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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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 reported seasonally adjusted estimate for total construction work done rose by +2.7% to $53,427 million for the September quarter, outshining expectations and being driven by increases in non-residential and engineering construction.
<a href="https://2.bp.blogspot.com/-O10dgtQhl98/UpkudK9hXuI/AAAAAAAAK98/mKcYB0PLYgc/s1600/ABS+Construction.jpg" imageanchor="1"><img height="255" src="https://2.bp.blogspot.com/-O10dgtQhl98/UpkudK9hXuI/AAAAAAAAK98/mKcYB0PLYgc/s400/ABS+Construction.jpg" width="470"></a>
Source: ABS
It was pleasing that total construction work done beat analyst expectations, yet not so smart was the fact that residential construction once again went nowhere, for a third consecutive print. Given that the economy is supposed to be rebalancing away from engineering construction (i.e. mining) and into residential projects, this doesn't look so great.
If you live or work in inner Sydney this might come as a surprise given that there is an uplift in construction happening here. However, it is not so elsewhere, and for this reason property analyst Michael Matusik is in the camp of those <a href="https://matusikmissive.com.au/2013/11/27/rates-to-fall/" target="_blank">expecting further rate cuts</a>:
"The continued subdued nature of new housing starts – despite record low interest rates &amp; a high number of actual dwelling approvals – means a lower than anticipated economic growth rate for next year; something below 3% per annum.  Very few new jobs will be created across the country if GDP stays below 3%.  Anything less than 2.5% usually means job losses.
"Whilst the RBA jawbones for a lower Aussie Dollar – yes, something in the mid 80 cent range would be very good – the only real tool we have to help get housing starts increasing again (and by ten-plus percentage points per annum) - and with that type of growth rate, many more jobs – is interest rates.
"At present new housing construction – for the year ending September – grew by just 1% across Australia.  New housing construction is actually contracting across Queensland – down 2% on last year.
"Despite talk to the contrary of late, interest rates need to fall again and soon. We need to build more new homes."
Matusik is <a href="https://www.propertyobserver.com.au/trends/seven-reasons-why-prices-might-rise-25-in-select-australian-east-coast-cities-over-next-three-years-michael-matusik/2013081464226" target="_blank">b</a><a href="https://www.propertyobserver.com.au/trends/seven-reasons-why-prices-might-rise-25-in-select-australian-east-coast-cities-over-next-three-years-michael-matusik/2013081464226" target="_blank">ullish about the outlook for east coast residential property</a> and in particular for Sydney, Melbourne and south-east Queensland, noting that prices could rise by as much as 25% over the next 3 years.
Private capital expenditure - actual and expected
Most of us are probably familiar with the doomsday scenario by now: mining capital expenditure tanks "off a cliff" through 2014 and beyond, our terms of trade collapse, unemployment rises and Australia sinks into recession. In contrast, what we actually want to happen is a relatively smooth transition from mining construction to mining production.
In this context, total new capital expenditure rebounding by 3.6% in the third quarter was a welcome surprise to the upside.
<a href="https://1.bp.blogspot.com/-kVRGoW5GxdM/UpkxlZdSeFI/AAAAAAAAK-I/2bdRkSRgow0/s1600/private+and+actual.jpg" imageanchor="1"><img height="296" src="https://1.bp.blogspot.com/-kVRGoW5GxdM/UpkxlZdSeFI/AAAAAAAAK-I/2bdRkSRgow0/s400/private+and+actual.jpg" width="470"></a>
Source: ABS
The "estimate four" figure for total capital expenditure in for 2013-14 came in strong at $166,832 million which is 3.2% higher than the estimate three for 2013-14. In plain English, this means that capital expenditure next year is expected to hold up a little better than had been feared - perhaps more of a plateau or a gentle taper rather than a cliff?
<img height="180" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/1ecf42b5ec12e8bcca2573460014f2df/Body/0.121E!OpenElement&amp;FieldElemFormat=gif" width="470">
Source: ABS
Similarly, the estimated figure for expected mining capital expenditure ticked up a little. The widely feared 'capex cliff' has not materialised to date.
<img height="180" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/1ecf42b5ec12e8bcca2573460014f2df/Body/1.3B8C!OpenElement&amp;FieldElemFormat=gif" width="470">
Source: ABS
There could be any number of reasons for this, including project cost overruns. Paradoxically, such inefficiencies appear to be a positive in capital expenditure actual prints (in line with the 'parable of the broken window' - if our aim it simply to boost GDP we should all go and smash a window tomorrow).
From my own experience I know how hard it can be to estimate capital expenditure in mining surveys and material blowouts are not uncommon. Expected figures which may appear entirely reasonable at the feasibility/FID stages can go badly awry over time. Labour costs are high in Australian mining and construction activities are tightly regulated (as they might say in mining parlance: "you can't go to the bathroom without filling out a form", or words to that effect).
New home sales
A weaker month <a href="https://hia.com.au/media/~/media/Files/MediaMicrosite/Media%20Releases/New%20Home%20Sales%20Take%20a%20Breather%20in%20October.ashx" target="_blank">recorded by the Housing Industry Association in October</a>. The small sample sizes mean that the data set is volatile, particularly at the state level. Clearly, new home sales are significantly stronger than they were in Q3 2012, with total sales up by around 25% year on year (in particular house sales are up strongly by more than 33%).
The largest increase across the three months to October this year was in South Australia (+10.5%), followed by Victoria (+6.0%), Western Australia (+5.3%), Queensland (+5.1%), and New South Wales (+2.0%). The trend in new home sales remains up, albeit not in an earth-shattering manner.
<a href="https://3.bp.blogspot.com/-xdqmii0NWeM/UpkyzMz-H3I/AAAAAAAAK-Y/hGcepL1te2E/s1600/HIA.jpg" imageanchor="1"><img height="295" src="https://3.bp.blogspot.com/-xdqmii0NWeM/UpkyzMz-H3I/AAAAAAAAK-Y/hGcepL1te2E/s400/HIA.jpg" width="470"></a>
Source: HIA
Affordability
The HIA caused a stir by <a href="https://hia.com.au/media/~/media/Files/MediaMicrosite/Media%20Releases/Low%20Interest%20Rates%20Continue%20to%20Drive%20Improved%20Housing%20Affordability.ashx" target="_blank">also releasing its housing affordability index</a> this week, showing 'affordability' at an 11 year high thanks to 225 basic points (2.25%) of interest rate cuts since 2011. Clearly repayments have dropped sharply, but entry prices remain elevated.
Dwelling prices
RP Data's <a href="https://www.rpdata.com/research/daily_indices" target="_blank">Daily Home Value Index</a> sees dwelling price growth lately as moderate or having moderated everywhere except for Sydney. Melbourne dwelling values will be reported as having fallen by more than 2% in November, although to some extent the index is likely have been impacted by a change in the sales mix.
<a href="https://3.bp.blogspot.com/-3fJJmMKEbM4/Upk2VSnIvqI/AAAAAAAAK-g/52Z1jZgRILU/s1600/RPD.jpg" imageanchor="1"><img height="212" src="https://3.bp.blogspot.com/-3fJJmMKEbM4/Upk2VSnIvqI/AAAAAAAAK-g/52Z1jZgRILU/s400/RPD.jpg" width="470"></a>
Source: RP Data
Summary and risks to the outlook
So, where does this all leave us? The rebound in total capital expenditure combined with improved retail sales suggests that the Q3 GDP print next week might be a little better than had been expected, perhaps in the realm of 0.6%-0.7% for the quarter. However, residential construction is not firing across Australia and the official cash rate appears set to be stuck in the 2-3% range for the foreseeable future.
<a href="https://3.bp.blogspot.com/-J84z62z_mms/Upk2zTtBB3I/AAAAAAAAK-o/HYL6l987DsA/s1600/RBA+rate+tracker+301113.jpg" imageanchor="1"><img height="290" src="https://3.bp.blogspot.com/-J84z62z_mms/Upk2zTtBB3I/AAAAAAAAK-o/HYL6l987DsA/s400/RBA+rate+tracker+301113.jpg" width="470"></a>
Source: ABS
I've alluded to some of the risks for 2014 and beyond above, including any severe drop in mining capital expenditure or a major weakening of our terms of trade from historically very high levels.
<img alt="Terms of Trade graph" height="382" src="https://www.rba.gov.au/chart-pack/images/15-commodity-prices/15br-tot-small.gif?accessed=2013-11-30-12-31-27" width="470">
Mining production is increasing, the iron ore spot has held up well at $135/tonne at a time of year when support may begin to return to the price, and the Aussie dollar is threatening to sneak into the 80-90%range which may help producers to remain competitive.
The biggest unknown is probably the outlook for China. No surprises that growth in China looks set to hit its target, but significant question marks still remain about the stability of the model. The Chinese economy is imbalanced, with a very high percentage of GDP growth being driven by investment rather than by consumption: the building of apartments (tens of millions of which reportedly sit vacant), infrastructure and factories.
Whether or not China is able to rebalance away from investment towards consumption in the years ahead is unclear, and consequently it needs to be considered whether the growth rates that we have come to expect from China are sustainable going forward.
<img alt="GDP Growth – China and India graph" height="404" src="https://www.rba.gov.au/chart-pack/images/1-3-world-economy/1tr-gdpci-small.gif?accessed=2013-11-30-12-30-57" width="470">
 
