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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

Joel Robinson

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

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

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

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

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

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

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

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

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

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

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

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

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

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There were 770 sales in Perth this week, up 15% from 670 the same week last year. The most actively traded suburb was East Perth, with 23 sales, followed by Scarborough, with 19. 
 
<img src="/images/stories/2012/11/reiwanov7.gif">
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Perth sales up 15% on same week last year: REIWA

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I love it when debates around whether there is a property bubble begin, and so I particularly enjoyed reading about the latest debate, right here on<a href="https://www.propertyobserver.com.au/residential/room-for-debate-is-there-an-australian-housing-bubble/2012110157585" target="_blank"> Property Observer</a>. 
This one pitted Terry Ryder, whose job is to examine property markets and their movements at their most fundamental, determining the potential impact of future, planned activity on micro property markets, against Phillip Soos, a master’s research student and employed researcher at Deakin University.
People always take sides, and it comes down to which side of the fence you sit on.  In this particular debate, the two sides have completely different backgrounds, experience and perspectives and use entirely different methods to assess and forecast the property market.
Terry uses factual data to establish whether or not there is likely to be property price growth in the future, along with issues of housing affordability, supply and demand and general price movements.  From what I can see he looks at areas in their individuality, considers the micro-economic situation in its present form and then overlays the information he has about what’s happening next in that area.  When this is all measured against the supply factor, I think he is saying that strong, local area economic growth, where there is an undersupply of property, has to mean that property in that area will go up.
Phillip uses some pretty impressive data, some great-looking graphs and some economic theory to predict a bubble.  From what I can see, he overlays this theory and graph drawing upon the Australian property landscape and from that he draws the conclusion we are in a bubble.  In addition, he quotes Minsky’s financial instability hypothesis, one that says that where income flows cover neither principal nor interest repayments the result is an asset bubble, to assert that there is, in fact, a bubble.
I like economic theory as much as the next guy, and I definitely use economic factors on which to base my own prognosis of where I think a property market is headed.  It’s not an exact science, but there is a good degree of empirical evidence to show that strong underlying economic factors, such as decreasing unemployment, increasing median household income and an improvement in gross regional product can often lead to property price growth.
However, I can’t help but get an uncomfortable squirming feeling when I see someone who devotes their life’s work to studying property markets at the most micro of level debating against someone who uses economic theory to pronounce to the property investing world that there is a bubble.
If my two cents worth means anything, here it is:  If we live in a country where there is such a vast difference in property prices, where we have areas that are ramping up and those that are plateauing or falling in value, where we have two-speed economies (Queensland) and varying degrees of local government activity, infrastructure development and employment opportunities, how can we possibly rely on a single, economic projection of a single property market to establish if there is a bubble or not?
 
<hr class="system-pagebreak">
 
The other factor that has me twitching at my desk, wanting to shake someone, is that those basing forecasts on economic theory like to ignore the bottom line impact of taxation.  Yes, I get it that at any time the government can take away tax benefits. 
I also know that investing for a tax benefit is no way to approach your retirement  income needs.  However, we do live in a country where the tax treatment of investors is quite unique and decidedly different than most others in the developed world, and from what I can see it makes it difficult to rationalise the theory that ‘where income flows cover neither principal nor interest repayments the result is an asset bubble’. 
To the average punter, what matters most is cashflow, and since investing in property in this country is tax advantaged, (and includes on-paper deductions for depreciation in many cases), the cashflow for many properties purchased today in economically strong areas with great yields and potential for further values growth is positive, or at least even.  Whether gross rent covers principal and interest repayments is a moot point when you consider that you can get a tax break equal to, or greater than, the difference.   And while ever that possibility exists, investors will continue to support those markets, creating further, albeit moderate, values growth and continuing strong yields.
I’ll never understand why economists cannot see the forest for the trees and why they insist on having a single-minded, broad view of the Australian property market. I am not suggesting that the market in Australia is fantastic or risk- free, and I don’t think Terry Ryder is, either.  But I do believe that talk of a unilateral property bubble decidedly ignores the true underlying situation – that opportunities for great property investing do exist, and that now is as good a time as ever to find them.
Margaret Lomas is a best-selling author and writes and hosts the popular Property Success With Margaret Lomas and heads up the panel on Your Money, Your Call, both on Sky News.
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Australian housing market too complex to make sweeping bubble statements: Margaret Lomas

