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

Joel Robinson

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

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.

Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.

While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" />

Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.

Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.

The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" />

The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.

In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.

Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.

According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.

Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.

The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a>

&nbsp;

Alfred Street the latest North Sydney pocket to be transformed by residential development

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]

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 

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

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

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

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

Every First Home Owner Grant for new property by state

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

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

Staff Writer

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

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

alisonwarters@gmail.com

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

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

Ellen Walker

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

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

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

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Hi Margaret,
I am currently working full-time earning $875 per week after tax. I want to buy a franchise coffee business that is about $500,000 inclusive of everything.
If I buy a property and build a duplex, strata subdivide and then sell one for $600,000 and keep the other, can I use that money to invest in the coffee business?
Or does that $600,000 need to go back to the home loan repayment?
Assuming: 
<ul>
<li>Purchase price of property - $650,000</li>
<li>15% deposit no mortgage insurance - $97,500</li>
<li>Construction loan - $450,000</li>
<li>Total loan - $650,000 + $450,000 - $97,500 = $1,002,500</li>
<li>Repayment (5%) - $4,062 per month</li>
<li>Rental income from one half of duplex ($450 per week)</li>
</ul>
Kind regards,
Daniel
Margaret's answer on the next page. Please click below.
<hr class="system-pagebreak">
Hi Daniel,
Regardless of what you intend to use the money for at the end of your project, when you borrow from a bank to purchase or develop residential property, you must at all times have in place enough security to cover the outstanding balance of the loan in the proportions required by the maximum LVR allowed.
In your case, you are after a 15% deposit loan ($85% loan). So, when the time comes to sell one duplex half, you must pay back enough of the original loan to ensure that the remaining loan does not exceed 85% of the remaining security.
In your case, if you ended up with two duplex halves each worth $600,000 and you sold one, the remaining security value is $600,000. This means the maximum loan you can have outstanding, at 85%, is $510,000.  If your loan was $1,002,500 you would have to repay $492,500.  You can keep the remaining $107,500.
Having said that, it’s probably not going to be so straightforward. 
Here are some things to think about:
<ol>
<li>Developments always cost far more than people realise.  Subdivision alone can run to more than $100,000 by the time you add a driveway and or even begin construction.  There are many costs and council contributions that people simply never think about that can blow out a development and mean that you don’t make any money or worse, come out behind the eight-ball. 
</li>
<li>When you sell you will pay capital gains tax at your highest marginal rate of tax.  If you sell inside 12 months, you pay CGT on the full gain.  So, let’s say the gain after allowable costs is $100,00, and you are in the 45% tax bracket, you pay $45,000 CGT.  If it is more than 12 months, the gain would be halved to $50,000 and you would pay $22,500. 
</li>
<li>When you sell a duplex, you will lose its rental income and when you start your coffee business you will be considered a new business. This will change your borrowing capacity – in fact it will probably be two years before you can borrowing anything.</li>
</ol>
I gather you are thinking of being able to put in place this loan now, while you are working, and then use the funds once you sell the property to provide a home loan rate loan for the business.  Unfortunately you won’t be able to achieve this.  Some lenders will, however, provide franchise finance and include a fit-out loan too, so this is the pathway you are better going down. 
If I may observe – starting a new business takes a lot of time and effort and I am not sure you want to complicate that by also taking on a development of this type.  Simplify your life by concentrating on one project at a time! 
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mlomas-KC9MUPZ6Ca

Can I use the profits from a duplex development to start up a new business? Ask Margaret

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A NSW government position paper has outlined 58 changes for those living in community schemes.
NSW Fair Trading Minister, Matthew Mason-Cox, said that more than 25% of the state’s population lives or works in strata and community schemes and by 2040 more than half of Sydney’s housing stock will be multi-unit type dwellings.
“Community schemes range from highrise buildings to rural subdivisions with irrigation channels as association property, as well as large closed communities with private roads, high security and extensive recreational facilities such as marinas and golf courses,” said Mason-Cox.
“The position paper sets out a coherent and informed approach to meet the future needs of residents living in nearly 2200 community, neighbourhood and precinct schemes operating around the state.
“At the very heart of the package are measures that seek to better protect residents with a focus on ensuring transparency and accountability in decision-making.”
This will provide a framework for community schemes going forward, removing the “onerous requirement” for all owners to agree unanimously on decisions relating to their property.
“Special resolutions will be sufficient where a significant majority of owners are in agreement,” he said.
More than 2,000 submissions and 1,200 online comments were made on the 2012 discussion paper.
“Community scheme law reforms will be delivered as part of a package of building industry reforms concerning the multiple occupancy of buildings, strata, security of payments and home warranty insurance,” Mason-Cox said.
The next step will be to draft the Community Scheme Bills, before consultation on the draft legislation in 2015.
Here is a selection about 10 of the crucial changes:
<ol>
<li>Meetings can be attended in various forms, including social media, video and teleconferencing 
</li>
<li>Committee members will be required to “act with due care and diligence” and disclose any potential conflicts of interest 
</li>
<li>A limit will be put on the number of proxies able to be held by any person, and limit the matters in which a priority vote can be used 
</li>
<li>Stop non-owners with a financial interest in the scheme from being a member of the strata/community committee (this would prohibit managing agents and letting agents) 
</li>
<li>A requirement for developers to set “realistic” levies, during the initial period and first year after 
</li>
<li>Disclosure and accountability for managing agents, with a contract term of three years minimum 
</li>
<li>Restriction of developers’ rights to vote on matters relating to building defects 
</li>
<li>Expansion on the issues that can be dealt with at NCAT 
</li>
<li>Better ways to improve parking within schemes 
</li>
<li>A requirement for meetings to be called to authorise certain matters identified in a development contract as “development concerns” (Community title specific)</li>
</ol>
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jduke-EHk3XBmHkn

