.6%) and 120 days or more (-10.1%).
The second chart highlights these same figures but specifically at a combined capital city level.
As you can see, properties selling in less than 30 days once again typically sell with the lowest level of discounting and those selling after 120 days have the highest discount levels.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_disc+by+tom_cap+city.jpg" alt="RP Data Property Pulse - research article">
 
<hr class="system-pagebreak">
The capital city data also highlights the typically superior selling conditions across these markets compared to the broader national housing market.
Whereas at a national level homes selling in less than 30 days had a typical discount of -3.9% over the past five years, it was slightly better at -3.8% across the capital cities.
On the other hand, capital city homes taking longer than 120 days to sell have had an average discount of -9.6% compared to -10.1% across the whole nation.
Across the individual capital city markets the trends are once again fairly consistent with quick sales experiencing low levels of discounting while properties that sit on the market for a longer time typically see excessive levels of discount.
Over the past five years, home sales that have taken less than 30 days to sell have recorded an average vendor discount of as little as -2.0% in Canberra and as much as -4.6% in Brisbane.
Those homes that have taken more than 120 days to sell have been discounted by an average of as much as -10.7% in Brisbane and as little as -7.1% in Canberra.
The other important component of this equation is understanding what proportion of sales occur in less than 30 days.
Analysing the results on a month-to-month basis shows that over the past five years, 22.7% of home sales sold in less than 30 days.
In comparison, an average of 28.2% of homes took more than 120 days to sell. What this data suggests is that the majority of vendors are taking more than 30 days to sell their home and are subsequently having to offer larger discounts in order to sell.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_sales+30d_v_120_cap.jpg" alt="RP Data Property Pulse - research article">
 
<hr class="system-pagebreak">
Across the combined capital cities we once again see similar trends to those across the nation however, slightly more people have, on average, sold their homes in less than 30 days.
On a monthly basis over the five years to May 2013, 26.0% of capital city sales have occurred in less than 30 days compared to 23.6% of sales taking 120 days or more.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_sales+30d_v_120_national.jpg" alt="RP Data Property Pulse - research article">
It is important to remember that not every home is going to get an offer within the 30 days of listing, but a property is most likely to receive offers when it is newly listed for sale.
These statistics highlight the importance of setting a realistic asking price from the outset.
If the vendors do this they are likely to sell the home quickly with a relatively low level of discount, if not they run the risk of the home sitting on the market for a long time and ultimately having to be discounted significantly.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
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The longer you wait, the less you may get: Cameron Kusher

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Housing affordability has been the name of the game this week.
We’re coming up to a general election and ‘lo and behold,’ much to the distaste of those who deny Australia has a housing affordability crisis – and first-home buyers are just being spoilt and picky – research by ‘Auspoll’ has revealed that 84% of Australian’s put housing affordability top of the charts when rating election issues by areas of importance.
The <a href="https://www.heraldsun.com.au/news/housing-affordability-crisis-set-to-hit-labor-where-it-hurts-in-western-sydney/story-fnii5s3y-1226679197545" target="_blank">article</a> which appeared last week across various ‘News Corp’ publications, focused on key electorates in which ‘housing affordability’ came streets ahead of other hot topics such as ‘education’ or ‘border control’ – accompanied with case studies in which 50% or more of family income is going towards mortgage or rental payments alone.
Cited within the report was a 2007 comment by the then Opposition leader Kevin Rudd, who in an attempt to boost his popular vote, told former Prime Minister John Howard that:
"Housing affordability is the barbecue stopper right across Australia." 
It’s interesting to chart the political narrative regarding housing matters – because after years of lousy half-hearted initiatives, which have done nothing to markedly advantage the two most venerable demographics of our market – principally first-home buyers and renters – we have no sustainable interventions in place to affordably accommodate a rapidly expanding population, all of whom will need some form of shelter.
Australia has sailed the ship of good fortune, sheltered within a resource rich environment. Most families have adjusted their lifestyles to suit their income and never feel particularly ‘well off’, even when earning substantially more than the median income.
For those working at, or falling below the median, the cost of accommodation is an increasing drain on the economy and well being of our society, resulting in areas of socio-economic advantage and disadvantage in an English-style cultural or class divide.
 
