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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Investing your hard-earned funds into commercial property can be very rewarding. You should look upon this as a strategic process, which you’re able to approach in many ways.
Outlined below are several options available to you when investing your money in a commercial property.
Option 1 – Listed property trusts
 
This is probably the easiest way to invest in commercial property; and involves little more than you opening an account with a stockbroker, depositing some money and then placing an order.
Option 2 – Property securities
 
This option consists of a managed fund that invests in a basket of listed property trusts. They are especially suited for beginners, who are unsure about which property trusts might be the most appropriate.
Option 3 – Public property syndicates
 
This process starts with an application via a product disclosure statement and generally requires you to commit a minimum of $10,000. You are then normally locked into the investment for the duration of the syndicate – which may be up to 10 years.
Option 4 – Mortgage funds
 
These are managed funds that lend money using commercial property as security. They generally offer the investor returns that can be a higher than a bank term deposit or cash management account; but there is no capital gain from this type of investment.
Option 5 - Mezzanine finance
Mezzanine finance is the provision of funding for commercial property developments.
As the name suggests, it involves providing funds between the developer’s own equity and that allocated by mainstream commercial lenders. As such, it carries a far higher degree of risk – and the potential for higher returns – than regular mortgage funds.
Option 6 – Direct property investment
Direct property is for people who have done their research on the market. It is also possible to buy into direct property through a private syndicate, which we’ll cover in a later article.
Either way, direct ownership of property offers you the greatest level of control.
Bottom line: The option that you ultimately choose will come down to what we affectionately call your “threshold of insomnia”. In other words, you ought only invest in something that won’t cause you to lie awake at night worrying.
You need to be totally comfortable with the level of control (or lack of it) that you have. And you should always seek to learn as much as possible about the option you intend to pursue.
And if you do have difficulty in finding the necessary background information, then you should cross that option off your list – however attractive it may initially appear.
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chrislang-EQKojcgJPV

Six ways to invest in commercial property

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Less needy Australians are increasingly occupying the cheap housing that has traditionally been the domain of the poor.
Research by the Australian Housing and Urban Research Institute found almost 80% of 268,000 private renter households with very low incomes (less than $22,000 a year) miss out on affordable rental accommodation.
The research found that the situation was worsened by a trend of wealthier Australians occupying cheap accommodation that has traditionally housed the very poor.
The greatest shortages in affordable and available private rental dwellings for very low-income renters in capital cities were observed in Sydney (44,500, or 93% missing out), Melbourne (40,200, or 87% missing out) and Brisbane (19,100, or 87% missing out).
It also studied eight large regional centres that also had high levels of very low-income private renter households missing out on affordable rental housing, including the Gold Coast (93%) and Sunshine Coast (88%) in Queensland.
The study analysed the amount and cost of housing as related to various income groups between 2001 and 2006.
It found only 37% of private renters with household incomes in the lowest 40% of the national income distribution were able to access affordable housing.
It found just 21% of very low-income private renter households pay an affordable rent, and 19% pay a severely unaffordable rent.
The study determined affordable rent as less that 30% of gross household income.
“Very-low income renters face affordability problems both because of an absolute shortage of housing that is affordable and because a significant proportion of affordable stock is not available to them because it is occupied by higher-income households,” says Professor Maryann Wulff from the AHURI Swinburne-Monash Research Centre.
“Low-income renters (households earning between $22,001 and $42,000) do not face an absolute shortage of affordable housing but are often excluded because affordable stock is occupied by other income groups,” she says.
For the 360,467 Australian households in the low-income group, there was a net shortage of 87,000 affordable homes, partly because many cheaper homes are occupied by wealthier households, according to the study, entitled Australia’s private rental market: the supply of, and demand for, affordable dwellings.
The study found age, living arrangements and number of children play an important role in determining access to affordable rental housing.
Generally, elderly renters, people living alone, and households without children are more likely to find an affordable rental dwelling.
It noted very few younger renters or families with two or more children were able to access affordable rental housing. About 33% of young childless couples; 36% of couples with children and 21% of single parents pay more than 50% of their gross household incomes in rent.
The researchers say policies aimed at increasing the supply of affordable housing could use the findings of the study to determine the need for various types of dwellings, and they suggested the adoption of a suitability concept that would assess household size and composition against dwelling type.
The study found that Geelong and Launceston had the best affordability outcomes of all the regional centres and major capital cities, so Wulff has recommended studying these two locations in greater detail to help identify housing market or economic factors that reduce the affordability problems.
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jchancellor-FAypfDUnLy