<hr>
 Pete Wargent is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
 
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
 
 
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pwargent-M4siyDbqQY

Some positive signs for the economy, but residential construction is going nowhere

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December brings out the opportunity for property experts to delve into their Christmas stockings and bring out a crystal ball to predict what some of the key trends for the pending 12 months may be.
Whilst uncertainty remains over weather commercial tenant demand will bounce back or if shoppers will start buying anything other than groceries again, one thing that is certain is that the continued emergence of Asian capital into all commercial property markets across our major capital cities.
Whilst the latest wave (post 2010) of Asian investment is being compared to the highs of the Japanese assault on Australian property in the early 1990's when  investigate in more detail it is so different for so many reasons and on so many different levels.
Malaysian and Singaporean investment dominated 2013 with a wide range of transactions being completed in both Melbourne and Sydney, deals varied from development sites to commercial office investments but the flow was strong and is expected to remain this way in 2014.
Whilst it is widely accepted that the stimulant for investors from these countries to target Australia has been based on their own political instability, the fall in the value of the Australian dollar and cooling measures that have been instilled on developers in their home countries, the Chinese investors and developers seem to be driven by many different reasons to their nearby counterparts from South East Asia.
Chinese investments into the Australian property market arguably presents our industry with the greatest opportunity for job and industry growth than any other single structural buyer shift spanning back more than 30 years.
Next year will see the continued dominance of Chinese investors wanting to acquire both development and passive opportunities as the relationship between Australian property and Chinese players grows with additional education across a wider range of markets, and more established infrastructure to assist the Chinese in completing transactions locally. Good news stories are being sent back to China off the back of sustained strong performance for Chinese developers, as they continue to deliver on many projects that they have been working on for some time.
As a property industry, we must better equip ourselves to benefit from the structural change that is occurring on so many levels. We must work hard and with purpose to ensure that we do not jeopardize in any way the intent and established level of comfort to date that Chinese investors have towards Australian property.  We must remain competitive on all levels from the federal government to local council and do what we can to encourage, foster and assist in the development of Chinese investment into our markets.
 
