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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

Joel Robinson

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Every First Home Owner Grant for new property by state

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

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

Staff Writer

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

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

alisonwarters@gmail.com

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

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

Ellen Walker

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

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

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

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Just like many others I have been trying to make some sense of our property markets – so I went back to 1990 (yes I was selling way back then) to look at what the market was doing.
Why, you might ask?
Well, back then the Reserve Bank of Australia (RBA) had the cash rate at 17.50% (today, it's at 2.50%). Back then we were selling un-renovated mansions on Prince Albert Street for $1,050,000 (that was the top-end back then) with semi-detacheds on Dalton Road fetching $275,000. A nice home on Wolseley Road with Balmoral views would set you back $485,000 and an apartment on Mandolong Road sold for $125,000; and yes, all these homes were in <a target="_blank" href="/news">Mosman</a>.
Pause for a moment and your attention would be diverted to the prices of the real estate – with little attention to the highest ever cash rate in Australia’s history – 17.50%. A cash rate seven times higher than the cash rate today – and even more frightening, it was just before the “recession we had to have”. This saw the cash rate in January 1990 drop from 17.50% to 4.75% in July 1993.
My point being that with a cash rate of 2.50%, why are there not more sellers in the market engaging in their long-term real estate strategies? <a title="Sydney property listings reach post – GFC low: SQM Research" href="https://www.propertyobserver.com.au/news/sydney-property-listings-reach-post-gfc-low-sqm-research/2014020567578" target="_blank">Sydney property listings reach post-GFC low, according to SQM Research</a> – January saw 20,080 listings in the city, a decrease of 3–4% from December. The previous low in listings for Sydney was recorded by SQM in January 2010, when 20,687 properties were listed. So the mystery is that the market in January 2014 is much stronger than back in January 2010 – so why are there fewer vendors?
The cash rate in January 2010 was 3.75% then in March it went to 4.00% to then peak in November 2010 at 4.75% with the RBA then easing the cash rate down in November 2011 to 4.50% to now where it sits at 2.50%.
Only when one actually extrapolates this data that the question is just how much attention the consumer pays to the cash rate – given it does not appear to be reflective in market sentiment. Based on that analysis it is clear that there is not a strong argument/interest for which direction the RBA will go when they next meet. Rather why are property owners ignoring the strongest selling conditions we have seen (in Sydney) since 2004?
Now there are a thousand upon thousand conspiracy theories – I prefer to call them myths, mysteries and market manipulations. The dominant buyer appears to be very high on the discussion index at the moment and that is the Chinese buyer. I looked at our deal book for 2013 and our sales to Chinese buyers made up less than 5% of our total transactions in that year. We don’t do any project marketing of new blocks of apartments, where in that demographic they make up over 80% of the transactions.
Maybe we should take a closer examination of the Significant Investor Visa (SIV) that was launched on November 24, 2012? 
From an article entitled "<a title="China’s Great Wall of visa money " href="https://www.businessspectator.com.au/article/2014/2/5/china/chinas-great-wall-visa-money" target="_blank">China’s great wall of visa money </a>"– "new analysis from real estate advisory arm of Korda Mentha has revealed that the government’s significant investment visa scheme is booming, with the numbers of approved visas growing exponentially in the second half of 2013."
There has been a significant spike in the number of SIV approvals since the Coalition government came into power last September. There were only 15 approvals in the first eight months of 2013 under the Labor government. The number of approvals surged nearly 600% in the first two months of the new government. Is it a mystery or a myth that this is because the Abbott government does not have a Housing Minister and these statistics will go unchecked?
In 2013, the highest house sale was Altona – Wunulla Road Point Piper for $52 million. For the first time in years the only other property to sell outside the Eastern Suburbs for Sydney’s Top 20 sales in 2013 was Julian Street, Mosman which was sold by Richardson &amp; Wrench Mosman &amp; Neutral Bay (RWM) for $13.9 million. From the Sydney Top 20 sales in 2013 just four went to Chinese buyers – so don’t believe everything you read in the newspapers, or hear from real estate agents for that matter. I would call that market manipulation.
In 2014, we have seen three houses listed with 60 million plus price expectations in Sydney’s Eastern Suburbs with a common theme in the media that they are chasing the Chinese buyers.
Nobody knows with any great certainty what lies ahead for our property markets in 2014. Rest assured there will be plenty of myths, mysteries and market manipulations. We do know from anecdotal evidence that at the top-end they don’t pay any attention to the cash rate either. On the other end of the market spectrum the lower end of the markets are fixated by the cash rate for obvious financial reasons.
Nothing can still explain why what should be a feast market has ended up as a famine.
Robert Simeon is a director of <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/" title="RWM" style="font-size: 14px;">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
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robertsimeon-hRNTwJyXkQ

