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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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The fashion giant Zara will open its multi-level store at Westfield Chatswood  on Thursday 13 February.

Zara's new Autumn/Winter collection will be on display.

Zara's new <a target="_blank" href="/news">Chatswood</a> home continues the international brand's strong Westfield presence with its only two other Sydney locations in Westfield Bondi Junction and Westfield Sydney.

European fashion giant Zara opened its first Australian stores in Melbourne and Sydney in 2011.
news@propertyobserver.com.au

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jchancellor-FAypfDUnLy

Zara set for February 13 Westfield Chatswood opening 

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Retail giant David Jones has confirmed it received a merger offer from rival Myer in October last year.  
David Jones revealed it received the “confidential, conditional and non-binding and indicative” offer from its rival on October 28, which saw Myer offer 1.06 shares for every David Jones share.  
However the offer, investigated by the Australian Securities and Investments Commission, was rejected on the grounds it had “substantial commercial, market, and regulatory risks” including a review from the Australian Competition and Consumer Commission.  
“The board formed the view that the potential transaction did not have sufficient merit for David Jones shareholders to warrant engaging in discussions and providing the access and information requested by Myer,” David Jones said.
This article first appeared on <a href="https://www.StartUpSmart.com.au" target="_blank">StartUpSmart.</a>
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asadauskas-o9wSWMRiAW

Myer discussed a merger with David Jones last year

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The New South Wales and Victorian governments have recently released business cases for their pet motorway projects, <a target="_blank" href="https://www.westconnex.com.au/documents/westconnex-executive-summary-september-2013.pdf">WestConnex</a> in Sydney and <a target="_blank" href="https://www.linkingmelbourne.vic.gov.au/pages/pdfs/east-west-link-stage-one--short-form-business-case.pdf">East-West Link</a> in Melbourne. But will these projects, costing a combined $20 billion (with $3 billion being donated by the federal government), really generate the economic benefits promised?

