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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Buying a home became a little bit easier in the September quarter in most capitals for the third consecutive time, according to the latest HIA housing affordability report.
Dwellings became 1.2% more affordable over the quarter, 5.2% more affordable than the same time in 2010.
“Continued earnings growth and a small decrease in the mortgage lending rates worked to further improve housing affordability… These factors more than offset a modest increase in the median house price,” says HIA senior economist Andrew Harvey.
“Affordability looks to now be trending in the right direction, and with interest rate cuts in November and December we will hopefully see this trend continue. However, potential home buyers should be aware that these underlying factors could see housing return to sustained price growth at some stage in 2012.”
<img src="/images/stories/hiadec81.gif">
Housing affordability increased in all Australian capitals, with the exception of Hobart.
Sydney improved 1.9%, Melbourne 0.8%, Brisbane 0.7%, Adelaide 4.5%, Perth 0.4% and Canberra 1.8%. Hobart went down 0.5%.
Affordability improved in all non-metropolitan areas. New South Wales improved 1.2%, Victoria 1.6%, Queensland 0.3%, Western Australia 1.3%, South Australia 6.6% and Tasmania 0.1%.
 
 
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awalsh-7Ub9EypybQ

Housing affordability improving slowly in all mainland capitals: HIA

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Even though all the major banks are passing on the RBA's rate cut, it is not provide enough stimulus to result in any significant turnaround in property value growth, according to RP Data research analyst Cameron Kusher.
“We suspect that consumers will remain cautious and continue to pay down their debt.
"Given this, if the cut is passed on it would likely provide welcome relief to home owners and may encourage some increase in sales activity next year, however, it is unlikely to provide a stimulant for property values to once again start increasing given the broader economic conditions,” Kusher suggests.
Kusher says if the interest rates cut announced by the Reserve Bank of Australia this week is passed on by all banks, it would provide reprieve for those home owners currently under mortgage stress.
“Undoubtedly interest rate cuts improve housing affordability."
But Kusher is cautious about anticipating any bounce from any full rate cuts.
“Although history can be a guide to the future, we feel that conditions are somewhat different this time round – property values are higher than they have been before and although interest rate cuts and value falls help boost affordability, it remains much more affordable to rent than it is to purchase,” he says.
He notes a raft of economic indicators suggest that market conditions may be somewhat different than those of the past.
<ul>
<li>Retail trade has grown by just 3.4% over the 12 months to October 2011, which is well below the decade average growth of 5.4% annually.</li>
<li>GDP data released for the September 2011 quarter this week shows that the Australian economy expanded by 2.5% over the year compared with an average expansion of 3% annually over the past decade.</li>
<li>Households continue to save around 10% of their income which is at levels not seen since the since the mid 1980s.</li>
<li>The total value of housing finance commitments have grown by just 4.1% over the 12 months to September and have fallen by -1.3% when refinances are removed.</li>
<li>The European governments are currently experiencing a debt crisis, not to mention the ongoing weakness of the US economy.</li>
</ul>
"Given the overall cautious nature of Australian consumers and the weak economic conditions in a number of other advanced economies , it would seem unlikely that even if the Australian economy continues to perform comparatively well, credit for housing will be as freely available as it has been in the past over the next 12 months,” Kusher adds.
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jchancellor-FAypfDUnLy

Rate cuts will not be enough to stimulate housing recovery: RP Data

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Buyers don’t need to see a lot of price growth to regain confidence in the housing market, they just want to know that home values have stabilised, according to estate agent John McGrath.
"A lot of people are sitting there with cash in the bank waiting for the signal that the market has levelled,” he says.
"The underlying demand is there, people are just waiting for the bell to ring, and I think there’s a good chance that will happen in the first half of 2012.
"People are looking for some good news.”
But his summer wish list is expecting plenty, since he says "we need to see unemployment down, retail spending up, a resolution in Europe, improved bonuses and a good consistent quarter on the stock market for the prestige sector to move".
"Sentiment can turn quickly and behind the veneer of nervousness, there is a genuine desire to get into the market," McGrath adds.
McGrath suggests a lot of people de-leveraged in the GFC and they will be ready to buy again when their confidence is restored.
McGrath points to RP Data figures suggesting the window of opportunity to buy at the bottom is closing.
"Capital city home values recorded their best result in seven months in September, with falling prices slowing to only -0.2% seasonally adjusted while regional houses rose 0.1%."
He suggests with so many traditional asset classes appearing "unstable at best or volatile at worst", bricks and mortar would prove to be a popular investment avenue, particularly with the significant baby boomer market.
He notesthere had been two big investment trends in 2011 – more people buying through self-managed super funds and also increased investment from the Chinese, who see Australia as a great investment market with a strong currency and business economy and excellent education opportunities.
He has also noticed less demand from retirees in coastal markets "but this will inevitably pick up as the population continues to age".
"We’re seeing increased buyer activity and general positivity in a number of regional markets as people begin picking the bottom and taking advantage of great buying.
"Sydney investors are increasingly looking at major regional markets offering lifestyle, improving infrastructure and jobs growth such as Newcastle/Hunter, Wollongong, Byron Bay and Port Macquarie,” McGrath says.
"Rental demand, yields and capital growth prospects in these areas are excellent," he adds
Although the Gold Coast is showing new signs of life with vendors more realistic and buyer sentiment improving, McGrath concedes a recovery still has a long way to go.
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Property could rebound in first half of 2012, but five factors must fall into place for prestige: John McGrath