What should be a feast market has ended up as a famine

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Work in the future will no longer be a place you go, but a thing you do. With new ways of working evolving, modern office environments need to be flexible and responsive to change to attract talented staff and boost productivity.
However, property is traditionally an inflexible resource, with buildings lasting longer than many companies. While the average office lease in Australia is around six years, larger firms typically take out 10 or 15 year terms with extension options. In a good quality, well maintained office fit out, many of the fittings and furnishings can wear well for nearly 15 years.  In comparison, product life cycles for many industries are now less than two years and technology is changing our lives in ways we could have barely imagined even seven years ago when the iPhone first debuted.
When considering renewing or relocating your office, you need to think long-term about whether your workplace actually supports the way people work and how your business will react to change.
For starters, many of the key decisions, like building selection and the amount of space need to be made several years prior to occupation.
This presents a real challenge for project teams as they gaze into their crystal balls and predict the future. Both in terms of internal questions, like what markets their organisation will be operating in and its consequent labour force composition, plus external questions like the direction technology is heading and what sort of workplace prospective staff will expect. Colliers International's research team has had a crack at identifying what might be on the horizon that could affect the way we design and use office space. We don't claim to be futurists and aren't in the business of predicting disruptive technologies so our point of departure is what we are starting to see today.  
Here are the seven forces transforming your office:
1. The new world economic order
Prevailing weak economic conditions leading to a focus on cost reduction and in many cases making employees more accommodating of changing and constrained working conditions. At the same time, organisations are becoming hyper competitive in order to survive, meaning the facilitation of product and process innovation has become paramount.  
2. Demographic change
The need to balance differing generational expectations at work and deliver work life balance. Ageing populations in many economies, combined with other factors such as weaker economic growth, are challenging traditional notions of apprenticeship, skill mastery and graceful retirement.  
3. Technology
Having enabled and created the expectation of a mobile and connected distributed workforce, we now need to think differently about the role and functional requirements of office buildings.  
4. Health and well-being
Healthy workers are more productive and effective workplace Arrangements can facilitate this in many ways.  
5. The regulatory environment
Restrictions and obligations on business activity are becoming tougher in many parts of the world. Sometimes this goes counter to what we hope to achieve through our workplace strategy.  
6. Sustainability
We have a duty to the planet and future generations to limit our environmental footprint at individual, business and community levels. We also need to make our organisations more resilient in the face of increasing severe weather and other events related to the impacts of climate change. Workplace strategy can play a significant part in this goal.  
7. Urban planning
Given the foregoing trends, how must our cities, buildings and workplace expectations adapt? I'll be examining each of these forces over a series of posts in the coming weeks. 
David McEwen is a management consultant working at the intersection of workplace strategy, sustainability and technology with <a href="https://www.colliers.com.au/%E2%80%8E" target="_parent" rel="nofollow">Colliers International</a>.
You can connect with David on <a href="https://www.linkedin.com/profile/view?id=9321351&amp;locale=en_US&amp;trk=tyah&amp;trkInfo=tas%3Adavid" target="_blank">LinkedIn</a>.
This article first appeared on <a target="_blank" href="https://www.colliers.com.au/News.aspx">Colliers International News</a>.
 
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dmcewan-RAeaafS4AZ

The seven forces that are transforming your office

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Just $200 million was given in first home buyer grants across NSW last year.
<a target="_blank" href="https://www.osr.nsw.gov.au/sites/default/files/file_manager/fhog_apps_received_3.pdf">It was the lowest year on record</a>. The aim of attracting first home buyers into new homes - not established ones to boost construction - has allowed the state government to get the good idea headlines, but then saved millions in the budget bottom line.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2014/02/12/chart-two-feb-12-big.gif" title="Click to enlarge"><img src="/images/stories/2014/02/12/chart-two-feb-12-small.gif"></a>
Source: NSW Office of State Revenue statistics
 