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Fact: most property investors never get past owning one or two properties. In my experience, the two big things most property investors fail to do are:
<ul>
<li>Have a formulated property investment strategy; and </li>
<li>Regularly review their property portfolio’s performance.</li>
</ul>
If you don’t really know why you want to build a property portfolio or how it will one day get you out of the rat race and if you don’t really know where you are heading, how will you know which properties to buy? How will you know if you’re on track and on target?
The trouble is if you don’t know where you are going, any road can get you there, but any road can get you lost. And nowhere is this truer than property investing.
What are your goals?
How much money do you want your property portfolio to produce? How many properties will you need to achieve this?
And what type of strategy are your going to follow – capital growth, cash flow or are you just going to leave it up to luck?
Currently there are over 400,000 properties on the market in Australia. Not all of them will make good investments. In fact, most won’t.
To ensure I only buy properties that outperform the market averages I use a 4 Stranded Strategic Approach:
1. I buy a property below its intrinsic value.
2. In an area that has a long history of strong capital growth.
3. I look for a property with a twist – with something unique, special, different or scarce about the property.
4. And I buy the type of property where I can “manufacture capital growth” through refurbishment, renovation or redevelopment.
While most investors read a book or two, do a little research and then buy one of the first properties they come across, strategic investors are smarter than that. They follow a system that is rooted in the real world and has stood the test of time and changing markets.
By following my 4 Stranded Strategic Approach I minimise my risks and maximise my upside as each strand represents a way of making money from property and combining all four is a powerful way of putting the odds in my favour. If one strand lets me down, I have two or three others supporting my property’s performance.
But it doesn’t end there. I also suggest you…
Regularly review your property strategy
While most investors just buy a property and hold it for the long term, strategic investors regularly review their investment portfolio’s performance.
When I ask investors how their properties are performing they usually have no idea. They’ve just closed their eyes, crossed their fingers and hoped for the best. It makes no sense to invest in a property and then not review its performance every year or so.
Some investors avoid the tough decisions and excuse their property’s poor performance by saying things like “it will turn around eventually” or “I don’t want to make a loss, so I’ll sell it when I can cover my costs.”
 
<hr class="system-pagebreak">
 
Interestingly, every year I like to ask myself some questions about each of my investment properties:
<ul>
<li>How has this property performed over the last few years?</li>
<li>Knowing what I know now, would I buy this particular property again?</li>
<li>Is this property likely to outperform the averages over the next decade?</li>
<li>Is there anything I could or should do to improve this property and generate a better return on investment for me?</li>
</ul>
Logically, if a property has not performed well over a three or four-year period, it’s likely to be a dud investment. The answers to these questions help ensure that I only retain top performing properties in my portfolio and that my money is working hard for me.
But isn’t it the wrong time to sell?
If due to your financial capacity you can only afford to hold five properties, you should aim to own the five best performing investment properties you can. This means that if your property isn’t giving you the return you feel it should, then it might be time to make a change either through renovations, by changing property managers or by selling up and buying a better performing investment property.
I know the market is flat and you may not get the optimal price today, but don’t wait till the market picks up because the gap between your underperforming property and better performing investments will only widen as the market improves and it will become harder and more expensive to buy the type of property you’d like to own.
Essentially the sooner you can identify and offload an underperforming property, the better. Sure, you may crystallise a loss, or have to pay some capital gains tax on the sale and then pay stamp duty on your next purchase.
I understand this may mean that you’ll take two steps back to move three steps forward; but if you treat your property investments like a business, and that’s what all strategic investors do. You’ll recognise that it’s not how much money you make that matters; it’s how hard your money works for you and how much you keep that counts.
Sure, there are lots of other mistakes you could make as an investor, but if you adhere to a proven property investment strategy and then regularly review the performance of your real estate portfolio, you’re likely to avoid the majority of blunders that other investors make.
Michael Yardney is a director of <a href="https://www.metropole.com.au/">Metropole Property Strategists</a>, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is best-selling author, one of Australia's leading experts in wealth creation through property and writes the <a href="https://propertyupdate.com.au/category/property-investment/">Property Investment Update</a> blog. Subscribe today and you'll receive a free video, The Golden Rules of Property Investment.
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myardney-DFoGhGbSJX

