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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

<html><body>
The Singapore-listed Hotel Grand Central has emerged as a contender to buy the Crest Hotel in Sydney’s Kings Cross.
The group owns and operates 11 four-star and 4 ½-star Hotel Grand Chancellor properties in Australia and New Zealand.
The vendor, Australand Property Group, has the hotel in its books at $70 million, but industry sources reportedly told The Australian Financial Review that bids are about $62 million.
Another hotel group reportedly showing interest in the hotel, now run as a Mercure hotel by Accor under a management agreement, has been pinpointed as Chinese group HP Leisure.
It has been listed through John Musca and Mark Durran of Jones Lang LaSalle Hotels.
Hotel Grand Central expanded its hotel property interests into Australia and New Zealand in the early 1990s.
In Australasia the hotel network is branded Hotel Grand Chancellor.
Australand paid $63 million in 2007 when bought from the owner of the Coogee Bay Hotel, Chris Cheung, who acquired the property at the corner of Victoria Street and Darlinghurst Road from developers Allen Linz and Eduard Litver.
Its among <a href="https://www.propertyobserver.com.au/leisure/mercure-hotel-d*lux-budget-hotel-and-diamant-hotel-listed-for-sale-in-kings-cross/2012101656915" target="_blank">three hotels straddling the glittering lights of Kings Cross </a>to have been listed for sale, including Mercure Hotel, the D*Lux and the Diamant Hotel.
</body></html>

jchancellor-FAypfDUnLy

Asian interest eyes Crest Hotel Kings Cross listing

<html><body>
Hotels and resorts operate in a very competitive tourist accommodation market, with a variety of accommodation styles and quality available at a range of prices points to suit particular needs. Over the past five years, the industry has contended with weak global economic conditions and increased competition from the serviced apartments industry.

The hotels and resorts industry suffered large revenue declines in 2008-09 and 2009-10, when the global financial crisis wrought havoc on consumer sentiment and business confidence. For this reason, industry revenue is estimated to decline by an annualised 0.4% over the five years through 2012-13, to total $5.77 billion.
The hotels and resorts industry has responded well in the years since the financial crisis and has posted revenue gains in each of the past two years. Many hotel and resort operators reacted to the adverse economic conditions by cutting room rates and offering additional perks and services as part of packaged deals. While average takings per room remain low by historic standards, the industry's occupancy rate has reached a historic high of 72%. On the back of the high occupancy rate, particularly in city markets, revenue is expected to increase by 1.6% in 2012-13.
In 2012-13, the industry is estimated to employ 66,800 people, down substantially over the past five years. The fall in employment numbers has been a result of hotel and resort operators seeking to cut costs in response to the global financial crisis. More employees have moved into part-time or casual positions as operators have sought to cut fixed costs. In the five years though 2012-13, the industry has slashed $36.1 million in wage costs.
<img src="/images/stories/2012/11/ibisnov8.jpg">
Domestic tourism has been weak over the past five years as Australians have taken advantage of cheap flights to Asia and a favourable exchange rate. Australians are spending 8.6% less on domestic holidays in 2012 than they did 10 years ago. However, the tourism slack has been picked up by international arrivals, especially from Asian countries like China. This has been the main contributor to the industry's growth over the past decade.
<img src="/images/stories/2012/11/ibisnov81.jpg">
The hotels and resorts industry is well positioned to take advantage of the tourism market's paradigm shift towards more Asian travellers. Industry revenue is expected to increase by an annualised 1.8% over the next five years, to total $6.31 billion in 2017-18.
 