Take WestConnex, for example. NSW Premier Barry O’Farrell <a target="_blank" href="https://www.rms.nsw.gov.au/newsevents/news_ministerial/2013/130919-biggest-transport-project-in-australia">claims</a> that this $11.5 billion motorway will “inject $20 billion into the economy”. But Infrastructure Australia has <a target="_blank" href="https://www.afr.com/p/national/infrastructure_boss_lashes_out_yoIxPWcyrNuiI0Ldqw60HJ">poured fresh doubt</a> on such claims, describing big-ticket road promises as electioneering with “only limited regard” for the underlying financial issues.
A glance at the <a target="_blank" href="https://www.westconnex.com.au/documents/westconnex-executive-summary-september-2013.pdf">WestConnex business case</a> reveals that some $18 billion of the claimed economic benefit is merely the value of expected “travel time savings” and “travel time reliability”. This is basically the amount of money that a team of economists (paid by the NSW government) has decided motorists would hypothetically be willing to pay for shorter and more reliable travel times. The actual calculations and underlying assumptions have not been made public.
But, except in the case of freight and business travel, there is unlikely to be any reduction in average travel times; and even if there were, this would not result in any real income or cost-savings for the economy.
For more than a century the average time humans spend travelling each day has been a <a target="_blank" href="https://assets.dft.gov.uk/publications/trunk-roads-and-the-generation-of-traffic/trunk-roads-traffic-report.pdf">constant 60-80 minutes</a>. Whenever we’ve been provided with faster transport options, we’ve simply opted to live further from work and travel longer distances, but keep our daily travel times the same.
This is why no previous motorway project, in Sydney, Melbourne, or any other city in the world, has ever succeeded in reducing average daily travel times. Rather, they have resulted in <a target="_blank" href="https://www.vtpi.org/gentraf.pdf">longer average travel distances, more traffic, more sprawl and therefore increased transportation costs</a>. There is no reason to believe that WestConnex or East-West Link will be any different.
Economic injection?
But let’s say, for the sake of argument, that these motorways will reduce average personal travel times. Will this then result in billions of dollars being “injected into the economy”?
Well, no. Basic <a target="_blank" href="https://www.sciencedirect.com/science/article/pii/S1366554500000132">utility theory</a> suggests that most of the time we save we would spend on other non-productive activities, such as watching TV or checking Facebook. This will not result in any money flowing into the economy, let alone A$18 billion. On the contrary, individual motorists will be financially worse off because of the new tolls - as much as <a target="_blank" href="https://smh.drive.com.au/roads-and-traffic/drivers-face-735-toll-on-new-115b-westconnex-20130919-2u2lo">$20 a day</a> for users of WestConnex.
And how confident can we be that the economists have correctly valued our willingness to pay for these “travel time savings”? They got it wrong with Sydney’s Cross City Tunnel, calculating that 70,000 drivers a day would be willing to pay the $4.90 toll to save time driving across the Sydney CBD. The actual number turned out to be only 40,000.
Furthermore, increasing the speed of the road network will <a target="_blank" href="https://www.vtpi.org/gentraf.pdf">encourage more people and freight to switch from rail to road</a>. We will end up with more traffic, congestion and toxic exhaust fumes, and calls to build yet more costly motorways through our neighbourhoods to “fix the congestion”, ad infinitum.
These motorway projects may provide some short-term economic stimulus in the form of construction jobs and bonuses for consultants and bankers, but then so could building a $20 billion giant white elephant on top of Parliament House. However, this short-term economic stimulus will be far outweighed by the long-term economic burden of increased sprawl and car-dependency in an age of increasing petrol prices. Sydney and Melbourne already spend about <a target="_blank" href="https://trid.trb.org/view.aspx?id=511932">13% of GDP on transport</a>, while the average European or Asian city spends only between 5% and 8%.
Much of the funding for WestConnex will come from the <a target="_blank" href="https://theconversation.com/are-we-selling-off-the-family-silver-by-privatising-australias-ports-13824">privatisation of Port Botany</a>. But selling revenue-generating public assets to invest in infrastructure only makes sense if the economic or social return on that infrastructure outweighs the forgone future revenue from the privatised assets. The NSW government is essentially depriving future taxpayers of revenue from Port Botany, and imposing more tolls on Sydney motorists, simply to make it possible for more of us to move further away from work and suffer longer and more expensive commutes. We will keep our average daily travel times the same, just as we always have done.
There are cheaper, <a target="_blank" href="https://www.sciencedirect.com/science/article/pii/S0966692303000607">more effective and more sustainable ways</a> of giving us better and more equitable access to jobs and services, and more pleasant daily commutes. The $20 billion being squandered on WestConnex and East-West Link could instead be used to create jobs in growth areas, build affordable family homes near existing employment centres, and construct new rail lines and busways. Such strategies would help to build and enhance local communities.
Urban motorways only ever succeed in destroying and severing them.
Chris Standen is a PhD candidate in Transport Economics at <a target="_blank" href="https://www.sydney.edu.au/?">University of Sydney</a>
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/big-road-projects-dont-really-save-time-or-boost-productivity-21560">original article</a>.
 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/21560/count.gif" width="1">
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cstanden-tgv42BnyVA

Big road projects: Are they really worth it?