Why most property investors don't get rich: Michael Yardney

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Buyers' agent Catherine Cashmore:
RP Data’s Rent vs Buy report flew into my email box this week, and already bold claims are being made across the internet and in print media that it’s currently cheaper to buy in 388 suburbs for those servicing a principal plus interest home loan using a variable rate.
Hurray! I hear you all cry – with the joyous voices marginally overpowered by the stampede of renters’ feet as they rush into their local real estate agency, chequebook in hand.
RP Data claims to be “Australia’s leading property data and analytics company”, and for the most part, I enjoy their market insights, updates, and media releases – all of which provide a valuable service for those of us not privy to direct data collecting software.
However, once in a while, I dearly wish RP Data would spend a little time thinking about the headlines it is creating before jumping in with the bold claims made on this report.
Median values – while a good barometer of the price point the predominant buyer demographic in any one suburb is purchasing – should always be used with caution when assessing if an area is “affordable”. The median price is only the middle number of all properties sold within a single period and therefore not helpful when it comes to assessing individual property prices.
RP Data stratifies its median prices between units and houses – and when producing detailed reports, usually breaks this data down listing other relevant information such as the number of bedrooms and so forth.
However, for the purpose of this report, the median values are simply divided between the two major property types – unit and house – therefore median “unit” value could mean a one-bedroom apartment or semi-detached three-bedroom townhouse. There is no distinction.
In its last report, <a target="_blank" href="/news">RP Data pinpointed 238 suburbs or towns</a> where “the mortgage repayment is lower than the median rent, based on a principal and interest loan on a variable mortgage rate”. Obviously the list expands two-fold when assessing interest-only loans, and there are hefty disclaimers explaining how the research is pinned together. In the latest report, due to lower rates and flattening prices, more suburbs fall into the bracket they use for assessment.
The resulting calculations are derived from the “median” unit price (or house price depending on suburb) and median “weekly advertised rental price”, with the “buyer” purchasing on a 90% loan-to-value ratio at an initial 5.9% variable 30-year loan. (Other examples are calculated on terms of interest only; however the above example is most applicable to the classic first-home buyer profile). The results, however, assume a great deal – to take median values and use them as a barometer of affordability against a median rental price has significant flaws. For example, in Victoria’s list, you will find the popular suburb of Abbotsford – located a hop and a skip from Melbourne’s CBD.
Abbotsford is a favoured area for home buyers looking north of the city, so it may surprise readers that the median value is listed as $360,868. There is currently only a small handful of properties listed for sale online in <a target="_blank" href="/news">Abbotsford</a> that you could comfortably purchase for the RP Data median value (or less) of $360,868. One of the listings is a small one-bedroom flat (roughly 40 square metres) situated on a main road.
There is nothing wrong with the unit – it would suit a first-home buyer – however probably not on a 90% LVR variable home loan (the formula used by RP Data.) Due to its internal size the lender of choice would probably require a larger deposit – however, we’ll put this to one side and assume otherwise.
The median rent in Abbotsford according to RP Data’s Rent vs Buy report is $475 per week – yet in reality, this is the price you’d expect to pay for a small house in “original condition” – not a one-bedroom apartment!
If you’re a renter currently paying $475 per week for a one-bedroom flat, of course it’s cheaper to buy! Yet for the one-bedder that I used as an example, the rent would be roughly $270 per week – cheaper to buy? Not on your Nelly is it cheaper to buy – in fact it’s far cheaper to rent in Abbotsford than it is to buy.
Let’s take another example –<a target="_blank" href="/news">Docklands </a>– Melbourne’s favourite underperforming high-rise metropolis. The median value is listed as $493,185 – the price will buy a standard two-bedroom apartment most likely servicing high owner’s corporation fees due to the high-density construction.
Furthermore, borrowing for high-rise accommodation would likely present problems for a first-home buyer who may encounter lending restrictions for this type of accommodation – especially if borrowing on a 90% LVR. However, once again for the sake of the analysis on this report, we’ll put this to one side.
The median weekly rent is listed as $963 per week – if any renter is paying over $900 per week for a two-bedroom apartment in Docklands I’d suggest they seek help. For roughly $900 per week, it’s possible to rent a fully furnished three-bedroom penthouse with views of the city and beyond! Is it cheaper to rent than buy? No! It’s not!
It may be advantageous for some in the industry to spread the rumours spruiked in the report and encourage buyers to make the move and go see a mortgage broker. Hopefully even those who don’t follow the market closely will be a tad more educated when assessing the analysis.
Rental prices in Australia have risen over 49% over the past five years, and the number of renters is up from 27.2% to 28.7%. Along with this outright ownership is down from 32.6% to 31% and of those figures, 34.5% of 30- to 39-year-olds now live in rented accommodation and clearly struggle to save a deposit while servicing rising rental costs.
Families with children in particular are suffering, recording a decrease in their ownership rates from 79.5% to 77.2%. If it were cheaper to buy than rent, these figures from the ABS census data would be – at best – questionable.
Although Australia may still possess a good proportion of owner-occupiers to renters – enabling some in the industry to close their eyes to distress calls coming from the increasing numbers locked out altogether – both state and federal governments would be foolhardy to ignore the downward trend in ownership and the reducing pool of first-home buyers. Meanwhile, any myth that it’s cheaper to buy rather than rent in some of our most desirable inner-city locations needs to be taken with a degree of mistrust until data can be analysed at a deeper level.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
 