The 10 changes to know from NSW's strata reform paper

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Australian commercial property is overvalued and investors in real estate investment trusts are at risk of significant capital losses when interest rates and bond yields rise, an analysis by investment researcher Morningstar has concluded.
Low interest rates have lead investors to divert capital from bonds to higher yielding property, which has driven asset values higher.
Commercial property values could drop by as much as 10 to 15% over a year when interest rates and bond yields rise again, making fixed income more attractive to investors, Morningstar suggested in a report on the Australian real estate investment trust (A-REIT) sector.
“It’s quite conceivable that when interest rates rise, property values could fall in orders of that magnitude,” Morningstar senior equity analyst Tony Sherlock told Property Observer.
The outlook for rental income from commercial properties was stable but income growth would be more than offset by the loss in asset values, he added.
Central banks have indicated that interest rates will stay low for a sustained period, although bond yields can increase ahead of any rise in official cash rates.
“From current levels, interest rates are going to eventually rise and when they do rise they are probably going to rise a bit faster than people expect,” Sherlock said.
Property values would respond fairly quickly to rising interest rates but A-REIT share prices could fall even more rapidly, he said.
A-REIT prices fell 10% over three weeks in May 2013 after yields on 10-year US treasuries increased by 10% when US Federal Reserve Chairman Ben Bernanke flagged a possible tapering of US quantitative easing.
The risk of investing in property through A-REITs was now “arguably greater” than usual because most were trading at a premium to the book value of their assets, “some by as much as 30%”, the Morningstar report noted.
Defensive A-REITS with low-risk tenants, such as BWP Trust, which owns Bunnings Warehouse properties, and ALE Property Group, which invests in pubs, were trading at the biggest premiums to book value and would be exposed to the largest share price falls, it said.
Sherlock said A-REIT prices had already started to fall due to rising bond yields and sales by offshore investors who were beginning to leave the market as the Australian dollar weakened. In the month to 18 September, the S&amp;P/ASX 200 A-REIT index dropped 3.74%.
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zfielding-GvX3Uq9KTa