The list is an interesting mix of old and new, of greenfields and increased urban density.
<a target="_blank" href="/news">Parramatta</a> buyers topped the list of recipients with around $5.4 million in grants in the 2150 postcode. Parramatta, one of Sydney's oldest locations is undergoing a transformation with major residential projects including <a target="_blank" href="https://vbycrown.com.au">V by Crown</a> headlining its renaissance. 
The $300 million “vertical village” was officially launched in 2012, with construction of the 27-storey tower – set to be Parramatta’s tallest building – well underway. V by Crown recently reached $150 million in sales, with more than 270 apartments sold up since the project was launched in 2012.
<a target="_blank" href="/news">Spring Farm</a>, which sits second on the list of recipient postcodes at 2570, is one of the newer suburbs on the south-western rural/urban precinct. 
Spring Farm is surrounded by <a target="_blank" href="/news">Elderslie</a> to the north, <a target="_blank" href="/news">Narellan Vale</a> to the northeast, <a target="_blank" href="/news">Mount Annan</a> to the east and <a target="_blank" href="/news">South Camden</a> in the south. Until recently it principal land use has been the poultry production by the Tegal family and Neville Clinton, along with extensive orchards and vineyards along the floodplain of the Nepean River. 
The first urban development in Spring Farm was in the Ettlesdale Road area in the 1960s. In 2006 the population of the Spring Farm was 287 predominantly made up of young families with 44% of the population under 25 years of age.  
The area is planned to have around 3,900 housing lots with three separate developers, the Cornish Group with 1100 lots, Landcom 1,400 lots and Mirvac, 450 lots.
I noticed Mirvac recently sold a seven hectare holding to the Starhill Property Group for $7 million last November. In 2008 at Mirvac's Ayre three-bedroom, two-bathroom townhouses were for sale starting from $335,000. House-and-land packages in Mirvac's Ayre started from about $357,000 in 2012. 
Lots of land have been selling at around $200,000 plus since the first Spring Farm estate was opened in 2007 off Richardson Road.
<a target="_blank" href="/news">Arncliffe</a> and <a target="_blank" href="/news">Waterloo</a> were the most established suburbs in the top 20 postcode recipient list.
<a target="_blank" href="/news">Woollongong</a>, with $2.1 million in grants, rounded out the list.
The top 20 postcodes securing around $71 million of the total funding which is a mix of the grant and stamp duty concessions.
There were around 9,500 recipients who secured the mix of grants.
<div title="Page 1" class="page"></div>
Click to enlarge
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Source: NSW Office of State Revenue statistics
news@propertyobserver.com.au
 
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jchancellor-FAypfDUnLy

Just $200 million in NSW first home grants last year

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RP Data has been tracking the average number of days properties take to sell and the average vendor discount since the beginning of 2005.  Both measures have recorded a significant improvement throughout 2013 and the average number of days on the market is currently at a historically low level.
<img style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;" height="171" width="470" src="https://blog.rpdata.com/wp-content/uploads/2014/02/VEE.jpg" alt="VEE" class="aligncenter size-full wp-image-2859">
Average vendor discount excludes properties sold at auction and those which have sold above their list price and measures the difference between the first advertised price and the ultimate selling price of a home.  The figure is then expressed as a percentage.  As at December 2013, the average discount for a capital city house was -5.7% and for a unit it was -5.5%.  At the same time in 2012, discounting levels were recorded at a much higher -6.9% for houses and -6.3% for units.  The current levels of vendor discounting are the lowest they have been since early 2010 for houses and mid to late 2010 for units.
An analysis of sales across the combined capital cities found that over the final quarter of 2013, 29.5% of all houses and 37.5% of all units sold transacted at a price which was at or higher than the original list price.  These figures were greatly improved from the 25.3% for houses and 30.8% for units at the end of the September 2013 quarter.  Although a relatively high proportion of properties are selling above the list price, the majority of homes continue to experience price negotiation and ultimately sell at a reduction from their original list price.
<img style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;" height="171" width="470" src="https://blog.rpdata.com/wp-content/uploads/2014/02/TOM.jpg" alt="TOM" class="aligncenter size-full wp-image-2860">
The average time (days) on market figure excludes properties sold at auction and is measured by looking at the difference between the first advertised date of the property and the contract date once sold.  Based on a data series from the beginning of 2005, the average days on market figures for the combined capital cities are at historic lows of 38 days for houses and 35 days for units.  At the same time in 2012 the average days on market for capital city houses was recorded at 56 days and for units it was 53 days.
With homes seeing lower levels of reductions to the original list price it is no wonder that we are seeing an improvement in the average number of days on market.  Lower discounting levels mean that buyers and sellers are generally able to come to an agreement on price quicker.
<img style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;" height="174" width="470" src="https://blog.rpdata.com/wp-content/uploads/2014/02/VEE-by-TOM.jpg" alt="VEE by TOM" class="aligncenter size-full wp-image-2861">
Looking at the level of discounting taking place in the market across the average time on market we see that well priced new stock is selling quickly at a very low discount level.  Across house and unit sales, homes that sold in less than 30 days had an average vendor discounting level of -3.3% in December 2013. 
At the same time, those homes that sold between 30 and 60 days had an average discount of -4.7%, -4.9% was the average discount for homes selling between 60 and 90 days, homes sold between 90 and 120 days on the market had an average vendor discount of -7.2% and homes which sold after more than 120 days had a typical discount of -8.5%. 
The data highlights the importance of setting an appropriate initial list price. Homes which are appropriately priced sell quickly and with a low level of discounting, whereas the longer you keep the property on the market it generally results in a larger discount in order to achieve the sale.
The improvement in both discounting and time on market is reflective of the broader housing market conditions.  Property transactions have increased measurably over the past year and home values have also risen.  These conditions are reflective of the increasing level of competition for those properties available for sale and have undoubtedly contributed to the improved discounting and time on market figures.
With mortgage rates likely to remain at their current low levels over the coming months and housing market activity likely to rebound from its usual December and January slumber, we would anticipate that discount levels will potentially improve further over the first half of 2014. The average time on market is also likely to remain at current low levels.
From a sellers perspective, setting an attractive initial list price will help to ensure that the selling process is a quick one and who knows, you may be one of the circa one third of the market that is selling their homes for more than their initial list price.
Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.myrp.com.au/">RP Data</a>.
 