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Last year (according to the RP Data-Rismark Home Value Index), capital city home values rose by 9.8%, creating further affordability pressures for those segments of the market who are most price sensitive; the younger aged cohorts and first time buyers.  Our daily index data shows that home values have continued their strong pace of growth through the first month of 2014 with our combined capitals index likely to end the month slightly more than 1% higher.
Based on homes sold over the December quarter, the median price of a house across Australia’s capital cities is now $575,000; ranging from $775,000 in Sydney through to $350,000 in Hobart.  In the most expensive capital cities the challenge to buy a detached house within close proximity to where they work or socialise is simply out of reach for the vast majority of younger buyers.
<img class="aligncenter size-full wp-image-2844" alt="Chart 1" src="https://blog.rpdata.com/wp-content/uploads/2014/01/Chart-12.jpg" width="470" height="171" 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;">
Housing finance data indicates that as a proportion of the owner occupier market, first home buyers are currently at a record low level, accounting for just 12.3% of all owner occupier finance commitments. 
If first home buyers aren’t entering the market now, at a time of historically low mortgage rates, one might consider how and when they will ever enter the market.  In my opinion it is not always a case of not being able to afford to enter the market, it is often that the sacrifices a potential buyer would have to make in order to enter the market are too great.
There are some clear reasons why housing in Australia is expensive, including::
<img src="/images/stories/2014/02/04/number-1.jpg" width="20" height="30" alt="number-1" style="float: left;"> Australian’s have high levels of personal wealth and high incomes relative to most other countries.
 <img src="/images/stories/2014/02/04/number-2.jpg" width="26" height="30" alt="number-2" style="float: left;">Australia’s population is heavily centralised with around 55% of the national population residing in either Sydney, Melbourne, Brisbane and Perth.
 <img src="/images/stories/2014/02/04/number-3.jpg" width="22" height="30" alt="number-3" style="float: left;">Job opportunities and employment availability tend to be most abundant within capital cities.
<img src="/images/stories/2014/02/04/number-4.jpg" width="22" height="30" alt="number-4" style="float: left;"> The supply of new housing within the capital cities has consistently been insufficient to meet the level of demand over the past decade or so.
<img src="/images/stories/2014/02/04/number-5.jpg" width="22" height="30" alt="number-5" style="float: left;"> Population growth is strong with relatively high levels of overseas migration and natural increase creating additional demand for housing.
<img src="/images/stories/2014/02/04/number-6.jpg" width="22" height="30" alt="number-6" style="float: left;"> The cost of vacant land has been driven to unaffordable heights due to the slow release of new residential land supply and the restrictions of urban growth boundaries in most capital cities.
<img src="/images/stories/2014/02/04/number-7.jpg" width="22" height="30" alt="number-7" style="float: left;"> Negative gearing (which is available on all asset classes) encourages many to invest in residential property as a way of reducing their tax liability which creates additional housing demand.
Although these factors all contribute to a relatively high cost of housing, it does not mean that purchasing a first home is unachievable.  An upcoming analysis which will be released by RP Data this month finds that as at the end of 2013, across the capital cities, 28.4% of all homes had a current value of less than $400,000. Even in a market which is considered significantly unaffordable such as Sydney, 17.5% (almost one in five homes) have a value below $400,000.  Of course most of these properties are not located in the desirable areas of the city, but they are available.
Many potential first home buyers either still live with their parents or rent within areas close to where they work and socialise. For those living with their parents, it’s likely that the home they are currently residing in was not their parents first home. I’m sure if you asked many of those parent’s they would say that their first home was vastly inferior to their current home (ie they upgraded when they could afford to). For those renting in inner city areas, the reason why property prices and rents are so high in these areas is that demand is very strong while supply is quite limited which in-turn results in the high prices you see within these areas.
Given this, the prospective first home buyer is, in most instances, going to have to make a sacrifice in order to enter into home ownership.  As I see it, first home buyers need to make one of two major sacrifices; either move away from their local area to an area where home values are more affordable in order to enter the market or buy something which is at the lower end of the local market (which will often be a unit rather than a house). The strategy for someone buying their first home should rarely be to buy at the  suburbs median selling price; it should be to buy an entry level property.  Of course varying levels of deposit and income will dictate what the purchaser can reasonably afford to borrow and repay.  Over time, the first home buyer should see some capital growth and it would also be reasonable to expect that they should also experience an improvement in their employment conditions (more pay/promotion/new role) which would eventually help in assisting them to upgrade.
Looking at my first home buying experience, the above scenario parallels my own. I have to admit, the home was pretty horrible but it was in the inner city location I wanted.
My first purchase was a two bedroom, one bathroom unit in Fortitude Valley in Brisbane.  The location was great but the unit was not so great.  The complex was largely utilised for short term accommodation and although the unit had two bedrooms and one bathroom, outside of those three rooms it had one further room which functioned as a kitchenette, lounge and dining room.  I purchased the property for $248,000 in July 2005 and sold the property in April 2010 for $334,000 effectively five years later.  At the time of purchase, the median unit price within the suburb was $309,240 and by the time of sale the median unit price in the suburb was $400,000.
The unit was purchased at a price well below the suburb median and upon sale the price had increased by 35%.  In comparison the median sale price across Fortitude Valley had increased by a lower 29%.  At the time I was single so I also had a friend come and live with me which assisted in making the mortgage repayments.
By the time I sold the property I had purchased a subsequent property which was a house, once again it was purchased at a price below the suburb’s median.  I had managed to make a profit on the sale of my first home and purchased a more expensive property, I had also benefitted from an increase in salary over the time which made repayments easier.
In my experience the choice to purchase a first home is never an easy one.  It is often the case that what you think you should be able to get for your money and what you actually can get are very different.  But having an understanding of your budget and doing your research to get a realistic expectation of what properties and in what location you can afford to purchase takes some of the pain out of the house hunting process and purchasing.
Undoubtedly some people will not be able or willing to purchase but bemoaning the high cost of housing in the local area is unlikely to change the situation outside of wide-spread changes to government policy(ies).
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
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ckusher-ujnxiKuFQs