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<div>
<table width="292" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="bottom" nowrap width="64">
Postcode
</td>
<td valign="bottom" nowrap width="135">
Suburb
</td>
<td valign="bottom" nowrap width="93">
Median house price
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4213
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">SPRINGBROOK</a>
</td>
<td valign="bottom" nowrap width="93">
$350,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4211
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">NERANG</a>
</td>
<td valign="bottom" nowrap width="93">
$370,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4209
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">PIMPAMA</a>
</td>
<td valign="bottom" nowrap width="93">
$380,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4209
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">COOMERA</a>
</td>
<td valign="bottom" nowrap width="93">
$384,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4216
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">COOMBABAH</a>
</td>
<td valign="bottom" nowrap width="93">
$395,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4209
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">UPPER COOMERA</a>
</td>
<td valign="bottom" nowrap width="93">
$405,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4211
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">LOWER BEECHMONT</a>
</td>
<td valign="bottom" nowrap width="93">
$405,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4215
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">LABRADOR</a>
</td>
<td valign="bottom" nowrap width="93">
$405,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4226
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">MERRIMAC</a>
</td>
<td valign="bottom" nowrap width="93">
$408,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="64">
4208
</td>
<td valign="bottom" nowrap width="135">
<a href="/news">JACOBS WELL</a>
</td>
<td valign="bottom" nowrap width="93">
$415,000
</td>
</tr>
</tbody></table>
</div>
<div></div>
<div>Source: RP Data</div>
<div></div>
<div></div>
<div></div>
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Top 10 cheapest suburbs on the Gold Coast for house prices: RP Data

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To help us get a sense of what happened this year in Melbourne’s top-end property market, on both sides of the fence, we asked some of the greats of Melbourne real estate – our legends – to give us their perspectives. We also asked them to take a longer historical view on how this year compared with the recent past and on how it might impact on the market when it opens again next year.
 