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ckusher-ujnxiKuFQs

About a third of homes selling above listed price - vendor discounting to fall further

Palm Beach v Portsea: Jonathan Chancellor and Margie Blok offer 30-plus insights

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Two leading international economists have forecast a property bust, if interest rates stay low and house prices continue to rise faster than wages growth.
Former top government economist Quentin Grafton has signalled the growth in house prices is a concern.
“While I am cautious enough not to claim there is a ‘boom’ that inevitably implies a bust, the recent growth in the national median house price of 9% in 2013 (14% in Sydney) is of concern, especially when it is about three times greater than nominal wage growth (and also inflation),” he will say in a speech to the Australian Bureau of Resources and Energy Economics.
“Should the house price growth spurt continue for much longer there could be an overshoot that may create an ‘overhang’.”
Australia’s ratio of house prices to income is the second highest in the world, although it remains slightly below its peak.
Grafton, now a professor with the Australian National University’s Crawford School says Australia has had one of the most rapid rises in nominal house prices of all developed countries since 1997.
Australia also has a household debt-to-income ratio of around 150%.
“The risk is that if Australia were to continue its historically low interest rates (the cash rate is at 2.5%), the housing price surge will continue,” Grafton says.
It’s unlikely the Reserve Bank will lower the official cash rate again, choosing on Tuesday to keep interest rates on hold. However, the RBA is still faced with a need to keep rates low enough to support economic growth.
“Successfully achieving all of these objectives simultaneously while avoiding a housing price boom, and in the midst of competitive devaluations from key trading partners, is a big ask of any central bank,” Grafton says.
“Given that Australia’s major banks borrow 30-40% of their funds from offshore capital markets, any rapid fall in house prices would pose a dilemma for the big four banks and would likely result in an Australian-made credit crunch.”
A UBS survey of bank chief financial officers released yesterday revealed banks are lowering their lending criteria, offering more competitive mortgages and discounting fees.
“Loan officers indicated lending standards have been loosened materially in both mortgages and large corporate lending over the last six months,” the report says.
“In housing, improved market prospects and competition were cited as the factors driving a loosening in standards. This has led to a material reduction in both price and fees in mortgage lending.”
Grafton’s predictions are not as dire as other forecasters, with United States demographer and economist Harry Dent saying this week Australian property prices will fall between 30-50%.
Dent says Melbourne and Sydney will be the worst affected and the crash will likely occur if the stock market suffers major losses or the Chinese property market declines.
“Bubbles ultimately peak when the people buying can’t afford to buy it,” he says as quoted by <a target="_blank" href="https://www.news.com.au/finance/real-estate/us-demographer-predicts-hit-to-aussie-home-prices/story-fndba8uq-1226816510923">News.com.au</a>.
“I see it like a popcorn popper, different markets are bursting at different times … but all of real estate in coastal cities all around the world is greatly overvalued and they're all going to burst whether it be 30 per cent or 40 per cent ... or 90 per cent in the worst case.”
Dent predicts the “China bubble” will burst next year and when it does, Australia will be the hardest hit.
“I see real estate going down 60-65% in the US, it's probably more like 30-50% in Australia, but that's still enough for you to say, ‘Hey why would you go buying real estate?’” he says.
Dent accurately predicted the 2008 GFC, but Australian Property Monitors senior economist Andrew Wilson told SmartCompany there will always be doomsday predictions when the market is doing well.
“These predictions are no surprise because there is a revival in the market at the moment. However they’re fruitless. They suggest catastrophic outcomes, but the underlying fundamentals and the historical evidence suggests this won’t occur,” he says.
“Equating incomes with house prices lacks relevance. The real issue is income versus mortgage repayments. The evidence clearly shows the average income required to pay a mortgage in most capitals is about 25% of weekly disposable income and that’s remained the same for a number of decades.”
Wilson says the only way there will be a major crash in house prices is if there is another global financial crisis “unlike what we’ve ever seen before”.
“We have a very rigid lending environment which is another factor in insuring a resilient housing market over the median to long term,” he says.
“Banks are competing more vigorously for market share at the moment which is pushing mortgage rates down…. But interest rate levels are really only where they were in 2008. They haven’t dropped to levels you might associate with a higher risk.”
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany.</a>
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yredrup-o4Anfe78KF