Investors in REITs at risk of significant capital losses: Morningstar

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GUEST OBSERVATION
Positively geared property investing has become very popular over the last decade, but what exactly is it and how can you benefit from it?
Positive property is an investment vehicle that by definition pays the holding costs of a property and puts profit in the owner’s pocket. That is, it provides a passive income to you, the investor, from the first day of holding. This is called ‘passive income’ and it’s what makes it different from other forms of investing when you’re paying out each month.
When you begin investing, it pays to start with the end in mind if you want to be successful.
This includes two main aspects of planning. The first is being clear about your goals and motivations, and the second is understanding exactly what success looks like to you (for instance, retiring early, travelling more, working part time). The key is to understand exactly what you want your investment outcome to look like, as this will assist you in structuring and shaping a property portfolio that will get you there. Without a clear end, you won’t know the type of property to purchase and the required benchmarks to reach your goal, and it’s entirely likely you will fall short as a result.
A recent in depth study by University of Melbourne and Towers Watson found that only 53% of couples and 22% of single people are on track to achieve a comfortable level of retirement income - a grim prospect.
If you’re like most who look to property investing, you’ll want to continue living on your current household income into retirement, which really should be the minimum standard you consider. Even on $100,000 per year as a household income, 20 years into retirement works out at a requirement of $2,000,000. Sadly, Australians who have not created a stable investment portfolio through their earning lives will have no chance retiring with this sort of money put away.
Even if you are saving, the numbers are against you. Just 1% of Australians are considered “wealthy” in retirement.
It is crucial to prepare for a financially stable life by investing. Which brings us back to positive property.
Here are four reasons that you should consider it:
<ol>
<li>It pays a profit from day one and builds a passive income </li>
<li>As your portfolio grows, your serviceability and passive income also grows </li>
<li>The extra income from positive property improves your lifestyle and future investment choices, providing you a stable base to build a portfolio, a life and a family </li>
<li>You can eventually look to achieve a goal of passive income where you are not controlled by your job, your budget or just “getting by”. Opportunities that didn’t exist beforehand can open up for you. </li>
</ol>
Often when I see a new client, I ask them how much of a passive income they are seeking to achieve their goals. A very common figure is $100,000 per annum, which appears to be a pivotal point at which people consider replacing their working life for something else. It’s always exciting to see people cross this threshold and realise their options have changed.
By using the high yielding passive income method, investors can grow and expand their portfolio much more quickly than if they were paying out on a regular basis. It also means it won’t affect your lifestyle, and you’ll see a return far more quickly than if you were to go down a negatively geared path. 
This doesn’t work in every location.
Highly positive properties are not, for instance, located in capital cities – if they were, everyone would be investing there and everyone would be a wealthy investor. They are usually spread between regional coastal and resource towns across the country.  
You must undertake your due diligence when it comes to finding the right town with the right outcome. You cannot find these in the inner city property regions, and you must accept that if you’re chasing positive property then you will likely be looking outside of areas you are familiar with.  Good due diligence will help you feel comfortable investing in these areas.
Picking the right property for now and down the track is also important. You must consider not only the individual property, but how it will affect your future purchases. Each property should be bought with the next in mind.
You need to get that yield and return figure right – you will want to pick a specialist in the area who deals with the corporate leasing market. They can maximise your return and, ultimately, your income.
It’s interesting to note that the property clock applies to all markets across the country, and has done so for as long as property prices have been recorded. When looking at the statistics, in particular the historical performance of Australian properties over the last 50 years, a clear and steady incline is noted.
Generally, every seven to 10 years, our capital cities run from the top of the clock, which you may call the peak, downwards to the bottom of the cycle. This then goes back up to the peak again, each time rising through its highs and lows, but taking strong and substantial steps forward in both capital growth and rental yield in each cycle.
In some of the largest property downturns of this century, investors have simply had to wait until the end of that cycle to receive capital growth.
Despite the long running success for many in property, only 5% of the Australian population own an investment property, with less than 0.2% owning more than four. Considering our access to lending, low interest rates and high wages, this is a staggeringly low number.
Many property investors purchase blindly – without considering their desired income and without having a stable base to invest from. Having a base of positive property will allow you to keep borrowing and not hit the serviceability glass ceiling that many hit when they reach two to three negatively geared properties.
My recommendation? Build a passive income first, with three to four positive properties generating $100,000 or more. Then look to diversifying into the capital cities either with negative gearing or through projects like flips and renovations.
Why? Because positive income acts as a risk buffer that not only allows you to do these active projects, but also allows you to protect yourself in the event that something goes wrong or interest rates increase.
Ryan Crawford is group director of <a href="https://www.crawfordpropertygroup.com.au" target="_blank">Crawford Property Group</a>.
Ryan is one of Australia’s most successful property investors under 40 and a leading expert in positively geared property investment. In less than a decade, Ryan built a portfolio of more than 40 positively geared properties and is now dedicated to helping others plan and implement successful property investment strategies. 
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RyanCrawford-aLR2qkAu6t

Four reasons why you should consider positive property

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At last, some informed comments about Australian real estate by someone in a position of authority.
Joe Hockey isn’t my favourite politician, but the Federal Treasurer has a better handle on residential property than all of our chattering economists, the overseas analysts who appear obsessed with Australian prices and the twits at the Reserve Bank who speak to the public about real estate as if they were lecturing primary school students.
Hockey has criticised offshore commentators looking at Australian real estate through a very long and out-of-focus telescope. He has<a href="/news/joe-hockey-dubs-housing-bubble-claims-as-lazy-analysis"> accused them of “lazy analysis”</a>. He might have pointed the figure equally at the RBA.
Glenn Stevens continues to fret about “soaring real estate prices” and has pumped out a series of Real Estate #101 lectures to the public; such as this platitude: “People should be aware that real estate prices do not always rise. Sometimes they fall.”
Hockey’s absolutely right about lazy analysis. It’s just too easy to look at a single average figure for one-year price growth across our major cities and rush out a press release claiming a bubble in the hope of some cheap publicity– and media always obliges without ever thinking to ask a question or two.
Hockey has made it clear he’s not interested in taking action on what one newspaper termed “spiraling property prices”. That’s because we don’t have spiraling prices, other than in Sydney, which is playing catch-up after 10 years in which average price growth barely kept pace with inflation.
Hockey pointed out that big growth has been limited to only small parts of the national market. “It's primarily in pockets of Sydney, pockets of Melbourne and, to a lesser degree, in Brisbane," Hockey said.
The Federal Treasurer has done something that 99% of economists haven’t done. He has looked behind the average growth figure for the 12 year (about 10% or 11%, according to most research sources) and discovered that none of our capital cities have had growth that big, other than Sydney.
It’s not rocket science - indeed it’s the most basic of analysis that would take approximately five seconds - but incredibly most economists haven’t done that.
Hockey said this week many parts of Australia had experienced no significant increase in property prices, therefore any action to cool the market must be "very targeted and it needs to have some capacity to be time-limited".
Here’s the bottom line, based on price data from the Australian Bureau of Statistics. Annual growth in prices has been 2% in Canberra, 3% in Darwin, 4% in Perth and in Hobart, 5% in Adelaide, 6% in Brisbane and 9% in Melbourne.
There is no Australian property boom. There has been, so far, a Sydney property boom.
Does that constitute a Sydney price bubble? Well, no. This is the first major growth in Sydney prices in 10 years. ANZ chief executive Phil Chronican commented: “Sydney has been <a href="/news/nsw/sydney-property-price-playing-catchup-anzs-philip-chronican">playing catch-up</a>.”
Despite the growth of the past 18 months, the average annual rise in house prices in most Sydney suburbs has been 3% to 4% in the past decade. Prices have barely kept pace with inflation.
Even with the most vivid imagination, it is impossible to construct a bubble from those facts.
Shakespeare <a href="https://www.goodreads.com/quotes/5926-the-first-thing-we-do-let-s-kill-all-the-lawyers" target="_blank">almost got it right</a>. First thing we do, we get rid of all the economists.
You can contact Terry via  <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
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terryryder-YECXbqmri2

