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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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In a letter to a political ally in 1900, Theodore Roosevelt coined the phrase “Speak softly and carry a big stick; you will go far”. The corollary was that, without a big stick and preparedness to use it, one would go nowhere.
It’s a line that perhaps the Reserve Bank of Australia has been pondering in its comments around the persistently high Australian dollar.
After this month deciding to leave the cash rate unchanged, Governor Glenn Stevens noted the exchange rate was “still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.”
At times, the Bank has also signalled its views as to the size of the depreciation required to get back to a balanced growth path. Its <a href="https://www.rba.gov.au/publications/smp/" target="_blank">November Statement on Monetary Policy</a> opines that “a further depreciation similar in magnitude to that seen earlier this year could be expected to see growth return to trend, or even above trend, sooner than forecast”.
But Roosevelt’s advice also applies to monetary policy. The Reserve Bank has, advisedly, stopped well short of announcing prospective policy changes designed to lower the dollar. For announcements to have any significant effect, markets would need to be convinced that the Bank does, indeed have a big stick.
Such is not presently the case.
Since 1996, the objective of the RBA has been to keep consumer price inflation between 2-3%, on average, over the cycle. What established the credibility of this objective was not its announcement but a track record of achieving it. Having established credibility expectations of inflation don’t move very far outside the target range, especially in the medium term.
Setting the cash rate with an eye on the inflation target and to a lesser extent the level of economic activity leaves little room for intervention in foreign exchange markets, other than to smooth short run disorderly conditions.
Markets know this. They also know that the Reserve Bank and the Australian Prudential Regulation Authority are aware of the risk that lax bank lending standards and rising loan-to-valuation ratios might set off an unsustainable boom in housing prices. The standard policy intervention to lower the exchange rate – a cut in the cash rate and a concomitant expansion in the monetary base– would only increase this risk. But if this risk were controlled by restrictions on bank lending such as caps on loan-to-value ratios (as have recently been implemented in New Zealand) this might give the Reserve Bank more room to manoeuvre.
Even then, monetary expansion on the scale required to shift the exchange rate would have to confront the problem that most of the “high dollar problem” is due to monetary policy in the United States. Markets know that the Reserve Bank is unlikely to intervene while there is uncertainty about the stance of monetary policy in the United States.
Indeed, the policy of the US Federal Reserve provides an interesting example of where announcements of future policy do shift markets.
Faced with a situation where its equivalent of the cash rate cannot be cut any further, the Fed has adopted a policy of quantitative easing. QE itself is just the policy whereby the Fed purchases assets (government bonds) from the private sector, increasing the monetary base.
Because rates are already so low, this has no effect on the current short term interest rate, and the Fed has attempted to gain the use of an additional policy instrument by announcing the terms under which this unconventional policy will be continued.
To the extent that this “forward guidance” works, it is because markets expect future short term interest rates will be kept low by QE, and that keeps current long term interest rates low. As a side effect, forward guidance pushes down the US dollar on foreign exchange markets.
Because they are credible announcements about the path of future policy, any change in forward guidance, particularly as to when QE will be withdrawn, has an effect on longer term rates and on the relative returns on Australian and US bonds. An announcement of “tapering” QE would see the return on US bonds rise relative to Australian bonds, holdings of Australian bonds would become less attractive, and the Australian dollar would fall relative to the US.
Can policy announcements push the Australian dollar down? Yes. But the relevant announcements are those of the Federal Reserve, not the Reserve Bank.

<hr>
Graeme Wells is university associate, School of Economics and Finance at <a href="https://www.utas.edu.au/" target="_blank">University of Tasmania</a>.
<a href="https://theconversation.com/institutions/university-of-tasmania"></a>
This article was originally published at <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/talking-the-dollar-down-does-jawboning-work-20254">original article</a>.
<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/20254/count.gif" width="1">
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jake-cSmGT7VXVf

Can policy announcements push the Australian dollar down?