Economists warn of a property bust if interest rates stay too low

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Sydney prices skyrocketed last year, Harry Dent is <a target="_blank" href="https://www.propertyobserver.com.au/news/property-crash-is-like-popping-popcorn-especially-in-melbourne-harry-dent/2014020567560">diagnosing bubbles</a> all over the country and housing affordability is on everyone's mind. So Property Observer has turned to a range of industry experts for their thoughts on whether Australian property is overvalued.
Cameron Kusher – Senior research analyst, <a href="https://www.rpdata.com/">RPData<img style="float: right;" alt="cameron_kusher_new" src="/images/stories/2014/02/07/cameron_kusher_new.jpg" height="150" width="120"></a>
IF YOU'RE COMING TO AUSTRALIA FROM OVERSEAS, YOU MIGHT THINK OUR PROPERTY IS OVERVALUED – BUT THERE ARE GOOD REASONS FOR IT.
I don’t think you can say that the market is overvalued here in Australia. When you’re looking at examples of other countries, property here does look expensive. But there are good reasons why property prices are high in certain capital cities. Our population is so centralised, and job opportunities are centralised to a few capital city marketplaces – so there’s lots of competition for available stock. Plus there’s the fact that the supply of new housing and land for new housing is very restricted by our government, through their land releases.
So if you’re coming to Australia from overseas, you might think our property is overvalued – but there are good reasons for it.
Whether or not the price of Australian property is beneficial, and to whom, is another question for another day.
 
Catherine Cashmore – Market analyst<img style="float: right;" src="/images/stories/2013/12/12/CatherineCashmoreProfile.jpg" alt="CatherineCashmoreProfile" height="150" width="125">
YOU'D BE HARD PUSHED TO FIND ACCOMMODATION ON THE FRINGES OF OUR CAPITAL CITIES FOR LESS THAN SIX TIMES MEDIAN INCOME
It's important to draw a distinction between property and land.
The raw cost of 'building' a home has seen very little increase over the past decade or so - and therefore is not overvalued. However - due to housing policy that encourages speculation into the established sector, and fails to ensure fringe land identified for residential development, is sold close to its agricultural value - the cost of an average subdivided plot has increased more than tenfold.
Meanwhile, in the late 1990s a typical first homebuyer’s budget would have secured a modest family home, in a reasonably facilitated suburb, for three times median income. Today you’d be hard pushed to find accommodation on the fringes of our capital cities for less than six times median income, and in Sydney, it's closer to 10 times.
To some extent, lower mortgage serviceability rates buffer the effects for initial owners who generally work out how much they can borrow month to month, rather than concentrating on the total outstanding amount.
However, for prices to continue to increase, thereby inflating the 'entry cost' further, the system relies on debt being 'ever more affordable' to keep afloat, and the risk of still having outstanding mortgage debt to service upon retirement is significantly higher.
Today - due to the costs of an initial purchase, buyers enter the market later, have less time to pay off their mortgage, and often will end up reaching into their ‘super’ account upon retirement to clear the debt - after which, they obviously don't want to see the price of their biggest asset - which has been a chain around their neck in terms of monthly mortgage repayments - drop.
To some extent, it's a self perpetuating circle - voting for a politician who recognises an economy that relies on 'ever rising' house prices, is one that is ultimately set to fail, by way of an eventual sharp correction, is therefore not desirable for many owners.
But are prices overvalued?
<ol start="1">
<li>Land prices are inflated to multiples what they would be if used for other purposes - with sites often 'land banked' in lieu of any development </li>
<li>Yields are generally low - averaging around 4% for a unit and 3.5% for a house. </li>
<li>First homebuyers are having to find inventive ways to 'enter' the market if they want to gain a foothold onto the onerous housing ladder - borrowing a deposit, or being 'first time investors' and capitalising on family assistance to do so. </li>
<li>Mortgage/household debt has gone from 30% - or one third - of disposable income in the 70s, to almost one-and-a-half years disposable income today.</li>
</ol>
Therefore, ‘Yes!’ land is overvalued. But will people keep buying it?
Of course - land is a necessity to all business and commerce, as well as our personal needs - and whilst buyers are able to service the debt, there will always a market for it.
However, take careful note - as time progresses, and values increase, this significantly valuable resource will increasingly fall into the hands of  'those who can' and not necessarily 'those who need' – and the consequence of such, does not take much intelligence to guess.
Article continues on next page. Please click below.
 