<hr class="system-pagebreak">
<img src="/images/stories/2012/11/ibisnov82.jpg">
Hotels and resorts in the industry can be segmented via star ratings, which are dependent on the quality of rooms, facilities and services. These star ratings are assessed by the national AAA organisation through the various state motoring organisations, such as NRMA, RACV, RACQ, RAASA, RACWA and RACT. Classification depends on the standard of both facilities and services provided by hotels and resorts.
Overall, the majority of the industry's rooms are in the high-end range of four stars or greater. Four-star and five-star rooms are estimated to account for 56.9% of industry revenue and make up 79% of total hotel rooms in 2012-13. The largest segment in the industry is four-star rooms, which are estimated to account for 34.6% of the market, followed by five-star rooms with 22.3% of the market.
Most hotel operators derive over 30% of their revenue from sources other than accommodation, mainly from the sale of meals and beverages at their restaurants. Some of Australia's major hotels are attached to entertainment complexes that aim to provide guests with the complete on-site experience – for these types of hotels, room tariff revenue almost becomes secondary to non-room revenue.
Other revenue streams include the sale of in-room food and beverages, management fees and charges, interest and the hiring out of function rooms for conventions and meetings. Total estimated revenue derived from conventions and meetings (which includes meals and liquor provided at these receptions) is estimated to make up 9% of total revenue.
<h3>Major players</h3>
<ul>
<li>AAPC Limited (27.6%)</li>
<li>IHG Hotels Management (Australia) Pty Limited (9.6%)</li>
<li>Amalgamated Holdings Limited (9.2%)</li>
<li>Hilton International Australia Pty Limited (4.0%).</li>
</ul>
<h3>Industry outlook</h3>
The industry is expected to perform modestly over the next five years, constrained by a shaky global and domestic economic environment. While international tourist numbers are expected to increase, the European debt crisis, British recession and a slowdown in parts of Asia will continue to plague Australia's main tourism markets. To some extent, domestic tourism will remain at the mercy of exchange rate movements; the Australian dollar – which has been the nail in the industry's coffin over the past two years – is often unpredictable, but is expected to remain at high levels for at least the short term. IBISWorld forecasts that while revenue volatility will continue in the short term, revenue will increase by an annualised 1.8% over the next five years, to total $6.31 billion in 2017-18.
Karen Dobie is general manager Australia of <a target="_blank" href="https://www.ibisworld.com.au/">IBISWorld</a>
To purchase IBISWorld’s full, 37-page report on Australia’s Hotel and Resort Industry, <a rel="nofollow" href="https://www.ibisworld.com.au/industry/default.aspx?indid=1811">click here</a>. 
This story originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany</a>.
</body></html>

cknowlton-QnEa6ntUYP

Australian hotels and resorts to benefit from increased tourist numbers

<html><body>
Sydney’s Pitt Street mall has dropped from fourth to fifth place in the latest list of the world’s most valuable retail destinations, according to analysis by Cushman &amp; Wakefield.
The 2012 report has found that rents on Pitt Street mall have remained unchanged at US$952 per square foot over the past year, with the location suffering from not having enough landmark building on the strip to attract higher rents.
In local currency, rent on Pitt Street mall are around $10,000 per square metre, more than double the $5,000 per square metre on nearby, but far less fashionable George Street.
The report says it is more expensive to rent space on Brisbane’s Queens Street mall ($5,000 per square metre) than on Bourke Street in Melbourne ($4,500 per square metre).
The world’s 10 most expensive retail locations in each country (2012)
<table border="0" cellspacing="0" cellpadding="0" style="width: 470px;"><tbody>
<tr>
<td width="47" valign="top">
Rank 2012
</td>
<td width="47" valign="top">
Rank 2011
</td>
<td width="104" valign="top">
Country
</td>
<td width="76" valign="top">
City
</td>
<td width="142" valign="top">
Street
</td>
<td width="66" valign="top">
US$/sq ft/year
</td>
<td width="100" valign="top">
% change
local measure
</td>
</tr>
<tr>
<td width="47" valign="bottom">
1
</td>
<td width="47" valign="bottom">
2
</td>
<td width="104" valign="bottom">
Hong Kong (China)
</td>
<td width="76" valign="bottom">
Hong Kong
</td>
<td width="142" valign="bottom">
Causeway Bay
</td>
<td width="66" valign="bottom">
2,630
</td>
<td width="100" valign="bottom">
34.9
</td>
</tr>
<tr>
<td width="47" valign="bottom">
2
</td>
<td width="47" valign="bottom">
1
</td>
<td width="104" valign="bottom">
USA
</td>
<td width="76" valign="bottom">
New York
</td>
<td width="142" valign="bottom">
Fifth Avenue
</td>
<td width="66" valign="bottom">
2,500
</td>
<td width="100" valign="bottom">
11.1
</td>
</tr>
<tr>
<td width="47" valign="bottom">
3
</td>
<td width="47" valign="bottom">
5
</td>
<td width="104" valign="bottom">
France
</td>
<td width="76" valign="bottom">
Paris
</td>
<td width="142" valign="bottom">
Avenue des Champs-Élysées
</td>
<td width="66" valign="bottom">
1,129
</td>
<td width="100" valign="bottom">
30.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
4
</td>
<td width="47" valign="bottom">
3
</td>
<td width="104" valign="bottom">
Japan
</td>
<td width="76" valign="bottom">
Tokyo
</td>
<td width="142" valign="bottom">
Ginza
</td>
<td width="66" valign="bottom">
1,057
</td>
<td width="100" valign="bottom">
0.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
5
</td>
<td width="47" valign="bottom">
4
</td>
<td width="104" valign="bottom">
Australia
</td>
<td width="76" valign="bottom">
Sydney
</td>
<td width="142" valign="bottom">
Pitt Street Mall
</td>
<td width="66" valign="bottom">
952
</td>
<td width="100" valign="bottom">
0.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
6
</td>
<td width="47" valign="bottom">
6
</td>
<td width="104" valign="bottom">
UK
</td>
<td width="76" valign="bottom">
London
</td>
<td width="142" valign="bottom">
New Bond Street
</td>
<td width="66" valign="bottom">
936
</td>
<td width="100" valign="bottom">
3.1
</td>
</tr>
<tr>
<td width="47" valign="bottom">
7
</td>
<td width="47" valign="bottom">
8
</td>
<td width="104" valign="bottom">
Switzerland
</td>
<td width="76" valign="bottom">
Zurich
</td>
<td width="142" valign="bottom">
Bahnhofstrasse
</td>
<td width="66" valign="bottom">
854
</td>
<td width="100" valign="bottom">
8.7
</td>
</tr>
<tr>
<td width="47" valign="bottom">
8
</td>
<td width="47" valign="bottom">
7
</td>
<td width="104" valign="bottom">
Italy
</td>
<td width="76" valign="bottom">
Milan
</td>
<td width="142" valign="bottom">
Via Montenapoleone
</td>
<td width="66" valign="bottom">
825
</td>
<td width="100" valign="bottom">
2.9
</td>
</tr>
<tr>
<td width="47" valign="bottom">
9
</td>
<td width="47" valign="bottom">
9
</td>
<td width="104" valign="bottom">
South Korea
</td>
<td width="76" valign="bottom">
Seoul
</td>
<td width="142" valign="bottom">
Myeongdong
</td>
<td width="66" valign="bottom">
686
</td>
<td width="100" valign="bottom">
16.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
10
</td>
<td width="47" valign="bottom">
10
</td>
<td width="104" valign="bottom">
Germany
</td>
<td width="76" valign="bottom">
Munich
</td>
<td width="142" valign="bottom">
Kaufingerstraße
</td>
<td width="66" valign="bottom">
495
</td>
<td width="100" valign="bottom">
6.1
</td>
</tr>
</tbody></table>
Source: Cushman &amp; Wakefield 
 