Peter Batrouney – Jellis Craig 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/peter-batrouney1-120x90.jpg" style="float: left; margin: 5px;">
What happened this year in your area of expertise? Demand was not quite as strong as 2010. However for a prime property such as 47 Kinkora Road, Hawthorn, it is a very strong market still.
Supply is holding, and our own stats support that. Prices are down by 10% to 15%
Where are we on the price cycle compared with 2007 peak, 2008 GFC or say 2010. And what do you think will happen to price early next year? Next year I expect the market to open up briskly as it has always done in my 43 years of tracking it. February is statistically the most successful month in which to sell.
<div>The main reason is the lack of supply. And the fact that buyers left over from the spring quarter react to new stock very positively. Clearly the state of the overseas financial situation will have a continued bearing on how we see things here!</div>
<div> </div>
<div>In general terms I expect things to be steady as she goes in 2012.</div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/johnholdsworth-120x90.jpg" style="float: left; margin: 5px;">
John Holdsworth – Hocking Holdsworth
What happened this year in your area of expertise? This has been a year of two markets. The year stated strongly with supply and demand well balanced after a slow end to 2010. Most surplus stock from 2010 was mopped up early in the new year and prices were comparatively strong.
About mid-year however, the news of Europe started to dominate, which initially lowered supply. But at the same time we saw sliding prices (meaning demand dropped even more).
One thing that has become apparent is the flight to quality. Main roads and other distractions have almost become unsalable in Port Philip, particularly in the $2 million-plus range.
Where are we on the price cycle and what do you think will happen to price early next year? In one sense, having a breather after the price spikes of '07 and '09 is not such a bad thing, as 20% growth per annum is unsustainable. The question is, is this a breather or a five year flat market?
<div>I believe we would need some hefty rate cuts to get things moving substantially so as we can get rid of the fear factor.</div>
<div>Having said that, the market will become the market as we know it and we will deal with it accordingly.</div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/greghocking-120x90.jpg" style="float: left; margin: 5px;">
Greg Hocking
What happened this year in your area of expertise? Demand was steady for the first half of the year across all price ranges. In the second half there was a noticeable drop off in demand above $2 million. Up to and around $1 million has remained steady. Supply contracted sharply mid-year and rebounded strongly over October and November, noticeably easing prices. Overall the market faded toward the finish line, with many properties failing to attract buyers at any price. Subsequently a significant number have been withdrawn from sale altogether. In closing, it is fair to say that prices across the board have dropped by 10 to 15% this year.
Where are we on the price cycle and what do you think will happen to price early next year? The current price cycle mirrors the worst of 2008 and much like the early '90s buyers are remaining cautious and largely unresponsive to the downward movement in pricing that has occurred throughout 2011. The ongoing negative media coverage of the market has no doubt influenced many would be buyers to ‘sit on the fence’.
<div>Buyers currently brave enough to be in the market are almost paralysed by the fear of making an offer that might be accepted – which they fear must mean they must be paying too much!</div>
<div> </div>
<div>The easing of interest rates offers a glimmer of hope for a more balanced market as we move into 2012. No other factor will have more of an influence on the 2012 market than interest rate movements. However a full 1% drop over a relatively short time frame would be required before prices begin to rise again.</div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/jamesconnell-120x90.jpg" style="float: left; margin: 5px;">
James Connell – Marshall White
What happened this year in your area of expertise? In 2011 we have seen a reserved correction in terms of pricing as a result of general uncertainty and fear as a result of world economies and media commentary across the many markets in which we operate.
Where are we on the price cycle and what do you think will happen to price early next year? 2012 in my opinion will represent great buying opportunities to those looking to enter the market or upgrade an existing property.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/alastair-craig-120x90.jpg" style="float: left; margin: 5px;">
Alastair Craig – Jellis Craig 
What happened this year in your area of expertise? Demand has been strong for the good quality period/modern homes in the A-grade streets. Supply is down approximately 10%.
 Pricing West of Burke Road is very stable. East of Burke Road prices are down 10% to15%.
When the market gets a little tougher, buyers tend to stick close to Glenferrie/Cotham Road (the school belt). Pricing is approximately 10% down overall from the peak of the market – Easter 2010.
Where are we on the price cycle and what do you think will happen to price early next year? 2012- Hawthorn/Kew to remain steady. East of Burke Road has already fallen 15% and may thus remain stable.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/robvickers.jpg" style="float: left; margin: 5px;">
Rob Vickers-Willis – Abercromby’s 
What happened this year in your area of expertise? With the economic uncertainty from Europe and the continual fluctuations of the share market in the USA we have seen confidence drop in the Australian economy and share market.
This, along with the negative media over a period of time, has caused the market to drop between 5% and 10% this year. Many vendors with A-plus-rated properties have not placed them on the market, which has compromised the quality of stock. B-grade real estate is bringing average prices so the quality of property is not on offer and therefore prices have fallen. This is a trend that will most likely continue through the first half of 2012.
Where are we on the price cycle and what do you think will happen to price early next year? We are probably halfway through the cycle and, depending on what happens to the European markets and the RBA (if they have the balls to drop rates by another 75 basis points by April 2012), we will then see the cycle slow or jump ahead. I expect property prices to vary 1% to 5% up or down or stay constant for the next 12 months.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/andrewstuart.jpg" style="float: left; margin: 5px;">
Andrew Stuart – Hocking Stuart
What happened this year in your area of expertise? 2011 has been a tough year! And yet along with that it has brought opportunities.
Opportunities to "skill up" your staff, particularly in the area of selling in tough conditions, keeping track of that elusive buyer, and still endeavouring to achieve respectable outcomes for your clients.
Clearance rates in Bayside have remained fairly steady throughout the year at around 50-60%.
In previous years approximately 30% of the properties we sold were to investors. This year probably that figure is closer to 10%.
Given that, coupled with more people looking to rent rather than to buy, you can understand why rental properties are very hard to find and why weekly rent is going through the roof. Demand has slipped. Supply of saleable properties has declined, with many vendors still clinging to prices of two years ago. Therefore fewer properties have been selling for cheaper prices.
Where are we on the price cycle and what do you think will happen to price early next year? However, the good news is that I reckon we are at 6 o’clock. Things will improve from here. The question is: When?
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/johnbo.jpg" style="float: left; margin: 5px;">
John Bongiorno – Marshall White
What happened this year in your area of expertise? It has been a challenging year, however properties well priced have continued to sell successfully in this market.
Where are we on the price cycle and what do you think will happen to price early next year? In regard to prices compared to previous years, there are so many different market places within our markets – it is difficult to pinpoint movement, in some instances prices have held firm, in others there have been price adjustments compared to previous years.
I am optimistic about 2012 and I believe the adjustment to prices will see astute buyers take advantage of the market place that exists currently and create more activity than 2011.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/iaincarmichael.jpg" style="float: left; margin: 5px;">
Iain Carmichael – Bennison Mackinnon
What happened this year in your area of expertise? It has become evident that buyer demand for most sectors of the residential market across Melbourne’s inner suburbs has receded from the highs of late 2010. Buyers have become more studied in their approach and are less inclined to negotiate on properties that are overpriced.
Accordingly, people are taking longer to make buying decisions and family buyers are quite prepared to walk away from properties that do not meet their needs. On the plus side, buyers are still prepared to pay fully for well-located properties offering the right accommodation.
When prices fall in inner Melbourne, supply follows.  This time around is no exception to that rule and its not surprising that fewer people are choosing to sell right now. This very fact actually maintains buoyancy in the market.
A clear reduction in the level of "irrational exuberance" in the marketplace has occurred for all sorts of reasons: uncertainty, uneasiness and apprehension to name three.
Where are we on the price cycle and what do you think will happen to price early next year? Who knows where we are on the price cycle? On the "economic clock" we are probably at about ‘20 past’. Prices will be flat at best in 2012. All the more reason to select the right agent who really understands how to maximise selling prices on behalf of vendors, rather than just making another a sale! On the other hand, real estate prices could well rebound if the European economy falters and private investors move funds from equities. The money has to go somewhere!
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/bertstewart-120x90.jpg" style="float: left; margin: 5px;">
Bert Stewart – Buxton 
What happened this year in your area of expertise? Demand has been reasonably strong overall, especially at the bottom end of the market below the $1.5 million range.
Supply is certainly down on the previous year because of the vendors' uncertainty of what’s happening with the global financial situation, people tend to be conservative in times like these.
Prices have come off 10% to 20% in the top end of the market but have held better in the bottom end.
Where are we on the price cycle and what do you think will happen to price early next year? Compared to the price cycle of the last three years I believe prices are below, but having said that for prestige properties with a wow factor in excellent locations and priced well, they are selling well.
Prediction of the market next year would be steady as she goes with the first batch of auctions in February and March a strong barometer of what will happen going forward.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/michaelgibson.jpg" style="float: left; margin: 5px;">
Michael Gibson – Kay and Burton
What happened this year in your area of expertise? 2011 has been the year of continual market fluctuations, which has made giving accurate advice extremely difficult. Since the start of May supply and demand have been lower however the properties that tick all the boxes have continued to sell well.
Prices have come off in varying degrees; 5% to 15% depending on the quality of the offering, with market conditions perhaps similar to that of 2008.  The auction clearance rates do not reflect the current underlying strength in the market.
Where are we on the price cycle and what do you think will happen to price early next year? 2012 will be determined by local interest rates and confidence levels of the world around us, and to that end let’s hope rates come down and confidence goes up!
Mal James is principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
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maljames-vHwm28JUAa