Affordable rental housing snapped up by those who don't need it as much: Report

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Tired of the drudgery of finding, buying and managing an investment property? If the Australian Stock Exchange’s plans come to fruition, you will soon be able to get exposure to Australia’s $3.5 trillion residential real-estate asset-class without buying a home, paying stamp duties and land tax, or bearing the burden of maintaining and overseeing your property. In fact, rather than investing in one home, with its many idiosyncratic risks (e.g., the local zoning, economic activity, and the specific pros and cons of the dwelling in question), you will be able to buy an exposure to an exceptionally well-diversified portfolio comprising literally millions of homes spread right across the country. And you will not own any of them. Seriously! Perhaps most interesting of all, you will be able to make this investment for as little as about, say, $10,000. That is, one-fortieth the cost of buying a median-priced property outright. Over and above professional investors, this could be very attractive to mums and dads stuck in the rental market who are worried about the costs of home ownership outpacing the interest they earn on their savings. Another benefit of these new products will be that they are likely to afford users superior “liquidity” – put differently, a better ability to enter and exit your holding – than the many months of inconvenience one can experience when disposing of a home. How will this be possible? My best guess is that within the next six to 12 months Australians will be able to invest in capital city, or even national, residential property “index funds” available through the ASX, which will offer the capital growth and net rental returns generated by houses in those cities. This will be similar to putting money in an index fund that tracks the performance of the Australian sharemarket index. The key difference is that returns will now be tied to a house price index.
The ASX’s market has been some time in the making as it gets the various approvals and the capital city and national house price indices ready before the formal launch. But it should happen relatively soon.
Index-linked portfolios have two chief advantages. First, they offer vastly greater diversification than owning an individual share or residential property, and this means that they should have lower risks, all other things being equal. When Rismark measures the risk of a typical single-family home in Australia over the last 20 years or so, we find that its returns vary by around 15 to 20% per annum. This is on par with the risk you see in the sharemarket. In contrast, a nationally diversified house price index has radically lower risk, with volatility of just 3 to 5% per annum. The second obvious advantage of index funds is that they tend to have much lower costs. For example, an active Australian equities managed fund that buys and sells a concentrated portfolio of stocks often charges its investors 1 to 2% per annum. Index-linked funds, on the other hand, have fees that are a fraction of this. I expect the same to be broadly true in the residential property space. The new index-linked products should offer investors total costs that are significantly lower than owning an investment property outright, and with much less day-to-day hassle. A final important opportunity associated with these products will be “risk management”. About 60 to 70% of all household wealth is locked up in residential housing. It is often the single largest investment many families make during their lifetimes. Yet there is currently no way to insure against the risk of major house price falls. With so much talk swirling around house price bubbles, there are presumably many households out there that might like to take out a bit of insurance against the risk that their most important investment plummets in value. This is all the more germane in a rising interest rate environment. In addition to going “long”, or investing in, the index products I have discussed above, you will also be able to take the other side of this transaction and go “short”, or benefit from a fall in the value of the index. So if, for instance, you are worried about <city>Melbourne</city> house prices declining, you will be able to sell the <city><place>Melbourne</place></city> index and thereby realise positive returns if your anxieties prove correct. Opportunities to hedge, or reduce the risks associated with house price falls, have for a long time been recognised as one of the biggest “missing markets” around the world today. This point was hammered home during the global financial crisis, when US and UK house prices declined by 30% and 15% respectively. And in the US and UK, index-linked residential property markets have been successfully established, allowing institutions to reduce the risk of house price falls.
<hr class="system-pagebreak">
 Looking through the cycle, why might one choose to allocate a percentage of a portfolio (e.g., your self-managed super fund) to an index Australian residential property? As I noted above, residential property is Australia’s largest investable asset-class and about 2.5 times the value of all securities listed on the ASX. Yet investors currently have few ways to invest in it on a truly “diversified” or cost-effective basis. Round-trip transaction costs can frequently be between 12 and 13%. And while you can buy an individual home, you cannot currently get access to a portfolio of housing that has exposure to every city in <country-region><place>Australia</place></country-region>. A national index of residential property has low measured risks and has historically displayed about one-fifth the volatility of Australian shares, which has traditionally been the most popular holding in investor portfolios. On a risk-adjusted basis, residential property has, as a consequence, actually outperformed Australian shares, global shares, 10-year Australian government bonds, and listed property trusts over the past 28 years, which represents the longest period over which we can credibly compare returns. Australian housing has also proven to be a resilient performer throughout all of the major crises over the last three decades, including the 1987 stock market crash, the 1991 recession, the 1997-98 Asian and LTCM crises, the 2001 tech wreck, and the 2007-09 GFC. During <country-region><place>Australia</place></country-region>’s last severe recession in 1991, when unemployment rose from 5.6% in December 1989 to 10.9% in December 1992, an index of residential property generated solid positive capital returns (returns were higher inclusive of net rents). Since 1982, a national index of residential property’s rolling three-year capital or total returns have never entered negative territory. And during that especially turbulent episode between 2007 and 2010, a nationally diversified portfolio of housing significantly outperformed Australian shares, global shares, commercial property, hedge funds and private equity. In recent times, Australia has had among the strongest population growth in the developed world, with the Treasury projecting that our population will rise by 16% between 2010 and 2020 to 25.7 million people, and increase to 35.9 million people by 2050. Treasury and ABS forecasts indicate that Sydney and Melbourne will each have about 7 million to 8 million people living in them within four to five decades. As the population expands in metropolitan markets it is becoming increasingly difficult to bring new housing supply online, as evidenced by the flat absolute volume of housing starts over time. ANZ and Westpac estimate that <country-region><place>Australia</place></country-region>’s current underlying housing shortage is around 200,000 homes and rising. This is why independent experts, such as the National Housing Supply Council and the Commonwealth Treasury, forecast that robust housing demand coupled with continued housing supply constraints will result in a growing structural shortage in the national dwelling stock.
 
