Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Joel Robinson

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.

But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.

As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.

For apartment residents, that can present a challenge.

If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.

That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.

It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.

As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.

Australia Post's Parcel Lockers provide one solution.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe>

Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.

The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.

For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.

For buyers, it's a reminder that the best apartment features aren't always the most obvious.

A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.

The apartment feature many buyers don't think about, until their first missed delivery

<a href="https://www.apartments.com.au/developers/hg-developments">HG Developments</a> is doubling down on Maud Street in Newstead, filing plans for a new apartment tower just a few doors down from its under-construction Aire Newstead development.

Recently submitted to Brisbane City Council, the proposal is for an 18-storey building designed by bureau^proberts, which has drawn heavily on Brisbane's subtropical design principles while referencing the suburb's industrial heritage.

A total of 64 apartments are planned for the amalgamated 1,518 sqm site at <a href="https://www.apartments.com.au/new-apartments/17-21-maud-street-newstead-qld-4006">17–21 Maud Street</a>, a short walk from the Brisbane River and Newstead Riverwalk.

<img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="a400c7fd-bd15-48f8-a63b-10ede92efe00" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20bldg.png?VersionId=.0vPmjpbC7CNP7kqGWa6L7rGIwsNExaw" />

"The building is defined by a series of vaulted motifs that reinterpret the arches, colonnades and layered facades evident throughout Newstead's historic built fabric," the Urban Design Report states.

"Combined with recessed glazing and generous balconies, these elements create a layered building envelope that provides shade, weather protection and opportunities for natural ventilation whilst establishing a distinctive architectural identity."

The proposal comprises 64 two, three and four-bedroom apartments across 18 residential levels, positioning it alongside a growing number of taller residential projects transforming Newstead's northern precinct. The tower incorporates extensive subtropical landscaping, with cascading planter boxes, deep planting at street level and a landscaped rooftop recreation area.

<img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="1d8140f4-8b98-45cd-b1b8-1efe8c8e266b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20podium.png?VersionId=VAZtbCoD44YCJ57N99fQCAKeSJx7ldZs" />

Bureau Proberts has prioritised passive environmental design throughout the project, with generous balconies, recessed glazing and operable façades helping reduce solar heat gain while maximising natural ventilation. River views become available from the upper levels, while the building has been orientated to capture prevailing breezes from both the Brisbane River and the west.

The architects say landscape is intended to be integral to the building rather than an applied element.

"Vertical greenery, cascading planter boxes and elevated gardens are woven throughout the architecture, softening the built form and strengthening the connection between residents and the subtropical environment."

"Through the integration of landscape, high-quality materials and passive design principles, the development delivers a refined residential address that celebrates Newstead's heritage character while contributing positively to Brisbane's evolving subtropical identity."

Newstead has remained one of Brisbane's most active apartment markets in recent years, with a number of developers continuing to back the inner-city suburb.

HG Developments is currently delivering the 40-apartment Aire Newstead at 25 Maud Street. Fortis recently launched the 65-apartment <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> on Kyabra Street, while builder-developer BPG and Don O'Rorke's Consolidated Properties are both expected to launch their respective Newstead projects before the end of the year.

HG Developments doubles down in Newstead with second Maud Street apartment development

Walk past a new apartment development promoting its sustainability credentials and it's easy to picture rooftop gardens, mature trees, landscaped courtyards and residents surrounded by nature.

But in many cases, that's not actually what those sustainability ratings guarantee.

Australia's leading environmental rating tools have played a significant role in improving the energy efficiency and environmental performance of buildings. Yet despite their focus on reducing emissions, many don't require developers to include trees, biodiversity or meaningful green space.

In other words, a building can achieve one of the country's highest sustainability ratings while containing little more than concrete, glass and hard landscaping.

That disconnect has led to the emergence of a new movement across Australia's property industry: nature-based cities.

The concept goes beyond designing buildings that consume less energy. Instead, it encourages developers to treat nature as essential infrastructure, integrating biodiversity, tree canopy, living landscapes and green spaces into projects from the earliest stages of planning.

Research has consistently linked access to nature with better physical and mental health, cooler neighbourhoods, improved biodiversity, stronger climate resilience and more connected communities. As Australia's cities continue to become denser, advocates say those outcomes should be considered just as important as energy efficiency.

Nature Based Cities (NBC) was established in 2022 to help accelerate that shift.

Founded by Hamton Executive Chairman Paul Hameister OAM, the not-for-profit was created after research highlighted a significant gap in Australia's sustainability framework. While existing environmental rating tools rewarded energy performance and emissions reductions, they placed little emphasis on the inclusion of living landscapes.

"We've always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren't there," Hameister says.

"In Australia, you can have a five-green-star rated building that's concrete and glass with not a blade of grass.

"The focus is on reducing emissions, which is laudable, but there hasn't been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities."

Since its launch, NBC has developed independent design guidelines and accreditation frameworks that encourage developers to prioritise ecology, biodiversity, tree canopy, walkability and living landscapes alongside traditional sustainability measures. The organisation first focused on medium and high-density residential developments before recently expanding into precinct-scale communities and masterplanned neighbourhoods.

Jan Talacko, founder of sustainability consultancy Ark Resources and a member of the Nature Based Cities Advisory Council, says the initiative addresses an area that has largely been overlooked by the property industry.

"Throughout my 25 years of working collaboratively with all stakeholders in the property sector, I've always favoured a pragmatic approach to sustainable design which encourages initiatives that not only meet environmental expectations but also improve amenity," Talacko says.

"Whilst we are making steady progress in relation to energy and carbon emissions from buildings, there has been much less emphasis on encouraging biodiversity and tackling the urban heat island effect.

"The Nature Based Cities initiative responds to a gap in the suite of tools currently used by the property development sector, which don't provide sufficient incentive, or recognition, for the integration of landscaping and greenery."

For apartment buyers, the shift is also changing the questions worth asking.

Rather than assuming a sustainable building will naturally include abundant green space, buyers are increasingly being encouraged to look beyond environmental ratings and ask what nature is actually being delivered. How much tree canopy will the development create? Has biodiversity been considered? Are landscaped spaces designed for people as well as appearance?