 
<hr class="system-pagebreak">
Terry Ryder – <a target="_blank" href="https://hotspotting.com.au/">hotspotting.com.au<img style="float: right;" src="/images/stories/2013/10/25/Terry-Ryder-for-profile.jpg" alt="Terry-Ryder-for-profile"></a>
THE ONLY CLAIMS THAT AUSTRALIAN HOMES ARE "OVER-VALUED" COMES FROM INDIVIDUALS OR ORGANISATIONS WITH ULTERIOR MOTIVES
Australian property values are pretty much where they should be, relative to the strength of the economy, the wealth levels of the nation, the low rate of unemployment, the absence of over-supply (except in specific sub-markets) and the low level of interest rates.
Both regular affordability indexes (HIA-CommBank and REIA-AdelBank) says that affordability levels are the best they have been in 10 years. An ABS report found that, relative to incomes, our house prices are at the same levels as in 1995 and the Reserve Bank has stated on a number of occasions that Australian house prices are unremarkable by world standards.
The only claims that Australian homes are "over-valued" come from individuals or organisations with ulterior motives, mostly from the US, including the Demographia report which is published by a developer lobby group campaigning for a major relaxation of regulations "retracting" developer activity and the very strange Harry Dent who makes his living by making doomsday predictions, not one of which have ever come to pass.
 
Louis Christopher – Managing director, <a target="_blank" href="https://sqmresearch.com.au/">SQM Research<img style="float: right;" alt="Louis-Christopher-profile" src="/images/stories/2013/12/12/Louis-Christopher-profile.jpg" height="150" width="125"></a>
THERE HAVE BEEN TIMES WHERE THE MARKET HAS BEEN MUCH MORE OVERVALUED THAN IT IS NOW
The overall market is, in our opinion, only modestly overvalued. But it’s a difficult question to answer, for many reasons.
For example, if credit is turned off tomorrow, we’d have a crash in this country. And on that basis, you could say “the market is overvalued.” But assuming we continue to have low interest rates, the data suggests to me that we’re only modestly overvalued.
Looking at house price changes in comparison to total income changes – that metric suggests that property is slightly overvalued – and that’s one of the reasons that we’ve been relatively bullish on the market.
Of course if we had a cash rate at 6%, I’d say the market is overvalued, and we’d be due for a correction. One of my concerns is that the market is sensitive to interest rate changes, particularly with the number of investors in the market at the moment. When we get an interest rate rise, I believe it will negatively influence the market in a fairly significant way. Markets would be fairly susceptible to a 50 basis point increase.
But if interest rates stay the same, we only have a little bit of overvaluing. Sydney’s starting to look that way, but in the scheme of things I’ve seen worse, particularly back in 2003. I’d say it’s only moderately to modestly overvalued.
Hobart’s looking undervalued at this point in time, and Brisbane’s looking neutral – neither undervalued nor overvalued. The Gold Coast is starting to look quite undervalued now, and we’re expecting a pickup in their market.
In Adelaide, we don’t think the market’s going to do much. It’s at fair value, considering issues to do with the economy. Perth is looking a little overvalued, given that we know what’s happening with the downturn. Darwin is also looking overvalued, to an extent. And Melbourne’s only modestly overvalued.
But we don’t believe that the market in general is excessively overvalued, assuming the global economy remains in the current status quo.
You could argue that property expensive, but if I looked at the data from the last 20 years, there have been times where it’s been much more overvalued than it is now – particularly in 2003.
jrichardson@propertyobserver.com.au
 