<hr class="system-pagebreak">
  
RP Data national research director Tim Lawless:
The Buy versus Rent analysis from RP Data is aimed at providing a guide to the difference between mortgage payments and rental payments at the suburb level.  The report is not positioned as a detailed property-by-property assessment of rental costs and loan repayments, although we would encourage prospective purchasers to undertake a more specific assessment of costs based on their individual circumstances.  As Catherine Cashmore points out, there is going to be some diversity in the findings for individual properties.
The article from Cashmore does make some valid points; RP Data has not gone into detail in the report, segmenting houses and units by the number of bedrooms and bathrooms.  This level of detail was not our intention; the report provides an ideal starting point for prospective buyers to embark on their own due diligence.
In saying that, there are some errors in her comments. Firstly, the analysis is based on an assessment of median values, not median prices. The difference may be subtle, essentially, the median value for houses or units within a suburb is much more representative than a median price, as it is not based on simply only those properties that have sold over a period.
RP Data estimates the value of virtually every residential property across the country, the median value for a suburb is based on all dwellings within the suburb, not just those that have sold. It provides a much more stable and representative estimate about what a typical house or unit within a suburb sells for.
Cashmore also suggests the report is rife with disclaimers; any reporting will have disclaimers, and RP Data’s are standard. I think Cashmore is referring to the assumptions outlined in the report.  We aim to be completely transparent in our analysis, and for this reason it is important to ensure readers are completely informed about what assumptions are behind the figures; interest rates, the loan to valuation ratio, the mortgage period, and the methodology behind the numbers is essential to that end.
Tim Lawless is national research director of <a href="https://www.myrp.com.au/" target="_blank">RP Data.</a>
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Room for Debate: Is it really cheaper to buy than rent in some suburbs?

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It is often mentioned that Australia has the second-biggest listed property trust sector in the world behind the US.
But second place might as well be 100th when you consider the size of the US REIT sector.
The following graph shows that Australia’s REIT market has a market capitalisation of almost US$82 billion, with Westfield and its spin-off Westfield Retail Trust representing around 40% of this total.
This makes it just over one-eighth the size of the enormous US REIT market, which has a market capitalisation of $632 billion.
Click to enlarge
<a href="/images/stories/2012/11/eynov8.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/11/eynov8thumb.gif"></a>
According to the Ernst &amp; Young Global Perspectives 2012 REIT report, the US REIT market returned to “robust growth” last year and significantly outperformed the wide share market.
“The total returns of public equity REITs increased more than 8% in 2011, compared with about a 2% gain for the S&amp;P 500. REITs raised a record US$37.5 billion of equity last year — the most since the US$32.7 billion of 1997," says Ernst &amp; Young.
“Their total market capitalization increased to US$632 billion, the highest since 2006, when it reached US$412 billion.
The report also notes that, like Australian listed property trusts, US REITS are also deleveraging.
As of September 2011, the listed US REIT industry’s ratio of debt divided by total market capitalization stood at 41.6%, approximately its historical average.
"Of 140 REITs tracked by SNL Financial, about one-third raised their dividends in 2011, compared with 17% the previous year.
"Commercial property markets are continuing to improve, although the recovery has been uneven," notes Ernst &amp; Young.
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US listed property trust market dwarfs second-placed A-REITS

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More than a quarter (26%) of all commercial properties listed for sale in October were either receivership sales or mortgagee-in-possession sales, according to the latest update from property valuers LandMark White.
The valuation firm says 82 out of 312 commercial properties advertised in the national press in October were distressed sales, with distressed sales starting to trend up in three states covered by the report – Queensland, NSW and Victoria.
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This was the highest number of distressed sales listings since May this year, when 86 commercial properties were listed as distressed sales and slightly up on the 79 distressed properties listed for sale in October last year.
Proportionally though, this is in line with the 12-month average of 27% of all commercial property listings being distressed.
In line with a longer-term trend, Queensland has the highest proportion of distressed sales listings relative to total listings at 40%.
This is above the 12-month average of 38% but lower than October 2011 (48%). 
The proportion of properties advertised as distressed sales in NSW was 19%.
The proportion of properties advertised as distressed sales in Victoria was 13%
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Distressed commercial property listing on the rise: LandMark White