As Australia's cities continue to grow upwards and outwards, the next generation of sustainability may not simply be measured by lower emissions, but by how successfully developments bring nature back into everyday urban life.

What does it really mean for a building to be 'green'?

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>

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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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Waimea House, a Federation Arts and Crafts-style residence in Sandy Bay, Tasmania has been sold for a record $8.5 million in a late 2011 deal that has stunned the island’s estate agents.
It had only been sold nine months <a href="https://www.propertyobserver.com.au/https://www.propertyobserver.com.au/news/%246-million-waimea-house-sale-eclipses-tasmanian-record/2011071050751" target="_blank">earlier in 2011 for a record $6.06 million</a>.
Its latest buyer is the low-key investment banker Greg Woolley from Point Piper, Sydney. He was born in Hobart in 1973 and is understood to have admired the home since childhood.
Its fortunate seller-turned-property flipper was the Sydney property developer Piers Dawson-Damer and his wife, Kim, who’d moved to Tasmania after selling their Rose Bay, Sydney home.
Many regard the landmark property as occupying the finest position in Hobart, with harbour views and complete privacy.
The property had previously been in the Nettlefold family ownership for 70 years until sold in early 2011.
The prominent Hobart family had consolidated a four-block amalgamation.
The Sandy Bay property was marketed as Hobart's most prestigious and distinguished residential estate by Brian Watchorn of Charlotte Peterswald for Property.
It sits on a 9,726-square-metre-holding with a pool, tennis court, and a smaller second residence with Art Deco influences.
Woolley, a former Macquarie Bank executive, has specialised in leasing, primarily overseeing the Melbourne Liberman family's aircraft leasing business, Global Aviation Asset Management.
Last August the Greg Woolley-led Global Aviation Asset Management was sold to US-listed Fly Aviation Leasing.
It was reported Woolley netted $42.5 million in proceeds.
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jchancellor-FAypfDUnLy

Waimea House $8.5 million sale to Greg Woolley sets Tasmanian residential record for second time in nine months

<html><body>
The availability of rental homes has improved slightly in Melbourne, but there are still opportunities for investors, particularly in regional Victoria. Aspiring first-time investors should undertake research before buying their first property, and there are a few terms that they will need to know: equity, capital growth, investment return and gross rental yield.
Equity: This is the difference between the property purchase price and the amount owed on the loan. In other words, what you own, not what you owe.  Generally equity increases over time in line with capital growth and a reduction in the debt.
Capital growth: The term capital growth is often used in real estate to describe the increase in the price or value of a property. Capital growth is the annual compound rate of growth in the value of the property. For instance, if you bought a house in Coburg for $538,500 and 12 months later it was worth $550,000, the capital growth is the difference between the two – $11,500 – divided by the purchase price. This equates to 2.1% over a year. Capital growth is also known as capital appreciation.
Investment return: From a real estate perspective the term “investment” return is very similar to the capital growth figure.  It is the percentage of change in value of the investment over a given period of time.
Gross rental yield: Gross rental yield is a term that is frequently used to compare the investment return on a property investment. To calculate the amount you divide the yearly rental income by the purchase price of the home. For instance, the yearly rental income on a three-bedroom house in Coburg is $20,000 and the median house price is $550,000, resulting in a gross rental yield of 3.6%.
Enzo Raimondo is CEO of the <a href="https://www.reiv.com.au/" target="_blank">Real Estate Institute of Victoria</a>.
For more advice on buying your first investment property, <a target="_blank" href="http://propertyobserver.com.au/ebooks/first-investment-property-a-beginner-s-guide">download our free eBook.</a>
</body></html>