Melbourne’s top-end market in 2011 - Eleven top agents weigh in on the year: Mal James 

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The timing of the Reserve Bank’s reduction in official rates couldn’t have fallen more awkwardly for the major banks, sandwiched as it was between last week’s modest downgrading of their credit ratings and the looming European Union summit at the weekend. The S&amp;P move highlighted the now well-understood vulnerability of the banks to the freezing of offshore wholesale funding markets, while the summit may well represent the last chance for those teetering markets and the wider European financial system. As the clock kept ticking today none of the banks was prepared to be the first to respond to the RBA rate cut, knowing than anything less than a full 25 basis point pass-through would cause them to be vilified. Indeed, even before they have actually done anything, they’ve already been vilified. Bank bashing is a populists’ sport. The uncomfortable silence of the banks would suggest that they don’t want to pass on the full 25 basis points and are hoping that one of their peers will lose patience first and wear the brunt of the storm that will ensue – much as NAB did last month when it kept a mere five basis points and retained its status as the major with the lowest headline mortgage rate. The pre-emptive belting they have already received from those who regard them as soft targets would also suggest that the banks have failed, despite a lot of effort by them, and some support from the RBA, to convince the politicians, media and public that there is no material direct linkage between the official cash rate and their own cost of funds. Treasurer Wayne Swan, who should know better, was urging the banks to pass the RBA cut on in full today and warning them that they would face the wrath of their customers if they didn’t, in effect making a direct and misleading linkage between the cash rate and their funding costs. Given that households are in an anxiety-induced savings mode, the better argument might have been that the banks would get the resultant savings back in the form of increased deposits and, to the extent that they didn’t, some lift in consumer confidence and spending would ultimately be good for their customers and ultimately their own businesses. Unemployment and business failures are the traditional key threats to bank profitability. At present, however, the majors are pre-occupied with unconventional threats – the prospect of a Eurozone, and perhaps global meltdown. Funding markets are highly volatile and, at times, effectively closed. Even when they have been functioning the cost of funding on offer would, if accepted, signal desperation – which no banks would want to risk, unless it were desperate. Privately the majors are talking quite freely about how long they could survive without access to any wholesale funding despite having significantly reduced their reliance on those markets since 2008. February appears to be the point where they’d have to start asking the RBA for emergency liquidity support. Unless and until the Eurozone is stabilised and debt markets normalised, the majors will remain nervous and defensive and very protective of their status, as a group, as among the handful of the world’s most stable and highly-rated banks. To retain that status, which protects their access to funds when markets are functioning, they have to protect their profitability. Passing on a 25 basis point cut might appear a relatively painless decision to make, given the customer backlash that will develop if they don’t.  With owner-occupied housing loans totalling more than $600 billion on their books, however, the four majors would transfer about $1.5 billion of profits from their shareholders to borrowers if they did. If the rate cut were also passed onto customers that have borrowed for investment housing, the annualised cost would be around $2.2 billion, or nearly seven per cent of their combined profits last financial year Given their critical need to maintain their elevated levels of deposit funding, which have reduced their reliance on wholesale money, they can’t necessarily offset some of that impact by reducing deposit rates. With the RBA deemed likely to cut rates further and more heavily if the Eurozone continues to teeter, the stakes for the majors are potentially very significant. All the banks experienced a significant squeeze on margins as the last financial year progressed, as funding costs inched up and lending volumes fell away. The accelerated response to the Basel III reforms being imposed by the Australian Prudential Regulation Authority, and their own existing big post-2008 holdings of excess capital and liquidity, will also put a rising floor under their funding costs over the next few years. Whereas in 2009-10 it was Westpac and CBA, which had gorged on the surge in home lending sparked by the Rudd Government stimulus packages, that were under real pressure from their funding costs, this time it is NAB that has the most difficult decision to make. Its peers essentially kept the growth in their asset bases in line with the growth in their holdings of deposits last financial year, but NAB, thanks to the success of the Breaking Up campaign, grew its lending at multiples of the system’s growth and beyond the rate of growth in its deposits. The retention of those five basis points last month was an indicator of margin pressure and an increased exposure to wholesale markets. Tactically, its peers may wait for NAB to blink first and move so that they can end its boast of having the lowest headline mortgage rate and devalue the big investment it made in the Breaking Up campaign. NAB would be very aware of that risk and presumably will either pass on the full 25 basis points or wait for them to show their hands before it moves.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator</a>.
 