The report notes that luxury retailers in Australia are largely located in Sydney along Pitt Street mall, Westfield Sydney Shopping Centre, George Street and Martin Place.
“There is, however, a noticeable disparity between the rents paid by luxury and mass-market retailers. Luxury brands are attracted by properties which stand out – for example a landmark building or location.
“Despite a number being located on Pitt Street, they are often situated a block away from the main strip, allowing them to build their own identity and also pay more moderate rents,” says Cushman &amp; Wakefield.
Hong Kong’s Causeway Bay has replaced New York’s Fifth Avenue as the most expensive retail location for the first time in 11 years.
Causeway Bay retail property values have increased 35% over the past year, while Fifth Avenue values have managed only 11.1% growth.
Of the 326 prime locations in 62 countries surveyed for the report, a total of 147 had rent rises. 
</body></html>

lschlesinger-FZcF9M3vE6

Sydney’s Pitt Street mall drops to fifth most valuable retail strip: Cushman & Wakefield

<html><body>
Last Saturday a great piece of blue-chip real estate went under the hammer in <city><place>Melbourne,</place></city> but most of the market was completely unaware. The majority of people think if it’s blue chip it must be expensive; however blue chip really means an asset that has constant demand and price stability regardless of the price point.
Which property?  <a href="https://www.realestate.com.au/property-apartment-vic-armadale-111894799" target="_blank">15/7 Sutherland Road, Armadale</a>.
This property was nothing flash. It was one-bedroom apartment in a very tired condition, some might say dilapidated, but it did appeal to many buyers in the market. While the crowd was not huge the auction was very competitive with six bidders competing before it finally sold for $375,000.
You can <a href="https://www.facebook.com/photo.php?v=307643982681553" target="_blank">watch auction highlights here</a>.
This is not a one-off result in this street, as in June this year another one-bedroom apartment at <street><address>
<a href="https://www.realestate.com.au/property-apartment-vic-armadale-110572281" target="_blank">12/48 Sutherland Road</a>, </address></street><a href="/news">Armadale</a>, sold at auction for $386,000.
When we dig a bit further we find these types of properties have not only held their own but have excelled in a sluggish market. In August last year a one-bedroom apartment in the exact same block<a href="https://www.realestate.com.au/property-apartment-vic-armadale-107574513" target="_blank"> at no 48</a> that was similar in every way – top floor, car parking, same floor plan and in good condition – sold for $345,000. The investor who secured this property last year has experience a 9% gain in 12 months.
This example illustrates the fact that even in a market where property values are falling some are still growing.
Many people view the median growth rate as a definitive indicator of what the market is doing. However while the median growth is a good indicator of long-term trends it fails as a useful tool when selecting an individual asset. This is because the median represents the midpoint of growth rates over a series of properties. Logic suggests that half the properties in the market will out perform the median while the other half will under-perform.