enzoraimond-7fvRFHPR52

Terms first-time property investors need to know

<html><body>
The national residential market is anticipated to remain subdued in 2012 as consumers continue to pay off debts, according to a survey of the 350-plus First National Real Estate offices.
However, subdued house prices will stimulate some activity, particularly among bargain hunters who have been squirreling away savings and are now cashed up, according to First National chief executive Ray Ellis.
The vast majority of offices acknowledged the market had steadied or fallen, but there were distinct regional differences. The Sydney market is anticipated to stabilise first, as it has already shown signs of doing, but for some of the other capital cities, like Melbourne, there could still be some way to go.
TYPE OF MARKET – LAST SIX MONTHS 2011
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="48" valign="top"></td>
<td width="55" valign="top">
National
</td>
<td width="52" valign="top">
WA
</td>
<td width="52" valign="top">
VIC
</td>
<td width="43" valign="top">
TAS
</td>
<td width="37" valign="top">
QLD
</td>
<td width="52" valign="top">
SA
</td>
<td width="52" valign="top">
NSW/ACT
</td>
</tr>
<tr>
<td width="48" valign="top">
Falling
</td>
<td width="55" valign="top">
58%
</td>
<td width="52" valign="top">
33%
</td>
<td width="52" valign="top">
81%
</td>
<td width="43" valign="top">
94%
</td>
<td width="37" valign="top">
80%
</td>
<td width="52" valign="top">
43%
</td>
<td width="52" valign="top">
36%
</td>
</tr>
<tr>
<td width="48" valign="top">
Steady
</td>
<td width="55" valign="top">
36%
</td>
<td width="52" valign="top">
34%
</td>
<td width="52" valign="top">
19%
</td>
<td width="43" valign="top">
-
</td>
<td width="37" valign="top">
13%
</td>
<td width="52" valign="top">
57%
</td>
<td width="52" valign="top">
59%
</td>
</tr>
<tr>
<td width="48" valign="top">
Rising
</td>
<td width="55" valign="top">
6%
</td>
<td width="52" valign="top">
33%
</td>
<td width="52" valign="top">
-
</td>
<td width="43" valign="top">
-
</td>
<td width="37" valign="top">
7%
</td>
<td width="52" valign="top">
-
</td>
<td width="52" valign="top">
5%
</td>
</tr>
</tbody></table>
The First National agents expect the market will further moderate, although some areas have the potential to experience an even deeper decline.
TYPE OF MARKET – FIRST SIX MONTHS 2012
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="48" valign="top"></td>
<td width="55" valign="top">
National
</td>
<td width="52" valign="top">
WA
</td>
<td width="52" valign="top">
VIC
</td>
<td width="43" valign="top">
TAS
</td>
<td width="47" valign="top">
QLD
</td>
<td width="41" valign="top">
SA
</td>
<td width="66" valign="top">
NSW/ACT
</td>
</tr>
<tr>
<td width="48" valign="top">
Falling
</td>
<td width="55" valign="top">
25%
</td>
<td width="52" valign="top">
-
</td>
<td width="52" valign="top">
31%
</td>
<td width="43" valign="top">
-
</td>
<td width="47" valign="top">
20%
</td>
<td width="41" valign="top">
29%
</td>
<td width="66" valign="top">
32%
</td>
</tr>
<tr>
<td width="48" valign="top">
Steady
</td>
<td width="55" valign="top">
66%
</td>
<td width="52" valign="top">
83%
</td>
<td width="52" valign="top">
69%
</td>
<td width="43" valign="top">
89%
</td>
<td width="47" valign="top">
60%
</td>
<td width="41" valign="top">
71%
</td>
<td width="66" valign="top">
59%
</td>
</tr>
<tr>
<td width="48" valign="top">
Rising
</td>
<td width="55" valign="top">
9%
</td>
<td width="52" valign="top">
17%
</td>
<td width="52" valign="top">
-
</td>
<td width="43" valign="top">
-
</td>
<td width="47" valign="top">
20%
</td>
<td width="41" valign="top">
-
</td>
<td width="66" valign="top">
9%
</td>
</tr>
</tbody></table>
The survey concluded it was unlikely uniform property prices will be seen in the 2012 Australian real estate market.
Some parts of the market will demonstrate greater price resilience, especially “muscle towns” with direct links to the mining sector or specific agricultural regions, Ellis suggests
“Other parts of the housing market may experience strong price deflations.”
He says stagnant prices are a normal part of Australia’s long-term cyclical housing market.
The housing market across Australia has remained soft in 2011, with home values dropping in all capital cities for an average dwelling price in October last year of $448,500.
Residential property prices are expected to bottom out in 2012, especially if official interest rates are cut below their current 4.25%.
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="254" valign="top">
City
</td>
<td width="74" valign="top">
Movement Year on Year
</td>
<td width="102" valign="top">
Median Dwelling Price
</td>
</tr>
<tr>
<td width="254" valign="top">
Sydney
</td>
<td width="74" valign="top">
-1.1%
</td>
<td width="102" valign="top">
$498,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Canberra
</td>
<td width="74" valign="top">
-1.1%
</td>
<td width="102" valign="top">
$475,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Brisbane
</td>
<td width="74" valign="top">
-8.0%
</td>
<td width="102" valign="top">
$402,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Melbourne
</td>
<td width="74" valign="top">
-5.4%
</td>
<td width="102" valign="top">
$458,500
</td>
</tr>
<tr>
<td width="254" valign="top">
Adelaide
</td>
<td width="74" valign="top">
-5.2%
</td>
<td width="102" valign="top">
$370,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Perth
</td>
<td width="74" valign="top">
-5.0%
</td>
<td width="102" valign="top">
$443,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Hobart
</td>
<td width="74" valign="top">
-4.0%
</td>
<td width="102" valign="top">
$310,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Darwin
</td>
<td width="74" valign="top">
-3.1%
</td>
<td width="102" valign="top">
$458,000
</td>
</tr>
<tr>
<td width="254" valign="top">
Regional
</td>
<td width="74" valign="top">