Joe Hockey is right, 'bubble' chatter is lazy analysis

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There are many types of insurance policies to consider when you purchase an investment property.
Among these is landlord’s insurance, a type of cover that safeguards you, as the property owner, against damage caused by tenants in your rental property.
What does it cover?
Every landlord’s insurance policy is different and you must always read the fineprint to ensure you know what you are covered for. However, the general theme is that you are covered for damage, accidental or malicious, caused by tenants. It may also cover theft by tenants or tenants’ visitors.
It can also cover you in unlikely, but damaging, situations – <a href="/expert-insights/dont-fear-the-reaper-10-things-to-do-if-your-tenant-dies">such as death</a>, or a similar circumstance, and it can also be cover in the event of a tenant undergoing illegal activities, such as <a href="/expert-insights/investing/drug-labs-landlords-exposed-if-tenants-undertaking-criminal-activity">setting up a drug lab</a>.
It can also cover tenants who default on their rent or who vanish – meaning you aren’t suffering the shortfall. This is often covered up to a certain amount, and some policies will also cover the legal expenses due to the loss of rent, up to a certain figure.
Some policies separate it into building only insurance for landlords, and contents insurance for landlords.
Usually, there are still premiums and excesses payable, as for most policies.
Very specific items are often not covered or cannot obtain cover. For instance, in the case of AAMI landlord insurance, the following are not included in the building cover:
<ul>
<li>Any part of the building or site used for conducting a business, trade, professional services or farming 
</li>
<li>Any part that cannot be locked due to it being altered, renovated or rebuilt 
</li>
<li>Any temporary structures or structures in the course of construction 
</li>
<li>Houseboats, watercrafts, caravans, mobile buildings (fixed or free-standing), motorised vehicles etc 
</li>
<li>Loose surfaces of tennis courts, driveways and paths 
</li>
<li>Hedges, laws, trees, shrubs, plants, flowers, garden beds or any other living material</li>
</ul>
However, it does cover any of the property’s furnished aspects, as owned by the landlord, including floor coverings, wall hangings, sound and vision equipment, household linen, bedding, kitchen and dining equipment, computers and printers, outdoor garden furniture and free-standing playground equipment.
AAMI also notes that their cover does not extend to damage/losses caused by vermic, rodents, insects (including termites) and domestic animals. It also doesn’t cover applications of heat where there was not flame – for instance, cigarette burns or scorch marks. These are just of the few of the does cover/does not cover specifications and it’s <a href="https://www.aami.com.au/sites/default/files/fm/pdf/landlord-freeholding-insurance-policy.pdf" target="_blank">worth reading them through if you’re considering the coverage</a>.
Metro Property Management's <a href="/expert-insights/investing/yes-you-really-need-landlord-insurance">Leah Calnan previously wrote that</a>: "The best policies on the market allow for 15 weeks loss of rent.  Loss of rent is payable to an owner when tenants stop paying the rent and are subsequently evicted from the property, when they up and leave overnight, in the event the property is not tenantable (i.e. due to flood, fire, etc.) or in the event your tenant dies."
"Like anything nowadays there are many different policies on the market to choose from. I have worked with some fantastic policies, but I have seen owners incur considerably out-of-pocket expenses due to taking out the wrong policy," she explained.
How much does it cost?
This will vary for every landlord, and will also vary depending on the provider and level of cover. Some also have multi policy discounts, for instance offering 10% discounts on building cover when you combine with landlord insurance.
It also varies depending on where the property is located, if you self-manage, whether or not it is a short term rental and the amount of rent charged. Most providers offer a rough online quote to get you started, for instance <a href="https://online.terrischeer.com.au/?cover=landlord-insurance%20%20" target="_blank">Terri Scheer online offers a fairly comprehensive assessment</a>. They also ask about whether the property is furnished, and the size of the property. 
What else you should know
While whether or not you obtain this insurance, and when is down to the individual’s varying circumstances, it’s often highly recommended. Landlord insurance can also cover you for when the property is being shown at opens and sitting vacant, where you have liability.
If you move into the property, the insurance isn’t valid.
While it’s possible to get cover for periodic and fixed term leases through different providers, many will not cater to “casual leases”, and some will also not cover self-managing landlords. You will also want to make sure your property manager is collecting the right paperwork, or you may find yourself unable to claim. For instance, Westpac’s Landlord Extras claims can only be paid if there is a written rental agreement (which has to include the term of lease, amount of rent and bond payable), documented booking confirmation (in the instance of casually-let properties) and documented property inspection reports. Without these things, they will not pay out.
YOU MIGHT ALSO WANT TO READ
<a href="/expert-insights/what-insurance-policy-do-i-need-as-a-landlord">What insurance policy do I need as a landlord?</a>
<a href="/expert-insights/investing/do-i-need-public-liability-insurance-to-cover-my-tenants-ask-margaret">Do I need public liability insurance to cover my tenants? Ask Margaret</a>
<a href="/expert-insights/investing/investor-stories-my-house-was-turned-into-a-hydroponic-drug-farm">Investor stories: My house was turned into a hydroponic drug farm</a>
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What is 'landlord's insurance'? Investment terms explained