 
 
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Bashing banks for a rate cut: Stephen Bartholomeusz

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London’s iconic Admiralty Arch is being sold by the UK government through Savills with reported hopes of more than £75 million.
Plans to sell the long leasehold interest in the building were announced in November as part of a bid to levy funds from the government’s property portfolio, saying the building was no longer suitable for modern office working practices.
The building lies on the south-west corner of Trafalgar Square and acts as the entrance to The Mall, which leads to Buckingham Palace.
The 13,685-square-metre building was most recently home to the Ministry of Defence and the Cabinet Office.
“This is a world-famous historic property in a prime central London location and will be of substantial interest to a wide range of organisations and investors,” says Savills director of Savills Robert Seabrook.
The building was originally commissioned by King Edward VII as a tribute to his mother and was completed in 1912 after his death.
The arch was designed by the architect Sir Aston Webb and built by John Mowlem and Co, now owned by construction giants Carillion.
The government says its objective is to protect the building’s heritage and enable public access, meaning it might not go to the highest cash bidder.
The move is part of austerity measures in the UK where civil servants have exited 36 property holdings in central London since last year’s election, reportedly saving more than £90 million.
 
 
 
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Admiralty Arch, a piece of London's history, up for sale

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Rents in mining towns in the Pilbara region of Western Australia are among the highest in Australia, with often modest and uninspiring houses asking exorbitant rents, especially when you consider what you’d get for about the same price in the prestige suburbs on Sydney Harbour and Melbourne’s south east. Following on from our list of <a target="_blank" href="https://www.propertyobserver.com.au/residential/pilbara-mining-rents-the-seven-most-expensive-wa-boom-towns/2011113052624?source=flicker1">the seven most expensive WA boom towns</a>, we’ve picked out some Pilbara houses up for rent and compared them with what you could rent in Sydney and Melbourne in a similar price bracket:
Less than $1,000 per week
Wickham, Karratha (yields 10% to 12%)
<img src="/images/stories/wickam.jpg">
There are just three properties listed for rent at under $1,000 per week across the suburbs of Karratha, Port Hedland and Dampier, according to real estate.com.au. This is the only house – a three-bedroom property in Wickham, a suburb of Karratha asking $750 per week and listed by <a target="_blank" href="https://www.realestate.com.au/property-house-wa-wickham-406157401">Dianne Huggins from North West Realty – Karratha</a>.

<p style="background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; text-align: center; background-position: initial initial; background-repeat: initial initial;"> Woolloomooloo, Sydney (yield 3.8%)        

<img src="/images/stories/cowper.jpg">
For $700 per week, you can rent a one-bedroom apartment with views over Garden Island on Cowper Wharf Road listed by <a target="_blank" href="https://www.realestate.com.au/property-house-nsw-woolloomooloo-406362706">Kerry Madeheim Morton and Morton Woolloomooloo</a>
Carlton, Melbourne (yield 3.2%)

 
<img src="/images/stories/rathdowne.jpg">
This three-bedroom <a target="_blank" href="https://www.realestate.com.au/property-house-vic-carlton-406363396">Victorian Terrace on Rathdowne Street</a> is available to rent at $700 per week listed by Claire Spence listed by Nelson Alexander Real Estate Fitzroy.
$1,001 to $2,000 per week

South Hedland (yield 10.2%)

<img src="/images/stories/southheadland.jpg">
This raised three-bedroom, one-bathroom property on Pedlar Street is asking weekly rent of $1,400, exactly the median rent for South Hedland.  It is listed by <a target="_blank" href="https://www.realestate.com.au/property-house-wa-south+hedland-406210456">Ashlee Morris from Hedland First National Port Hedland</a>. A three-bedroom property recently sold on the same street for $795,000, reflecting a yield on this weekly rent of 9.16%