Seven reasons Australia's housing is expensive; is it out of reach for first home buyers? 

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In my previous article, '<a href="https://www.propertyobserver.com.au/finance/australian-property-prices-explained-independent-analyst/2014011367181" target="_blank">Australian property prices explained</a>', I presented a chart that provided very accurate narrative on what has happened in the Australian property marketover the last three decades.  

It is safe to conclude that the same concept which allowed for the description of the past with such accuracy, should also be able to provide a reasonable guidance for the future.  
Of course, predicting exactly what will happen in 2014 and beyond is a tall order. Life is known to create such a variety of unanticipated scenarios that the reality will almost certainly play out differently to what everybody expects.  
Therefore, I prefer to think about the future in terms of a range of possible outcomes and likely probabilities of occurrence rather than as a single, definite result.  
The real benefit of such an approach is knowing how changes in economic conditions can potentially affect the outcome - not in picking the exact end result in advance.  
Since changes in some economic factors will have more profound effects than others, if you can identify in advance what are they, you can watch out for the tell-tale signs that a particular scenario is playing out – and act accordingly.  
You only need to be right about the direction property prices are heading to be able to benefit.
Please consider what follows with caution - in the “what if” category, rather than a certainty.  
Based on the income capacity of working Australians, residential property in this country is not overpriced and prices are far from bubble territory.  
The proof is in relative changes in the cost of buying over the last 27 years, which has been significantly below the relative changes in personal incomes over that time. Below is a slightly different representation of that information to highlight this point. 
<img src="/images/stories/2014/01/31/arek_jan_31_one.jpg" width="470" height="299" alt="arek_jan_31_one">
By rearranging the data we can create a chart that shows how much more property prices could increase at present and still be considered affordable (in relation to current incomes and as benchmarked to 1986). 
<img src="/images/stories/2014/01/31/arek_jan_31_two.jpg" width="470" height="301" alt="arek_jan_31_two">
The above chart indicates that current property prices are potentially undervalued by as much as 45%. Of course, this does not mean that prices will immediately move by this much but the potential for a substantial jump is there.  
Yet another perspective using the same underlying data reveals that conditions are now starting to resemble those in 2009. Although affordability in 2009 was not as extreme as in late 1990’s, it nevertheless led to a substantial price increase in 2010.
<img src="/images/stories/2014/01/31/arek_jan_31_three.png" width="470" height="277" alt="arek_jan_31_three">
Therefore, as history shows, if interest rates remain mostly unchanged and incomes keep growing, we can anticipate a significant jump in property prices in coming years.  
The increase could either be a rapid advancement of 10-20%, or even 30%, in the next 12-24 months if the 'good times' perspective prevails or, if pessimism dominates, it could result in an even more substantial jump but in the more distant future.  
Of course, this scenario can only play out on the proviso that there are no unexpected shocks applied to the system, such as a major international conflict, another economic calamity in the region, another collapse of world financial system, or a major natural disaster – to mention a few obvious cases.  
In terms of further outlook, if the relationship between costs of buying, incomes, rents and prices hold in the future, and the current rate of income growth continues, then it can be estimated that from now to the end of 2023 property prices could grow by as much as 140% under a historically low interest rate scenario (i.e. 5% per annum), or as little as 20% under a high interest rate scenario (i.e. 10% per annum).  
Under a more probable scenario of slower growth in incomes and interest rates averaging 7% per annum over the next decade, prices can still be expected to grow by 60% in the next 10 years.  
A much gloomier future is also possible but the probability of this scenario is rather small at this point in time.  
That is, a 40% drop in property prices is possible in the next decade but it would take extreme economic conditions for this scenario to play out. In particular, mortgage rates would have to persist at close to 20% per annum for a good part of the decade and income growth would have to drop to 2% per annum to bring prices down by this much.  
In conclusion, the outlook for property prices in Australia is positive - unless of course the world encounters another economic disaster of a magnitude that is hard to even imagine.  
Some insist that the next big event is 'just around the corner' so, it would be wise to keep an eye for the tell-tale signs of possible troubles brewing somewhere in the world but there is no obvious reason to panic just yet.    
Arek Drozda is an independent analyst who has worked in the public and private sectors for over 20 years in business development, data analysis and in building geographic information systems.
You can contact Arek on <a target="_blank" href="https://twitter.com/arekdrozda">Twitter</a>.
 