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Australia’s low-income residents are expected to take on a colossal amount of private debt just to put a roof overhead in our rentier economy, and the only explanation they are being offered is that Australia is suffering from a ‘housing shortage’.
Speaking at the 2014 <a href="https://topics.bloomberg.com/bloomberg-australia-economic-summit/">Bloomberg Economic Summit in Sydney</a>, where the investor share of the market is close to 50% and finance commitments have sky rocketed some 44% higher than July 2013. Treasurer Joe Hockey, denied that prices were ‘credit fuelled’ because: "Fundamentally we don’t have enough supply to meet demand (and) that doesn’t suggest a bubble.”
<img src="/images/2014/09/22/cashmore%20sept%2022%20one.jpg" alt="">
His views were supported by David Cannington, senior property analyst at Australia &amp; New Zealand Banking Group Ltd (ANZ), who referenced an apparent shortage of ‘300,000 homes’, while at the same time welcoming an elevated level of foreign speculation “as adding about $4.5 billion every quarter to total dwelling construction”.
The shortage Cannington refers to, is derived in part from research put together by the National Housing Supply Council (NHSC) established in May of 2008, just prior to the last Senate inquiry into housing affordability, yet promptly disbanded by the incoming Abbot government who are now only too willing to use its findings to support their populist view.
Using ABS data, the NHSC assessed what is known as ‘underlying demand’ - the amount of extra housing needed per annum over the last decade for all residents in Australia (not just active buyers) - ‘if’ we had continued to produce enough homes for an increasing population based on existing household composition figures.
The supply side findings of the report were hotly debated and justifiably so.
Planning for population growth is not an easy task, it is predictive in nature and makes many assumptions and revisions along the way.
However, this was not the NHSC’s only role.
It was also commissioned to produce a comprehensive evaluation of Australia’s affordability problems, which included the status of those impacted most – homeless, renters, first home buyers, low wage families and tenants in the public and social housing system, which helped clarify its findings.
For example, the reports showed utility costs such as electricity, gas, water, and sewerage, have been increasing at more than 10% per annum – yet they are not typically calculated as part of current analysis of housing affordability constraints.
They gave a good statistical overview to show a dramatic shortfall of affordable rental accommodation for low-income families. And clear evidence that our housing crisis is not that we do not produce enough homes ‘per se’ – but that we do not produce enough affordable and feasible options across the sector as a whole – in both the public and private sphere.
For example - the report noted a “shortage of housing for lower-income people  (specifically families) that results from a mismatch of housing prices relative to income”.
It made a point of stressing that Australia’s supply challenges cannot be met by ‘simply adding to the housing stock’. And further elaborated on the inability of apartment construction to meet both need and price for the majority of family residents - the value of the land and associated costs being too high, and the size of apartments being too small to adequately fulfil the task.
This places Cannington’s second comment – regarding the level of foreign investment pushing an unprecedented inner city boom in apartment construction, into context.
For individual renters, students and a small percentage of couples living downtown, the increase in high-density accommodation will assist in placing downward pressure on rents.
It cannot however assist in addressing Australia’s real housing shortage or accommodating the growing number of family and low-to-middle income residents, that want to buy – not just rent - and in the face of declining wages, find it increasingly difficult to do so.
This is not because we have booming population growth and a shortage of roof space, as our ministers are fond of sermonizing. But because our tax policies work directly against it, subverting supply side policy and negatively affecting wage growth by pushing up the price of land and the associated costs of doing business.
They encourage a system of false scarcity, in which land and dilapidated housing is hoarded and not effectively utilised, forcing a process of social polarisation, as low income residents are forced to ‘hop’ both the middle and outer rings, in search of cheaper options further afield.
They distort the use of the nation’s savings, encouraging speculation on rising land values.  This negatively affects the financing of new supply, as investors chase the capital gains associated with established stock, over and above rental income.
<img src="/images/2014/09/22/cashmore%20sept%2022%20two.jpg" alt="">
The behavioural impacts are profound, amplifying the boom and bust swings of the market cycle.