<hr class="system-pagebreak">
Since 1974 during which Gough Whitlam aroused passions in his ‘It’s Time’ speech by pointing out:
“The land is the basic property of the Australian people. It is the people's land, and we will fight for the right of all Australian people to have access to it”,
political advocates from both sides of the playing field have weighed into the debate.
Policies such as the NRAS, the first-home buyer’s savers account and spruiked initiatives to increase infrastructure have all failed to make significant or sustainable inroads to either supply based concerns, vacancy rates, or first-home buyer percentages.
A few decades on and it seems whilst everyone wants to be popular and ensure housing is ‘affordable,’ - years of easy capital gains and tapping into the housing equity ATM machine, have made any contemplation that prices should drop - or even stabilise for a lengthy period of time - downright out of the question.
As John Howard worded it during prime minister’s question time approaching the end of our 2007 housing boom;
“A true housing crisis in this country is when there is a sustained fall in the value of our homes and in house prices”
It’s worth mentioning that Howard’s response was in reply to a question challenging the plight of first-home buyers from soon to be elected Kevin Rudd – who upon taking office less than 12 months later - promptly inflated the market three-fold with his first-home buyers ‘boost,’ which bore the consequence of leaving our most inexperienced buying demographic in subsequent negative equity once it was stripped away.
 
<hr class="system-pagebreak">
Earlier this year, the question of housing affordability once again raised its political head, however this time it was in the form of ‘point-scoring.’
In a television program back in May, Joe Hockey made the call that house prices in Canberra would lose capital value under a Coalition Government:
"There is a golden rule for real estate in Canberra – you buy Liberal and you sell Labor". The response from Kevin Rudd – the then 'former-PM' - who ‘championed’ the cause of first-home buyers with his ‘vendor boost’ (as Professor Keen aptly named it) was:
"Can I just say, Joe, I'm not sure that will go down well with all the voters in Canberra," Labor politician Andrew Leigh, who represents the Canberra seat of Fraser, was not slow to weigh in on the debate:
''When the Liberals came to office in 1996, they wiped $25,000 off the price of a Canberra home....Today, Joe Hockey proudly jokes about how he'll do it the same again.”
A comment that was promptly disputed by ACT Liberal Senate candidate Zed Seselja, who – whilst paddling frantically against any suggestion that prices might drop under a Liberal Government, cited the ‘moving annual median house price’ from the Real Estate Institute of Australia with the comment:
‘‘Prices dropped more in last two years of the Keating Government than they did under Howard’s first 1.5 years, and to its lowest point.’’
Woe unto any politician who suggests market prices may actually fall. 
Far better it seems to burden buyers with cheap credit by way of grants, low interest rates and incentives, in a vain effort to mask rising costs under the false premise that residential real estate is getting ever more affordable – particularly in light of a construction industry that’s struggling to make any headway.
(hat tip @bullionbarron)
“Improving housing affordability does not mean reducing the value of existing homes, which are usually the primary asset of any individual or family,” said Labor's 2007 policy statement.
 
<hr class="system-pagebreak">
The policy of negative gearing, which was introduced and subsequently advocated to assist the lowly renter and reputedly ease the burden on social housing (waiting lists of which are increasing), coupled with the capital gains tax discount of 50% introduced by John Howard in 1999, resulted in a 30% increase in investment activity alone.
 It’s been by far and away the best incentive for the individual investor, fuelling speculation into the real estate sector and consequently creating a massive bubble of undiversified private debt.
Whilst I am not against investment in the residential real estate market, it makes little sense to extensively encourage it from a policy perspective if it doesn’t achieve:
<ol>
<li>An improvement in housing affordability and supply;</li>
<li>An increase in vacancy rates;</li>
<li>A substantial boost to new housing and consequently infrastructure in ‘growth’ suburbs; and</li>
<li>Lower rents for the most venerable in our society</li>
</ol>
<ol></ol>
All of which negative gearing has failed to do.
As I pointed out in <a href="https://www.propertyobserver.com.au/economy/property-investors-should-not-be-blamed-for-the-housing-unaffordability-catherine-cashmore/2013071463275" target="_blank">my column last week</a>, whist it would be unfair to condemn individual investors for taking advantage of various tax incentives, any Government that puts in place policies to fuel speculation and subsequently inflate prices, is a Government creating a difficult paradox: how to advantage those who entered at the beginning of the lending boom (during which capital price to income was lower), compared to those who find themselves at the sticky end of housing’s historical journey in which mortgage debt has inflated fourfold.
 