<hr>
 Mark Wizel is director of CBRE Melbourne city sales and Victorian retail investment properties
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mwizel-Mt6xbQordU

Chinese investment is arguably the greatest opportunity for our industry in over 30 years

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Over <a target="_blank" href="https://www.propertyobserver.com.au/developments/the-buyer-s-journey-the-gap-between-today-s-reality-and-future-plans-is-what-the-sales-centre-must-fill/2013112566584">the last few weeks</a> I have looked in detail at some of the <a target="_blank" href="https://www.propertyobserver.com.au/residential/the-fundamentals-of-a-creating-a-great-buyer-s-experience/2013111866420">key project marketing tools</a> we use to create and <a target="_blank" href="https://www.propertyobserver.com.au/residential/delivering-a-top-buyers-experience-real-estate-has-to-compete-like-any-other-service/2013110466153">enhance the buyers experience</a> which in turn is the key factor that underscores brand values across every project, our marketing brand and personal brand.
Now to finish this topic I want to take a detailed look at personal service. Because I believe this is where success is created and in such a highly charged market one on one service is still the winner, not only in the short-term but also for the long-run, after all market conditions are always changing and a good ‘personal brand’ is a real asset. Not only for the individual, but also across the board impacting every aspect of a project and the entire sales path.
Clearly what happens at a face to face level will influence the buyer’s experience and so I always give high priority to supporting and training the every member of the sales team. And my definition of team is extensive and is not only confined to the direct selling team members. To create a service focused environment I fervently embrace team sales training, structured (but not dogmatic) sales paths and importantly a diverse and structured role for sales mentoring and most importantly recruitment policies that looks at always finding leaders.
Seven seconds to make a first impression
One of the main reasons personal service is so important is the fact that you only get one chance to create a good impression. The moment that a new buyer, or for that matter a potential new client, sees you, both their and your brain gets busy asking a thousand questions: Is this someone to approach or to avoid? Friend or foe? Hard work, likeable, or a genuine prospect? And according to lots of reports this all happens in the first seven seconds of meeting.
We can all appreciate that in a sales environment first impressions count. While none of us can avoid making snap decisions with good training a robust sales path we can aim to make these decisions work in our favour. Likewise getting off to a good start also naturally puts the buyer off to a good start.
All important first impressions are more heavily influenced by non-verbal cues, but the environment can also be important. As <a href="https://www.propertyobserver.com.au/developments/the-buyer-s-journey-the-gap-between-today-s-reality-and-future-plans-is-what-the-sales-centre-must-fill/2013112566584">discussed last week</a>, this is where a well-planned and designed sales centre will speak volumes in helping to make a great first impression.
Key ways the team can make a positive first impression
It’s not my intention here to create a how-to manual, but I think it is always important to remind ourselves of the importance of keeping on message when we engage buyers. A big point is to always adjust your attitude, always be interest and fresh. People pick up on our attitude and that includes a late arrival at the sales centre ten minutes before closing time!
Our personal posture and a smile will always say “I’m friendly and approachable” and you’re welcome to be here, I think we always need to keep in mind that for most buyers these first few steps can be a little hesitant and with a degree of emotion involved.
Another golden rule, that none of us are too smart to overlook is to always make eye contact. I read once that if you open your eyes slightly more than normal to simulate eye contact we signal of recognition and acknowledgement, and that’s how we want every buyer to feel, isn’t it?
Then we come to the moment to shake hands and with an attentive body posture establish rapport. But as we all know in varied cultural circumstances we need to be respectful of the other person’s space and culture, and as we deal with more and more offshore buyers there’s a need here for awareness and sensitivity.
And so if you’ve got just seven seconds it’s good to remind ourselves of how when you think about it seeing these simple ideas in action is frequently the secret of great salespeople, they do it by nature, but I am also sure they think about every new encounter so as not to waste an opportunity.
Article continues on next page. Please click below.
 
<hr class="system-pagebreak">
It all starts with recruitment
To finish off this important topic, I hope that I have established that the face to face relationship that is established between the consumer, the potential buyer and the sales person that he or she deals with is a make or break point in every project’s sales cycle.
While no sales person will intentionally risk a potential sale with poor service, the stakes for the project, your brand and reputation are high and so the recruitment of the sales team is a very important step. It is a step that will greatly impact on the success of any project.
The sales team should be matched to the project and team members should be used in different ways and times to try and ensure the best results. It should also be kept in mind that even the best team players will become stale. This is another aspect of recruitment that has to be managed. It’s important to remain fresh and keep ideas with lots of energy.
While a sales team member might have a great deal of project knowledge and history care is needed to make sure they always remain bright, active and committed to the project. It can be possible to start to develop blinker vision and this can slow sales and might not show up until it’s too late, with the damage done.
External agents or in house teams
Sales teams can be recruited and then employed in-house by the developer; or the developer can appoint a real estate agent to market the project; or like some developers, they appoint accredited agents working under the project’s branding. There can also be a mix of internal teams and external agents. My choice is for a clear cut full service agency model as the most accountable and successful way to market projects.
In either case, for a major project the way the sales force is structured and managed is of great importance. It’s the biggest part of the marketing dynamic.
Both options have their own advantages and both have some disadvantages and while consumers may not see any difference in the delivery of the service they receive, there is a need to be sensitive to this appointment within the overall marketing plan.
We all know that buyers are, and I am sure we can all agree on this, the lifeblood of every project. At times markets are full of activity, selling well, running smoothly and this is usually not by accident. While big picture market dynamics are always a force, so too is the service we give and how we manage and deliver our project marketing roles, we should never take buyers for granted no matter how markets are performing, and I am sure that the most successful sales people never do.

<hr>
Peter Chittenden is managing director for residential of <a target="_blank" rel="nofollow" href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx">Colliers International.</a>
 
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pchittenden-eLqUUC8TWW

Face to face contact can make or break the buyer's experience

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At any other time, Friday’s decision by treasurer Joe Hockey to reject Archer Daniels Midland’s (ADM) A$3.4 billion takeover bid for GrainCorp might have been just another controversial foreign investment decision.