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Sydney appears to be having a property boom without substance.
The more I look behind the headlines, the more I find less. Those participating based on the FOMO syndrome (fear of missing out) need to ask: what is it that I’m afraid of missing out on?
The two leading cities for price growth this year are Perth and Sydney – and there’s a stark contrast between the two in terms of fundamentals underpinning the rise in values.
Perth is capital of the nation’s leading economy, driven primarily by the resources sector. Despite claims (like Sydney’s boom, without substance) that the resources boom is over, WA’s mining and gas industries continue to thrive, with exports at record levels and key participants like Rio Tinto and BHP Billiton expanding production. Population growth is the highest in nation, almost double the national average.
Perth’s property market began to deliver demand-driven rental increases in 2012 and this was followed by rising demand from home-buyers. Increases in sales volumes usually lead to price rises and, throughout the Perth metropolitan area, there are precincts where there have been marked increases in the number of houses sold over three or four successive quarters. This has provided a solid underpinning for price increases.
The suburbs of the Belmont LGA, an affordable precinct nicely positioned between the Perth CBD and the airport has seen sales numbers escalate since late in 2012. Over nine months the number of sales in Ascot has risen 44%, Carlisle is up 52% and Kewdale is up 92%. As a result, most of the suburbs in this precinct have had double-digit annual price growth.
None of that has happened in Sydney. There is no economic boom or a population explosion. According to the Rental Report from Australian Property Monitors, there has been very little growth in residential rentals in Sydney in the past 12 months: a small rise for apartments and zero change for houses.
An examination of sales data for the suburbs of Sydney reveals very few with an increase in sales volumes. In suburbs where you pay well over $1 million for a home, markets have been going sideways, with no uplift in demand. They include Paddington, Cronulla, North Sydney, Milsons Point, Mosman, Neutral Bay, Manly, Kirribilli, Cremorne, Turramurra and Vaucluse. There are many more where price rises are being driven by something other than an uplift in buyer demand.
The exceptions are in the more affordable markets in the Sydney metropolitan area where there is genuine ongoing demand. There have been significant rises in sales volumes in the markets for Auburn (median prices $$530,000 for houses and $342,000 for units), Bankstown (houses $544,000 and units $335,000), Bexley (houses $685,000 and units $420,000), Kogarah (units $440,000), Mascot (houses $800,000 and units $590,000), Moorebank (houses $520,000) and Parramatta (houses $588,000 and units $410,000), among others.
But these examples are rare exceptions.
It’s a hallmark of rising markets that the participation of investors increases. Nationwide, loans to home buyers have risen 6.3% in the past 12 months while loans to investors are up 18.7%. In WA, loans to both home-buyers (up 12%) and investors (up 21%) have risen significantly. It’s similar in Victoria, where home loans are up 8% and investor loans 14%. In some areas, including the ACT and Queensland, home loans are rising faster than investor loans.
But in New South Wales (read Sydney), there’s a marked imbalance. Home loans have risen only 1.3% but investor loans are up 30%. Sydney’s property market is being driven by an investor stampede, generated by hype and headlines.
It’s a media-driven avalanche of silliness. Fortunately, it’s happening only in Sydney and a small portion of the Melbourne market.

<hr>
Terry Ryder is the founder of <a rel="nofollow" href="https://www.hotspotting.com.au/" target="_blank" style="font-size: 14px;">hotspotting.com.au</a> and you can contact him via <a target="_blank" href="https://mailto:%20ryder@hotspotting.com.au">email</a> or on <a target="_blank" href="https://twitter.com/hotspotting" style="font-size: 14px;">Twitter</a>.
 