 
 
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Australian property prices in 2014 and beyond - a peek into the future

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The first week of February looks to be a busy one for property investors. We look at the dates to keep in mind, and what the indicators might mean for you.
February 2: RPData/Rismark Home Value Index
Marking home price trends by suburb, postcode, capital city and state, the RPData/Rismark Home Value Index is released on a monthly and quarterly basis. CommSec expects that the latest release may show a price lift of 0.8% in January.
February 3: TD Securities inflation gauge (January), ABS building approvals (December), ANZ job advertisement data
The TD Securities and the Melbourne Institute have devised their inflation gauge to indicate monthly movements in the inflation rate, with a one month lag. As always, keeping an eye on inflation will allow investors to have a better idea of future interest rates.
As we’ve <a target="_blank" href="/news">noted before</a>, increasing building approval rates can indicate a possible oversupply of property in the future. It’s expected that approval rates stayed flat in December.
February 4: Reserve Bank of Australia (RBA) board meeting
The RBA cut the official cash rate last August to an <a target="_blank" href="/news">all-time record low of 2.50%</a>.
Since then rates have remained on hold and our <a target="_blank" href="/news">experts predict</a> that the cash rate will remain unchanged this month.
February 6: ABS international trade data (December) and retail trade data (December)
Thursday’s data releases will help investors gauge the state of the economy. We’ll find out the extent of the country’s trade deficit (CommSec is expecting the deficit to near $350 million), and whether retail sales have increased in the last quarter.
February 7: RBA statement on monetary policy
Investors will have a better idea of the RBA’s monetary policy stance after Friday. It remains to be seen whether the RBA is comfortable with the December quarter’s <a target="_blank" href="/news">higher than expected</a> inflation figures. 
jrichardson@propertyobserver.com.au
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For the diary: The big dates in property for the first week of February