Indeed, were it not for a <a href="https://www.businessspectator.com.au/news/2013/11/5/politics/graincorp-bid-splits-coalition" target="_blank">widely</a> <a href="https://www.smh.com.au/federal-politics/political-news/graincorp-takeover-failure-stirs-fury-among-some-liberals-20131129-2yh7x" target="_blank">reported</a> split in the Coalition over the proposal, the decision may not have made it out of the business section of the national press.
However, inserted within the <a href="https://theconversation.com/hockey-kills-graincorp-takeover-by-adm-experts-react-20941" target="_blank">ADM-GrainCorp decision</a> was a never-before-seen rationale for rejecting a foreign investment: the tenor of community attitudes and level of popular support. This seemingly minor caveat may radically change the way in which foreign investment reviews are conducted by the Coalition government in coming years.
Australia’s foreign investment framework
Debate about Australia’s foreign investment policy was catalysed in 2008, with the highly contentious “<a href="https://www.ft.com/intl/cms/s/0/a51f903e-d09f-11dc-953a-0000779fd2ac" target="_parent">dawn raid</a>” by Chinalco on Rio Tinto.
Since then, an ongoing series of high-profile foreign investment deals has attracted both intense public and regulatory scrutiny: these include the takeover of <a href="https://www.smh.com.au/national/doubts-over-oz-decision-20090331-9i9t" target="_blank">OzMinerals by China’s Minmetals</a>; the acquisition of Felix Resources by <a href="https://www.bloomberg.com/news/2013-11-13/australian-regulator-said-to-tell-yanzhou-to-cut-yancoal-stake" target="_blank">Chinese state-owned Yanzhou Coal</a>; the failed <a href="https://www.theaustralian.com.au/business/wayne-swan-sinks-84bn-asx-takeover-by-singapore/story-e6frg8zx-1226034348911" target="_blank">Singapore Stock Exchange bid</a> for the Australian Stock Exchange, SAB Miller’s <a href="https://www.ft.com/intl/cms/s/0/0dee9878-173a-11e1-b00e-00144feabdc0" target="_blank">acquisition of Fosters</a>, and the current takeover bid of <a href="https://www.theaustralian.com.au/business/companies/saputo-matches-murray-goulburn-bid-for-warrnambool-cheese-butter/story-fn91v9q3-1226761417207" target="_blank">Warrnambool Cheese &amp; Butter</a> by Canadian dairy group Saputo.
Australian foreign investment policy presumes in favour of foreign investment, and generally does not enforce local ownership requirements. However, investments in a small minority of cases are screened by the Treasurer to ensure they are consistent with the national interest.
This screening process is conducted by the Foreign Investment Review Board (FIRB), and <a href="https://firb.gov.au/content/_downloads/AFIP_2013.pdf">must be undertaken</a> if an investment: a) is from a foreign government investor; b) is a business investment over 15% of the targeted firm and valued at over $248 million; c) is in real estate; or d) is in a defined set of “sensitive” sectors (such as banking, airlines, airports, shipping, media and telecommunications). All other foreign investment applications receive automatic approval.
Reviewed applications are subject to a six-point “national interest test”, administered by the FIRB. This considers:
<ul>
<li>
Impacts on national security
</li>
<li>
Impacts on competition
</li>
<li>
Impacts on Australian government policies
</li>
<li>
Impacts on the Australian economy and community
</li>
<li>
The character of the investor
</li>
<li>
[For state-owned enterprises] The commercial orientation of the investor
</li>
</ul>
Following its enquiries, the FIRB makes a (confidential) report to the treasurer, who may either approve, reject or conditionally approve the investment.
The overwhelming number of screened foreign investments are approved. Over the five years to 2011-12, 38,590 applications were approved (valued at A$860 billion), while only 63 were rejected. The bulk of these were in the real estate sector, and prior to the GrainCorp decision only two major business proposals had been recently rejected: the 2001 <a href="https://www.abc.net.au/pm/stories/s281616.htm" target="_blank">Shell takeover over Woodside Petroleum</a>, and the Singapore Stock Exchange’s 2011 <a href="https://www.smh.com.au/business/singapore-finally-walks-from-asx-bid-20110408-1d6o4" target="_blank">bid for the ASX</a>.
GrainCorp: a new populist precedent?
Friday’s decision is significant because it may set a new precedent for how foreign investment is screened. It would appear the ADM-Graincorp decision is implicitly adding a new, seventh criteria to the FIRB’s national interest test: community attitudes and popular support.
In explaining his decision, Treasurer Joe Hockey <a href="https://jbh.ministers.treasury.gov.au/media-release/026-2013/" target="_blank">outlined two reasons</a> for rejecting the proposal: that there is limited competition in the grains handling industry (presently dominated by GrainCorp), and that there was a “high level of concern from stakeholders and the broader community”. He also argued that “allowing it to proceed could risk undermining public support for the foreign investment regime and ongoing foreign investment more generally”.
<a href="https://www.smh.com.au/business/grain-of-doubt-over-national-interest-case-20131129-2yh6n" target="_blank">Several</a> <a href="https://www.smh.com.au/federal-politics/political-opinion/graincorp-decision-joe-hockey-caught-between-national-and-nationals-interest-20131129-2yfw2" target="_blank">analysts</a> <a href="https://www.businessspectator.com.au/article/2013/11/29/politics/hockey-fails-leadership-test-graincorp" target="_blank">have</a> <a href="https://www.businessspectator.com.au/article/2013/11/29/economy/adms-rejection-goes-against-grain-logic" target="_blank">argued</a> the competition policy rationale is relatively weak. The Australian Competition and Consumer Commission (ACCC) had already <a href="https://www.accc.gov.au/media-release/accc-to-not-oppose-archer-daniels-midland-acquisition-of-graincorp" target="_blank">approved the deal</a> in June on the grounds it would be unlikely to substantially lessen competition, and ADM had made <a href="https://www.theaustralian.com.au/business/latest/adm-ups-graincorp-spending-promises/story-e6frg90f-1226769989671" target="_blank">significant commitments</a> to improve bottlenecks in the grain handling chain.
Thus, it would seem political concerns have loomed large. One consideration appears to be opposition from the Nationals, who had <a href="https://theconversation.com/big-win-for-nats-as-hockey-rejects-graincorp-bid-20948" target="_blank">campaigned</a> <a href="https://www.watoday.com.au/federal-politics/political-news/graincorp-takeover-failure-stirs-fury-among-some-liberals-20131129-2yh7x" target="_blank">hard</a> against the application being approved. But another was widespread community opposition to the deal, with Hockey instructing the FIRB to consider the <a href="https://jbh.ministers.treasury.gov.au/media-release/026-2013/" target="_blank">“wider ramifications”</a> of the deal – including public attitudes – mid-way through the assessment process.
Until now, community attitudes have not been part of the FIRB’s national interest test. While “community concerns” are considered, these are defined in economic terms – a fair return to the community, opportunities for Australian participation, the interests of employees.
The FIRB has not assessed whether an investment is considered “popular”, or how it will influence community attitudes to foreign investment more broadly. Moreover, no recent decision by the treasurer – whether approval, rejection, or conditional approval – has made reference to public sentiments. Until now.
The implications of community attitudes
The ADM-GrainCorp case is of course a single decision, and it is not clear whether this will be a one-off, or will be followed by the Coalition government in future cases. But it raises questions over how community attitudes should be assessed, and whether the FIRB even has the capability to assess them.
Community attitudes are a nebulous and difficult to measure concept. For example: if the majority of the country supports an agricultural investment, but a majority of rural residents oppose it, whose views should dominate? Moreover, the economic policy-focussed FIRB has no experience in assessing community mood, nor the resources or capabilities to do so at present.
Whether this would be a robust test, or simply a “get out of jail free” card that allows the Treasurer to reject controversial cases, remains to be seen.
Secondly, it would significantly reduce legal certainty for foreign investors in Australia. At present, there is a clear set of national interest guidelines, which have been applied in a transparent and consistent manner. A foreign investor will have a good idea as to whether their proposal ticks the boxes before committing, and can be confident the goalposts will not be moved part-way through the process.
Introducing volatile and contested community attitudes into the process may deter investors out of fear their proposals will be decided at the whim of populist politics.
Third, it will “politicise” the foreign investment assessment process. Rather than approving investments based on their economic merits, popular attitudes will also become a key criterion. A number of worrying outcomes may result.
Investment proposals could become an issue for party politics, determined more by the electoral fortunes of the government of the day rather than sound policy criteria. A business’s competitors may try and sabotage a deal by stirring up community opposition, transforming the FIRB process into a politically-contested commercial battleground. Vested interests with something to lose may also use popularity arguments to sink deals, even when they bring net national benefits.
If the example set in the ADM-GrainCorp decision becomes common practice, Australia’s supposedly <a href="https://www.theaustralian.com.au/opinion/columnists/coalition-steadies-the-ship-of-state-as-shaky-labor-hogs-the-headlines/story-e6frg75f-1226718001935" target="_blank">“open for business”</a> approach to foreign investment may change radically.