 
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terryryder-YECXbqmri2

No substance behind Sydney property boom

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Australia’s commercial property market is attracting a substantial amount of capital. The nation’s outperformance is the result of a number of factors, significantly the “sheer weight of money” coming from both foreign investment and local institutions. Couple this with historically low interest rates and improved business confidence, and it’s no surprise the market’s running hot.
Like many other industries, our proximity to Asia, combined with attractive returns and the stable political and legal environment are fuelling significant foreign capital from the U.S., Europe and Asia.
But domestic institutional groups are also reaping the rewards of Australia’s strong economy, with capital markets providing conditions that allow them to attract new investment. Prime assets are in demand, meaning investors are looking for newer buildings, core locations, long leases and strong covenants. What does this mean? Heightened prices for assets that fit the bill.
Paradoxically, this is taking place in a market where the fundamentals are not so good - office vacancies in the capital cities are expected to continue to increase in the coming year before plateauing. On top of that, incentives to retain existing tenants and to attract new tenants are currently well in excess of 30% in many cities. Industrial properties are also now experiencing an increase in tenant incentives, but are well below those being paid in the office market. Office tenants’ space requirements are diminishing due to a change in work practises and the increase in outsourcing.
However, by sticking to the basics, good investments can still be found. Given the high vacancy and incentive environment, an investor should aim for office buildings with a weighted average lease expiry of at least five or six years. This should be coupled with a tenant or tenants who can satisfy a rigorous financial due diligence. The location is also important – buy where you can attract quality tenants. And be aware of the NABERS Energy rating – government and blue chip tenants have an increasing desire to locate into buildings with a minimum NABERS Energy rating of 4.5 stars.
With an accounting background, I regard myself a considered investor and advisor. Over my nearly 40 years providing financial advice to clients, I had discussions with many business people who were considering investing in commercial property. The thing I found was that some of them were abandoning the basic principles of investing and weren’t necessarily looking at all the facts, and more importantly, they weren’t considering the risks.
I’ve always stuck to a simple mantra – one that serves me well personally and professionally –‘put yourself in someone else’s shoes’.
I ask myself; if I was a potential commercial property investor, what advice would I want to receive when considering an investment in commercial property?
To be warned about following the hype: Don’t get caught up in the hype arising from the current huge volume of investment activity from overseas and local institutions. Just because others are investing, doesn’t mean you should throw yourself in without considering the underlying current and forecast relevant fundamentals i.e. rental rates, incentives, vacancy rates, tenant demand, new supply, etc.
To be advised to buy well below replacement cost: Doing so helps your investment remain competitive with other, newer buildings. It also allows for upgrades to the building and the ability to offer very competitive rentals to tenants, both of which are key to retaining existing and attracting prospective tenants..
To be warned not to get blinded by the initial yield: Don’t buy just because there is a high rental yield. Pay particular attention to the lease terms, check that the rentals being paid are not well above market rents, check on the strength of the lease covenants – an empty commercial building doesn’t pay the bills.
To be reminded of the importance of strong relationships with tenants: Look after the tenant, in fact love the tenant – they do pay the bills!
To always be prepared for let-up times: In times of subdued tenant demand, a property may stay vacant after a tenant leaves for an extended period. This must be built into the financial projections as well as any associated tenant incentive payment.
Finally, I’d want to be warned about the importance of doing my homework: The assumptions made by the promoter shouldn’t be accepted as gospel. It’s important to check whether the promoter has aligned his assumptions with reasonable market evidence of projected rental income, outgoings, let-up periods, adequate projected CAPEX and incentives over the syndicate term, as well as projected interest rates and yields.

<hr>
Harry Rosenberg is director of <a href="https://www.quintessential.com.au/" target="_blank">Quintessential Equity</a>
 