-3.4%
</td>
<td width="102" valign="top">
$316,000
</td>
</tr>
</tbody></table>
Ellis suggests the combination of lower interest rates, cheaper homes and rising incomes is generating a welcome boost to housing affordability, particularly in those markets where value falls have been more significant.
HOUSE PRICES – NEXT SIX MONTHS 2012
Movements in house prices are expected to be mainly within the vicinity of 1% to 5%, but the majority of survey respondents anticipate them to be less than 1%.  Small pockets of Victoria, South Australia and New South Wales/Australian Capital Territory are forecast to experience drops of about 10%.
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="74" valign="top"></td>
<td width="67" valign="top">
National
</td>
<td width="43" valign="top">
WA
</td>
<td width="43" valign="top">
VIC
</td>
<td width="43" valign="top">
TAS
</td>
<td width="43" valign="top">
QLD
</td>
<td width="43" valign="top">
SA
</td>
<td width="64" valign="top">
NSW/ACT
</td>
</tr>
<tr>
<td width="74" valign="top">
Flat
</td>
<td width="67" valign="top">
56%
</td>
<td width="43" valign="top">
50%
</td>
<td width="43" valign="top">
50%
</td>
<td width="43" valign="top">
92%
</td>
<td width="43" valign="top">
47%
</td>
<td width="43" valign="top">
86%
</td>
<td width="64" valign="top">
55%
</td>
</tr>
<tr>
<td width="74" valign="top">
Downwards
</td>
<td width="67" valign="top">
28%
</td>
<td width="43" valign="top">
17%
</td>
<td width="43" valign="top">
50%
</td>
<td width="43" valign="top">
-
</td>
<td width="43" valign="top">
27%
</td>
<td width="43" valign="top">
14%
</td>
<td width="64" valign="top">
23%
</td>
</tr>
<tr>
<td width="74" valign="top">
Upwards
</td>
<td width="67" valign="top">
16%
</td>
<td width="43" valign="top">
33%
</td>
<td width="43" valign="top">
-
</td>
<td width="43" valign="top">
-
</td>
<td width="43" valign="top">
26%
</td>
<td width="43" valign="top">
-
</td>
<td width="64" valign="top">
22%
</td>
</tr>
</tbody></table>
Tasmanian members all believe house prices will remain steady.
APARTMENT PRICES – NEXT SIX MONTHS
Apartment/strata property prices in the coming six months are expected to remain relatively flat although there could be some falls experienced.  A small portion of the membership anticipates prices for this segment to rise.
Falls for apartment/strata property prices are expected, in the main, to be below 1% although some members say there is a possibility they could move as much as 5%.  A very small portion of the membership indicates price movements in the area of 10%.
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="74" valign="top"></td>
<td width="60" valign="top">
National
</td>
<td width="43" valign="top">
WA
</td>
<td width="43" valign="top">
VIC
</td>
<td width="50" valign="top">
TAS
</td>
<td width="43" valign="top">
QLD
</td>
<td width="43" valign="top">
SA
</td>
<td width="64" valign="top">
NSW/ACT
</td>
</tr>
<tr>
<td width="74" valign="top">
Flat
</td>
<td width="60" valign="top">
55%
</td>
<td width="43" valign="top">
34%
</td>
<td width="43" valign="top">
56%
</td>
<td width="50" valign="top">
87%
</td>
<td width="43" valign="top">
42%
</td>
<td width="43" valign="top">
71%
</td>
<td width="64" valign="top">
60%
</td>
</tr>
<tr>
<td width="74" valign="top">
Downwards
</td>
<td width="60" valign="top">
31%
</td>
<td width="43" valign="top">
33%
</td>
<td width="43" valign="top">
38%
</td>
<td width="50" valign="top">
-
</td>
<td width="43" valign="top">
42%
</td>
<td width="43" valign="top">
29%
</td>
<td width="64" valign="top">
20%
</td>
</tr>
<tr>
<td width="74" valign="top">
Upwards
</td>
<td width="60" valign="top">
14%
</td>
<td width="43" valign="top">
33%
</td>
<td width="43" valign="top">
6%
</td>
<td width="50" valign="top">
-
</td>
<td width="43" valign="top">
16%
</td>
<td width="43" valign="top">
-
</td>
<td width="64" valign="top">
20%
</td>
</tr>
</tbody></table>
Land Prices
According to the survey, most of the First National offices expect land prices to remain flat.
LAND PRICES – NEXT SIX MONTHS
<table border="1" cellspacing="0" cellpadding="0" width="417"><tbody>
<tr>
<td width="73" valign="top">
Trend
</td>
<td width="55" valign="top">
National
</td>
<td width="45" valign="top">
WA
</td>
<td width="41" valign="top">
VIC
</td>
<td width="47" valign="top">
TAS
</td>
<td width="49" valign="top">
QLD
</td>
<td width="40" valign="top">
SA
</td>
<td width="66" valign="top">
NSW/ACT
</td>
</tr>
<tr>
<td width="73" valign="top"></td>
<td width="55" valign="top"></td>
<td width="45" valign="top"></td>
<td width="41" valign="top"></td>
<td width="47" valign="top"></td>
<td width="49" valign="top"></td>
<td width="40" valign="top"></td>
<td width="66" valign="top"></td>
</tr>
<tr>
<td width="73" valign="top">
Upwards
</td>
<td width="55" valign="top">
15%
</td>
<td width="45" valign="top">
17%
</td>
<td width="41" valign="top">
15%
</td>
<td width="47" valign="top">
-
</td>
<td width="49" valign="top">
20%
</td>
<td width="40" valign="top">
-
</td>
<td width="66" valign="top">
15%
</td>
</tr>
<tr>
<td width="73" valign="top">
Downwards
</td>
<td width="55" valign="top">
27%
</td>
<td width="45" valign="top">
-
</td>
<td width="41" valign="top">
39%
</td>
<td width="47" valign="top">
-
</td>
<td width="49" valign="top">
27%
</td>
<td width="40" valign="top">
29%
</td>
<td width="66" valign="top">
30%
</td>
</tr>
<tr>
<td width="73" valign="top">
Flat
</td>
<td width="55" valign="top">
58%
</td>
<td width="45" valign="top">
83%
</td>
<td width="41" valign="top">
46%
</td>
<td width="47" valign="top">
95%
</td>
<td width="49" valign="top">
53%
</td>
<td width="40" valign="top">
71%
</td>
<td width="66" valign="top">
55%
</td>
</tr>
</tbody></table>
For more property forecasts for 2012, <a target="_blank" href="https://register.propertyobserver.com.au/property-forecasts-for-2012/">download our free eBook.</a>
</body></html>