The financial sector accommodates, with property prices dependent on how much ‘endogenously’ created credit a bank chooses lend, subject once again, to our dysfunctional tax system.
Negative gearing, depreciation and lower land taxes, leave more economic rent available to be pledged to the banks in the form of higher prices, producing a rentier economy which prioritises ‘creating wealth’ through asset inflation and rising levels of private debt - rather than improving living standards by supporting tangible investment into value adding activities.
<img src="/images/2014/09/22/cashmore%20sept%2022%20three.jpg" alt="">
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
The distortion that inflated values have on the economy acts to subvert housing policy as any danger of a marked decline in prices, places an associated risk on financial stability.
Affluent neighbourhoods are therefore protected from ‘over development’, while inelastic responses to market conditions, allow professional land-bankers to squat on sites at low cost and secure windfall gains when they are later rezoned for residential development.
Stamp duty further restricts labour mobility and the regular turnover of housing stock.
The resulting effect is illustrated on the <a href="https://www.natsem.canberra.edu.au/publications/?publication=the-great-australian-dream-just-a-dream">maps below</a> that show where affordable options were located in 2001 for low-to-middle income buyers, compared to 2011, in all of our major capitals.  
The yellow patches being affordable, and blue patches unaffordable.
<img src="/images/2014/09/22/cashmore%20sept%2022%20four.jpg" alt="">
<img src="/images/2014/09/22/cashmore%20sept%2022%20five.png" alt="">
<img src="/images/2014/09/22/cashmore%20sept%2022%20six.png" alt="">
<img src="/images/2014/09/22/cashmore%20sept%2022%20seven.png" alt="">
<img src="/images/2014/09/22/cashmore%20sept%2022%20eight.png" alt="">
Source: <a href="https://www.natsem.canberra.edu.au/publications/?publication=the-great-australian-dream-just-a-dream">NATSEM</a> Income and Wealth Report Issue 29 - The Great Australian Dream - Just a Dream?
Prior to the 1970s, infrastructure financing was funded in part through the capture of economic rent from the land that directly benefited from the accompanying improvements. 
Now, infrastructure costs are financed through deadweight taxes on productivity from residents who derive no benefit in their own local neighbourhood, or loaded onto the upfront cost of new dwellings and promptly passed to the buyer.
The banking lobby loves minsters like Joe Hockey that offer no threat to their profits and instead, waft away any necessary concern over rising prices with simplified responses that fail to identify the root cause. 
It has driven up the cost of housing – damaging the potential of future generations, with a lifetime worth of debt sold as “forced savings”, while the interest is re-packaged an into an array of obscure financial instruments, allowing the country’s wealth to gravitate into an elite nuclei of financially strong hands.
Notwithstanding, all the above points were highlighted in the last <a href="https://www.propertyoz.com.au/library/A%20good%20house%20is%20hard%20to%20find%20report%20JUNE%202008.pdf" target="_blank">Senate inquiry</a> into housing affordability, as well as being set out clearly in the <a href="https://taxreview.treasury.gov.au/Content/Content.aspx?doc=html/home.htm" target="_blank">Henry Tax review</a>.  Yet studiously ignored in a budget that surgically set about reducing the living standards of Australia’s low to middle-income earners, the most productive sectors of our economy, rather than collecting the tax revenues from resource rents and monopoly profits.
Joe Hockey has reaped substantial unearned gains from an <a href="https://blog.australiaboomtobust.com/2014/08/propertied-federal-political-class/" target="_blank">impressive portfolio</a> of property investments - reportedly, picking up his Canberra home <a href="https://www.dailytelegraph.com.au/news/nsw/taxpayers-footing-bill-on-treasurer-joe-hockeys-15-million-canberra-house/story-fni0cx12-1227026624945">“for a song”</a> in 1997 at $320,000, and watched that land value more than triple in nominal terms to an estimated  $1.5 million today.
In light of the above evidence, it can only be assumed that Hockey’s comments are based on a vested interest to protect his own back pocket and seat in power, rather than the urgent need to invest in Australia’s future by eliminating the losses inflicted by our current system of taxation that forces up the cost of land and associated levels of private debt.  
Instead we need to move toward a system that finances society’s needs and infrastructure requirements, from capturing the <a href="https://www.macrobusiness.com.au/2013/11/land-tax-must-kill-negative-gearing-stamp-duty/" target="_blank">economic rents</a> currently capitalised into the price that buyers negotiate when they purchase a home, which would eventually act to improve the living standards of all, not just the privileged few.
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catherinecashmore-6LXia3pPQj