 
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jrichardson-uRX5hFdKfN

Is Australian property overvalued? The experts have their say

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Despite talk of a housing bubble in Australia, house prices have been flat in real terms over the past six years since the pre-financial crisis peak in December 2007. The weighted average of established house prices in Australia’s capital cities has just kept pace with inflation, according to the <a target="_blank" href="https://abs.gov.au/ausstats%5Cabs@.nsf/mediareleasesbyCatalogue/CEE35CDA94704AB0CA257A4C00126898?Opendocument">Australian Bureau of Statistics</a> house price index.
Much discussion has focussed on short-term factors that have supported housing prices since the crisis: Chinese buyers, low interest rates, the switch from shares into property by investors, and the renewed willingness to take on debt since households and investors have repaired their balance sheets post-crisis.
But we need to bear in mind potential long-term drivers of house prices, one of which is population ageing. We’ve known about population ageing in Australia and other developed countries for a long time. It’s like the Queen Mary - we can see it coming from a long way off, but it’s difficult to turn around.
Predicting house prices
There have been some over-hyped predictions about the potential effect of population ageing on house prices in the past. The so-called “asset meltdown” hypothesis was fuelled by some influential <a target="_blank" href="https://www.nber.org/papers/w2794">US</a> <a target="_blank" href="https://piketty.pse.ens.fr/files/PoterbaRESta2001.pdf">economists</a>. They said that the retiring Baby Boomers would sell down their assets, like housing and shares, to pay for their retirement, causing asset prices to plunge. The infamous Mankiw and Weil paper, for example, predicted that US house prices could fall by up to 40% as the baby boomers started to retire between 1990 and 2007. Suffice to say, this didn’t happen!
My <a target="_blank" href="https://econpapers.repec.org/article/blaausecr/v_3a43_3ay_3a2010_3ai_3a3_3ap_3a240-253.htm">research</a> for Australia suggests such a prediction is way out of the ball park (as are many other predictions of calamitous change to be wreaked by population ageing – but that’s a topic for another day). That said, ageing will affect house prices. But it will be a slow-burn effect, occurring gradually over several decades, and the magnitude will be modest.
According to our <a href="https://econpapers.repec.org/article/blaausecr/v_3a43_3ay_3a2010_3ai_3a3_3ap_3a240-253.htm">analysis</a> based on both econometric estimation using historic data as well as predictions from a household behavioural model, ageing will cause house prices to be lower than they otherwise would be, by somewhere between 3% and 25% over the next 35 years.
Two factors drive the effect of ageing on house prices in Australia. First is the declining population share of 35 to 59 year olds who have the highest incidence of property purchases, including both investment and owner-occupied housing. Investment housing has increased as a share of total housing purchases in the last two decades according to <a target="_blank" href="https://www.rba.gov.au/Statistics/Bulletin/D05hist.xls">data</a> from the Reserve Bank of Australia, and it is the 35 to 59 year olds who tend to be housing investors.
Second, older people may trade down in order to release housing equity to support their retirement. The latter effect has, however, become weaker as households have the ability to <a target="_blank" href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">withdraw equity</a> in their house without needing to sell it, through facilities such as equity redraw loans and reverse mortgages.
Housing bubbles and baby booms
The link between house prices and demographic change could also run the other way: from house prices to the population age distribution.
High house prices tend to reduce fertility rates according to the <a target="_blank" href="https://www.nber.org/papers/w17485">international evidence</a>, at least among non-home owners, although it may increase fertility among existing home owners. High house prices reduce the affordability of children for non-home owners, but increases the affordability for existing home-owners by increasing their wealth. In fact given financial and emotional investment in both housing and childbirth it stands to reason that these decisions are related in quite complex ways, and depend on government policies in the areas of family assistance and housing affordability. I plan to investigate these relationships for Australia with co-authors from Macquarie University and the ANU.
One of the lessons from economics is that it’s very risky to extrapolate from the past by drawing straight lines from historic data into the long-term future, for two reasons: the economy has powerful self-correcting forces that we tend to underestimate; and unexpected shocks – Donald Rumsfeld’s “unknown unknowns” – can throw the data off course for a considerable period of time.
This was the fate of Mankiw and Weil’s prediction of a possible 40% fall in US house prices over 20 years – in fact house prices rose dramatically over that period. Compared with the slow-burning effect of population ageing, events like financial booms and crises have a much greater potential to cause swings in house prices over the short to medium term – say five to ten years. And this is the period that matters for most people.
The long term is interesting and we should keep an eye on it. But we’d do well to remember the maxim of the great economist John Maynard Keynes who said: “In the long run we are all dead”.
Ross Guest is head of the department of accounting, finance and economics and professor of economics at Griffith University.
 He is an adjunct professor with the Australia and New Zealand School of Government (ANZSOG) and a national senior teaching fellow with the Australian Government Office for Learning and Teaching.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/22750/count.gif" width="1">
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rguest-QX7SdCCSpj

How will Australia's aging population affect house prices?

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Hi Margaret, 
Can you tell me what has happened to unit rentals in Sydney over the past two years? 
Your advice is appreciated.
Kind regards, 
Peter
 
Hi Peter,
This is almost like asking ‘how long is a piece of string!
‘Sydney’ is a very large place and unit rentals can vary greatly from area to area, depending on many things including current demand, current and future supply, housing affordability, demographics and population growth.
For example, rents in <a href="/news">Double Bay</a> are 15% higher than last year while those in <a href="/news">Mosman</a> are 2% lower.  <a href="/news">Cronulla</a> sits 1% lower than last year while <a href="/news">Alexandria</a> sits 3% higher.  <a href="/news">Woolloomooloo</a> is 7% lower while <a href="/news">Parramatta</a> is 4% higher.
As an investor, it's crucial that you have a wider view of what you are buying and you must consider many aspects alongside potential rental yield. Look at areas where the population is growing faster than average but relatively few new developments are planned.
Consider buying in suburbs which have a lot of future infrastructure plans and where it seems that the services required by the demographics of the area are considered and being supplied.
And, more importantly, don’t buy a unit just because it seems to have a good yield, or it feels like a ‘cheaper’ way to get into the market.  In some areas the units grow better than the houses and in others the reverse is true. 
This is related to the kinds of people who live there – in family oriented areas houses will always get better growth and better yields, while in areas targeting couples or singles it will most likely be the units which present the better buy. 
Buying the wrong property type for the demographics could lead to a bad investment in an area which otherwise might have presented a good opportunity.
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? <a target="_blank" href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
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mlomas-KC9MUPZ6Ca

What has been happening with Sydney unit rentals recently?