First National agents mostly expect house prices to remain subdued in 2012 

<html><body>
The values of residential land in the Maitland local government area have only shown slight increases in the past three years.
Commercial land values have generally remained steady or shown a slight increase since July 1, 2008, according to the latest official data from NSW Valuer-General Philip Western.
That will be of interest for Pauline Hanson, <a href="https://www.propertyobserver.com.au/commercial/pauline-hanson-buys-former-maitland-pub-premises-and-won-t-completely-rule-out-her-return-to-fish-and-chips/2012010852977" target="_blank">who has bought former hotel premises on the main street in town of Maitland</a>.
Industrial land values have generally remained steady.
Rural residential or hobby farm land has generally shown a slight increase in value over the three-year period.
The value of rural land has generally shown a slight decrease over the period.
<img src="/images/stories/maitlandmap.gif">
The median Maitland residential land value jumped 3.5% from $144,000 to $149,000 over the past year. The median Maitland commercial land value dropped to $149,000 from $160,000 during the past year.
The overall value of the 28,106 properties in the Maitland local government area as at July 2011 was $5.26 billion, a slight increase from the $5.25 billion at July 2008, Western says.
Sales that assisted in determining land values during the 2011 valuation program included 312 residential, 16 commercial, 18 industrial and 91 rural sales that were analysed, he said.
While the value of residential land generally showed a slight increase exceptions included residential land in the northern section of East Maitland, which showed a moderate increase in value.
Residential land in the southern part of Rutherford and parts of Largs and Bolwarra Heights showed a slight decrease in value.
While commercial land values remained steady, the Valuer-General noted selected areas in the main CBD, such as the Church and Elgin streets areas, recorded moderate increases.
But parts of Rutherford, Morpeth and Greenhills showed a slight decrease.
While industrial land values generally remained steady, the exception was land in the Thornton industrial area, which showed a moderate increase in value, and some larger industrial and environmentally constrained sites, which have shown a slight decrease in value. 
Typical residential land values were:
<ul>
<li>835 square metres at Bolwarra Road, Bolwarra valued at $194,000</li>
<li>660 square metres at Brigantine Street, Rutherford valued at $103,000</li>
<li>340 square metres at Bulwer Street, Maitland valued at $97,900</li>
<li>468 square metres at Green Hills Avenue, Woodberry valued at $109,000 </li>
<li>727 square metres at Reilly Street, Thornton valued at $163,000</li>
<li>849 square metres at Wilton Drive, East Maitland valued at $211,000</li>
<li>721 square metres at Semillon Ridge, Gillieston Heights valued at $146,000. </li>
</ul>
Typical commercial land values were:
<ul>
<li>282 square metres at East Mall, Rutherford valued at $87,800</li>
<li>588 square metres at High Street, East Maitland valued at $129,000</li>
<li>1,355 square metres at Mitchell Drive, East Maitland valued at $334,000</li>
<li>221 square metres at High Street, Maitland valued at $126,000. </li>
</ul>
Typical industrial land values were:
<ul>
<li>4.1 hectares at Kyle Street, Rutherford valued at $2,240,000</li>
<li>2,571 square metres at Kestrel Avenue, Thornton valued at $365,000</li>
<li>1,912 square metres at Racecourse Road, Rutherford valued at $252,000</li>
<li>1,627 square metres at Turton Street, Metford valued at $198,000. </li>
</ul>
Typical rural land values were:
<ul>
<li>131 hectares at Knockfin Road, Luskintyre valued at $1,273,000</li>
<li>40 hectares at Maitland Vale Road, Maitland Vale valued at $565,000. </li>
</ul>
Typical rural residential land values were:
<ul>
<li>4,008 square metres at Woodlands Drive, Thornton valued at $268,000</li>
<li>1.4 hectares at Beacon Hill Road, Windella valued at $290,000</li>
<li>4,000 square metres at Quiescent Close, Louth Park valued at $278,000. </li>
</ul>
Typical hobby farm land values were:
<ul>
<li>12.1 hectares at Old North Road, Lochinvar valued at $342,000</li>
<li>11.7 hectares at Scotch Creek Road, Millers Forest valued at $350,000. </li>
</ul>
Western says landowners wishing to know more about their land value or the land valuation system could call toll free on 1800 110 038 or visit the <a href="https://www.lpi.nsw.gov.au/valuation/land_value_search?utm_source=lpihp&amp;utm_medium=middlebanner&amp;utm_campaign=landvaluesearch">Land and Property Information website</a>.
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Values holding steady in Maitland, Pauline Hanson's new investment neighbourhood

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Land values in the Bogan local government area in central western NSW have fallen slightly.
<img src="/images/stories/bogan_lga_nsw.jpg">
The total land value of the Bogan Shire was $313 million, a slight decrease from the $316 million total as at July 2007.
Over the four-year period since landowners in Bogan were issued with notices of valuation, the value of residential and commercial land had generally shown a slight decrease, NSW Valuer-General Philip Western says.
There are just 2,024 properties in the Bogan municipality and therefore few sales to analyse price movements.
“Real estate analysis in the Bogan LGA has been comprehensive during the course of the 2011 valuation program, with 32 residential, four commercial, one industrial and 21 rural sales analysed,” Western advises.
The median residential land value fell from $30,500 to $26,500 over the past year.
Its only significant town is Nyngan.
The shire’s famers graze sheep and cattle along with cropping, primarily wheat.
Western says red farming country decreased slightly in value.
He says industrial land generally showed a slight increase in value.
Most of the rural, rural residential and village land zoned holdings generally remained steady over the four-year period.
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Bogan values slightly down, with industrial outlook the brightest

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Many people can’t afford to buy a new home until they sell their current one. Selling and buying at the same time has its advantages yet can also be stressful, as you not only need to successfully sell but also locate and successfully purchase. 
From a cashflow perspective it can be difficult, as you need a deposit for the home that you are buying. While some people apply for a deposit bond to bridge the gap, there is also the option of applying for an early release of the deposit from the home you have just sold. 
The law in Victoria, specifically section 27 of the Sale of Land Act, allows the seller to apply for release of the deposit before the settlement date. 
It outlines a number of conditions and a mechanism for the release, including the critical condition: the purchaser must be pleased to release it. 
If you believe that you are able to meet the criteria, you need to issue a notice that contains specific information and asks the buyer of the property to allow the release of the deposit monies. They are held in trust by your estate agent or solicitor. 
While this may sound simple, it can also take some time; in fact, it may be no quicker than waiting on the settlement date of a short settlement period. 
It is important to also note that if early release is agreed to, your agent may deduct his or her fees at this time.
Enzo Raimondo is CEO of the <a target="_blank" href="https://www.reiv.com.au/">Real Estate Institute of Victoria</a>.
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Vendors can sometimes release a deposit early