Supply v demand: A political game of smoke and mirrors

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GUEST OBSERVATION
The unemployment rate is one of the most closely followed macroeconomic indicators.
Of importance in its own right, it tells us about the level of spare capacity in the economy and provides information about likely future developments in inflation.
Recent fluctuations in the unemployment rate have surprised many economists. In July, the unemployment rate jumped by 0.3 percentage points to 6.4% – its highest level in twelve years – only to be unwound in the August release.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59385/area14mp/gndjq2sw-1411017659.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59385/width668/gndjq2sw-1411017659.png" alt=""></a> ABS
The sharp increase in July may partially reflect measurement issues - the Australian Bureau of Statistics (ABS) updated the criteria to be actively searching for a position, although the ABS said the impact of this change was not significant.
The unwinding of this spike in unemployment in August was due to a surge of part-time employment – in fact the largest growth rate since the mid-1980s. The increase was so large that the ABS extensively checked the figures. However, the lift in part-time employment was evident in many dimensions of the data – it occurred both across the country (with the exception of the Australian Capital Territory) and across many age groups.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59386/area14mp/c33bsqdg-1411017876.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59386/width668/c33bsqdg-1411017876.png" alt=""></a> ABS
Amidst this considerable volatility, it is probably best to focus on estimates of the “trend” unemployment rate, which is also advocated by the ABS. The trend measure effectively smooths the data, down-weighting the recent observations.
However, trend estimates aren’t perfect – for example, as more data become available they can be revised. Also, by down-weighting the recent data they can miss turning points which policymakers might have otherwise wanted to react to in a timely manner. Bearing these caveats in mind, the trend unemployment rate in recent months has moved higher.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59387/area14mp/cc8z98s6-1411018041.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59387/width668/cc8z98s6-1411018041.png" alt=""></a> ABS
At around 6%, the trend unemployment rate suggests that slack exists in the labour market. Similarly, the trend participation rate – the ratio of people in the labour force (either employed or unemployed) to the population – recently has picked up, but remains below the levels of the late-2000s.
Structural issues
While as discussed in a speech by Reserve Bank of Australia Assistant Governor <a href="https://www.rba.gov.au/speeches/2014/sp-ag-160614">Christopher Kent</a> part of the decline in the participation rate probably can be explained by structural factors, such as the ageing of the population, a component is likely to be cyclical.
Recent <a href="https://www.rba.gov.au/publications/bulletin/2014/sep/pdf/bu-0914-2.pdf">Reserve Bank of Australia</a> model-based estimates also suggest that spare capacity currently exists in the labour market, but much less than occurred during the early-1990s recession. The Reserve Bank study also highlights the considerable uncertainty which surrounds these estimates.
The unemployment rate is a narrow measure of labour market slack – it abstracts both from people working fewer hours than they would like, or in a position that does not fully utilise their skills. The ABS tackles the first aspect in its measure of labour force underutilisation. As it is a broader measure, the labour underutilisation rate is always greater than the unemployment rate, although the wedge between them widened in the early 1990s recession.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59390/area14mp/nzfpfzym-1411018671.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59390/width668/nzfpfzym-1411018671.png" alt=""></a> ABS
We’re getting more ‘flexible’
This wedge widened with the onset of the global financial crisis, unwinding some narrowing in it which had occurred. An important part of the macroeconomic adjustment that occurred in Australia during the GFC was a reduction in average hours worked. This mitigated the rise in the unemployment rate and probably was facilitated by the more flexible nature of the labour market today relative to in the past.
The increase in the labour underutilisation rate over the past eighteen months has outpaced that in the unemployment rate. In the September quarter it exceeded the levels reached during the GFC, although it remains well below the high levels reached during the severe early-1990s recession.
The rise in labour underutilisation has not been uniform across all parts of the labour market. While typically labour underutilisation is much higher for those aged 15-24 compared to those 25 and above, and it increases sharply during either recessions or slowdowns, recently it has risen noticeably.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59392/area14mp/qf49y4bk-1411019346.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/59392/width668/qf49y4bk-1411019346.png" alt=""></a> ABS
The unemployment rate and the labour underutilisation measures show slack exists in the labour market, but much less than in the early 1990s. This slack is likely to hold down wages growth.
Private sector wages growth over the year to the June quarter was the lowest rate since the measure preferred by policymakers was introduced in the late 1990s. As wages, together with productivity, are the key factors which influence domestically-based inflationary pressures, these are likely to remain contained in the near term.
Tim Robinson is a research fellow at the Melbourne Institute, University of Melbourne<a href="https://theconversation.com/institutions/university-of-melbourne"></a>.
Tim Robinson is on extended leave without pay from the Reserve Bank of Australia. The views expressed in this article are his own.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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po-LsXgBTHBmX

What's really happening with the unemployment rate?