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In 2013 the property market had a bumper season. House prices in major cities rose substantially, investors bolstered the Sydney market to new heights and clearance rates in Melbourne and Sydney returned to three-year highs.
The median house price in Sydney rose by 15.1% to $793,000 and in Melbourne the median price jumped 8.6% to $569,000, according to Australian Property Monitors (APM).
With house prices through the roof and predictions first home buyers are being locked out of the market by the skyrocketing values, 2014 is set to be an interesting year in property.
APM chief economist Andrew Wilson gave us his five predictions for 2014.
1. House price growth to slow
Sydney and Melbourne were the hot markets in 2013, but this is set to change in 2014.
Wilson says house price growth peaked in Melbourne and Sydney in the December quarter last year.
“Sydney reached record-level price growth rates, the best in 10 years, and was overall very high by historical standards, but economic headwinds are blowing against medium-term growth in house prices now,” he says.
“The lower dollar will impact inflation, wage growth has slowed and this will impact living standards.”
Wilson says the level of growth reached in 2013 will be difficult to sustain.
“Markets will start well, there is still a lot of energy in the market, but this will moderate and we’re looking at likely growth rates of about half of what was achieved in 2013 in Melbourne and Sydney,” he says.
“There is more pessimism than optimism about the New South Wales and Victorian economies. The Sydney market will also have issues to do with affordability because of low income growth.”
2. Brisbane and Perth – the new hotspots
While Melbourne and Sydney slow, Brisbane is tipped to bang.
“The Brisbane market is still in catch-up mode, but the Queensland economy is ramping up with regional centres recording growth. There will be an increase in job seekers in Queensland too, as they shift from Melbourne and Sydney where the jobless rate is higher,” Wilson says.
“Investors will be more interested in Brisbane real estate because of its potential for high yields and prospects of high capital growth.”
Wilson says the Adelaide market is resilient, despite there being issues with its local economy.
“It doesn’t have that volatility in the housing market, so modest growth of about 3% is expected. Canberra is a similar story with jobs being shed in the public service, so house price growth of around 3% to 5% is expected in 2014.
Hobart is starting to show some improvement in its property sector, so modest house price growth can be expected.
Wilson says Perth is tipped to perform well, continuing its strong run in the property sector with growth between 6% and 8% for 2014 predicted.
3. Clearance rates to moderate
The cause and effect between clearance rates and house price growth was observed in 2013, with strong clearance rates reflecting higher prices.
Wilson says one of the early signals of the market starting to moderate will be clearance rates falling back from high percentages in Melbourne and Sydney.
“I expect to see that as a forward indicator of moderating buyer activity. This will be apparent in the June quarter, rather than March and it will be interesting to see if they can be maintained in Sydney,” he says.
“Clearance rates started to fall away in November-December last year, but there was a lot of stock going into the market. With record levels of properties auctioned, this could have easily caused clearance rates to fall slightly, so we’ll see how it pans out over March.”
4. Suburbs to watch
Sydney’s prestige market had lagged behind the rest in 2013, but it’s expected to pick up pace in 2014.
“It started to pick up toward the end of the year and it will take advantage of that increased confidence,” Wilson says.
“Sydney’s northern shore and eastern suburbs will do well. Growth levels were modest in 2013 and there is room to grow there. If we see strong results from the sharemarket, the prestige market will keep bubbling along.”
In Melbourne, the expensive areas of the eastern suburbs were the best performers of 2013.
“The eastern suburbs have been the star performers of 2013, but there are questions as to whether they’ve reached affordability barriers,” he says.
“They still have some upsides like Sydney’s premium markets, but generally there will be a moderation of price growth. Declining numbers of first home buyers is also likely to impact the outer eastern suburbs.”
5. Owner-occupier versus investors
Each city has its own property market characteristics and in 2013 investors dominated the Sydney market, while owner-occupiers were more prevalent in Melbourne.
“In NSW there were record numbers of investors recorded by the Australian Bureau of Statistics,” Wilson says.
“But we have to be mindful of overshooting the rental market in Sydney and I question if there’s enough demand. We’re already seeing rents flat lining and vacancy rates start to rise.”
Wilson says this will put pressure on investors looking for cash flow.
“The only hook will be prices growth, but I think investors will start to look at Brisbane instead, and possibly Adelaide to a lesser extent.”
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany.</a>
 