<hr class="system-pagebreak">
Now we have a situation where household debt to income sits close to 150% with ‘<a href="https://www.moodysanalytics.com/" target="_blank">Moody’s Analytics</a>’ in a paper entitled “Trends in Australian consumer lending” demonstrating how Australian banks have the highest exposure to residential mortgages in the world.
It was years of dizzy speculation into the established real estate market which resulted in prices escalating to their current heights, with banks only too eager to create credit through the extension of mortgage lending which in the ten years to the GFC, increased in-excess of 450%.
And despite the innocent impression some try to imprint suggesting we have a stable and responsible banking sector. 
Global measures to date, which aim to ensure a similar GFC crisis does not occur again, do not go far enough in ensuring financial institutions fund their investments with substantially more equity than current regulations dictate.
As Moody's Analytics managing director Tony Hughes and senior economist Daniel Melser suggest;
"Irrespective of the complacency of local analysts, who sound a lot like many US housing cheerleaders circa 2006, this exposure (to home loans) represents a major concentration risk for banks and the Aussie economy," comments not to be taken lightly. 
The influence of investment into the property sector was noted as far back as 2003 in a Productivity Commission Inquiry on <a href="https://www.rba.gov.au/publications/submissions/prod-comm-frst-home.pdf">first-home Ownership</a> submitted by the RBA.
The study concerned itself with the effect of “strong and rising house prices which were burdening new home owners.” And noted
“The most sensible area to look for moderation of demand is among investors.”.. “In particular, the following areas appear worthy of further study by the Productivity Commission”
The report noted some key investor incentives which in light of the comments above, could be moderated:
1.)          “The ability to negatively gear an investment property when there is little prospect of the property being cash-flow positive for many years;”
2.)            “The benefit that investors receive by virtue of the fact that when property depreciation allowances are 'clawed back' through the capital gains tax, the rate of tax is lower than the rate that applied when depreciation was allowed in the first place.”
3.)            “The general treatment of property depreciation, including the ability to claim depreciation on loss-making investments.”
<ol></ol>
This was 10 years ago – and without putting too blunter note on it – we’re no further forward.
In addition – for those who continually suggest house prices are as high as they are simply because we have a ’shortage’ of accommodation, the same report highlights:
“At the macro level there is not much evidence to suggest that the growth in house prices has been due to a persistent shortage of supply of houses relative to underlying demand for new housing.”
 
<hr class="system-pagebreak">
There are plenty of initiatives which can be employed to ease affordability – albeit an active attempt to gradually ease investor demand in our established housing sector, whilst facilitating the construction sector.
A few days ago I read an interesting blog by <a href="https://blog.rpdata.com/2013/07/the-key-differences-between-the-current-housing-market-growth-cycle-and-the-previous-cycle-in-200910/" target="_blank">R P Data</a> investigating why the current upward cycle may be different and more tapered to the last.
The comment was made that first-home buyers ‘tend to push prices higher…. because their behavior can be more emotional than other segments of the market’ whilst investors are ‘more clinical’ when acquiring real estate.
It may seem a sensible assumption to conclude, as is often the case when assessing behavioral economics, that the reality can sit some distance away from the broadly held perception.
There has without doubt been a push in home prices from first-time buyers in periods during which easy credit has been offered on a plate by way of incentives and grants to the inexperienced proportion of our buying market.
However, without these dynamics, investors play (and have played) a far bigger contribution to price rises in Australia’s real estate market.
From my own anecdotal experience, seeing an investor pay over and above what a property is worth, (based on an educated assessment of recent comparable data,) is a work related Saturday pastime.
Compared to last year, all states are experiencing an investor lead boom.
Victoria’s numbers are up 11.3%, Queensland 4.3%, South Australia 8.3%, Tasmania a more modest 1.5%, ACT is up 11.1%, the Northern Territory up 28.5% with the outright winner Sydney, up 35%.
You don’t have to be Einstein to work out where all this is heading.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
 