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The Western Australian government is starting an education campaign through EnergySafety around the responsibilities and obligations of property owners when it comes to overhead power lines.
Privately owned power poles and lines located on private properties are the responsibility of the home owner, explained Commerce Minister Michael Mischin and Energy Minister Mike Nahan.
“Property owners have always had a common law duty of care to maintain their assets and ensure they do not pose a danger to themselves or the community,” Mischin said.
“The state government is now alerting people to this responsibility to give them a chance to have their privately owned power poles and lines inspected by a licensed electrical contractor.”
Lines supported by wooden poles that have been in service for 25 years, or longer, may be near the end of their service life and thus unsafe, warned Mischin, who said they could be a potential bushfire danger.
Nahan said that Western Power and Horizon Power were not responsible for these private poles and lines.
“Private power lines are part of a customer’s electrical installation. Their maintenance and safety are purely an owner’s responsibility,” he said.
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Private power line on your WA property? Here are your responsibilities

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GUEST OBSERVATION
A “yes” vote to Scottish independence today would mean a great many things for Scotland, and also for England. But what would it mean for Australian business and financial markets?
It’s tempting to say “very little” — what do internal politics half a globe away have to do with us? Yet the Australian dollar strengthened markedly against the pound last week, almost surely due to a poll suggesting that the “yes” vote was ahead 47-45%.
To begin to understand what Scottish independence might do to Australian firms and markets it’s important to understand what it would do to Scotland and England. The key economic question here is what currency the Scots would use.
The pro-independence “team” has been pretty clear about this. They’ll keep using the pound. And it’s true that England can’t stop them — just as Australia can’t stop New Zealand from using the Aussie dollar.
At first this sounds sensible — the pound is a big, liquid currency. The Haggis — or whatever a Scottish currency would be called — would not be. Case closed, right?
Actually, no. Having a common currency without economic and political integration is a very, very dangerous thing. Monetary policy would be set by the Bank of England, presumably without reference to Scottish economic conditions. So if there was a recession in Scotland one would want lower interest rates, but unless England was also in recession of a similar magnitude the Bank of England would be unlikely to cut rates.
Worse, losing control of the ability to print money means that if Scottish debt got out of control it could not be inflated away. Ask Spain how that works out.
The risk for banks
Worse still, Scottish banks would no longer be implicitly guaranteed by England. This is a huge deal.
The events of 2008 taught us how quickly modern-day bank runs can happen, how devastating the effects can be, and how only overwhelming credibility can prevent disaster. Scotland wouldn’t have that — and England would have no incentive to help out. Even if England wanted to, markets would have to believe it, and that’s far from a sure thing.
So it’s clear Scotland would be in a dangerous economic position — not obviously in trouble right away, but without any macroeconomic fire extinguishers if trouble arises.
This is a potential worry for major Australian exporters to Scotland — but there just aren’t very many of those. Australian companies with operations in Scotland could be affected.
A notable example is National Australia Bank, whose subsidiary Clydesdale Bank is located in Scotland and could face higher borrowing costs under independence. NAB has said it would seek to <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-09-12/nab-clydesdale-bank-plans-to-leave-independent-scotland/5738822" target="_blank">shift</a> Clydesdale bank’s corporate registration to England in the event of a “yes” vote. But even in that case it’s a small part of the NAB.
The bigger concern would be if independence affects England in a significant way, since this is a bigger trading partner for Australia. As we saw last week, markets have rightly been concerned about the impact on England. At the very least there would be an 18-month plus process of “demerging” two countries, a process that would be complicated and distracting.
Keep calm
Yet, whatever the impact on England, it’s hard to see how it would materially impact Australian business. The pound might weaken relative to the Australian dollar, potentially hurting Australian exporters. Having said that, we would all do well to heed former treasury secretary Ken Henry’s advice on Tuesday to be less focused on the real exchange rate in this country. The impact of a modest devaluation of the pound just won’t make much difference.
Could independence lead to a major blow-up of the English economy? As we learnt in 2008, a major problem in any significant economy can quickly reverberate around the world. We are all interconnected now. A big problem in England could be a big problem for world financial markets, Australia’s among them.
This is possible, but it seems highly unlikely. England is a very large economy with its own currency and a broad web of international economic connections. Scotland is close, historic, and important – but independence is not likely to lead to an economic meltdown in England.
Perhaps it could change politics in England in a big way and this could have an effect. Perhaps a more conservative Tory leader would emerge. And perhaps that would lead to different economic policies. But that’s a lot of perhapses.
Demerging two countries would be wrenching. It would affect those countries — especially Scotland — in lots of ways, including economically.
Whatever the pros of a “yes” vote for Scotland, it would bring with it huge economic risks. And some for England, too. For Australia and Australian businesses, the risk is small.
<img src="https://counter.theconversation.edu.au/content/31724/count.gif" alt="The Conversation" width="1" height="1">Richard Holden is professor of economics at <a href="https://www.asb.unsw.edu.au/Pages/default.aspx" target="_blank">UNSW Australia Business School</a>.
<h5> </h5>
Richard Holden is an Australian Research Council Future Fellow.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
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