Balwyn North, Melbourne (Yield 2.3%)

<img src="/images/stories/balwynnorth.jpg">
Asking $1,950 per week, this five-bedroom European-influenced fully furnished house includes a grand entrance with staircase and a formal dining room with ornamental open fireplace and is listed by <a target="_blank" href="https://www.domain.com.au/Property/For-Rent/House/VIC/Balwyn-North/?adid=7329519">Cherie Leman from Fletchers Canterbury</a>
$2,001 to $3,000 per week
Port Hedland (yield 10.72%)
<img src="/images/stories/porthead.jpg">
This three-bedroom house with palm trees on McPherson Street, <a target="_blank" href="https://www.realestateview.com.au/Real-Estate/53-mcpherson-street-port-hedland/Property-Details-rent-residential-3275273">currently under application at $2,700 per week, is listed by Joanne John from Crawford Realty</a>.  A nearby five-bedroom property at 58 McPherson Street was sold by John Briggs of Port Hedland Real Estate for $1.31 million in February this year. At a weekly rent of $2,700 this would equate to a yield of 10.72%.
Balwyn, Melbourne (yield 2.3%)
<img src="/images/stories/balwyn.jpg">
Asking $2,900 per week, this-four bedroom Mediterranean-style house is set in manicured fountained gardens. The property is listed through <a target="_blank" href="https://www.domain.com.au/Public/AgentProfile.aspx?mode=sell&amp;agencyID=17215&amp;adid=7301607">Thomas Moreland Real Estate</a>
Pyrmont, Sydney (yield 3.7%)

<img src="/images/stories/pyrmont.jpg">
Available to rent at $2,800 per week is this <a href="https://www.realestate.com.au/property-house-nsw-pyrmont-405965851">three-bedroom Pyrmont apartment listed by Gerard Marino from Morton and Morton Pyrmont</a>. The apartment features expansive 270-degree views across Sydney Harbour, the city, Harbour Bridge and Blackwattle Bay, and it has a huge balcony and air-conditioning.
More than $3,000 per week
Baynton West, Karratha, Pilbara (yield 9.9%)
<img src="/images/stories/karatha.jpg">
Asking $3,400 per week, this four-bedroom, four-bathroom home features a swimming pool, corner pantry and powder room. <a title="Visit " href="https://www.realestateview.com.au/Real-Estate/karratha/Property-Details-rent-residential-3411403">The property is listed through Pilbara Real Estate</a>.
Toorak, Melbourne (yield 2.1%)
<img src="/images/stories/toorak.jpg"> 
Asking $3,500 per week, this five-bedroom family home includes “resort-style” facilities including gas- and solar-heated swimming pool, tennis court, trampoline and deck area with built-in barbecue. <a href="https://www.domain.com.au/Property/For-Rent/House/VIC/Toorak/?adid=7290687">It is listed by Hayley Mitchell from Mitchell Property Management</a>
Elizabeth Bay, Sydney (yield 4.8%) 
<img src="/images/stories/elizabethbay.jpg">
Asking $3,500 per week, this five-bedroom waterfront apartment is set over 390 square metres and has been fully restored. It includes and entrance with cathedral high, ornate designed ceilings and an imposing formal lounge with bay window, and a separate dining room<a href="https://www.domain.com.au/Property/For-Rent/Apartment-Unit-Flat/NSW/Elizabeth-Bay/?adid=7322405">. It is listed through Jenni Favas from Morton and Morton</a>
 
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Hefty residential rentals in the booming Pilbara rivalling the east coast's wealthy suburbs

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As we look back on 2011, Property Observer is republishing some of our most noteworthy stories of the year.
 