<hr>
Jeffrey Wilson is fellow of the Asia Research Centre at <a rel="nofollow" href="https://www.murdoch.edu.au/" target="_blank">Murdoch University</a>.
This article was originally published at <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/foreign-investment-and-the-popularity-test-does-graincorp-set-a-new-precedent-20992" target="_blank">original article</a>.
<img width="1" src="https://counter.theconversation.edu.au/content/20992/count.gif" height="1" alt="The Conversation">
 
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jwilson-73uvCTKJtg

Does the government's rejection of GrainCorp set a new foreign investment precedent?

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There are many reasons to own investment property: you might want an asset for retirement, you might wish to rent where you live and own a property elsewhere, or property might be your choice of wealth-creation. Regardless of why you invest in property, there are a few things to keep in mind:
<ul>
<li>
Goal: be clear about what you want to achieve, and in what time-frames. Before you buy a property you should decide on your earning goals: will this be a negatively or positively geared investment? Will you invest in renovations to increase your rental return?
</li>
<li>
Budget: write detailed plans about what you have to spend, how much you will have to borrow, and what the borrowings will cost. Include the cost of renovating, repairs and maintenance as well as the predicted costs of management, insurance and rates. And then calculate rental income.
</li>
<li>
Research: Do your research before you buy a property. Go to real estate agencies in the area and pick up their ‘for rent’ sheets. See what rents are being asked for what kind of properties. Ask agents what properties they would like to manage. Go to some open days. Get a sense of which agents are on their game.
</li>
<li>
Inspections: if you’re buying a place to rent to others, basic things must be in working order that you might let slide if you lived there yourself. Always have an inspection done by a qualified expert.
</li>
<li>
Tax advice: don’t rely on barbecue chatter for your tax advice. If you intend to negatively gear your rental property, and claim the loss you make against your taxable income, then you should be advised by a solicitor or accountant, at least before the purchase and for the first tax return you lodge.
</li>
<li>
Fixed or variable: budget a scenario for a fixed rate and a variable rate. Fixed rates are currently very low, and give you interest rate certainty for two, three or five years. But variable rates provide you with flexibility. Many lenders allow you to split your mortgage between fixed and variable.
</li>
<li>
Renovation: do your best to assess the renovation requirements before buying the property, and put these in your budget. Don’t get carried away with renovations – stay within your budget.
</li>
<li>
Insurance: landlord insurance is imperative and you should contact a broker if the inclusions and exclusions confuse you. Renting property is a business and some of the features of landlord insurance might not be familiar. Get this right.
</li>
<li>
Management: there’s a clear choice. You either decide to manage the property yourself, doing basic maintenance and repairs. Or you use a managing agent who will charge a percentage of the rent. DIY managers of property can usually do the handiwork, but inexperienced owners usually stumble on tenant law and collecting rent.
</li>
</ul>
Investing in property is an excellent way to build wealth, but it should be approached like a business. Have a goal, have a plan and work within your budget.
Good luck.
 
<hr>
 Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" rel="nofollow" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
You can contact Mark on <a target="_blank" href="https://twitter.com/markbouris" rel="nofollow">Twitter</a>.
 