 
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hrosenberg-nJRZVHPNqS

Australia's commercial market is running hot and it's no mystery why

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While we may all currently have lots of buyers eager to enter the market, with many being repeat buyers and investors, I think it is important that we keep a firm eye on the buyer’s experience. Sales and marketing centres and public relations are just two key steps in the buyer’s journey and with both there is increasing complexity in how these assets are employed.
Public relations
Starting with PR is a somewhat brave step and the distinction between PR as a freestanding way to reach consumers, and the rise of digital and social media is forging some changes. However the value of PR is still a vital part of the network of information that informs our market – an indispensable ‘touch-point’.
In a time of media and content saturation, there is an important role that public relations can play, a role which now needs to be very agile and extending way beyond the press release because instant content may well overtake the best laid plans.
However despite this across all aspects of project marketing the use of public relations has always been an essential tool and can, and does, pay great dividends, partly because of the endless quest for content.
While advertising will always be central be it old or new media, the influence of public relations can drive exposure in a way that some, but not always all, buyers will see as more independent because editorial content is less sales driven.
Public relations can be used in many varied formats to give more details of what a particular project offers and also how various projects compare with each other and the general market. Now most buyers can go online and get what might appear to be endless commentary, and the reality of this very fact increases the need for content to be well constructed and expressing varied points of view. It can be a great tool to get detailed attention for a particular aspect of a project that would otherwise be harder to communicate.
Reaching a wider target
Public relations can also operate in a wider target market context, part of the collision factor I have talked about. Where people may well read an article about a project in an environment or media that interests them, rather than going to a specific media that only targets them. The importance of a wider reach of PR is important when so much activity is database managed.
What this means is that a potential buyer may not be looking at a real estate advertisement because ‘they are not in the market’ but they may come across some editorial content that still captures their interest and so they then seek more information – they are opportunity buyers.
Exposure however is not only product driven, the context of potential public relations is extensive and will include aspects such as the general state of the market and it is also worthwhile to be involved via this level of commentary, and blogs can be an ideal way to contribute, so too can email marketing. However the wider reach of general PR is again a point to keep in mind, because as we know markets never remain static.
I think that PR plans are good to have but I also feel that opportunity driven PR can be of even more value. It’s a good idea to structure PR so that the release of material becomes an ongoing part of the project marketing calendar but with flexibility so that buyers are exposed to varied ideas and offers.
How is the success of public relations measured? A higher project, brand or personal profile will do this and where possible we should be alert to a direct link to sales, good internal feedback is important here.
Public relations also covers such activities as events, and there are examples of events being a great social success that generates some high profile coverage, but does this work to influence sales? This is never a straightforward question or an easy one to answer, but in today’s market events can look excessive or overdone, it’s an area where it may be more productive to concentrate on your already committed customers.
The celebrity
It is also vital to look at the true cost of any PR undertaken. This would include for example the fees paid for the endorsements of a particular celebrity, this can run into large amounts of money, it can work or backfire. Celebrity based marketing has been popular at times and there have been examples of results and some failures. It is not the intention here to explore these in greater detail. It is however valid to suggest that in some circumstances the idea has merit and with other projects clearly not.
Again the impact of social media has somewhat diminished the role of endorsements. Which direction to take will be a function of budget and the target market involved as well as having clearly defined outcomes. Celebrity chefs have been the raisin-deter of late – but possibly overdone?
A well-know person, not necessarily a paid celebrity as such, might be involved with a project and attract a number of direct sales. This would clearly be a valued exercise.
The same mix of personality and associated PR could attract a great deal of attention, it might all be a lot of fun for everyone involved, but if no sales result then there is little to justify the time and money involved.
Fun alone is not a way to justify any PR activity, in the end the reality is that all activity must be sales focused. Different markets will always vary the PR focus but a feel good outcome alone is difficult to justify in some markets and impossible to justify in others.
Involve the team
The project team needs to be fully sold and involved with the PR process. PR should not be seen as a short-term process. The best impact will usually result from targeted and ongoing activity. This is a more productive approach than creating one-off and soon forgotten hot spots so that we are supporting a project in the long run.
More than ever in today’s media mix PR is also a very complex task and it is a specialist and professional skill that should not be underestimated. Property PR like many other areas is also now a very competitive market and relationships with the main media and editorial staff are key.
While we need to ask what do the journalists or bloggers we deal with expect from us we also need to ensure that all PR content adds value to the buyer’s experience, and we understand that there many ways to do that.
 