Supply and demand are important factors in the performance of our property markets, and currently we have subdued demand and an oversupply of properties. 
This means that our property markets are likely to remain flat for much of 2012. 
Recently <a target="_blank" href="https://www.rpdata.com/">RP Data</a> reported that based on the current rate of sales and total number of homes being advertised for sale, the Australian residential market has 7.4 months of effective housing supply overhanging it. 
What does this mean? I know some commentators are suggesting we have a shortage of properties, but I don’t necessarily agree. 
You see, there are two ways to measure supply in the residential marketplace:  “core supply” and “effective supply”. 
RP Data explains that “core supply” is the difference between base level demand (i.e. population growth) and base level supply (i.e. new dwelling construction). And this is what many commentators are measuring. 
“Effective supply”, which measures the number of months it would take to sell all the properties listed for sale based on the current rate of sales, seems a better way of measuring what’s really going on. 
So what’s really going on? Across our nation’s capital cities, the effective supply of properties is currently recorded at 5.8 months, and nationally that level stands at 7.4 months. In other words, there is an even bigger oversupply in regional areas. 
Digging deeper into the numbers shows that sales volumes are at similar levels to those recorded 12 months ago, which means that supply levels are being driven higher by a greater amount of stock available for sale rather than fewer people buying properties. 
How does this compare with the past? Not surprisingly, things are worse than they were a year ago when our combined capital cities had an effective supply of 4.5 months of stock and nationally there was an effective supply of 5.6 months. 
These results suggest that current effective supply levels are well above average. 
Since the beginning of 2007 the effective supply level across the capital city markets has averaged at 3.9 months and reached a high point of 6.5 months in January of this year. 
Record number of listings Currently the number of homes for sale is at near-record high levels. There are 26.4% more houses for sale this year than there were at the same time last year, and it’s not because more people are putting their homes up for sale. 
The increase in listings is almost entirely being driven by rising levels of re-listings, which is indicative of slowing market conditions and the <a target="_blank" href="/news">longer length of time it is taking to sell a home</a>. 
Around the nation As expected, the oversupply situation varies from region to region. 
In each capital city and state except for Perth and Western Australia the months of supply figure is currently higher than it was at the same time last year, indicating that selling conditions have deteriorated. 
Canberra has the lowest current effective supply at 3.6 months while Brisbane has the greatest effective supply recorded at 8.8 months. 
Melbourne has 5.3 months’ supply, Sydney 5.1 months’ supply, Adelaide 6.4, Perth 6.1 and Darwin 6.3 months’ supply of properties on the market. 
My thoughts:'
 This extra supply of properties available at a time when buyers are standing on the sidelines waiting to see how matters pan out suggests that our property markets are likely to languish, at least in the first half of 2012. 
The November and December drops in interest rates have boosted consumer confidence a little, but not enough to move our property markets. Not with all the uncertainty about how the problems in Europe will affect us. 
Some Australians are still hesitant to buy residential property due to expectations of falling housing prices. 
For property prices to start rising, consumer confidence is going to have to increase and the oversupply of properties is going to have to be taken up. 
Of course we don’t have “one” property market in Australia and there are still some areas where prices are moving up slightly, but they are far outnumbered by suburbs where prices are stagnant or falling. 
No property collapse in sight
But don’t misunderstand me – there is no suggestion that our property markets are going to collapse. The underlying fundamentals will underpin our property markets. 
1. Interest rates are likely to drop once or twice more next year.
2. Vacancy rates are low and rents are rising.
3.  Unemployment is falling and wages are rising.
4. Consumer confidence is slowly returning and the spectre of a number of interest rate rises that we expected earlier in the year has disappeared. 
The bottom line is that there is still a large demand for housing – people are still getting married, having babies, getting divorced and coming from overseas. And if they can’t afford to buy their homes they are going to rent, and this will force rentals up. 
Over the next six months we’ll move into the stabilisation phase of the property cycle where values might only grow a few percentage points higher than inflation for a few years, but it’s a time when investors will be compensated by higher rents. 
As I’ve explained, it is important to recognise that there is not one “Australian housing market”. 
Capital city and regional housing markets are performing differently and even in each capital city markets are segmented according to the impact of the various supply and demand dynamics on different price points and in different geographic locations. 
Of course, as it is a buyers’ market, informed home buyers and investors will be able to pick up great properties below their intrinsic value if they do their research properly and negotiate wisely. 
This is also a great time to buy properties to which you can add value through renovations and manufacture some capital growth. 
And when buyers look back in a few years they’ll wonder why they didn’t buy more properties while others were waiting for the bubble to burst.
 Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
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Oversupplied property markets to remain flat in 2012 - but there is opportunity for investors