 
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mbouris-tauSvXGAM2

Starting out as a property investor: The nine things to keep in mind

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First home buyers are <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyReleaseDate/05DBCE56402EC566CA25723D000F2999?OpenDocument" target="_blank">slipping</a> in the ranks of Australians purchasing a home, and once again negative gearing and supply issues are back in the spotlight.
Even Aussie Home Loans founder John Symond has <a href="https://www.abc.net.au/tv/qanda/txt/s3873461.htm" target="_blank">acknowledged</a> negative gearing is skewed towards high income earners and should be addressed as part of a tax system review.
There is also growing concern from the <a href="https://www.rba.gov.au/publications/fsr/2013/sep/pdf/0913.pdf" target="_blank">Reserve Bank</a> that highly geared property investments by self-managed super funds (SMSF) are pushing up prices, with the potential to drive home ownership further from the reach of ordinary households.
In his first major <a href="https://chfa.com.au/sites/default/files/sites/default/files/docs/kevin_andrews_speech_national_housing_conference_adl_1nov13.pdf" target="_blank">speech</a> on housing since the election, Social Services Minister Kevin Andrews referred to a national housing shortfall which the National Housing Supply Council expects will grow to nearly 370,000 dwellings by 2016. Minister Andrews stressed the economic imperative of attracting a variety of investors into housing, and specifically towards private rental.
Willing and able contenders include Australia’s rapidly growing superannuation funds. Yet as SMSFs have shown, they can also drive up the price of existing dwellings. Much more efficient and effective investment pathways are required to boost housing supply and improve affordability.
Obviously, to attract the right kind of super funds, Australian governments need to be conscious of what drives their investment strategies. Risks, returns, liquidity and scale are all variables which cannot be ignored. Driven by tax incentives, highly geared speculative investment is not only costly for governments but also damaging to rental security.
Industry fund managers are actively learning about Australia’s emerging affordable rental housing providers, such as housing associations and rental co-operatives, and trying to define the terms and conditions under which they would be willing to invest. Australian Super, our largest industry super fund, recently hosted an international think tank to design an investment mechanism.
Currently, bank lending terms are stymieing the growth of the affordable housing industry. The cost and conditions of lending can be improved by rerouting the financing pathway, matching super funds risk/return appetite with the secure rent revenue of well-regulated community housing organisations.
Recently published research by RMIT and UNSW for the Australian Housing and Urban Research Institute (AHURI) has explored how governments can attract institutional investment to this new asset class, by supporting the establishment of a specialist financial intermediary to pool borrowing demands and providing a conditional government guarantee.
Housing associations and co-operatives aim to grow the supply of affordable rental housing for a range of low and middle income households where needed across Australia. Yet they remain small as optimum public-private financing arrangements lag behind.
RMIT research has found commercial borrowing by housing associations has expanded considerably in the past five years, but the variation in terms offered and the length of the debt-raising process suggests such borrowing is still immature with a limited number of engaged lenders.
Loan tenures are extremely short, often less than three years, imposing significant refinancing risks. Many loan facilities are interest-only, preventing organisations from amortising debt and building up any equity. Research strongly suggests commercial banks are unlikely to provide the considerable financing required to expand affordable rental housing in the future.
Luring the super sector
According to the RMIT AHURI <a href="https://www.ahuri.edu.au/publications/projects/p53019" target="_blank">report</a>, a new financing option could attract investment from Australia’s rapidly growing superannuation sector. Australian funds invest heavily in more risky equity investments as well as infrastructure such as toll roads, rail and airports. But they also invest and hold lower yield, fixed income securities as a hedge against inflation and to ensure greater diversity alongside more risky equity investments.
To help establish a new market, governments can guarantee investment in well regulated not-for-profit landlords, such as community housing organisations. This would enable long term rental housing providers to attract lower cost, longer term investment.
The RMIT AHURI research has analysed seven schemes in Europe and the US detailing how guarantees and intermediaries channel longer term, lower cost investment to increase the supply of social and affordable housing. One of the most important findings of this review is the minimal impact that guarantees have had on government budgets.
Through appropriate revenue support and regulation, sound business management practices and carefully structured guarantees, there has been a zero default rate among many European housing providers receiving guaranteed loans.
A stable and supportive policy environment could deliver the same result for Australia.

<hr>
Julie Lawson is honorary associate professor with the <a href="https://www.rmit.edu.au/ahuri" target="_blank">AHURI RMIT Research Centre</a>. Together with emeritus professor Mike Berry, she conducted international and national research on the design of targeted guarantee schemes to increase investment in affordable rental housing. This was funded by a competitive grant from the Australian Housing and Urban Research Institute, an independent not for profit research organisation.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/its-time-we-incentivised-affordable-housing-investment-19969">original article</a>.
 
 
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/19969/count.gif" width="1">
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jlawson-EsDwT89dxJ

We need to start incentivising investment in affordable housing

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They're back. Investors have returned to the market and with that comes a need to make some key decisions. The biggest is probably; do you or don't you? I'm talking about property management.
I see it as the DIY dilemma of real estate. 
Think about it. You decide to retile the bathroom. You get a quote from a professional tiler. You have a heart attack. You decide it can't be that hard. You will do it yourself for half the price.
Uh oh. Fast forward three months. You've had more trips to the hardware store than you can count, a trip to hospital and the cost of the project is already in line with the quote you laughed at....and it still isn't finished.
It can be the same with property management. You get a quote from an agent and decide 'it can't be that hard. I'll save money and do it myself.'
But just as not everybody can conquer the DIY renovation, the same is true of property management.
It's much more than securing a good tenant and ensuring the rent and bills are paid. There is the slightly tedious reality of always being on call to manage any maintenance and tenant issues. Then there are the countless 'other' issues that come when dealing with people, personalities and property and it's when the inevitable, unexpected, sometimes the truly unbelievable, happens that the DIY owner will be left wishing they had left it to the experts.
 
<hr>
 Ewan Morton is managing director of the Sydney based <a rel="nofollow" href="https://www.mortonandmorton.com.au/" target="_blank">Morton &amp; Morton</a>.
 