<hr class="system-pagebreak">
One of the reasons these apartments have held their own is because of the underlying characteristics of <a href="/news">Armadale</a>. According to the 2011 census 53% of properties in Armadale are owner-occupied and 60% of these owner-occupiers have no debt on their home at all. In a suburb where the median value of a house is around $1.5 million that is a lot of equity.
Further, investors control 44% of all property in Armadale, and while most of these owners may have debt on their property, it is inexpensive debt to carry because rental income and negative gearing offset the cost
This balance of cashed-up home owners and investors means there is more likely to be consistent demand in this market.
On the supply side we find level of new stock coming onto the market is restricted by a scarcity of land and onerous town planning regulations. The 2011 census shows a modest 2% growth in dwellings in Armadale over the last five years.
This compares with areas such as <a href="/news">Port Melbourne</a>, where town-planning laws encourage development, which had 6% growth. While <a href="/news">Point Cook</a>, where land is in abundant supply, had an increase in private dwellings from 4,962 in 2006 to 11,525 in 2011, a massive 132% jump.
The upshot is these one-bedroom apartments have benefited from being in a suburb that has strong, consistent demand from both home buyers and investors in addition to restrictions in supply. These properties were also affordable and in a location that provides a great lifestyle.
The property market is driven by many factors including affordability, lifestyle, location and investment potential. When a property ticks all these boxes and is in limited supply it is more likely to be blue chip regardless of its price point.
Mark Armstrong is a director of <a target="_blank" href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
</body></html>

marmstrong-sd3emVLPPb

Seek out the blue-chip Melbourne property investment suburb. And at under $400,000 it's not expensive: Mark Armstrong

<html><body>
There’s an easy trap to fall into when you’re a property commentator or you work in the industry: the lure of the blanket statements. As more and more of our lives get reduced to soundbites, it’s easy to release lines like “only buy houses” or “don’t touch it if it is more than 10 kilometres from the CBD”, then sit back and relax.
Of course, in property investing, like everywhere else, there are many shades of grey to each argument. Your skill and attention as a property investor should be focused on ensuring that you make the right decision for you and your personal circumstances, while our job as industry leaders should be to provide you with enough factual information to make that decision an informed one.
Unfortunately there has been a lot of misinformation from some property commentators or financial planners telling investors to stay away from properties in the National Rental Affordability Scheme.
While I’m obviously in favour of investing in the NRAS system, I should point out from the start that this is not a blanket statement. There are good NRAS investments and bad ones – it’s your job to make sure that you choose an investment that is best for you.
If you are new to NRAS let me explain it very simply:
•             You buy an investment property.
•             You provide a discount on the rent
•             You get tax-free money from the state and federal governments
The scheme is in place to provide affordable rental properties for middle- to low-income earners. However the income threshold is not as low as you may think. For example, tenants qualify with an income below $45,496 for a single person and $93,079 for a couple. If the couple has two children, the eligible income can increase by 25% with no penalty, which takes the threshold to more than $116,000 per year – a figure most would consider as well off.
According to the Australian Department of Families, Housing, Community Services and Indigenous Affairs, which is responsible for administering NRAS, properties in the scheme are typically indistinguishable from other middle-market dwellings. Rigorous criteria is applied to the location, design and amenity of approved dwellings, and investors can expect to benefit from the annual NRAS Incentive, rental yields and capital gain.
If you are a potential property investor what does this mean to you? Let’s say the normal rent is $400 a week. Under the NRAS program you rent it at $300 a week.
This means you lose $5,200 in income each year ($100 per week), although this income would have been taxable, so your actual loss is about $3,800. But you get $9,981 tax free!
As a comparison, we recently sold units in an <a href="/news">Essendon North</a> development where some were under the NRAS allocation and others were sold to either owner-occupiers or investors who did not wish to participate in the scheme.  For those investors, the cashflow was negative $90 a week in year one, $66 in year two and it took 10 years to become positive. But as an NRAS property, it was positive cashflow $54 a week in year one $81 in year two and $239 by year 10. Over the first 10 years this property is cashflow positive by more than $70,000. These figures are based on an income of $65,000 and a 6.5% interest rate.
This money can be used to reduce personal debt, to pay off the investment property or, yes, to have a holiday.
 