 
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catherinecashmore-6LXia3pPQj

The failed politics of housing affordability: Catherine Cashmore

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Twenty years ago, a financial term such as ‘asset allocation’ would have been reserved for fund mangers and analysts.
But with the advent of compulsory superannuation in Australia, we have all become investors now. Even members of retail and industry super funds have to at least understand the concept of asset allocation and to make good decisions about how their retirement savings are invested.
Asset allocation is about putting the right amount of your investments to cash, bonds (fixed interest), shares and property. The idea is that when some of the asset classes are doing poorly, at least one of the classes is doing well. It’s a balancing act.
But how do you make sure you have the right asset allocation for you? The answer isn’t easy, because every person has different needs.
The two main determinants of asset allocation are your risk profile and your life stage.
Let’s start with risk profile.
Risk profile refers to the amount of risk and volatility you accept. Most people know if they are prepared to accept ups and downs in the equities markets to achieve higher returns in the long haul, or if they are prepared to accept low returns of cash and bonds for very little volatility and a high degree of certainty.
Matching an asset allocation to your risk profile is important, especially for long term investors who want to be really comfortable with how their investments are performing. The five profiles, in order by increasing risk, are: preservation, moderate, balanced, growth and aggressive. This is how fund management professionals typically match those risk profiles to asset weightings:
Preservation: 40% cash, 60% fixed interest and no allocation to other classes.
This is for investors who don’t want any volatility in returns; they want to preserve their capital and have returns slightly in front of inflation.
Moderate: 30% cash, 35% fixed interest, 15% Australian shares, 10% international shares, 10% listed property.
The emphasis on cash and fixed interest keeps this portfolio at the non-volatile end of the spectrum but also retains some growth assets to stay further above inflation.
Balanced: 15% cash, 20% fixed interest, 35% Australian shares, 20% international shares, 10% listed property.
Balanced is for people with an appetite for growth but conservative instincts. It seeks to anchor the portfolio in inflation-beating investments but gives almost two-thirds of the portfolio for potential growth.
Growth: 10% cash, 15% fixed interest, 40% Australian shares, 25% international shares, 10% listed property.
This is for people chasing growth with the chance of volatility. Only a token anchor in conservative investments.
Aggressive: 5% cash, 5% fixed interest, 45% Australian shares, 35% international shares, 10% listed property.
This allocation is for an investor who is willing to let their investments ride with the markets and is prepared to accept the volatility of that decision in order to make the greatest gains (which equities offer).
As you can see, there’s an asset allocation for everyone. Your job is to find the right one for you. And that will involve the further complicating matter of life stage.
For those unsure about this, the first step could be an adviser.
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Determining your investment risk preparedness is important: Mark Bouris