Christopher Joye is a leading financial economist and works with <a href="https://www.rismark.com.au/" title="Rismark International" target="_blank" style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;">Rismark International</a>. Rismark and RP Data provide house price analytics products, and solutions that enable investors to go long and/or short the housing market. The above article is not investment advice. You can follow Christopher on twitter at <a target="_blank" title="Follow Christopher Joye" href="https://twitter.com/#!/cjoye" style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;">@cjoye</a> or read his blog.
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chrisjoye-JYhJsTrNRC

A safer way to invest in housing

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Being a property manager is about much more than knowing the law and taking care of administration tasks. Property managers sometimes have to deal with uncomfortable, confronting scenarios, such as: what happens when one of your long-term tenants dies of old age and you are the one who finds him or her?  Whom do you notify? Is there a next of kin? What happens when there isn’t? What do you do with their belongings? Once the property is ready to be released, what are your legal obligations to the next prospective tenants? There are a lot of questions, and many of those answers are not covered by any act of government.
 Or perhaps a tenant has fallen so far behind on rent that an eviction is required. Although we have empathy for the tenants’ situation, we also have an understanding on the financial impact that late or no rent can bring to an owner's personal situation. Remember that although the rent is late, the bank is still looking for its mortgage payment.
 Both scenarios are situations confronted by property managers all the time, and you need to learn to deal with such stresses if you want to stay in the industry.
 Property management is a difficult industry to work in with its day-to-day challenges, so the key for owners is to find a property manager who has passion and enthusiasm and isn't afraid to say, "I love my job".
 Passion for property management is a must, and without it you might as well go and find another role. There are much less stressful and challenging careers out there. It’s a tough gig and does not suit everyone, but I must say – I love my career and wouldn’t do anything else!
Leah Calnan is the director of <a style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;" target="_blank" title="Metro Property Management homepage" href="https://www.metropm.com.au">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
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leahcalnan-pwE6GD6KY9

It's not all by the book

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Real-estate agents selling properties in Australia’s ski fields are all dreaming of a white Christmas in July as they face a lacklustre selling season.
Depending on who you speak to, the predictions for property sales this winter range from low-key optimism to downright pessimism.
Reasons for the gloom range from Australia’s growing savings culture to little new stock coming on board to banks’ unwillingness to provide financing.
However, all believe that plenty of powder on the ground will go a long way to attracting buyers.
“If it’s a good snow season, it will help our cause,” says Steve Forbes, director at Snowy Mountains real-estate group Forbes Stynes. “We need snow consistently on the ground.”
He is blunt about the current prospects for sellers: “The market is dead. I’m expecting price drops of around 20%.”
Sales volumes at Forbes Stynes are down 50% since 2010. In 2005-06 the agency sold about 50 properties in Thredbo. Last year it sold 18.
Forbes says property sales were hurt by the impact of the GFC and the subsequent savings culture that emerged, with fewer people spending money on luxuries such as ski lodges and chalets.
“The situation will only change when people stop saving and start spending again. Two years ago the national savings ratio was in negative territory, now it’s positive. When we see that change, then I will become more bullish again,” he says.
When Property Observer spoke to Forbes he was preparing to sell the 25-suite Marritz Alpine Chalet at Perisher on behalf of receivers. The property sold the following weekend for $3.1 million, with Forbes telling the AFR it was half of what it would cost to build such a building today.
Although not nearly as gloomy as Forbes, Toni Wheelhouse from Raine &amp; Horne Thredbo is also hoping for good snow falls this season.
“If there’s a lot of snow, people who come for a holiday get excited. They think, ‘This is great, let’s buy a property’.”
Ski season is traditionally a time when people make inquiries about properties, but Wheelhouse says sales are strongest around Christmas time.
She says the Victorian it has taken a small dip relative to the New South Wales market, but the change is not major.
“The outlook is fairly even. It boomed in 2008 and then dropped off, but it’s been quite steady since,” she says.
No investor interest
Unlike buyers of residential and commercial, purchasers of snow properties buy them because they love to ski, not as an investment.
Forbes says in his 10 years of selling snow properties, he has never sold to an investor. “There is no interest from overseas investors. Why should they buy here? There are way better places to buy.”
Forbes says although most people who buy a property near the snow are happy with the income or possible tax benefits, most are just looking for holiday home. “They are rarely a straight and pure investor such as people who buy residential property in the CBD,” he says.
A survey carried out last year of 2000 home owners and investors by PRDnationwide found that people who wanted a second home were nearly four times as likely to buy a beachfront property as a ski lodge. CBD apartments were also more popular locations for second homes.
??? <img src="/images/stories/secondhome.jpg" style="display: block; margin-left: auto; margin-right: auto;">Doug Edwards, owner of Mountain High Real Estate, which sells properties in the Thredbo and Jindabyne regions, agrees that most purchases are for lifestyle rather as a “pure investment scenario”.
Although he prefers not to call the market – “it’s pretty hard to judge” – he says there has been a positive start to the season with “lots of inspections and inquiries”.
Usually Edwards sells 30 to 40 properties a year. This year he doesn’t think he’ll sell more than 25.
 