<hr>
 Peter Chittenden is managing director for residential of <a href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx" rel="nofollow" target="_blank">Colliers International.</a>
 
 
 
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pchittenden-eLqUUC8TWW

The fundamentals of creating a great buyer experience

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The Fair Work Ombudsman is writing to 7,000 fast food businesses across Australia, in the next step of its three-year crackdown on the hospitality sector.
The aim of the campaign is to educate fast food businesses about their legal obligations toward their employees and will be backed-up by a random audit of 300 businesses early next year.
Fair Work Ombudsman Natalie James told SmartCompany it’s targeting the fast food industry because it employs a large number of people and includes many small and medium-sized businesses.
She says the sector has also generated a significant number of complaints from workers.
“About 300 fast food businesses in metropolitan and regional locations will be selected for audit in January, and during the audit phase Fair Work Inspectors will check employers are paying workers the correct rates of pay, penalty rates and loading and overtime rates, as well as complying with record-keeping and pay slip obligations.”
A free webinar for employers in the industry will be held at 3pm AEDT on Tuesday, November 19, 2013.
The <a href="https://extranet.deewr.gov.au/ccmsv8/CiLiteKnowledgeDetailsFrameset.htm?KNOWLEDGE_REF=216297&amp;TYPE=X&amp;ID=8767190189517383988889912894&amp;DOCUMENT_REF=387652&amp;DOCUMENT_TITLE=Fast%20Food%20Industry%20Award%202010&amp;DOCUMENT_CODE=MA000003">fast food industry award</a> was created in 2010 and includes information such as how many hours employees can work, loading rates for work outside of the ‘normal hours’, and how often employees have to be paid.
There are also links to record-keeping and pay slip templates, best practice guides and fact sheets.
As part of the three-year campaign, the FWO has also cracked down on accommodation providers, pubs, taverns and bars and cafes, restaurants and caterers.
“In the first wave, 750 accommodation providers, pubs, taverns and bars were audited in 2012, and hundreds of cafes, restaurants and caterers across Australia are being audited now as part of the second wave,” James says.
The results of this first round of audits are due for release in the coming weeks.
Workplace law expert Peter Vitale told SmartCompany it’s not a surprise the fast food sector is being targeted.
“The sector is dominated by small business, many employees are young and sometimes they don’t have English as a first language, and I think the most significant aspect is they operate in a world where their peak business periods are those where they’re required to pay penalty rates,” he says.
“Historically, one of the most common underpayment issues is the failure to properly pay penalty rates.”
Vitale says it’s difficult to gauge the effectiveness of FWO education campaigns.
“The results, if you like, are judged based on a reduction in prosecutions, but there are only a certain number of prosecutions each year. But it’s an important part of the ombudsman’s function to continue to do this and to continue to assist employers to understanding their obligations,” he says.
Ombudsman James says education is a key part of the FWO’s role.
“It’s our job to educate and help businesses – particularly small businesses that don’t have the benefits of in-house HR staff – about how to comply with workplace laws, and that’s what we’ll be doing throughout this campaign, we’ll be working with these employers to help them get it right,” she says.
In January the operators of a <a href="https://www.smartcompany.com.au/people/industrial-relations/29867-fair-work-ombudsman-exposes-adelaide-sham-contractors-pretzel-logic">fast food pretzel outlet were fined a total of $36,630</a> for sham contracting.
Also in January, the FWO found a <a href="https://www.smartcompany.com.au/growth/economy/29781-three-month-probation-without-pay-uncovered-as-fwo-issues-stinging-hospitality-industry-report">generally high-level of non-compliance</a> within the hospitality industry following an audit in three states. One of the revelations included a number of businesses trying to hire employees on probation for three month periods without pay.
Vitale says the fast food industry award isn’t any more complex than any other industry awards.
“They’re all, to some extent, difficult instruments to expect SME owners to understand comprehensibly. I think the FWO, the government and the industry associations recognise this is an area where employers need some help to understand their obligations.”