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2013 has been hailed as ‘the year of the property investor’ because interest rates are now below rental yields in many areas, and attracting investment.
Rents are predicted to keep pace with an anticipated lift in house prices of 3.5% according to one survey, depending on location.  Western Australia is expected to produce the strongest gains.
There is relatively measured growth in the rental market.  Over the 12 months to April 2013, capital city rental rates increased by 3.5% for houses and 3.3% for units. 
Across all capital cities, the weekly median rent for a house is $474 per week and $440 per week for a unit.
Gross rental yields currently sit at 4.3% – ranging from 4.25% for houses in Melbourne to 6.22% for units in Darwin, compared to currently achievable 4.59% fixed rates.
NSW and Western Australia are considered the most expensive rental markets, although there is high demand for units in Sydney, Melbourne and Perth, driving up median weekly asking rents in the March quarter. 
Upward pressure on rents is set to continue in Sydney, Perth and Darwin due to an ongoing chronic shortage of housing.
According to our members, the rental market in Australia will continue to be relatively tight, with little room for movement. 
Vacancy rates are expected to remain flat or trend downwards due to ongoing strong demand tightening the market even further. 
This is exacerbated by the improved affordability of houses in comparison to weekly rental prices.
VACANCY RATES – NEXT SIX MONTHS
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td width="74" valign="top"></td>
<td width="60" valign="top">
National
</td>
<td width="43" valign="top">
NSW
</td>
<td width="43" valign="top">
Vic
</td>
<td width="50" valign="top">
Qld
</td>
<td width="43" valign="top">
WA
</td>
<td width="50" valign="top">
SA/NT
</td>
<td width="50" valign="top">
Tas
</td>
</tr>
<tr>
<td width="74" valign="top">
Flat
</td>
<td width="60" valign="top">
46%
</td>
<td width="43" valign="top">
44%
</td>
<td width="43" valign="top">
27%
</td>
<td width="50" valign="top">
50%
</td>
<td width="43" valign="top">
57%
</td>
<td width="50" valign="top">
60%
</td>
<td width="50" valign="top">
100%
</td>
</tr>
<tr>
<td width="74" valign="top">
Downwards
</td>
<td width="60" valign="top">
38%
</td>
<td width="43" valign="top">
37%
</td>
<td width="43" valign="top">
55%
</td>
<td width="50" valign="top">
43%
</td>
<td width="43" valign="top">
43%
</td>
<td width="50" valign="top">
10%
</td>
<td width="50" valign="top">
-
</td>
</tr>
<tr>
<td width="74" valign="top">
Upwards
</td>
<td width="60" valign="top">
16%
</td>
<td width="43" valign="top">
19%
</td>
<td width="43" valign="top">
18%
</td>
<td width="50" valign="top">
7%
</td>
<td width="43" valign="top">
-
</td>
<td width="50" valign="top">
30%
</td>
<td width="50" valign="top">
-
</td>
</tr>
</tbody></table>
The ongoing tight rental markets across Australia will continue to place upward pressure on weekly rental prices. 
However, given the strong affordability of housing at the moment, there is not much more the market can bear in terms of weekly rental prices.
Queensland and Western Australia lead the anticipated weekly rental price increases, followed by NSW and then Victoria and then South Australia.
WEEKLY RENTALS – NEXT SIX MONTHS
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td width="74" valign="top"></td>
<td width="60" valign="top">
National
</td>
<td width="43" valign="top">
NSW
</td>
<td width="43" valign="top">
Vic
</td>
<td width="50" valign="top">
Qld
</td>
<td width="43" valign="top">
WA
</td>
<td width="50" valign="top">
SA/NT
</td>
<td width="50" valign="top">
Tas
</td>
</tr>
<tr>
<td width="74" valign="top">
Flat
</td>
<td width="60" valign="top">
35%
</td>
<td width="43" valign="top">
33%
</td>
<td width="43" valign="top">
41%
</td>
<td width="50" valign="top">
27%
</td>
<td width="43" valign="top">
14%
</td>
<td width="50" valign="top">
60%
</td>
<td width="50" valign="top">
100%
</td>
</tr>
<tr>
<td width="74" valign="top">
Downwards
</td>
<td width="60" valign="top">
11%
</td>
<td width="43" valign="top">
11%
</td>
<td width="43" valign="top">
17%
</td>
<td width="50" valign="top">
-
</td>
<td width="43" valign="top">
14%
</td>
<td width="50" valign="top">
20%
</td>
<td width="50" valign="top">
-
</td>
</tr>
<tr>
<td width="74" valign="top">
Upwards
</td>
<td width="60" valign="top">
54%
</td>
<td width="43" valign="top">
56%
</td>
<td width="43" valign="top">
42%
</td>
<td width="50" valign="top">
73%
</td>
<td width="43" valign="top">
72%
</td>
<td width="50" valign="top">
20%
</td>
<td width="50" valign="top">
-
</td>
</tr>
</tbody></table>
Stewart Bunn is national communications manager for <a href="https://www.firstnational.com.au/" target="_blank" rel="nofollow">First National Real Estate.</a> This article first appeaed on<a target="_blank" href="https://firstnationalnews.com/2013/07/19/the-year-of-the-property-investor/"> firstnationalnews.com</a>.
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Is 2013 the year of the property investor?: Stewart Bunn

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Brookfield Place in Perth has been named development of the year as part of the Urban Taskforce Australia's Development Excellence Awards.