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Mortgage debt is by far the largest component of debt in Australia today—government debt, which is the focus of political debate, is trivial by comparison (a quick caveat though—finance sector debt may be larger again than mortgage debt, if <a href="https://www.zerohedge.com/news/psssst-france-here-why-you-may-want-cool-it-britain-bashing-uks-950-debt-gdp" target="_blank">this claim</a>, sourced from Morgan Stanley, is accurate— since it shows Australia’s aggregate private debt ratio as almost equal to the USA’s).
<img width="470px" src="/images/stories/keenjan1.png">
The household debt to income ratio may have topped out now, after growing fivefold in the last two decades. Figure 2 shows the ratio of household debt to disposable income, which peaked at 149% of disposable income back in late 2008. Despite the enticement into debt given by the <a href="https://www.debtdeflation.com/blogs/2009/03/22/fhb-boost-is-australias-sub-prime-lite/" target="_blank">first-home vendor's boost</a>, aggregate household debt never exceeded this pre-boost peak as a percentage of disposable income, since the fall in personal debt outweighed the rise in mortgage debt.
<img width="470px" src="/images/stories/keenjan2.png">
This huge rise in household debt compared to income has more than offset the falls in interest rates that occurred since the 1990s. The perennial argument from property <a href="https://en.wiktionary.org/wiki/spruiker" target="_blank">spruikers</a> that the rise in debt has simply been a rational reaction to the fall in interest rates is pure bunkum—especially when you take a less-than-myopic look at the data, and consider mortgage rates back in the 1960s, which were well below today’s rates (see Figure 3). <img width="470px" src="/images/stories/keenjan3.png">
This comparison stands even when inflation is taken into account. The average real mortgage rate in the relatively low-inflation 1960s was 3% — a full percentage point below the low inflation level of the last decade (see Figure 4). Why wasn’t mortgage debt higher back then, if the increase since the 1990s was a “rational response to lower interest rates”?
<img src="/images/stories/keenjan4.png">
I date the Australian house price bubble from 1988, when it was spiked by the reintroduction of the first home owner's scheme by the Hawke government in reaction to the share market crash of 1987 (the scheme works by encouraging would-be buyers to take on mortgage debt, and then hand the leveraged sum over to the vendors—which is why I prefer to call it the <a href="https://www.debtdeflation.com/blogs/2011/09/09/hand-of-gov-report-on-the-australian-housing-bubble/" target="_blank">first-home vendors scheme</a> [FHVS]). It then really took off in 2001, when Howard doubled the grant in response to a feared recession (see Figure 5, which combines <a href="https://www.debtdeflation.com/blogs/2009/04/06/steve-keens-debtwatch-no-33-april-2009-lies-damned-lies-and-housing-statistics/" target="_blank">Nigel Stapledon’s long-term index</a>with the ABS data from 1976 on; “Hawke” and “Howard” respectively mark the re-introduction of the grant in 1988 and Howard’s doubling of it in 2001), though it was already running hot again from 1997 when — without any additional help from the government — the financial sector had enticed Australians to go from a 50% to a 70% mortgage debt to GDP ratio (at a time of rising interest rates). <img width="470px" src="/images/stories/keenjan5.png">
The combination of higher rates and much higher debt levels means that paying the mortgage is taking far more out of the family purse than it used to do back in the pre-housing bubble years. Readily available data from the RBA shows that interest payments on household debt are five times as high as they were back in the 1970s.
The RBA data for mortgage debt only start in 1976; in the spirit of countering spruiker myopia, I’ve estimated pre-1976 mortgage debt as 30% of total debt, from the <a href="https://www.rba.gov.au/statistics/frequency/occ-paper-8">RBA’s long-term data</a> (the average from 1977-1980 was 31%). Interest payments on mortgage debt are as much as 10 times as high now as in the 1960s (see Figure 6).
<img width="470px" src="/images/stories/keenjan6.png">
Spruikers also prefer to ignore the fact that debt has to be repaid, and focus on the interest payments alone. In the past mortgages been paid off after five to seven years via the resale of the property, but that will be a lot more difficult in future as house prices fall. Figure 7 shows household debt service as a percentage of disposable income with mortgage debt being repaid over 25 years and personal debt over 10. On this basis, there has been a twelve-fold increase in the proportion of family income that has to be devoted to servicing mortgages since 1970. Even compared to the high-interest days of 1990, mortgage debt service is now 2.5 times as burdensome.
<img src="/images/stories/keenjan7.png">
There is clearly no capacity for debt service to take a larger slice of the family income pie, which in turn is taking the wind out of the housing market. Spruikers happily make a “supply and demand” argument about why house prices have risen, but obsess about regulation-impaired supply and equate demand with population growth. In fact, demand for housing doesn’t come from population growth: it comes from the growth in the number and value of mortgages. That growth rate in fact peaked back in 2004, and it has been trending down ever since: the first-home vendor's boost merely delayed this process without stopping it.
<img width="470px" src="/images/stories/keenjan8.png">
That in turn is the main factor driving house prices down — just as rising mortgage debt drove prices up, falling mortgage debt is driving them down. As I’ve explained elsewhere, the causal factor behind asset prices is not just rising but acceleratingdebt. This is an extension of my basic proposition that macroeconomic analysis must include the role of credit — which is ignored by conventional neoclassical economics. In a credit-driven economy, aggregate demand is the sum of incomes plus the change in debt, and this monetary demand is expended buying commodities and claims on existing assets — basically, shares and property.
Part of demand for housing thus comes from income — the focus of the property spruikers — and part comes from the increase in mortgage debt —which they ignore.
<img width="470px" src="/images/stories/keenjan9.png">
For prices to rise, demand must also be rising, and this requires not merely rising mortgage debt but accelerating debt. Of course variations in income (and variations in supply, too) can play a role, but in the overwhelmingly speculative, overly-leveraged market that Australian housing has become, accelerating mortgage debt trumps the lot (see Figure 10).
<img width="470px" src="/images/stories/keenjan10.png">
This is especially so since such a large percentage of buyers are so-called investors — "so-called” because a better description is speculators. Actual investors aim to make a profit out of the income flow generated by an investment. Australia’s property “investors” instead lose money on their rental income, and hope to recoup the loss as capital gains via a later sale. With the days of house prices rising faster than incomes well and truly over, this percentage of the market could drop back to pre-1990s levels.
<img width="470px" src="/images/stories/keenjan11.png">
Both sources of demand are now falling strongly from the artificial boost given by Rudd’s spin of the FHVS sauce bottle.
<img width="470px" src="/images/stories/keenjan12.png">
One of the world’s last and greatest house price bubbles is thus finally ending.
<img width="470px" src="/images/stories/keenjan13.png">
Steve Keen is Associate Professor of Economics and Finance at the University of Western Sydney and author of <a href="https://debunkingeconomics.com/" target="_blank">Debunking Economics</a> and the blog <a style="text-decoration: none; color: #287bce; background-color: transparent; margin-top: 3px; margin-right: 0px; margin-bottom: 3px; margin-left: 0px; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; line-height: 14px; padding: 0px;" href="https://www.debtdeflation.com/blogs/" class="=article" target="_blank">Debtwatch</a>.
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stevekeen-hGRrVP8sYD