<hr class="system-pagebreak">
 
Critics of NRAS are quick to dismiss its tax benefits by likening it to other schemes with so-called ‘tax benefits’ such as timber plantations and olive groves. Of course, the two have nothing to do with each other. The stock-market based tax dodges were marketed for their tax breaks alone, whereas investors in the NRAS scheme have the security of owning quality properties in good locations.
Others have linked it to negative experiences purchasing off the plan properties in large-scale developments such as Melbourne’s <a href="/news">Docklands</a>. Once again, the commentators are attempting to use guilt by association. It would be like a stockbroker warning you not to invest in a particular stock because four years ago an investment in a completely different stock performed badly.
A final criticism is levelled at direct sales companies selling NRAS properties, because of the high commissions they receive. They suggest the commission is being added to the price and the properties sold above their real value. Does that happen? Sure, but it happens with non-NRAS properties as well, so to dismiss all NRAS properties because of it is short sighted.
Besides, it is easy to find out if this is happening: just mystery shop the builder/developer and see if you save money by going direct. If so then drop the marketing group like a hot potato.
So why is the blanket statement “Don’t buy any NRAS property” wrong? Effectively these commentators are saying there is not one single NRAS property worth buying in the whole country. In fact a recent article on this site suggested that NRAS properties were so bad you would be better spending your money on a holiday. Really?! Come on!
Why would these commentators make these negative comments about NRAS? More often than not, these commentators often promote inner-city high-capital-growth properties as the only way to invest. They really can’t understand why an investor would buy an apartment off the plan instead of an older inner-city apartment in a block of 12, or a single-fronted terrace or any other of those beautiful properties.
If buying a property that you can brag about is your main reason to invest, or if money is no object then you should buy one of these properties. But these properties are out of reach of the average investor; typically they will cost $300 a week or more after tax. How many investors can afford that? And for those that can afford it, you need to ask the question: what else could you do with a spare $300 a week?
The choice between these two mindsets (the pro-NRAS and anti-NRAS) can be reduced to this. You could buy a normal investment property and put money towards it every week or buy an NRAS property and enjoy the tax breaks where the tenant not only buys the property for you but also gives you a profit.
One thing is for sure, the cashflow on these properties can be outstanding. A client of mine on a high income recently purchased an NRAS property and it is positive cashflow by more than $100,000 in the first 10 years.
When this scheme finishes I doubt we will ever see cashflow figures like this again without investing in mining areas.
Just before you think I have broken my own rule about making blanket statements, I want to make something clear.
Not all NRAS properties are good investments, just like in the regular investment market some are terrific and some are shockers. Each NRAS property needs to be treated on its merits, instead of dismissing all NRAS properties. What’s the solution to avoiding a bad NRAS property? Don’t buy one.
Also, a word of warning about the risks of allowing a company that is selling you an NRAS property to also arrange the loan (in a one-stop-shop type arrangement). Potentially the property will undervalue, and they won’t tell you (especially if you have plenty of equity, as you’ll find the bank will lend you the money without telling you about the poor valuation).
How do you deal with this issue? Firstly, you should be aware that there is a cost for the builder/developer to get an NRAS allocation and they will usually pass that on to you (the cost is generally around $10,000 to $16,000). While some might baulk at this, you should remember that it’s similar to paying extra for ducted heating so you get higher rent.  If you want to check the valuation, make your offer subject to a satisfactory valuation, then make an allowance for the NRAS loading and decide if it is reasonable. The key is to make sure the broker or lender tells you what the property values at.
Lastly, one more warning: for most investors interested in NRAS, it is now or never. Why?  Because it is unclear how much longer the scheme will last for. For an investor who plans to buy a few investment properties, buy the NRAS-approved property first, because by the time you’re back in the property market the scheme will likely be at an end.
So remember: keep an open mind about the National Rental Affordability Scheme. Don’t buy a property just because it is has an NRAS allocation. And don’t listen to commentators telling you to stay away from every NRAS investment.
Michael Sloan is the founder of The Successful Investor. He regularly writes for NAB about property investing – for further information about NRAS visit <a href="https://moneybasics.nab.com.au/michael-sloan.">https://moneybasics.nab.com.au/michael-sloan.</a>
</body></html>