The building (pictured below) currently occupied by BHP Billiton and developed by Brookfield, was noted for reinvigorating surrounding spaces and its sustainability rating.
<img src="/images/stories/2013/08/brookfield_aug_30_one.jpg" width="470" height="268" alt="brookfield_aug_30_one">

“It is an elegant addition to Perth’s skyline. It has restored heritage buildings at street level and created a series of bustling urban spaces. It innovates in providing flexible working spaces for high quality tenants. It achieves a 5 star Green Star rating and has 86,000 square metres fully let making the project a commercial success,” said NSW government architect and jury chair, Peter Poulet. 
The Eclipse Tower in Parramatta by Leighton Properties with Grosvenor Australia received the commercial development award.
<img src="/images/stories/2013/08/parramatta-aug-30-two.jpg" width="470" height="578" alt="parramatta-aug-30-two">

“Eclipse is a demonstration of the importance of delivering jobs to Western Sydney and to Parramatta,” commented Poulet.

“Leighton [Properties] has developed a top quality 19 level office building that came through the Global Financial Crisis with full financing and has now been sold at a Parramatta record value to Retail Employees Superannuation Trust. The commitment of the developer to driving design quality as well as commercial outcomes for a commercial office building has added great confidence to Parramatta as a location for more buildings like this.”

The residential development award went to 74 level residential tower, Soleil (pictured below), in Brisbane’s city centre developed by Meriton. 
<img src="/images/stories/2013/08/brisbane_aug_30_one.jpg" width="470" height="317" alt="brisbane_aug_30_one"> 
“Soleil demonstrates that very tall residential towers can be well designed and be commercially successful,” said Poulet.
The innovative development award was given to apartment building Forte, at Melbourne’s Victoria Harbour developed by international property and infrastructure group, Lend Lease.
Deemed as the world’s tallest timber apartment building at 10 storey’s, Forte (pictured below) uses Cross Laminted Timber construction and is considered to be the world leader in this application.
<img src="/images/stories/2013/08/victoria_harbour_aug_30_onw.jpg" width="384" height="384" alt="victoria_harbour_aug_30_onw" style="display: block; margin-left: auto; margin-right: auto;">
“The use of timber has excellent sustainability qualities and reduced construction time considerably as the laminated timber panels are made in a factory and assembled on site. To manage commercial risk sales only occurred when the building was completed and it is now fully occupied,” adds Poulet.

Urban Taskforce CEO, Chris Johnson said this year’s Development Excellence Awards demonstrated that the development industry is being effective in lifting Australia’s prosperity.
“Developers are part of the service industry providing products that communities need at prices they can afford,” Johnson said.

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Perth's Brookfield Place named Urban Taskforce development of the year

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The median house price in Melbourne rose slightly in the June quarter by 2.4% to a seasonally adjusted $562,000, according to the Real Estate Institute of Victoria (REIV).
The gain was only possible after the preliminary median house price in the March quarter was a revised down sharply from $561,500 to $549,000, raising doubts about claims at the time that it was "the strongest March quarter in just over a decade".
Had the figure not been revised downward, no growth would have been recorded over the June quarter.
Commenting on the June quarter results, REIV chief executive officer Enzo Raimondo says those selling or buying should take advantage of these improved conditions.
“Conditions for both buyers and sellers look very solid in the lead up to the spring selling season.
“Unlike last year, there are more active buyers looking for a home and this is driving moderate price growth.
Compared to the June 2012 quarter, the median house price increased 8.4% from $518,500.
Raimondo says Melbourne is still on track for moderate growth in 2013.
Suburbs that saw the strongest growth in the quarter include Hawthorn East, Glen Iris, Malvern East and Kew.
Raimondo says Ringwood, Croydon and Lilydale in the outer east saw strong demand from buyers around the $500,000 price point.
“The healthy demand recorded in many suburbs around the median price point, including Keysborough, South Morang, Craigieburn and West Footscray will in part be a result of first home buyers rushing to take advantage of the now ended $7,000 grant,” says Raimondo.
Raimondo says clearance rates were stable compared to the March quarter, but were up 10% on the same time last year.
In regional Victoria, Ballarat’s median house price rose 0.9% to $287,500 but no change was recorded in Bendigo with a median house price of $310,000.
There was also no change to Geelong’s median house price recorded in the March quarter at $385,000.
Raimondo says units and apartments recorded a similar level of demand to houses with a 2.8% increase in seasonally adjusted terms to $464,500.
“Median rents also remained stable in most parts of the metropolitan area except for two-bedroom houses in the middle suburbs which saw a 4.5%,” says Raimondo.
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Melbourne's median house price up 2.4% in June quarter : REIV