 
 
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emorton-DecMjPQt5h

Property management: Should you do it yourself or leave it to the experts?

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China has signalled its intention, reiterated in the recent Third Plenum, to open up its financial markets. This would be an important reform which carries significant risks and opportunities both for China, and many opportunities for Australia.
There are two main elements to the reforms. The first is to remove many of the regulated prices in the domestic financial system and to allow markets more scope to set them. The second is to float the Renminbi and allow freer international flows of capital. Both carry substantial risks.
Until recently bank lending and deposit rates, and hence bank net interest margins, were heavily regulated. The effect was to guarantee bank margins and protect the (mainly government owned) banks from much of the low quality lending they had engaged in during the 1990s.
With the deposit rate set artificially low, funds were cheap. Over time however less-regulated financial institutions found ways to offer higher returns to depositors. Many of these wealth management products were effectively deposits in that they could be readily turned back into cash. China has thus seen a rapid growth in its shadow banking system as a result.
The deregulation of lending rates squeezed the banks. Since they were forced to pay a below-market price for deposits but had to compete in lending, their margins have been under pressure.
Deregulating deposit rates is the next big step. But regulators are worried about whether the banks will cope with competition for deposits. The risk of bank failure increases significantly.
China currently limits its banks to only lend out a fixed proportion of their deposits, that is the volume of their deposits always exceeds the value of loans they make – unless they make very poor lending decisions. The deregulation of deposit rates puts this at risk. It is now far more likely that banks will fail, and depositors lose money. Since China does not have a deposit insurance system, this is a significant risk.
Protecting depositors
China is currently working on developing the required deposit insurance scheme. We are unlikely to see the deregulation of deposits until that is in place. Even that though does not end the problems.
The transition of banks from only having to worry about the quality of their assets (loans extended) to also having to worry about their liabilities (deposits and other forms of funding) is problematic.
Australia <a href="https://penguinunearthed.wordpress.com/2006/04/02/book-review-westpac-the-bank-that-broke-the-bank/" target="_parent">almost lost</a> one of our major banks (Westpac) in the process of adjusting to a liberalised financial system, although there is little doubt that the economy functions better now than it did in the 1980s.
The implicit trade-off between the additional growth generated by a better allocation of resources valued against the risk of more frequent crises has generally come down in favour of liberalisation (see for example Ranciere, Tornelland and Westerman’ paper “Systemic Crises and Growth” in the Quarterly Journal of Economics, February 2008).
Those with longer memories will also remember many Australians losing money when they took out loans in foreign currencies just before a big fall in the Australian dollar. Some elements of the Asian crisis were also worsened by foreign currency borrowing as countries (partially) liberalised their capital accounts.
Both the internal reforms and the floating of the currency provide opportunities. While Australian banks, wealth managers and insurers have struggled to get a strong foothold in China in the face of strict regulation, that should change with the next phase of reform.
The biggest opportunities for Australia however will derive from the opening up of the Chinese capital market to the freer flow of money in and out of the country. Recent <a href="https://www.imf.org/external/pubs/ft/wp/2013/wp13189.pdf" target="_blank">work by the IMF</a> suggests while it’s hard to see whether China will finish up importing or exporting capital, the size of the flows both inward and outward will increase significantly. Chinese will seek to diversify their portfolios away from China, and foreigners will try to increase their exposure to China.
The IMF paper actually suggests that Chinese will increase their current foreign asset holdings by a factor of five, and that foreign holdings of Chinese assets will increase by a factor of three. That is, China will be a net foreign investor.
Australia will have to get used to the idea of Chinese companies and individuals continuing to buy local assets. This should bid up the price of assets, which is good for their owners, but is likely to raise community concern. There will obviously be sizeable business opportunities involved in servicing this outflow.
The other flow is also important. Australian wealth managers, and Australian companies, will have very significant business opportunities servicing the outward flow.
 
<hr>
 Rodney Maddock is Vice Chancellor's fellow at Victoria University and adjunct professor of economics at <a href="https://theconversation.com/institutions/monash-university" target="_blank">Monash University</a>
 
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/china-is-liberalising-its-banks-and-thats-good-news-for-australia-20708">original article</a>.
<img width="1" src="https://counter.theconversation.edu.au/content/20708/count.gif" height="1" alt="The Conversation">
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rmaddock-AxiRakmDz9