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Ray White chairman Brian White says the decision to leave the cash rate on hold in November will not have a significant impact on the housing market, so long as an easing bias remains.
White says property remains a great investment over a decent span of time.
“I expect to see an easing of rates which will continue to buoy the confidence of investors and owner- occupiers resulting in a good steady market in 2013.”
“When the community believes rates will decline, activity picks up before the event actually happens,” White tells Property Observer on the back of Ray White achieving its best monthly sales result in a year in October.
White says borrowers have a “clear anticipation” of future downward movement in rates which is the reason there has been an increase in open for inspections and activity in the housing market.
Looking at the performance of the Ray White group over October with sales reaching $2.6 billion, White says Auckland was the standout Australasian market outperformed the rest of the New Zealand market “by a huge margin”.
In Australia, White says capital city markets continue to outperform relative to other parts of the country.
“There is not that much difference between these markets, there is good strength across all of them.”
White says Melbourne and Sydney were for a long time the standouts but Brisbane and Perth have rallied while Adelaide has remained “consistent”
White notes that property investors are increasingly using their self-managed super funds to make investments.
SMSF investors are a huge percentage of investors. They are looking at property because they have control. They can rattle the letter box and knock on the door compares with derivatives and other financial instruments that people don’t understand.”
“A number of investors went into mining regions, but this will change. They will come back to more consistent investment in the cities,
White says property remains a great investment over a decent span of time.
“I expect to see an easing of rates which will continue to buoy the confidence of investors and owner- occupiers resulting in a good steady market in 2013.”
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Rate hold decision not significant as long as easing bias remains: Brian White

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The co-founder of accommodation booking website Wotif, Andrew Brice, has been tipped as the buyer of the office tower Nathan Tinkler didn’t – at time when BIS Shrapnel is forecasting the Brisbane office vacancy rate to hit 10%.
Brice has reportedly purchased <a target="_blank" href="https://www.commercialrealestate.com.au/Property/7834047/For-Lease/QLD/BRISBANE/Offices">443 Queen Street</a> in Brisbane for around $40 million.
<a target="_blank" href="https://www.propertyobserver.com.au/commercial/nathan-tinkler-lets-another-property-purchase-lapse/2012100957061">Tinkler had initially agreed to buy </a>the 22-year old waterfront building in the heart of the Brisbane’s CBD for around $37 million from Bramley Properties earlier this year.
Brice's name emerged after the 5,500-square-metre building was relisted for sale after Tinkler was unable to secure an extension on his deal. Jones Lang LaSalle’s Seb Turnball and Geoff McIntyre reportedly negotiated the deal but are declining to comment on the matter.
Both The Australian Financial Review and the The Australian have outed Brice as the buyer.
Brice is reportedly worth more than $200 million and is a member of the Order of Australia for his services to business. He co-founded Wotif with Graeme Wood.
The five-storey property is one of the last riverfront locations in the CBD yet to be developed into a high rise. The building will be leased to engineering company Hatch after Rio Tinto Alcan moved out of the building in June.
The property was built by developer Kevin Seymour in 1990 and bought by Bramley properties in 2004 for $23 million.
Linc Energy founder Peter Bond was reportedly close to paying $37 million for the building last year.
BIS Shrapnel has just published a report predicting the office vacancy rate in the Brisbane CBD to hit 10% by June 2013, reflecting the growing imbalance between new supply and demand.
“The completion of 145 Ann Street, has already released back-fill space and more will be added when the ATO moves into its new home at 55 Elizabeth Street in mid-2013”, says BIS Shrapnel’s Christian Schilling.
But he says the main factor pushing vacancy rates up in the short term is weak demand.
“The outlook for demand has softened markedly since early this year.”
“Large-scale redundancies at the state government, the downturn in demand for resources and falling business confidence mean that virtually no-one is looking for additional space.
“Only nine months ago the prospects for Brisbane was looking bright. Demand was strong and vacancies were falling, buoyed by investment in resource projects and associated employment growth. Most commentators expected the market to go from strength to strength.
“Few people anticipated the magnitude and speed with which the incoming Queensland government has cut jobs. In some departments over 1,000 staff have already gone, with large pockets of empty space appearing across floors. And the process is by no means complete—it will take some time, years perhaps, before it works itself through the system.”
He says as well as a drop in government tenancies, declines in the mining sector will lead to further vacancies.
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Wotif co-founder Andrew Brice reportedly buys Brisbane office block Nathan Tinkler didn't