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A rebound in activity across Australia’s property market is having a flow on effect to other industry sectors; particularly dwelling approvals where, based on recently released Australian Bureau of Statistics (ABS) results, throughout 2013 there were 177,418 residential dwelling approvals.
Australia’s economic reliance is transitioning away from the resources sector to housing construction where according to the ABS building approvals data, there has been a sharp rebound in dwelling approvals through 2013. This is exactly what the RBA was hoping for.
Based on the ABS results, there were 177,418 residential dwelling approvals in 2013; the annual number of dwelling approvals was 15.7% higher over the year which represented the greatest annual increase since January 2011. The 177,418 dwelling approvals was also the greatest number of approvals since January 2011.
A valuable point of interest in the ABS data is that a vast majority of dwelling approvals continue to be granted to the private sector, with the public sector playing little part in the construction of new homes. Over the year, 98% of all dwelling approvals were to the private sector, which is encouraging.
The improvement across the housing sector is important for a number of reasons.
Housing construction is one of the key economic pillars that policy makers are looking towards to assist with the economic transition away from mega-infrastructure projects related to the resource sector which is winding down. Additionally, housing construction provides a significant multiplier effect on the Australian economy, providing more jobs and demand for building materials, home furnishings, appliances and white goods.
Points of interest - house and unit approvals:
• More approvals were granted for units at 77,909 approvals – an increase of 23.4% over the year
• 99,508 house approvals – an increase of 10.4% over the year which was the greatest annual increase since October 2010.
<img src="/images/stories/2014/02/06/kusher-feb-6-one3.gif" alt="kusher-feb-6-one3" height="221" width="470">
Looking specifically at the 77,909 unit approvals, this was the greatest number of annual unit approvals on record. As a result, units also accounted for a record high 43.9% of all dwelling approvals throughout 2013. Placing the heightened level of unit approvals into perspective, 10 years ago 32.6% of all approvals were for units whereas 20 years ago, they accounted for 30.0% of approvals.
Clearly, there is a significant push towards higher density development and this is particularly the case within capital cities.
While 43.9% of national dwelling approvals were for units in 2013, across the combined capital cities the figure was recorded at 52.3%.
<img src="/images/stories/2014/02/06/kusher-feb-6-two.gif" alt="kusher-feb-6-two" height="236" width="470">
Looking across the individual capital cities, all recorded more than half of all approvals for units over the year:
• Sydney (69.2%)
• Melbourne (53.7%)
• Brisbane (57.5%)
• Darwin (63.2%)
• Canberra (67.2%)
• Elsewhere 33.6% of Adelaide approvals were for units, 22.1% in Perth and 25.6% in Hobart.
<img src="/images/stories/2014/02/06/kusher-feb-6-three.gif" alt="kusher-feb-6-three" height="233" width="470">
The results also show that more than 50% of approvals have been for units in Sydney since 1992, in Melbourne since mid-2012 and in Brisbane since early 2003. Sydney has for a long time had a focus on higher levels of densification whereas it is a relatively new phenomenon across other capital cities.
The shift to more unit approvals over houses is indicative of ongoing densification of our capital cities as well as developers seeking to utilise land parcels to their highest and best use which is often multi-level development.
<img src="/images/stories/2014/02/06/kusher-feb-6-four.gif" alt="kusher-feb-6-four" height="236" width="470">
On a state by state basis, dwelling approval increases have been broad-based where approvals are -4.1% lower than a year ago in Victoria (after a strong run up in approvals during 2009/10) and -8.7% lower in Hobart. In all other states, approvals are higher than a year ago; the largest increases were located in: New South Wales (27.7%), Queensland (22.0%), South Australia (22.6%), Western Australia (32.3%), Northern Territory (47.5%) and Australian Capital Territory (41.1%).
Tasmania is the only state where home values continue to trend lower and Victorian dwelling approvals have been elevated over recent years while other states have recorded low levels of approval.
Overall the ABS results are encouraging and highlight that dwelling approvals are increasing. Based on the trend, it looks as if the housing pipeline is set to continue growing.
Ongoing densification across select capital cities is also reflective of changing lifestyle patterns and growing demand for inner city living. Based on this, we would expect that the proportion of unit approvals will continue to grow as the population increases and many property purchasers show a preference for living closer to the centre of cities at more affordable prices than those available for detached houses.
Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.myrp.com.au/">RP Data</a>.
 
 
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