 
 
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Andrew Wilson's five property predictions for 2014

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The Australian Housing and Urban Research Institute (AHURI) has concluded that an estimated 9% of all Australians aged 50 and over had downsized their dwellings to homes with fewer bedrooms between 2006 and 2011.
Merging the results of a 2011 2,819-participant survey and ABS data, AHURI estimates that the largest proportion of downsizers in Australia (comprise over 81,000 individuals) were between aged between 55 and 64.
Of the participants who had downsized, 47% had moved into a two bedroom home, 10% moved into a one bedroom home, and 1.7% into a bedsit. Individuals who moved downsized into three bedroom homes comprised 42% of all downsizers. However, downsizers generally didn’t move far – 70% of participants moved to a home in the same suburb or region they were previously living in.
Changing lifestyle preferences were the most common factors contributing to the decision to downsize, nominated by 38% of the participants. Other reasons nominated included the inability to maintain a larger house or garden, leaving home, or retirement. Participants also raised health family circumstances, with 12% nominating relationship breakdown as a motivating factor, while 7% reported the illness of a partner or self, and the same proportion nominated their partner’s or their own disability.
The institute raised financial barriers as a disincentive for relocation for senior Australians. In 2006-2011 period, only 18% of Australians aged between 65 and 74 and 16% of those aged 75-74 moved house, while 46% of people aged between five and 54 relocated in the same period. According to AHURI, while some may expect downsizing to free up housing capital for older homeowners, the demand for two-bedroom houses, especially in New South Wales, has driven up housing prices and reduced the financial benefit of downsizing. AHURI also raises the impact of housing capital gains on aged pension eligibility.
AHURI’s full report can be seen <a href="https://www.ahuri.edu.au/publications/projects/p70687">here</a>.
<a href="mailto:jrichardson@propertyobserver.com.au" target="_blank">jrichardson@propertyobserver.com.au</a>
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Older Australians downsizing homes, but barriers still exist

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In a turnaround for preferred property types in 2013, value growth for houses outperformed units whereas in 2012 it was the opposite. However, I question whether this will last during 2014, especially if buyers are locked out of markets due to affordability constraints.
Using the results in the December 2013 RP Data-Rismark Home Value Index, the combined capital city house values increased by 9.9% in 2013, compared to a 9.0% increase in unit values.
Although house values rose at a faster pace than units over the year, capital city houses and units recorded similar annual rates of growth over the past five years, at 4.8%, and 4.7% per annum respectively.
If we look at the median selling prices for houses and units across all capital cities over the final quarter of 2013, unit prices were around $95,000 lower than median house prices.
Across the individual capital cities, Adelaide had the smallest gap at $80,000 while in Sydney it was $218,000, Darwin $145,000, Melbourne $144,000 and Canberra $138,000; all recorded a differential which is greater than $100,000.
<img src="/images/stories/2014/01/29/kusher-jan-29-one.gif" width="470" height="233" alt="kusher-jan-29-one">
Based on these results, buyers may now opt to purchase units over houses, particularly in the more expensive cities where units are in abundance in the inner city areas and where the price difference between houses and units can be significantly greater than those across the broader capital city areas.
By percentages, the median unit prices across the combined capital cities are currently -16.5% lower than median house a price which is a record high differential. At the same time in 2012, the differential was - 14.3%.
<img src="/images/stories/2014/01/29/kusher-jan-29-two.gif" width="470" height="231" alt="kusher-jan-29-two">
Again, the widening gap between house and unit prices is likely to drive more purchasers to the unit market rather than the detached housing market.
At an individual capital city level, the price difference between houses and units has been increasing:
•Sydney - 28.1%
•Melbourne - 23.0%
•Brisbane - 18.5%
•Adelaide - 19.8%
•Perth - 18.3%
•Hobart - 27.1%
•Darwin - 24.5%
•Canberra -24.2%
<img src="/images/stories/2014/01/29/kusher-jan-29-three.gif" width="470" height="234" alt="kusher-jan-29-three">
For Sydney, Melbourne and Hobart, the differential in prices is at an all-time high. For Brisbane the price differential is the highest since early 2010, and in Adelaide it is at its largest level since the middle of 2008. The gap has closed slightly recently in Perth and Canberra, whilst in Darwin the differential is the greatest since late 2010.
If dwelling approvals data is anything to go by, it seems that in many of the capital cities new supply will be dominated by units rather than houses.
Over the 12 months to November 2013, approximately 50% of all approvals were for units in Melbourne and Brisbane while in Sydney, Darwin and Canberra, more than 60% of all dwelling approvals over the year were for units.
<img src="/images/stories/2014/01/29/kusher-jan-29-four.gif" width="470" height="237" alt="kusher-jan-29-four">
With strong value increases in some cities across 2013 coupled and with an increase in selling prices, we may see price sensitive buyers start to look at the unit market where there are many more options available.
As to who should be buying where, first home buyers should look at older units in inner city areas as these can offer more affordable entry points into the market while still being within popular locations. Units also offer a good housing alternative for those looking to downsize.
From an investor’s perspective, units typically enjoy stronger rental demand and superior gross rental yields to those awarded by houses.
All of these benefits are in most cases afforded at much lower prices than houses within the same local area.
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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Mind the price gap: Units currently better value for buyers than houses