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An ongoing theme in the recent increase in housing market activity has been that it has largely been driven by investors and upgraders rather than the first-home buyers.  If you recall, it was first-home buyers that led the market recovery back in 2009.
The surge in first-home buyer activity saw this cohort of the market account for as much as 31.4% of the total number of owner occupier finance commitments back in May 2009.
In May 2013 they accounted for just 14.6% of all owner occupier commitments and in terms of the number of commitments there were more than 10,000 fewer first-home buyer commitments in May 2013 than there were in May 2009. 
The first-home buyer market is much thinner this time round which may be due to a number of factors however, it is clear that the fact that there is no boost to the first-home owner’s grant is partially responsible. 
So too is the fact that in New South Wales and Queensland the first-home owner’s grant is only available for new homes with Victoria recently following suit (as at July 1 this year). 
This has seen the proportion of first-home buyers sink to just 7.3% of all owner occupier finance commitments in New South Wales and 9.8% in Queensland, both at pretty much record low levels. 
Although you would think incentives for first-home buyers to purchase new product would be a positive, new stock is typically more expensive than pre-existing stock and therefore it may actually act as a disincentive for these first time buyers to move into the market.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/FHB-chart.jpg" rel="wp-prettyPhoto[g2221]"><img alt="FHB chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/FHB-chart.jpg" width="570" height="215"></a>
 
<hr class="system-pagebreak">
So with first-home buyers making up just a small overall proportion of the housing market, it is the upgraders and investors which are really driving the overall market activity.  Data relating to investment activity in the housing market is only presented in terms of the total value rather than the number of loans, nevertheless the trend is quite clear.
In May 2013, $8.4 billion worth of housing finance for investment purposes was committed to. 
The $8.4 billion was the highest level of finance for investment purposes since January 2008 ($8.3 billion). 
As the below chart highlights, investment finance commitments have been ramping up sharply over the past 12 months, increasing by 23.7% on a year-on-year basis and indicating a surge in investment activity in the housing market.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/Investment-chart.jpg" rel="wp-prettyPhoto[g2221]"><img alt="Investment chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/Investment-chart.jpg" width="570" height="211"></a>
As already highlighted, first-home buyer finance commitments are at extremely low levels. However, the total value of owner occupier new loan commitments (which exclude refinances) has increased by 18.5% year-on-year to May 2013. 
This data highlights that upgraders are also playing a significant role in the market currently albeit it is being outstripped by the rise in investment activity.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/Total-value-of-finance-commitments.jpg" rel="wp-prettyPhoto[g2221]"><img alt="Total value of finance commitments" src="https://blog.rpdata.com/wp-content/uploads/2013/07/Total-value-of-finance-commitments.jpg" width="570" height="210"></a>
 
<hr class="system-pagebreak">
So why are upgraders and investors so active in the current market?
Clearly the low mortgage rate environment is proving to be an attractive incentive to investors and upgraders but one would think that it would also be attractive to first time buyers.
However, this has not been the case perhaps due to the reasons already highlighted as well as the fact that much of the first-home buyer demand was brought forward due to the availability of previous grants and stamp duty concessions.
From an investment perspective it is probably the hunt for yield, or the combination of yield and capital growth prospects, which is driving the increase in investor activity. 
With official interest rates low and yields on most forms of investment quite low, I believe investors are increasingly seeking out higher yielding properties that will hopefully show medium to long term capital growth prospects. 
Although housing is not a liquid asset, investors can get in now and lock in a yield in the hope that rents and values continue to trend higher over the coming years which would subsequently boost their return. 
Whether this is proves to be a good investment strategy will of course be revealed over the coming years.
The current spread between official interest rates and capital city gross rental yields is 152 basis points.  This is close to the largest spread since 1999. 
Units tend to be much more attractive to investors in the housing market and the current spread in 215 basis points which is the largest spread since late 1997. 
Of course these figures are just looking at the spread between the gross yield and don’t factor in the moderate growth in values which has been recorded at 4.0% for houses and 2.4% for units across the combined capital cities over the past year. 
Given this, I don’t think it is any surprise that investor activity has been surging back to the housing market.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/Rate-spread-chart.jpg" rel="wp-prettyPhoto[g2221]"><img alt="Rate spread chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/Rate-spread-chart.jpg" width="570" height="210"></a>
 