msloan-w8V4ADPZxb

Keep an open mind about the National Rental Affordability Scheme

<html><body>
BIS Shrapnel is forecasting the metropolitan Melbourne office market to weaken significantly over the next 12 months, with the vacancy rate reaching 10.6% by the end of 2013.
It forecasts a metropolitan-wide negative net absorption rate of around 130,000 square metres over 2012-13, the worst annual rate of net absorption in the post-GFC period and worse than in the 2002–2003 slowdown.
Net office absorption is the amount of space leased minus the amount of space vacated over a given time frame.
The metropolitan office market incorporates the city fringe (<a href="/news">Port Melbourne</a>, <a href="/news">Richmond</a>, <a href="/news">Collingwood </a>and <a href="/news">East Melbourne</a>) and suburban office markets extending in a 20-kilometre radius around the city.
In its first half of 2012 report, Colliers calculated the Melbourne metropolitan office vacancy rate at 6.2%, with the highest vacancy rate of 7.7% in the outer east (<a href="/news">Box Hill</a>, <a href="/news">Mt Waverley</a>, <a href="/news">Mulgrave </a>and <a href="/news">Burwood</a>) and the lowest in the city fringe (5.5%)
<img src="/images/stories/2012/11/bisnov14.gif">
According to BIS Shrapnel, the implications for landlords and tenants are clear, with an “extremely tough two years” ahead for the Melbourne office market.
“It’s already a tenant’s market and conditions for tenants will become even brighter over the next two years," says Maria Lee, senior project manager at BIS Shrapnel and author of the Melbourne Commercial Property Prospects 2012 to 2022.
“Tenants will be well placed to delay leasing negotiations to take advantage of greater leasing incentives and lower rents. Meanwhile, landlords should focus on leasing strategy to preserve cashflows and property values through the downturn.”
The report notes that the CBD and <a href="/news">Docklands</a> will be somewhat insulated by the fact that several tenants are centralising from the suburbs. BIS Shrapnel forecasts negative net absorption of 50,000 square metres over 2012–13 before the market turns  positive in the following year.
 
<hr class="system-pagebreak">
 
According to Lee, there is a common misconception that the current softness in Melbourne’s office leasing market is due to nationwide lack of business confidence and slow growth outside the mining sector with the expectation that Melbourne will return to business as usual once this is over.
However, she says local conditions are the bigger problem.
According to Lee, the weakness in the Victorian economy will dramatically impact office-based employment in Melbourne over the next two years.
Victoria weak economy is the result of a number of different factors.
BIS Shrapnel expect dwelling building activity to decline over the next two years, compounding the existing weakness in the building industry, which is under pressure from falling non-dwelling building.
The research firm also expects the high Australian dollar is taking its toll on manufacturing, tourism and education services, as well as on the financial services sector which is looking to offshore operations.
And it says that significant cuts to public spending have only just begun, and will get deeper over the next two or three years, providing a significant and prolonged drag on the economy.
“The stand-alone office workforce is expected to be hit particularly hard; indeed, we can already see it coming through in the data. We expect the stand-alone office workforce to contract this financial year” says Lee.
Apart from the economic factors, changes to the way businesses use office space are also impacting on demand for office space.
BIS Shrapnel highlights another negative influence on the demand for office space: falling workspace ratios – the amount of occupied office space per worker, a trend in recent years and one that is expected to continue
“This will compound the impact of a contracting workforce, leading to negative net absorption in 2012-13,” says Lee.
"Many operating in the market today will remember what it felt like to be operating in a market where the mood was depressed. That’s what we are set to return to,” Lee says.
Picture of Melbourne courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
 
</body></html>

Weak local economy to push suburban Melbourne office vacancy rate to 10.6% by December 2013: BIS Shrapnel

<html><body>
Sydney houses priced under $1 million are at six o’clock on the property clock and at the bottom of the property cycle, according to Greville Pabst, CEO of property valuers and consultants WBP Property Group.
However, Pabst does not expect to see an improvement in Sydney house prices in the short term, with the prestige market still favouring buyers.
He also places the unit market at the bottom of the bottom of the property cycle, but with better prospects for price growth.
<img src="/images/stories/2012/11/clock-generic.jpg">
<ul>
<li>At 12 o’clock the market is at its peak (demand exceeds supply)</li>
<li>At 3 o’clock the downswing has set in (an evenly supplied market)</li>
<li>By 6 o’clock it has bottomed out (an oversupplied market)</li>
<li>At 9 o’clock the market is rebounding (supply tightening)</li>
</ul>
Looking at the prospects for the detached Sydney housing market, Pabst says there may be increased activity within the market place assisted by the lower interest rate climate with potential for further reductions.
“I can’t see sustained increases in prices however until overseas market volatility subsides and confidence returns. We are going to bounce along however overall trend will be flat,” he says. Pabst says the prestige market could have further to fall, "depending on where you are in Sydney".
“Northern beaches, for example, remains a buyers’ market and discounting is still significant. These markets may be a five on the property clock.”
Pabst says Sydney units remain at six o’clock, but “we may see some price growth due to higher price new units being sold off-the-plan depending on when they settle.
“Unit prices otherwise won’t see significant change,” he says. 
</body></html>

Sydney houses under $1 million and units at bottom of cycle, but prestige market still favours buyers: WBP