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Shares or property?
Ahh, that old chestnut…  It’s a question that is often asked.  What performs better?  Shares or property? On a capital appreciation measure over the past decade, the past half-decade, and over the past three years, residential property has well and truly outperformed shares.  Over the most recent 12-month period shares have outperformed the housing market.
<img src="/images/stories/2012/11/rpnov82.gif">
It’s important to note that the share market has shown periods where capital gains have been substantially higher than what has been achieved in the housing market.   As can be seen in the ‘rolling annual change’ graph below, the annual growth rate in the ASX 200 has been has high as 39% over a 12-month period (the year ending February 2010); share prices have also fallen by more than 40% in the space of a year, which is what happened during the GFC (the ASX 200 fell by 42.7% over the year ending November 2008). Capital city dwelling values haven’t shown anywhere near the same level of volatility.  The largest rise over any 12-month period, based on the RP Data-Rismark eight city aggregate index, was 21% over the year to May 2002, and the biggest fall was recorded just recently when dwelling values fell 5.3% over the year to May 2012. While the volatility of the share markets may appeal to some, it is the stability and resilience of residential housing that is likely to be one of the key reasons why investing in the housing market is a popular choice for mum and dad investors.
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Tim Lawless is national research director of <a target="_blank" href="https://www.myrp.com.au/">RP Data.</a>
 
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Should you invest in shares or property?: Tim Lawless

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I am often staggered by the property bubble debate and how many believe the answer is black or white, we either definitely do or definitely don’t have one. The debate is a futile exercise, however, as it fails to recognise there are different sub-markets at play at any one time. Those who are arguing a bubble exists are just as correct as those who think there is no bubble. Often they are looking at different indicators that provide a different perspective of a completely different area of the market.
For example, for many years now we have had drummed into us by international economists that there must be a property bubble in Australia because the median price of property is a such and such multiple of the average wage. This is an extremely general statement and while technically true in an economist’s hands, virtually irrelevant to a person who earns five or 10 times the average. It is even less relevant to a home owner who bought a house back in the 1980s and only owes $12,768.
Now we are starting to hear the argument that because auction clearance rates are on the up this is a clear sign of no bubble. But there is a massive hole in this point because according to the REIV 70% to 80% of property is not sold at auction in Victoria, and the percentage of property sold by private treaty is even higher in other states.
However, clearance rates are a good indicator of a very small sector of the market where auctions are prevalent, and they do give great insight into where the market will find its feet first.
Confidence returns to the safe and more established markets first. These are markets that tend to have low levels of debt and lots of equity. For example, property that was purchased more than 20 years ago has quadrupled in value. A property purchased for $200,000 is now worth $800,000. Even if the owner did not pay off a single dollar of debt he or she would have $600,000 worth of equity. It is this equity that allows confidence to bloom earlier than the rest of the market.
 
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However, even in these areas the property market has come off by around 5% to 10% over the last couple of years. As confidence returns I expect this slack will be taken up very quickly, and some punters may get caught off guard and end up chasing the market.
 
This is because most people value property based on what they think it is worth, but the value of property in auction markets is determined purely by what the market is prepared to pay.
To get a clear understanding of the market it is not only essential to know what similar properties in a particular area have been selling for but also how many underbidders there were and at what level they stopped competing. The buyers who missed out on the last property will be your competitors for the next one, and they will be the ones who drive price growth.
Let's take a look at an example of an investor or home buyer who finds the perfect property. She bases the value on what she thinks is a fair price in the current market. The property is due to be auctioned and she decides on an upper limit prior to the auction, in this case $600,000. As the auction progresses she soon realises there are others who are prepared to pay more, and the property sells for $610,000.
A couple of months go by before our buyer finds another comparable property. She reasons that because the last one sold for $610,000, this one is worth the same. However, she fails to understand this sale is now a couple of months old and the market has moved on. Once again she fails to secure the property, as this time it sells for $620,000.
These buyers are now falling into the trap of chasing the market. They are basing their purchase price limits on what happened in the past, and in a growing market they will continually miss out.
While it is never a good idea to overpay for property, as the market begins to move if you are always a step behind the market you could end up paying a lot more or worse still, miss the boat altogether.
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
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