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Mobile payments company Square, founded by Twitter co-founder Jack Dorsey, is rumoured to be coming to Australia, potentially providing small businesses with an easy in-store payment solution.
Speculation started circulating earlier this month after a photo was posted on Twitter of Dorsey and Communications Minister Malcolm Turnbull, accompanied by the message “disruptive innovation soon to come to Aus”.
Since then sources have confirmed to The Australian Financial Review preparations have begun to launch the business down under.
The technology has been a success in the United States and should it enter the Australian market is expected to disrupt the banks and provide businesses with a cheaper and simpler solution to electronic payments.
Square allows businesses to accept electronic payments on their iPhones, iPads or Android devices through the attachment of a card reader.
It’s also created the Square Wallet, an app which allows people to pay at some US retailers by simply saying their name.
Pin Payments head of business development Chris Dahl told SmartCompany new players coming into the market help to drive innovation.
“It’s a good thing for Australian tech companies and also for Australian businesses. From our experience helping small and medium-sized businesses get online and start transacting quickly, this is effectively what Square will be able to do in the retail space,” he says.
“We help online business and Square is a clear alternative for the retail space. We think it’s great and we’ve been following its progress.”
Dahl says there are local competitors to Square such as Kounta, but more competition in the space is a good thing.
“Anything which helps businesses to not have to liaise with the banks is a good thing,” he says.
“Before solutions like Pin Payments, or in retail companies like Square, businesses had to go to one of the banks, approach their merchant team and explain the business. The bank would generally ask for a business plan and a transactional history and the process can take weeks to months.”
Dahl says online businesses frequently approach them after waiting months to set up a payment system with a bank.
“Banks are big organisations and for small-to-medium-sized businesses where they might not have a business plan completely fleshed out or have a transactional history, players like Pin and Square are filling that void,” he says.
In the past two years <a href="https://www.smartcompany.com.au/growth/economy/33127-the-future-of-payment-technology-new-systems-which-could-help-your-business">payment systems have started to develop rapidly</a>, as Australian businesses have pushed for innovation in the space.
In 2013 Pin Payments launched, Braintree came to Australia and PayPal launched new technology allowing businesses to accept payments via mobile phone and letting consumers order and pay on the go.
Speaking to the Australian Payments Clearing Association in 2012, Reserve Bank of Australia governor Glenn Stevens said elements of Australia’s payments infrastructure are “a bit dated”.
“It is very clear that both individuals and businesses are demanding greater immediacy and greater accessibility in all facets of their day-to-day activities,” Stevens said.
“This includes payments.”
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany.</a>
 
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