Australia's housing bubble is finally ending: Steve Keen

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No one is more despised by Melbourne's property tycoons than Bill Oliver. In Victoria's $25 billion construction game, the stubbled Scotsman can shut down rogue building sites in a flash and, builders say, hold their projects to ransom.
Each working day in bleak city, Oliver guides his 30,000-strong army of Construction Forestry Mining and Energy Union workers towards the industrial promised land -- a world of bolstered wages, expanded rights and far-reaching political influence. While his mainstream union rivals seem content to take the low road, Oliver and crew are always on hand to extract cash and conditions from tight-fisted employers who'd really prefer a new Lexus.
Just look at the enterprise agreement Oliver negotiated in 2007 for those working on the controversial, and still unfinished, $24 billion Wonthaggi desalination plant. It, more than any other wage deal in the last 20 years, signalled the return of militant union power to Victoria.
"Industrially, there's no one that can match Bill," one senior Victorian Labor MP says. "He's the master of his domain and all the big decisions go through him."
Already dominant on the thousands of construction sites scattered across Melbourne's sprawl, the desal deal showed how the union's aggressive tactics could still prevail on projects of state importance, even while the broader labour movement suffered massive membership declines.
The mere mention of Bill Oliver's name sends right wing critics into fits of apoplexy. They contrast the "20%" lower cost of building a project like the EastLink toll road (using labour provided by Cesar Melhem's more moderate Australian Workers Union) with the CFMEU's strong-arm tactics on sites like the Westgate Bridge, Royal Children's Hospital and Epping Market.
But as Oliver explains, he regularly cops criticism "for getting good deals for our members ... but that's our job. I am not paid by the business lobby or [Ted] Baillieu. I am paid by members of this union, and it's my job to represent their interests and get the best deal I can."
And he denies he is personally powerful: "No! The only power I have is because of the strength of the members, the dedication of the delegates and the union as a whole. Any power I have is not about me ... but about the collective strength. These may seem old fashioned concepts, but they are still true, nevertheless. That's the whole idea of a union: strength in numbers."
Regular sparring partner Brian Welch of the Master Builders Association begs to differ. He says under Oliver's reign building costs in Victoria are once again 30% higher than other states, with multi-million dollar fines levelled by the ABCC failing to make an impact.
Welch -- who reluctantly signed off on wage increases worth 20% over four years last June -- says simply: "Ignore Oliver at your peril".
"Does that mean that he's powerful? Well, any building site can be affected significantly and as a consequence that makes them an influence that you would not wish to ignore," Welch says. "Bill's the head of that union. If he says that he's upset with a particular builder or specialist contractor then they're very upset because he holds their business in his hands."
ALP affiliation has also delivered the CFMEU leverage, with Oliver throwing his weight around and often threatening to vote with the party's rebel Right to exert preselection pressure on the dominant Socialist Left and forces pledged to Stephen Conroy and Bill Shorten.
(In 2009, in the wake of deal cut between those two outfits, Oliver was allegedly a player in a side agreement that delivered to his members, rather than his rivals, thousands of coveted jobs on the desal plant in exchange for his preselection heft. The MPs and unions involved strenuously denied any such agreement was ever reached).
The bearded enforcer says spats with less aggressive unions like Melhem's AWU are unavoidable, especially when they try to undercut his wages and conditions. "Unlike some other unions in the industry, it's no secret that we get better deals," he says. "Despite rumours that it's our charm and good looks that win people over, the truth is that we fight hard for our members."
He's certainly not shy about countering continual media criticism, issuing this fiery retort late last year to a run of Herald Sun hatchets that tried to implicate the union in AFL ticket scams and other nefarious behaviour.
It's been a familiar theme ever since the days in the early 1970s when Oliver started working as a shipwright and shop steward on Glasgow's Charlie Connell shipyards at age 20. Halfway through completing his papers to travel to Australia, a group of radical workers, led by Jimmy Reid, occupied the Upper Clyde Shipbuilders, thwarting the Tory government's plans to shut them down. After the struggle, Oliver's papers came through and he ended up in Melbourne, working again as a shipwright and carpenter before joining the Building Workers Industrial Union as a full-time organiser in 1986.
He was elevated to the CFMEU's leadership in 1993 as assistant secretary to Martin Kingham following the BWIU's merger with the Builders Labourers Federation. He played a key role in the 1998 waterfront dispute and leading thousands of unionists to testify before the Cole Royal Commission and succeeded Kingham when his comrade transferred to the CFMEU's national office in 2009.
His greatest triumphs have been felt inside Fair Work. Last year's landmark four-year enterprise deal delivered 20% wage increases, double overtime pay and a hefty $750 a week living away from home allowance.
The self-described "principled, practical, tenacious and tough" operator says there is no silver bullet and definitely nothing illegal in his robust approach to vigorous employer relations. Stories of bikies and bad behaviour are legion but Oliver says he's basically just a figurehead for years of collective struggle.
"We are continuing to build on a tradition of militancy in this union that has been part of the Victorian industrial scene for the last 40 years. Our members have struggled long and hard to make a dangerous and dirty industry safe and rewarding for them...Our industrial strength has not happened overnight."
And if you're a commercial player in the building industry it won't be disappearing for a while either.
This article originally appeared on <a target="_blank" href="https://www.thepowerindex.com.au/">The Power Index</a>.
 
 
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cknowlton-QnEa6ntUYP

Victorian builders accuse Bill Oliver of holding them to ransom

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Building approvals rose 8.4% in November on a seasonally adjusted basis, following a fall of 10% in the previous month, according to the latest ABS figures.
Despite the strong turnaround in November, approvals remain almost 19% below the level reached a year earlier.
In total 11,424 dwelling were approved for construction in November on a seasonally adjusted basis, with the number of houses approved for construction rising 4.8% to 7,469 while the more volatile units sector increased by 17.2% to 3,762 dwellings.
Westpac called the November result “better than expected, though still only a partial, rebound in November”.
“The November partial rebound … still leaves a strong trend decline in place, but the picture is considerably better than that in October. 
“That detail shows solid rebounds in key areas that were of concern last month, including: private sector houses, +4.8%, retracing two thirds of the previous month's decline; and Victoria up a staggering 40% for the month basically reversing all of the slump over the previous two months. 
“The bounce in Queensland though was less pronounced with a 6.6% monthly rise only recouping a little of the 30% slump over the previous two months. 
“WA also saw a sharp 16.9% drop although this looks unlikely to mark the start of renewed weakness with the state recording accelerating mining-led growth a turnaround in population growth and tightening housing supply. 
“NSW posted a 1.9% monthly rise but had been much more resilient in previous months,” Westpac says.
Earlier this week, the <a href="https://www.propertyobserver.com.au/residential/new-home-sales-rise-6.8-in-november-as-interest-rates-decline-but-experts-warn-still-more-work-to-do-in-2012/2012010952984" target="_blank">HIA reported a 6.8% increase in new home sales</a> following the November rate cut, but both it and <a href="https://www.propertyobserver.com.au/residential/builders-gloomy-about-year-ahead-mba/2012010952992" target="_blank">Master Builders Australia say the 2012 outlook is poor </a>and are urging further rate cuts and government stimulus measures to help residential construction.
 