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We are in a phony war with bank mortgage and interest rate cuts, which, if it was happening in a fortnight, would be on a par with the search for Big Foot, the Penrith Panther or the Nullarbor Nymph.
Yes, the big four?—?CBA, ANZ, Westpac and NAB?—?are sitting back and waiting for one of them to bolt from cover, so the others can get a lead on how much of the 0.25% rate cut to pass on. (Isn’t that price signalling? You can bet that the ACCC is watching closely.)
The tip is that the NAB will break cover soon with a rate cut of about 0.15% to 0.2% (it only passed on 0.2% of the 0.25% November 1 cut, remember). The NAB has been lending more than the others and has led the move to eliminate some of its income streams by getting rid of some fees and charges, so its finances are said to be the weakest.
The cupidity of the big four banks on the issue of rate cuts and rises has already been exposed on two fronts: two smaller banks, Bank of Queensland and ME (Members Equity) have already passed the cut on in full, even though they do face higher costs for raising funds locally (being smaller and carrying lower credit ratings than the big four.
And, what the media conveniently forgets is that big four banks all have past form.
It’s not new news if they big four don’t pass on all the 0.25% cut. For example, in April 2009 during the global financial crisis?—?three eventually passed on only 0.10% of the 0.25%, while one passed on nothing.
And remember how the big four boosted their mortgage rates by more than the 0.25% rise in November 2010? How quickly we all forget. A reminder: the CBA and ANZ lifted mortgage rates by 45 and 39 basis points, respectively follwoing the Melbourne Cup day rate rise in 2010. The NAB lifted its standard variable mortgage rate by 0.43% and Westpac by 0.35%.
So we know all banks are bastards. It’s not a new story.
And there are a couple of other points to be made: the cuts won’t have all that great an impact on mortgage holders because, asCrikey pointed out last month, well over half of them repay more than they have to each month, thereby building up equity at an even faster rate than they were doing a year ago. The banks get their money back faster and people will own their houses a bit quicker and newer mortgage holders will find the pressure easing, if they cut their repayments. But most won’t.
And what about savers: they will get less for their term deposits as they rollover (that’s called “rollover risk” at the big end of the market) and will get lower rates on their transaction accounts. For people on fixed incomes, its another blow, and yet you don’t hear much about that and the media only covers mortgage holders (is that because many in the media have mortgages). The damage is greatest among older bank account holders and pensioners.
And you can bet that the banks will be quick to cut deposit rates, and slow to cut rates charged on credit cards and loans to business: all in the name of boosting what’s called their net interest margin and improving their bottom lines.
There’s a large element of churlishness and “let them eat cake” from the big four if you look at recent history.
One of the real achievements of the GFC so far as Australia is concerned, is that we managed to save our banks the ignominy of reporting big losses or worse. Sure Bank West (owned by a crippled UK bank) and St George, were allowed to be taken over by the CBA and Westpac respectively (which hasn’t done wonders for Westpac’s earnings since 2008-09), but a combination of timely Reserve Bank action, the federal government loan guarantees and the financial claims mechanism convinced customers not to do what their counterparts had done to Northern Rock in the UK or countless UK banks, and stage a confidence-sapping run that forces a government bailout.
The federal government (that’s us, the taxpayers), will earn more than $5 billion from the loan guarantee fee by the time this financial year is up and the Reserve Bank also made hundreds of millions of dollars from doing deals with the big banks in the final quarter of 2008 and early in 2009 to maintain liquidity levels in the financial system.
Despite that move, ordinary Australians and small and medium businesses (and no doubt some larger ones) quietly withdrew billions of dollars (over $10 billion by some estimates on top of normal needs) in the closing months of 2008 and early 2009. By June 30, 2009 the number of bank notes on issue was still up 14.3% from the year before, an indication of large the silent run had been. But that didn’t cripple the banks because confidence was maintained as much of that cash was returned to the banks as 2009 went on.
That confidence was supported and nurtured by the federal government and the Reserve Bank, in other words, taxpayers supported the banks and the financial system and saved a lot of loss and anguish for everyone concerned.Three years on the world is facing another crisis, this time in Europe. It is nowhere near as dangerous as the sudden near collapse in 2008 that was sparked by the failure of Lehman Brothers and the US subprime crisis crunching banks, businesses and economies around the world in the space of two months. But it is a growing concern.
Banks throughout Europe have badly hurt this time around, but in the US, Australia, the banks are OK, except for a rise in short-term funding costs, which is normal as investors worry about the safety of the banks they are lending money to.
One of the key indicators to watch is the amount of money held in Exchange Settlement Accounts at the Reserve Bank by banks and other financial groups eligible to do so. If the amount starts rising, its a sign the banks are starting to worry about the safety of the financial system and lending to their peers, so they start leaving as much as they can with the RBA in these special accounts where it is safe.
In the 2008-09 crisis it soared to well over $16 billion on one day (December 22, 2008) as the RBA allowed banks to do so (and then siphoned off much of that into special term deposits).
This time around, there’s been no change at all, the ESAs at the Reserve Bank have been at normal levels for months on end, there’s just no sign of nerves among our banks and financial groups, unlike Europe.
At the same time our banks are healthier than they were in late 2008, much of the dodgy debts have gone, poor loans have been written down or expensed and the banks have raised tens of billions of dollars in new capital to strengthen their balance sheets. That’s why last week’s one-notch downgrade for the big four by Standard &amp; Poor’s to AA minus was a storm in a teacup.
A senior RBA official pointed out in <a href="https://www.rba.gov.au/speeches/2011/sp-ag-211111" target="_blank">a speech</a> last month that the banks have cut back their exposure to offshore funding since 2007 and lifted their harvesting of domestic deposits: ”In Australia, since mid-2007, deposits have grown at an annualised pace of 11%, compared with credit growth of 5%. As a result, while the level of wholesale issuance by Australian banks in 2011 is about the same as that in 2007, it is a significantly smaller share of total bank funding.”
That has reduced their exposure to Europe, but with the US market still open, its nowhere near the problem of three years ago this month. The big four have cut the amount of offshore funding in the past year because of the strong rise of domestic deposits as the Australian savings rate has steadied around 10% to 10.5%. That has helped the banks maintain their interest margins, even though they started offering relatively high interest rates on deposits.
Those are falling, thanks to the fall in market yields as investors have factored in RBA rate cuts and foreign buyers have plunged into Australian government bonds and state government securities, attracted by our AAA rating and secure and steady financial system. But listen to the banks in recent weeks and their lobbyists and they are facing higher levels of danger and costs.
Given what happened three years ago, that’s rubbish, but don’t think that the current stand-off is something new. It isn’t and we are going to see similar situations time and again.
 
This article originally appeared on <a target="_blank" href="https://www.crikey.com.au/">Crikey</a>.
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