How much money do you need?
Prices can range from a few hundred thousand dollars for a small two-bedroom apartment to more than $1 million for a modern, architecturally designed pad with a view.
Edwards says “top-of-the-line” new 130-square-metre apartments in Thredbo and Jindabyne can sell for between $1.1 million and $1.25 million, up from about $850,000 five years ago.
“The newer apartments are much larger and have more facilities, such as onsite parking and under-floor heating,” he says. Having just recently listed a three-bedroom apartment for $1.3 million, he says the premium end of town is very tightly held.
The older style, smaller (75 to 80 square metres) two-bedroom units fetch about $500,000, he says.
Edwards has fewer concerns than Forbes about banks’ willingness to lend – he says many buyers use their personal wealth or their super to make purchases.
Wheelhouse is more bearish about the top end of town. She says $1 million plus units are taking longer to sell and owners have had to drop prices to get sales through.
“Depending on condition, you’re probably looking at about $500,000 for a two-bed place or a one-bed with loft,” she says. Add a great location and an amazing view and the price tag pushes up towards the $1 million mark.
Future growth
As for future property developments, among the biggest planned is the village earmarked for James Packer’s Perisher Blue ski field.
In May 2009 Packer’s Consolidated Press Holdings signed an agreement with the NSW government to relinquish control of the Perish Blue car park to make way for a new recreation, retail and commercial village with 800 beds of accommodation. In return CPH got new 40-year leases with options for another 20 years.
However, the village is still some way away, with work anticipated to begin in the summer of 2012-13.
Wheelhouse says there are also plans to rebuild the 65-bed Thredbo Alpine Hotel, part of the Rydges group.
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lschlesinger-FZcF9M3vE6

Let it snow,  agents pray

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By 2006, I was really starting to get into the whole property investing thing. I was constantly on the internet looking, looking, looking and slowly but surely, the addiction was starting to surge through my veins.
I researched Mount Isa for about three months, watching the market to really see how it performed. I’d started to educate myself through reading property magazines, and I began to really look at investing differently, but I still had a long way to go in terms of my knowledge and understanding what it all meant.
I started to call agents to chat to them about the area and get an idea of where prices were heading. One day, I spied a lovely duplex on a real-estate website: it was fully furnished with renovated bathrooms and kitchens, and both sides of the duplex were tenanted. It was on a large 920-square-metre block, and it was relatively affordable at $240,000.
I spoke with the agent at length, and we chatted about the price.  After our conversation, I sent an email to the agent with my offer –which was slightly less than what we discussed on the phone – at $233,500, and it was accepted straight away. I couldn’t believe it. I threw my hands over my face and had an “OMG!” moment.
So, what was the drama about this purchase? Well, it also happened to be the case that I had quit my job that morning after a disastrous five-month temp job and my husband, John, was away on business. He wasn’t too happy and needless to say, I’m now banned from putting in offers without him being in the room.
I really didn’t have to move forward with this purchase, as no money had actually changed hands and no contracts had been signed, but I convinced John that the dual-income property was a good buy, as it had a rental yield of just over 9%. We needed a balance for our negative cash flow position, so this was perfect.
Once a building inspection was completed, we found a few things that needed to be fixed, so we negotiated another $3,000 off the price.
I recall the agent that I dealt with said just before my offer “'I think you’ve missed the boom, love,” and I said: 'Oh, I don’t think so!"  I could see that Mount Isa would continue to boom for some time, and so far, the increase in growth in a relatively short time and the rental return has been this property’s biggest asset.
The Facts
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="187" valign="top">
Purchase Price 2006
</td>
<td width="123" valign="top">
Current Value 2010
</td>
<td width="104" valign="top">
Rental Start
</td>
<td width="112" valign="top">
Rental Current
</td>
<td width="131" valign="top">
Yield Current
</td>
</tr>
<tr>
<td width="187" valign="top">
$230,500
</td>
<td width="123" valign="top">
$360,000
</td>
<td width="104" valign="top">
$410
</td>
<td width="112" valign="top">
$655
</td>
<td width="131" valign="top">
14.77%
</td>
</tr>
</tbody></table>
 
On our way to a holiday in Cairns, just one week before settlement, John took a side trip flight to Mount Isa to check out the duplex. Luckily, he was happy with what he saw.
However, this is our problem-child property, and we have experienced the full gamut of issues, including residents not paying rent and skipping off in the middle of the night; storm damage to the property that required extensive repairs of approximately $10,000; tenants that we suspect have had “special dealings” in the backyard of maybe an organic nature; and both air-conditioning units blowing up within a week of each other, which required complete replacement of a new system to the tune of $18,500.
Also, the initial real estate agent’s dodgy pest inspection report failed to reveal that there were termites! Slugged with a repair bill of $3,500 one month after settlement, this was an expensive mistake to make, as we could have uncovered the damage if we had done our own inspection.
This is where I can absolutely recommend that landlord’s insurance comes into play, because we’ve made five claims already. Our property manager, Tracey Lowe at RealWay Property in Mount Isa, has been invaluable in helping us manage this dear property and its many incidents – we love her. To show her that we do appreciate her work, I’ve sent her flowers and a bottle of champers. She takes good care of us.
We’ve also had a few offers to purchase the property from us. Once, the real-estate agent went down to give me a market appraisal and she came back saying she actually couldn’t give me a fair appraisal because she wanted to buy it off me for about $300,000. We declined.
The second offer came from the two tenants that were renting one side of the duplex, who asked if we were interested in purchasing, but we also declined. We know that the rental return will continue to grow and help our portfolio balance out and our investing strategy is definitely geared for the long term.
This is an exerpt from  <a target="_blank" title="Journeys Along the Property Path" href="https://www.ipip.com.au">Journeys Along the Property Path: 12 real life stories of 12 property investors</a>, published by Inspirational People in Property. Two of the authors are fighting against breast cancer, and IPIP has aligned with the McGrath Foundation to raise money to fund McGrath breast care nurses in communities across Australia and raise awareness of breast cancer, particulary among young women. The <a target="_blank" title="Keep up with the campaign" href="https://www.facebook.com/inspirationalpeopleinproperties">initiative </a>aims to sell 9,000 books in nine days to raise $90,000 to support the McGrath Foundation.
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swarniecondon-aTY2bgqmPh