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lschlesinger-FZcF9M3vE6

Units lead 8.4% jump in building approvals in November: ABS

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Despite much public interest in, and debate around, the major banks’ purported “gouging” and taxpayer-guaranteed status, some very fundamental questions remain, rather bizarrely, unanswered.
These include: what exactly is the major banks’ “cost of funds” that they regularly complain about; how has their overall cost of funds changed (i.e., has it been rising or falling); and if the cost of funds is so obviously important to the banks, and a key determinant of what they can and cannot do with mortgage rates, why don't they simply publish a cost of funds index that tracks any change in it over time?
Yet even a cost of funds index would be inadequate, since it is only one input into the profitability, and overall rates of return, that the major banks target. A more informative benchmark is the major banks’ “net interest margin”, which simply measures the net difference between the interest rates the banks pay on the money they borrow from their funders (e.g., depositors like you and me) and the interest rates they receive on their loans to businesses, households, and SMEs.
By looking at the change in the major banks’ net interest margins, one can get an indication of the profitability of their business activities. Realised profits will, however, be influenced by three further factors: (1) the volume of loans that they write or “credit growth”, which has been in structural decline since the GFC; (2) the extra fees and charges they levy on customers, which yield the banks profits above and beyond their net interest margin; and (3) the banks’ fixed and variable operating costs, the most significant of which is the amount they choose to pay their executives. After accounting for these variables and a few other things, one can get close to calculating the major banks’ “return on equity”, which is a measure of their shareholder earnings.
Regular readers will know that I have been critical of major bank remuneration levels for senior executives, and the banks’ proclivity for hiring former regulators (e.g., Treasury secretaries and RBA governors), which, I have argued, creates dysfunctional long-term incentives between the public and private spheres. Or, in the words of MIT professor, Simon Johnson, a financial “oligarchy”.
According to CBA’s 2011 Remuneration Report, the average total compensation of the top 15 executives was an incredible $4.5 million (the median was only slightly lower). Excluding CEO Ralph Norris, the average compensation was still $4.2 million (see table below).
<img src="/images/stories/cbachart.gif">
These numbers highlight the absurdity of attacks of the RBA governor’s comparatively paltry $1 million pay, especially given he is responsible for overseeing the entire banking system (in concert with APRA), and, more pointedly, bailing out Australian banks facing funding crises via the RBA’s liquidity facilities. And this all in addition to the RBA’s first-order monetary policy functions.
Reasonable criticisms of major bank pay can also be made on the basis that they are effectively quasi-public (i.e., non-private) institutions that implicitly and explicitly rely very heavily on taxpayer subsidies in the form of free taxpayer guarantees of bank deposits, subsidised taxpayer guarantees of bank debts, and the RBA’s many and varied forms of low-cost liquidity support. Ask yourself: what other private companies get the benefit of all this taxpayer largesse?
According to the RBA, the major banks’ average net interest margin (or NIM) was 2.4% per annum as at September 2011. But this is merely a single point estimate.  How does this margin compare with its pre-GFC levels? In the chart below I have illustrated UBS’s estimate of the major banks’ average net interest margin since the beginning of 2004.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/jan102.gif"><img src="/images/stories/jan102thumb.gif"></a>
We can draw two insights from this analysis. The first is that the major banks’ net interest margins have been steadily increasing since the low of 2.06% reached during the first half of 2008. The second is that notwithstanding the banks’ much higher cost of funds and the introduction of a raft of taxpayer support schemes, the margins they are earning today are as good as they have been since the second half of 2004.
As noted above, net interest margins are only one part of the banks’ complex profitability picture. Several years ago I censured the RBA for focussing on this proxy to the neglect of more complete benchmarks, such as return on equity (RoE). The RBA now regularly reports and parses bank RoEs in its bi-annual Financial Stability Review.
So how has bank profitability varied over time? And has there been a decline in bank returns post-GFC in recognition of their lower risks as a function of (1) higher internal capital requirements (i.e., less leverage) and (2) the fact that as explicitly taxpayer-backed institutions there is demonstrably less of a need to produce ultra-high growth in order to raise capital?
In my final chart I have depicted UBS’s estimate of the average major bank return on equity (profit-weighted) since 1993. Remarkably, the major banks were able to maintain solid double-digit RoEs during the global credit crisis experienced in 2007-09 (and since). Today, the average RoE remains a still very high 17%, and, abstracting away from some circa 20% spikes, is not materially different to the levels observed in the 10 to 15 years before the GFC. Indeed, this crisis was evidently a good one for Australian banks, since they were able to keep their returns way above the lows observed during the 1991 recession.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/jan103.gif"><img src="/images/stories/jan103thumb.gif"></a>
We have, therefore, yet to see a structural decline in RoEs commensurate with the much lower risk profile of these utilities. And there can be little debate about the latter claim. The world’s largest rating agency, Standard &amp; Poor’s, concluded in a review of the banks in <a href="https://www.propertyobserver.com.au/economy/major-banks-play-down-sp-ratings-downgrade/2011120252649">December that their credit rating is two notches higher, and hence their cost of funds lower</a>, because of the assumption that they are government guaranteed. Specifically, S&amp;P remarked, “Our counterparty credit rating on Commonwealth Bank is two notches higher than the [stand-alone credit rating], reflecting our view of a high likelihood of extraordinary government support in a crisis.”
A closing thought is that the major banks have ample room to absorb higher funding costs. That is, they should be prepared to deliver shareholders lower returns, and operate on the basis of somewhat thinner net interest margins, given the advent of public guarantees of their livelihood and solvency has unambiguously improved shareholders’ risk-return trade-off.
Christopher Joye is a leading financial economist and a director of Rismark International and Yellow Brick Road Funds Management. The above article is not investment advice.
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