Why China's move to liberalise its banks is good news for Australia

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Owner occupiers represent a small but important component of the inner Brisbane apartment market. At the youngest end, they represent occupiers who could potentially be occupying greenfield development in the outer suburbs and thus helping to reduce the requirement for new infrastructure. Similarly, at those at the older end are likely to have freed up an existing established home for the next generation to move into.
As part of the preliminary work for our upcoming Inner Brisbane Apartments 2013 to 2020 report, we have taken a closer look at the actions of owner occupier purchasers by undertaking an analysis of two buildings that were built targeting different markets. Both buildings were marketed and completed in the early to mid 1990s, which allows us to identify long term trends.
<ul>
<li>
Admiralty Towers in Howard Street faces the Brisbane River and contains 152 apartments that were pitched at the investor end of the market.
</li>
<li>
The Moreton in the Dockside development is located in Kangaroo Point and also faces the Brisbane River, with 106 apartments and was pitched at higher price points, and presumably being more attractive to owner occupiers.
</li>
</ul>
Reflecting the market positioning of each building, a higher average pre-sale price was achieved at The Moreton, at $425,000 per apartment versus $377,000 per apartment at Admiralty Towers—although this could also reflect the mix of apartments and location as well as the size/quality of apartments.
An analysis of sales shows that despite the different price points, pre-sales were dominated by investors (which include second home purchasers) in both projects, who accounted for 75% of off the plan sales in The Moreton and as much as 84% of apartments in Admiralty Towers (see chart below).
Click to enlarge
<a title="Click to enlarge" href="/images/stories/2013/11/29/angie-nov-29-one.gif" rel="shadowbox"><img src="/images/stories/2013/11/29/angie-nov-29-two.gif"></a>
Source: PriceFinder
Subsequent sales show that both buildings attracted a higher level of owner occupier purchasers after completion, although they favoured the higher priced The Moreton project at Kangaroo Point. The majority (52%) of apartments in The Moreton are now owner occupiers, and while investors are still the majority in Admiralty Towers, owner occupiers now fill out 40% of apartments.
This reflects two things:
<ul>
<li>
Investors are attracted at pre-sale, most likely due to the negative gearing benefits of depreciation, etc, being at their greatest. There may also be stamp duty benefits in purchasing off-the-plan.
</li>
<li>
Owner occupiers prefer to come in after the building is completed. As the negative gearing benefits are not relevant to an owner occupier, there is less incentive to purchase off-the-plan, while they can also “touch and feel” the dwelling that they will be living in. Moreover, the timing of their requirement for an apartment may not necessarily coincide with the timing of the construction of a new apartment project. For example, a first home buyer could wait up to three years or more between signing the contract and when their apartment is completed, while upgraders and downsizers face a more uncertain market in the future to sell their existing dwelling before moving in.
</li>
</ul>
Interestingly, there was a greater turnover of apartments in The Moreton—88% of apartments have recorded a re-sale compared to 74% in Admiralty Towers—despite the perception of owner occupiers having more stable occupancy. Perhaps for many owner occupiers of apartments, this represents a stepping stone into another dwelling.
Nevertheless, despite the higher turnover, apartments in The Moreton achieved higher price growth on average than Admiralty Towers, with sales on average achieving a rate of growth of 3.9% per annum, compared to 3.6% per annum. The margin may not be substantial, but it builds up in aggregate over an extended holding period.
What does this mean?
While a development can be developed and marketed as attractive to owner occupiers, developers are nevertheless reliant on investor purchasers to achieve the pre-sales for development finance to proceed. This poses a problem for policy makers, who would like a greater level of owner occupiers living in apartments.
The limited owner occupier demand at pre-sale means that developers are likely to build stock at a price point to be more attractive to investor purchasers in order to achieve the required pre-sales in a timely manner. Owner occupiers instead then prefer to purchase the finished product, where the look and quality of the apartment is a known quantity. However, a development developed and priced to maximise investor sales may not necessarily be attractive to owner occupiers in the future.
Even in conducive locations where a developer may develop and seek to target a higher share of owner occupiers for off-the-plan sales, investors are a necessary—and indeed compulsory—part of the marketing equation. Only smaller or unique buildings can get away with being purchased in majority by future owner occupiers, as they could potentially face a more limited opportunity to buy in at re-sale. Nevertheless, the prospect of greater future price growth and potential onsale to either another investor or an owner occupier can play a part in marketing to investors. Such a project would also attract a larger, although probably still a minority, share of owner occupiers provided the project is developed as being attractive to this market upon completion.
 
<hr>
 Angie Zigomanis is senior manager of <a rel="nofollow" title="BIS Shrapnel" href="https://www.bis.com.au/" target="_blank">BIS Shrapnel.</a>
 
 
 
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angiezigomanis-VT64gGbExQ

How important are owner occupiers in the inner Brisbane apartment market?

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While Sydney and Melbourne are frequently mentioned as Australia’s start-up hotspots, a new report into state-based business taxes has revealed South Australia and Queensland are the cheapest states to launch a company in.
The state-by-state tax review of Australia released by accounting, auditing and investment group <a href="https://www.propertyobserver.com.au/https://www.startupsmart.com.au/financing-a-business/venture-capital/pitcher-partners-director-tells-how-to-get-a-start-up-investment-ready/2013080210386">Pitcher Partners</a> looks at what taxes two hypothetical start-ups would pay in each state.
Paul Glover, a partner at Pitcher Partners, told StartupSmart the reason these two states had performed well was due to lower property costs and the state governments being more proactive in updating their tax regimes to encourage small business.
“We decided to take into account the relative property values because if you don’t do that it does leave out a serious factor that would influence where you might start up,” Glover says. “Also their taxes are more attractive because they’ve done more to make it so for business.”
For the smaller start-up with an annual payroll of $1,178,427, <a href="https://www.propertyobserver.com.au/https://www.startupsmart.com.au/growth/growth-strategy/brisbane-emerging-as-a-start-up-hot-spot-on-tech-scene/2013091010686">Queensland</a> had the lowest payroll tax, followed by New South Wales, <a href="https://www.propertyobserver.com.au/https://www.startupsmart.com.au/planning/entrepreneurial-perth-digs-in-as-the-resource-investment-boom-slows/2013062710074">Western Australia</a>, <a href="https://www.propertyobserver.com.au/https://www.startupsmart.com.au/growth/adelaide-aiming-to-become-start-up-hot-spot/2013090310623">South Australia</a> and Victoria.
For the larger start-up, with an annual payroll of $5,834,950, Victoria had the lowest payroll tax, followed by Queensland, New South Wales, Western Australia and South Australia.
New South Wales and Western Australia were the most expensive states to launch a company in, largely due to high property prices.
“New South Wales and Western Australia need to focus a bit more on their state tax systems because there is a risk they could lose out when start-ups and other established businesses become more mobile and able to move. They shouldn’t sit back and relax because they’re the leaders at the moment for business,” Glover says.
The report found the states were fairly similar when it came to the costs for larger start-ups, excluding NSW, which was significantly more expensive.
“There has been a very large stamp duty recovery in NSW due to the hot property market, and this gives them the opportunity to invest that revenue into reforming their tax system to make the state more efficient,” Glover says.
You can <a href="https://www.startupsmart.com.au/images/stories/20121120/pitcher%20partners%20state%20tax%20review%202013-2014.pdf">download the full report here</a>. 
 
<hr>
 This article first appeared on <a rel="nofollow" href="https://www.startupsmart.com.au/">StartupSmart</a>.
 
 
 
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