There's nothing like your first problem-child investment

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
One of the perennial puzzles tossed around Australian dinner tables is whether our bricks and mortar is expensively priced.
Despite the steady ascent of national dwelling prices at an inflation-plus pace over the last few decades, one has never had to look far to find an “expert” declaring that the world was about to end. Predictions of catastrophic falls in house prices have always been good for garnering a few media headlines.
And, regrettably, the media is not great at holding purported experts to account. A classic example appears in the Australian Financial Review today. AMP’s Shane Oliver is reported as claiming that <city><place>Sydney</place></city> housing is overvalued because the representative dwelling price is an unacceptably high $634,000. Shane also contends that since his home’s capital gains have outstripped his personal income growth, this is likely true of all <city><place>Sydney</place></city> housing.
Unfortunately, the facts do not fit with this fiction. Shane’s estimate is actually off by $119,000 (or 23%). According to the biggest database of home sales in <country-region>Australia</country-region>, which covers all transactions, the median dwelling price in <city><place>Sydney</place></city> is currently $515,000. Furthermore, <place><city>Sydney</city></place> dwelling prices have only risen by a compound annual growth rate of 2.7% over the last eight years. That means Sydney dwelling prices have declined in “inflation-adjusted” terms (after a very strong run-up before 2003). If we look at Sydney detached houses – as opposed to all dwellings – the compound annual growth rate falls to just 2.3%.
In income-adjusted terms, the comparison is even more stark: the ABS reports that average disposable household incomes have advanced by 6.3% per annum since March 2003. This is a massive difference. It means that while disposable household incomes across Australia have risen by 63.4%, Sydney dwelling prices have expanded by only 24.6%. That is, incomes have outpaced <city><place>Sydney</place></city> dwelling prices by an extraordinary 38.8 percentage points over the period March 2003 to March 2011.
In sympathy with the boom-bust business cycle, asset prices tend to also rise and fall.
The housing market is a little different to other asset-classes insofar as you can typically obtain more debt against a property – more than 90% in some cases – and for longer terms – up to 30 years – than alternative investments. This means that there are latent risks that can build up if credit growth is unnecessarily lubricated and used to fuel house price inflation, which can stimulate more credit creation until the Ponzi pattern is undone by a shock.
The point is that policymakers need to be attuned to these interdependencies if they are to avoid the sorts of problems we saw emerge in the <country-region><place>US</place></country-region>.
Across the $3.5 trillion worth of private housing in Australia, the amount of debt secured against it is actually quite low, at circa 29%. For those home owners with a mortgage, the value of their loan as a proportion of their home is, on average, also pretty low, at 50 to 60%. That means house prices would have to fall by about 40% before the typical person suffered “negative equity”.
Clearly, there are also folks sitting in the tails of this distribution who are more vulnerable. But they are a small percentage of the total. The RBA estimates that only 2.5% of all borrowers have a loan-to-property-value ratio equal to or greater than 90% and are paying away more than 50% of their disposable income to service their repayments. 
 