<html><body>
The truth is, the best time to plant a tree will always be "10 years ago". But while hindsight is a great tool to reflect on the past, it is useless for planning and acting in the present. This is because no two moments in time are ever the same. If that sounds a little vague, let me put this in to a property context. There are so many variables in the property investment space occurring at any one time, each one reacting to and affecting the others differently, and in changing volumes. This dynamic mix means that conditions are constantly changing, so very rarely would one exact same market conditions present itself twice to the would-be property investor. In this sense, it is true that yes – the best time to act and to start planning (and implementing!) your investment strategy will always be "now".
Probably the best way to reassure aspiring investors who have doubts is to look at one main performance metric: the property asset class performance over time. I say this because property follows a cyclical trajectory. While few are able to predict exactly how long one full property cycle takes to occur (a cycle completion is not really observed until after it has ended – in other words, only really definitive in hindsight), history tells us that a cycle occurs approximately every five to 10 years. It doesn't really matter how long or short each cycle is. Instead what matters is that cycles occur and that the four main phases to one cycle finish and a new one begins over time. These four phases are a definable peak period, then a decline, followed by a flattened, or stagnated market, followed by a rising market.  Cycles have been plotted pretty extensively over the past 20 or so years, due in part to both better demographic and census data analysis being made available and residential property investment as an asset class coming in to its own. The emergence and industrialisation of property investment has then fuelled this demand for data and statistics in the past five to 10 years, allowing for unprecedented granularity in statistical analysis and coverage of market trends.  Going back about 20 years before that – so, the early 1970s – cycles were fairly loosely observed and tracked, with some of the early pioneering residential property investment strategists beginning to grow their portfolios as far back as this point. Up until then, the concept of using property as a wealth driver was limited only to those "investing" in their own homes and being done with it. What a shift we can observe from those days! Now many investors choose not to own their own home, instead renting where they want to live, and buying where they want to invest.  What this means is that we have a good track record that regardless of how bad things seem at the worst phase of any property cycle and all the naysayers shouting loudly from the rooftops "the bubble will burst and you'll all be left exposed", history tells us otherwise. Even when observing examples where extreme market corrections take place (I refuse to call them "bubble bursts", because that language suggests that a single person or small group is forcibly and artificially blowing air into the bubble at any one time, suggesting that a such a single-party force has any control over the market – it does not; the market is far too big and complex for any one party to influence significant at any one time), the markets do recover again and providing your investment strategy can work around this; i.e. employing a tactical approach such as long-term "buy and hold", or a manufactured-wealth strategy such as "renovate and hold" or even "flipping' property".
 
<hr class="system-pagebreak">
 Let's observe the USA market correction that occurred in 2008. While values dipped heavily in many markets during this time, fast-forward four years and USA national averaged values are in a much better place. Recovery has by no means commenced in all markets, with some markets still to correct further, by and large many markets have begun growing further and some are even coming in to an early boom phase. 
 
Nearly all market monitoring metrics are born from following the property cycle. Variables like interest rate peaks and troughs, supply and demand, and demographic factors such as population growth and decline can all be deduced and plotted against the overall property cycle.
 
<img src="/images/stories/2012/11/mcevoynov14.jpg">
<div>There are certainly some factors that make right now, so November 2012, very attractive to new investors: 1) Capitalising on current cyclical position. I have always believed that Australia is made up not of one big cycle, but hundreds and thousands of smaller ones, all operating independently. But when you average out the national trajectory, it seems that most markets are in their flat/bottomed out stage of their cycles. In other words, now is a great time for mostly dirt-cheap price entry points for property.</div>
<div>
 2) The cost of finance is very cheap. How cheap? There are fixed and variable interest rate deals out there so cheap;that they have only been recorded lower just once in the last 50 years. Now is a great time to revisit your current rates (if you are already an investor), or acquire property on a cheap finance deal.</div>
<div>
 3) Supply and demand in most markets is excellent. And I say "most" markets because there are of course exceptions. Inner Melbourne, for instance, is oversupplied, with demand levels low. But for every market like this one, right now there are three or four others where rental demand is very strong. This means that quality tenants – who are willing to pay market rate for the right kinds of properties – are out there in abundance.</div>
<div>
 4) Infrastructure projects are quietly creeping onwards. I say quietly, because there has not been huge levels of noise in the market about these, but most states and territories are pushing on with development projects such as new arterial roads, highways, train and bus lines, parks, hospitals, and education facilities (including entirely new university campuses). Align with areas where development will make residing in these areas more attractive, and there are gains to be had. </div>
"Now" is always the best time to invest. As always, do your thorough due diligence and seek out opportunity in relation to the property cycle.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" href="https://propertyspectator.blogspot.com.au/">Property Spectator.</a>
</body></html>