<hr class="system-pagebreak">
On the upgrader side of the equation, the likely reason this segment of the market are so active is due to a few main factors. 
Firstly mortgage rates are extremely low currently and the likelihood of any short term increases to mortgage rates seems limited so upgraders are taking advantage of these conditions. In fact, if you were to fix in your mortgage for three years you could find a rate beginning with a 4. 
Secondly, growth in home values has been quite modest over recent years, with combined capital city home values increasing by just 12.8% over the past five years.  Of course there are varying performances across individual cities but values have generally risen at a modest pace recently. 
Finally, households have been saving around 10% of their income for the past five years reversing the 30 year trend of declining rates of savings.  The additional savings means that if you were to upgrade and use those savings, the size of your borrowings may be similar or perhaps even lower than the initial loan on the current home.
Overall, despite the fact that upgraders and investors have been so active in the market growth in home values has been quite modest to date. 
Sales activity has lifted from an extremely low base however, the evidence suggests there isn’t a level of speculation in the market to drive values significantly higher. 
This is probably due to the fact that the more emotive first time buyers are playing a relatively small overall part in the market currently whereas the more experienced upgrader and investor market is driving current market activity.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
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Housing market activity largely driven by upgraders and investors: Cameron Kusher

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Chinese investors have acquired $201 million worth of Australian commercial real estate in the first four months of the year, Colliers International's head of Australian research Nerida Conisbee has tweeted to her 117 followers.
She points out that five years ago, the Chinese weren't buying any Australian commercial property at all.
<a href="https://twitter.com/neridaconisbee" target="_blank"><img alt="nerida_conisbee_tweet" height="87" width="470" src="/images/stories/2013/larry_uploads/nerida_conisbee_tweet.jpg"></a>
Her tweet links through to the <a target="_blank" href="https://www.colliersvideo.com.au/eMag/Capital_Markets_Report/#/1/">Colliers International's Australian Capital Markets 2013 report</a>, providing further details on the state of the commercial real estate market and how the buyer profile has shifted.
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Chinese investors have bought $201 million worth of Australian commercial property in first four months of 2013: Tweet of the day

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Nearly $4 billion in investor finance was approved in NSW over May, says Australian Property Monitors (APM) economist Andrew Wilson, quoting ABS housing finance figures.
This rising demand came as part of continued demand for home loans for investment purposes with investor lending up 1.5% in May to $8.4 billion and 23.7% higher than a year ago.
In total NSW made up 40% of the value of all investor loans approved in Australia in May.
The chart (below) prepared by Westpac to April shows the sharp spike in NSW, but also a longer trend of rising investor lending
<img alt="investor_finance" height="325" width="470" src="/images/stories/2013/larry_uploads/investor_finance.jpg">
Wilson says this is a record for NSW and part of a nationwide trend of rising demand for home loans for investors.
“At the moment nearly 52% of home loan activity in NSW is made up by investors.
“The flight to bricks and mortar is no surprise given low interest rates and a volatile stock market that’s still 25% below its previous peaks,” says Wilson in a video on Fairfax-owned Domain.com.au.
“The number are volatile and do bounce around a bit, but in May loans to residential investors were the highest ever recorded.
There was also a big increase in investor lending in Perth, up 27% on the same time last year.
“All the states have recorded an increase in investors activity over the first five months of this year compared to the first five months of last year,” says Wilson.
Commonwealth Bank economist Diana Mousina notes that the construction component of investor lending has been the stronger part of the story recently, with construction lending surging by 17.2% in May.
“This also bodes well for our residential construction forecasts.  Total construction?related lending is up by 26.5% over the past year,” she says.
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