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One of the reasons banks have been prepared to lend so much for so long is the fact that borrowers have historically been vigilant in paying off these loans. Today there are slightly more than 30,000 borrowers who are more than three months behind on their home loan repayments, juxtaposed against a total pool of roughly 4 million to 5 million borrowers. That is, Australia’s “mortgage default rate” is a paltry 0.7%, despite our internationally high lending rates. This is less than one-10th and one-quarter the equivalent US and UK default rates respectively.
With more than 60% of all household wealth accounted for by housing, discussions around its valuation understandably attract attention.
There are, of course, many ways to “value” an asset. One school of thought is that the best possible measure is the price at which willing buyers and sellers are prepared to transact. That is, today’s prices. This is known as the “efficient markets” view of the world.
Others like to point to the underlying demand- and supply-side fundamentals while abstracting away from prices, incomes and the cost of debt. These drivers are, among other things, the rate at which new households are formed, which is determined by population growth and the number of people willing to share their homes, and the rate of construction of new dwellings (i.e., supply).
The RBA, Treasury and the Government’s own National Housing Supply Council have all concluded that underlying housing demand in Australia looks to be running well ahead of supply.
An alternative benchmark that gets regularly referenced in the media is how house prices compare with incomes over time.
Although the calculation of a “house price-to-income ratio” is tricky, if you can lay your hands on a timely (i.e., regularly updated) proxy for dwelling prices, and contrast this with an equally frequent measure of household incomes, you can make some valuable comparisons of the change in normalised housing costs over time.
Rismark produces <country-region><place>Australia</place></country-region>’s most comprehensive and timely dwelling price-to-income ratio, which is released on a quarterly basis following the publication of the ABS’s National Accounts. It covers all homes sales across <country-region><place>Australia</place></country-region> and uses the ABS’s measure of disposable household incomes, which is the only official estimate available on a quarterly horizon.
In encouraging news for home buyers, <country-region><place>Australia</place></country-region>’s dwelling price-to-disposable income ratio is now back around its June 2003 level, based on Rismark’s latest analysis.
We found that Australia’s average dwelling price-to-average disposable household income ratio has fallen to just 4.2 times in March 2011 from its recent peak of 4.7 times in December 2009. (While one can quibble about the exact levels, the change in incomes and prices is more difficult to dispute.)
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyejune91.jpg"><img src="/images/stories/joyejune91humb.jpg"></a>
Assuming that the RBA hikes interest rates another 0.5 percentage points over the next six to 12 months, we believe that the gap in the growth rates attributable to incomes and prices will widen.
While it is unlikely that that Australian dwelling prices will rise much as long as the RBA wages its war against inflation, investors will continue to benefit from robust rental returns given our historically low vacancy rates. And although we will hear complaints about the multi-speed economy, solid overall wages growth of more than 4% per annum in concert with the income flowing from the capex boom should yield reasonable increases in household earnings.
The RBA will be pleased with these developments, since it is hoping that the retail and housing sectors will make room for the unprecedented volumes of private investment already baked into the capex pipeline.
Rismark’s central case is that the RBA will commence normalising interest rates at some point during 2012-13, which should drive a powerful affordability dividend. This will stimulate higher capital growth rates and the price signals necessary for builders and developers to start committing scarce capital to the production of new housing supply. Indeed, the recovery, when it eventually materialises, could give rise to significant capital gains. Through the cycle, however, we believe that the cost of housing will track disposable household earnings, as it has done in the past.
Contrary to popular myth, <country-region><place>Australia</place></country-region>’s house prices have actually grown more slowly than household incomes since the end of the last boom in 2003. According to the ABS’s National Accounts data, disposable incomes on a per household basis have realised a compound annual growth rate of 6.3% since March 2003. In contrast, RP Data-Rismark’s hedonic index suggests capital city dwelling values have risen by a more modest 5.7% per annum. On this basis, disposable incomes in <country-region><place>Australia</place></country-region> have advanced 7.5% further than capital city dwelling prices over the last eight years.
Unlike other estimates, Ri<personname>sma</personname>rk’s national dwelling price-to-disposable household income ratio includes:
<ul>
<li>Dwellings across all Australian regions (not just capital cities); </li>
<li>All property types (not just detached houses); and </li>
<li>The ABS’s quarterly National Accounts measure of average disposable household incomes (not just average weekly earnings), which captures income earned from all areas (e.g., labour and investment income) and reflects the fact that there is typically more than one income earner per household.</li>
</ul>
Our preferred ratio also compares average dwelling prices with average disposable incomes on a per household basis.
It is important to note that the income measure Rismark uses is the quarterly ABS National Accounts disposable household income proxy before interest payments and excluding unincorporated enterprises, which is then divided by the HIA’s estimate of the total number of households. It represents the total disposable wage and investment income generated by all members of the household and should not be confused with simpler estimates of average wages or median incomes.
On an annual basis, one can examine the impact of excluding the “net imputed owner-occupied rents” that the ABS includes in its National Accounts numbers. The chart below shows that this results in a small increase in the dwelling price-to-income ratio.
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyejune92.jpg"><img src="/images/stories/joyejune92thumb.jpg"></a>
Christopher Joye is a leading financial economist and works with <a href="https://www.rismark.com.au/" title="Rismark International" target="_blank" style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;">Rismark International</a>. Rismark and RP Data provide house price analytics products, and solutions that enable investors to go long and/or short the housing market. The above article is not investment advice. You can follow Christopher on twitter at <a target="_blank" title="Follow Christopher Joye" href="https://twitter.com/#!/cjoye">@cjoye</a> or read his blog.
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Aussie housing stock is not too expensive

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The much-vaunted first home saver account scheme has finally gained some traction, with a 21% jump in accounts over the past year.
There are now 27,400 account holders holding $173 million in savings that form the basis of their future home deposits.
Smart money might consider opening an account with $5500 by June 30, as it will immediately qualify for the maximum $935 Federal Government contribution this financial year.
Financial advisors have been making the suggestion as a worthy means of minimising the time the deposit sits in the bank, and maximising the government payout.
It will be necessary to maintain the account, with further, say, $5500 deposits, for the full financial years of 2011-2012 and 2012-2013.
Then, on making one final $5500 payment into the account on July 1, 2013, the total funds can be immediately withdrawn, and the account closed with the final Government maximum contribution for the 2013-2014 year.
Participants will walk away with the makings of a deposit of $27,300, of which about $3740 will be from the Government, accumulated in two years and two days.
The scenario is based on calculations from infochoice.com.au, Australia’s leading finance comparison site. The calculations are based on the government making a contribution equal to 17% of personal contributions for each financial year, up to a maximum of $935 based on annual deposits of $5500 or more.
The deposit will have been topped up with interest calculated at 5.5% per annum, which is the current rate available with some of the providers of first-home savers accounts. The net benefit depends in part on the saver’s marginal tax rate; the higher it is the better off the person will be, but an ordinary bank account would have to get 15% interest to beat the benefits of the first-home savers accounts.
The “four years is really only two years” scheme, as outlined, ideally suits indolent and expectant young people relying on the largesse of benevolent family patrons, who don’t necessarily see an imperative to buy their first home until spring of 2013 at the earliest.
Perhaps they could travel overseas in the meantime.
Of course this doesn’t quite match the purpose of the scheme, which was to encourage first-home buyers to save in a disciplined environment, which then helped with applications to banks.
But this well-intentioned scheme hasn’t matched the Federal Government’s initial high hopes of $4 billion under deposit by 2012. The typical account currently has $6,300, the Australian Prudential Regulation Authority said.
The initial projections were of 220,000 accounts opened in 2009, and 730,000 by 2012. The scheme had a very slow start, with just $41 million deposited after its first nine months. As at June 2009 there were just 13,946 First Home Saver accounts. This jumped to 22,600 as at June 2010, and to currently about 27,400.
It dates back to an election commitment by then aspiring Prime Minister Kevin Rudd, with the Government offering to contribute up to $850 for every $5000 deposited each financial year. This amount has now been adjusted to $935 for every $5500 or more.
Anyone over 18 and under 65 who has not previously purchased a home in which to live can have an account with an indexed $80,000 balance limit.
Only 18 financial institutions offer the accounts, and most of them are credit unions. Just two of the four big banks, the ANZ and Commonwealth, offer the accounts.
One of the main reasons why the scheme's uptake was woefully slow was its introduction coincided with the frenzy accompanying the first home owner grant boost, one of the overdone stimulatory measures during the global financial crisis.
The first-home saver scheme became swamped by the first home owner grant bonus.
There are tight rules regarding withdrawals, which are tax-free but can only be used to go to the purchase of a first home.
Account holders who change their minds about buying a house can transfer the balance of the account into  superannuation. 
The account holder must live in the home for at least six months as his or her main residence following the purchase of the property after the withdrawal of the funds.
First home saver accounts are an individual account, not a joint account.
Account holders don't have to be Australian residents or living in Australia to open or contribute to a first-home saver account, but do have to be Australian residents for income tax purposes for at least part of the financial year to receive the government contribution.
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Saving for a first home, thanks to a silver spoon