cmcevoy-Go82SmsJA9

The best time to invest in property is right now

<html><body>
There is likely to be no dramatic rebound in new dwelling investment in the next few years despite a build-up demand through population growth and other factors such as low interest rates, according to Jonathan Kearns, head of economic analysis at the RBA.
Kearns says there is likely to be a "relatively moderate" pick-up in the rate of dwelling investment in the medium term, with high prices holding back young adults from moving out of parents' homes.
This modest, medium-term outlook will be keenly considered by the RBA board given it noted in its monetary policy statement that “private residential building approvals, dwelling prices and auction clearance rates have all increased” in recent months indicating signs of a “prospective improvement”.
Delivering a speech today in Sydney on the outlook for dwelling investment Kearns said the high cost of housing relative to incomes was a factor holding back the demand for new housing, despite strong population growth.
“If housing was less expensive, then young adults may decide to move out of their parents' home earlier, people may decide to live by themselves rather than in a group household, and more people may decide to have a holiday home,” says Kearns.
In particular he placed the blame on the last boom in house prices in the late 1990s and early 2000s
“The sharp increase in house prices from 1999 to 2003 is likely to have had a dampening effect on household formation rates, and so the demand for housing," he said.
Kearns presented the following graph to show how new dwelling investment has declined over the past decade.
<img src="/images/stories/2012/11/rbanov13.gif">
But Kearns also noted supply-side issues preventing a strong recovery including the supply of land.
“The ownership of undeveloped land has also been highlighted as an issue in some circumstances.
“Where the ownership of land on the city fringe is dispersed, say through many ‘hobby farms’, or equivalently in the inner city where existing blocks could be used for infill, it can be difficult for developers to negotiate the purchase of sufficient land to make development economically viable.
“Proposed developments can also attract opposition from nearby existing residents. These objections can take many forms including increased congestion, a change in the character of the area, environmental issues or reduced value of their own homes,” he said.
Overall though he says the information on the strength of demand related to demographic factors, and the tightness in the rental market, "suggest that the rate of new construction has been lower than might have been expected".
 
<hr class="system-pagebreak">
 
Kearns highlighted a number of demographic and economic factors that suggest there was “sufficient demand for housing in the economy that an increase in supply could easily be absorbed”.
These include strong population growth, a relatively low rate of dwelling construction and relatively tight conditions in the rental market suggest combined with lower interest rates and relatively strong income growth.
“That said, some factors suggest that the recovery may be relatively modest, including that households have not shown an inclination to take on debt at the same rate they did in the 1990s and early 2000s, and that the ratio of prices to income is high relative to its history, suggesting that it is unlikely that a large increase in prices is in prospect."
He also highlighted that determining under-supply and over-supply of housing in any one year is difficult to calculate.
“Often analysts calculate a concept of ‘underlying demand’, which is said to be the demand for new housing there would have been in the absence of significant changes in price growth … but … it isn't really possible to distinguish what part of the levelling off in average household size is the result of demographic preferences, and how much is due to the cost of housing
“Depending on what assumptions are made about this, some basic calculations can suggest that, since 2005, new construction and ‘underlying demand’ have been somewhere between being broadly in balance to there being a shortfall of up to 50,000 dwellings per year,” he said.
Overall, he said, “it looks likely that dwelling investment will pick up at a relatively moderate rate in the medium term".
“How quickly and how strongly of course remain important questions for understanding the impact on the overall economy,” he says.
</body></html>

Only modest pick-up likely for residential building in next few years with high prices a factor: RBA

<html><body>
Business conditions fall further in October, recording their weakest outcome since May 2009, with construction sentiment falling sharply, according to the latest NAB monthly business survey.

The index fell from +1 to -1 partly unwinding a modest improvement in September, and showing no signs of improving despite the RBA cutting the cash rate by 25 basis points on October 3 to 3.25%.
Confidence in the construction sector fell 11 points to -9 points, "with the lure of lower borrowing rates seemingly having little positive impact on sentiment in construction".
“Businesses were more downcast in October, with the pessimism particularly apparent in the mining and construction sectors," says NAB chief economist Alan Oster.


“Confidence deteriorated heavily in construction, returning to the heavily negative levels that have applied since May and making the improvement in September look anomalous.


"Mining conditions are currently the weakest they have been since the Queensland floods in early 2011, which caused major disruptions to coal mine production.


“It appears that the RBA’s decision to lower the cash rate by 25 bps to 3.25% at its October meeting failed to improve sentiment, with firms instead likely to be focussing on the reasons for the rate change – a softening global economy, fiscal tightening, a soft labour market and high Australian dollar,” says Oster.


</body></html>

Latest Investing Insights

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

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Investing Insights

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

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News