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Rismark reports today that <country-region><place>Australia</place></country-region>’s average dwelling price-to-disposable household income ratio fell from its peak of 4.7 times in December 2009 to just 4.2 times in the March quarter of 2011.
In encouraging news for home buyers, <place><country-region>Australia</country-region></place>’s dwelling price-to-disposable income ratio is now back around its June 2003 level.
 With the exception of the GFC, this is the longest correction in <place><country-region>Australia</country-region></place>’s housing market valuation since Rismark’s analysis began in 1993 and confirms its projections last year. 1
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyejune8.jpg"><img src="/images/stories/joyejune8thumb.gif"></a>
This follows news yesterday that the RBA could keep its finger off the interest rate trigger until after the second-quarter 2011 inflation results are released in late July.
The headline mortgage rate is currently 7.8%, which is slightly higher than the average rate of circa 7.3% since the RBA adopted its “inflation-targeting” regime in the early to mid 1990s.
Rismark joint managing director Ben Skilbeck says: “We expect the national dwelling price-to-income ratio to continue to trend down over the next year or so as wages and disposable household incomes outpace capital growth. We are forecasting robust rental returns during this period, which should furnish owners with better total returns.”
“Contrary to popular myth, disposable household incomes in Australia have outpaced Australian capital city dwelling prices by a 7.5% margin over the last eight years based on RP Data-Rismark’s hedonic index.”
On the topic of when the RBA will next hike rates, ICAP’s Adam Carr says: “Having kept rates steady this month at 4.75% when there was a clear cut case to hike, the natural question is: what additional information could they possibly need to see to hike?
“My initial thoughts are that if they are going to wait till July, then waiting till August is no biggie. They are already behind the curve, so it makes little difference. I’d also note that there is no urgency in this [RBA] statement to hike in July – no clear signal. So until we see the board minutes, I think July and August are fairly even bets,” Carr says.
Terry McCrann of News Ltd and Fairfax’s Alan Mitchell are, however, today insinuating that an August move is more probable conditional on the second quarter inflation numbers supplying Australia’s central bank with a case to go. This brings them in line with UBS’s chief economist, Scott Haslem, who has long forecast an August hike.
If the inflation data do turn out to be benign, the RBA may be on hold until later in the year, consistent with Goldman Sachs’s Tim Toohey’s November forecast.
McCrann, who is known as the RBA’s “Shadow Governor” in financial markets, now believes that the RBA will need to be presented with an empirical catalyst to hike rates in July before receiving the next tranche of inflation data.
Tomorrow’s unemployment figures therefore loom large as a major monetary policy event. If the unemployment rate falls significantly below its current 4.85% level, which is widely regarded as consistent with a “fully employed” labour market, the RBA may feel it has sufficient justification to undertake another rate increase.
There has been widespread speculation that the RBA’s executive is at loggerheads with its more “dovish” board, which contains five representatives of corporate Australia, including businesses that are adversely affected by higher interest rates and an elevated currency. These include a current director and former CEO of the large retailer Woolworths.
McCrann has rejected this critique, and declares today that the RBA Board is “unified” around its comparatively dovish position, which has thus far ignored Australia’s very high first quarter inflation results.
Another swing variable is the departure of the notoriously “hawkish” Professor Warwick McKibbin from the RBA Board. July will be Professor McKibbin’s last board meeting.
Australia’s central bank has missed its 2.5% per annum through-the-cycle inflation target over the last decade, with underlying or “core” inflation averaging a substantially higher 3.0 per cent.
Alongside <country-region>Norway</country-region>, <place><country-region>Australia</country-region></place> has the highest inflation target in the developed world.
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Housing more affordable in March quarter

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<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Interest rates didn’t rise yesterday, and no surprise there. Yet we keep hearing about how they will, inevitably, do so and in fact many, many times.  Will these desk-bound, Canberra-centric economists ever shut up? Maybe they should go outside for a while, leave the ACT for a bit and visit a few shops, speak to a small business owner or two or visit a Queensland construction site (if they could find one). They might discover the real world.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Although mining-related stuff is going great guns, the rest (and it is a very big rest) of us are not.  Technical recession or not (well, not yet, anyway – but the June quarter figures will leave no shadow of a doubt), we are facing some very tough economic times and an increase in interest rates any time soon will stuff things up big time.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">I was going to quote a baker’s dozen or so of statistics, highlighting our current economic woes, but to be honest I don’t have the strength nor do you want to keep hearing about them. “More sugar,” someone emailed me the other day, and “less lemon”. I am listening, but it is bloody hard at present. I do prefer a blue sky over cloud.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">This mining boom – let’s call it Mark II – is shaping up to be quite different from the first one. During the first leg of the mining boom (circa 2001 to 2008), our exports over imports (<em style="outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: italic; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; margin: 0px; border: 0px initial initial;">terms of trade for all you smarties out there) rose to the highest level since the early 1950s. Although a two-speed economy was evident then, the gap was perceived as less than today, due to limited government regulations, tax cuts and generous public handouts.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">After a GFC-induced pause during 2008-09, the mining boom is back and according to some, big time.  The terms of trade are up; unemployment (well as feebly measured by the ABS) is below 5%; apparently there are skilled labour shortages and almost all of the mainstream financial press are running headlines screaming BOOM!  But this time around it feels (heck….it is) different.  Why is this so?
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Firstly, house prices have hit an affordability wall.  With some good luck, it won’t turn into a collapse, but it has hit a serious barrier.  Time will fix the problem – as wage growth catches up with housing prices – but this will take years to resolve.  A dose of commonsense would do wonders.  A change in planning policy would see housing affordability fixed almost over night.   But there is a lot of inertia here, including in some of our biggest institutions (i.e. the banks).  So I suspect a slow deflate (in real terms) is on the cards for Aussie homes for some time to come.  Of course, there will be winners and losers as always is the case when an overall market type loses its pep.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Secondly, the Australian dollar is high and is likely to remain so.  Profits, for many private businesses, are already changing to losses.  High commodity prices and our high interest rates; against the world stage; are likely to ensure a strong Aussie dollar for some time to come.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Thirdly, policy makers (I really mean the RBA) so far have managed the second phase of this mining boom quite well; although the November interest rate rise was a step too soon, but everyone is allowed to make a mistake now and then.  A fool, however, makes that same mistake twice; an idiot three times.  I hope Glenn Stevens isn’t going to be foolish nor act like an idiot.  Yesterday’s decision to leave rates on hold, at least, proved that Glenn is no fool, yet.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Given the tight Federal Budget – which as I have <a style="outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; color: #990000; text-decoration: none; padding: 0px; margin: 0px; border: 0px initial initial;" href="https://matusikmissive.wordpress.com/2011/05/04/may-budget/">argued </a>recently isn’t really what is needed now, as we need to stimulate the non-mining (the vast majority of the economy) sectors now for years to come – and the post-flood/cyclone slowdown, interest rates, for the time being at least, should remain on hold.  My way of thinking is this needs to occur for at least another twelve months or so, maybe more.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">However, if the general economy continues along its current trajectory in coming months, then last November’s pre-emptive strike will need to be reversed.  Inflation (for now at least) is well under control; jobs advertisements are on the slide; house prices are also falling; fewer firms are posting gross profits; there has been no economic growth so far this year and manufacturing is contracting once more.  Sorry, for the lemon infusion, but I couldn’t help myself!
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Hmmm, sound like we might see interest rates actually fall next rather than rise.  I might have been <a style="outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; color: #990000; text-decoration: none; padding: 0px; margin: 0px; border: 0px initial initial;" href="https://matusikmissive.wordpress.com/2011/02/16/rates-must-fall/">right </a>after all.   The RBA confesses in yesterday’s media release that the current cash rate setting is mildly restrictive.  I think that come August this mild settling will feel severe indeed.  Fingers crossed (the sugar) that it doesn’t come to this.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Regardless of the future direction of interest rates, what would help the situation – and stop all the jawboning and resultant negativity – would be some very clear advice from the RBA outlining (in plain English please) their prognosis for the next financial year and when (and by how much) interest rates might change.  This monthly interest rate guessing game is counterproductive.  Run through a budgetary process, factor in the variables and let us know.  If nothing else, it will help shut up all those damn economists waxing lyrical about every minute detail that is muttered by GS and his band of merry men (and two ladies).
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">And the final reason, and the main one, why this boom, for most of us, feels more like a recession, is the lack of confidence.  Yes, consumer attitudes have changed fundamentally.  And I don’t buy into the surprise lift in April’s retail turnover, as a sign that we are going back to our old spending ways.  Consumption is out and saving is in.  Most, too, are less interested in taking on debt.  But things right now have become outright gloomy – we are squirreling money away like our lives depend on it – yet our balance sheet indicates considerable strength.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">One of the key reasons for this gloom is the almost daily threat of looming interest rate rises.
<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">Glenn please, from this day onwards, tell us a year in advance, when to expect a change in interest rates and by how much.  Proact, stop reacting – this constant game of cat and mouse needs to stop.
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