<hr>
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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Fair Work Ombudsman to audit fast food sector in hospitality industry crackdown

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Leighton Properties has sold a North Sydney development site to Singaporean investment group Suntec Real Estate Investment Trust for $413.19 million.
Leighton Group will take a head lease over 76% of the office space at 177 Pacific Highway, a 30-storey 40,000 square metre commercial development.
The deal was negotiated by Paul Noonan and Simon Storry of Jones Lang LaSalle and Josh Cullen and Richard Butler of CBRE.
It’s the first major commercial development in North Sydney in six years in an area increasingly dominated by residential conversions.
Leighton are aiming for a five star Green Star and five star NABERS energy rating.
“It is a strategic fit with Suntec REIT’s portfolio of high quality commercial assets. We are excited about partnering with Leighton on this project which will be their corporate headquarters in Sydney. We look forward to its completion in early 2016,” Suntec REIT chief Yeo See Kiat says.
Suntec REIT is Singapore’s second largest listed SREIT by asset under management.
Suntec’s current portfolio includes ccommercial properties in Suntec City, Park Mall, a one-third interest in One Raffles Quay and one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall.
Leighton Holdings chief Hamish Tyrwhitt says the site was keenly sought after by local and international buyers.
“(The sale) is testament to the building’s design and it is in line with our strategy to align with key investors and efficiently use our capital through pre-selling developments,” Tyrwhitt says.
<a href="mailto:awalsh@propertyobserver.com.au" target="_blank">awalsh@propertyobserver.com.au</a>
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Leighton Properties sells North Sydney site to Singaporeans for $413 million

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Are apartment and unit owners the new ‘second-class citizens’ of the Australian housing market?
With the release of proposed strata title law reforms in NSW, it’s a question that needs to be asked. This new legislation, if passed, will for the first time enable a majority of lot owners in a strata scheme to force their neighbours to sell against their will.
Are we seeing the beginning of the strata law wars - where neighbours can now force you from your home unit?
If a block of units is old and costing too much in strata levies, currently every single owner within the apartment building must agree before the strata scheme can be demolished, or sold to a developer. However, under the <a title="NSW Strata Law Reforms" href="https://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Strata_schemes.page" target="_blank">new laws put forward by NSW Fair Trading minister Anthony Roberts</a>, only a majority of 75% is required.
In what other form of residential property is your home at the mercy of your neighbours? If you own a free-standing house it’s yours for life; as long as you continue to pay the mortgage, you live in the home that you love until the day you die. (The only rare exception is where the RTA requisition land for road building, but even then you’re given plenty of notice and fair market vale for your property. And besides, it’s a government planning initiative).
This is different. These strata laws potentially set neighbour against neighbour in a fight to control your housing destiny. That’s powerful, emotive stuff. Strata is already notorious for conflict amongst residents, but this proposal could take disputes to dangerous new highs.
Apartment living has skyrocketed over the last decade and the trend is forecast to grow exponentially over coming years. Indeed, the <a title="50 percent NSW Residents in strata living by 2050" href="https://www.parliament.nsw.gov.au/prod/parlment/hansart.nsf/V3Key/LA20120614005" target="_blank">NSW government predicts 50% of all residents will live in strata schemes by 2050.</a> That’s amazing growth, and the surge of money and capital into apartment complexes by property investors and developers is no surprise.
But what if the effect of these laws is to create an underclass of home-ownership? “The home you have, when you may not have a home for life?”
<a title="Home ownership sacred cow" href="https://www.businessspectator.com.au/article/2013/10/24/australian-news/housing-australias-great-boondoggle" target="_blank">Home ownership is a ‘sacred cow’ in Australia. </a>Our whole culture of wealth creation is built around housing – <a title="ABS Household wealth" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6554.0Main%20Features22011%E2%80%9312?opendocument&amp;tabname=Summary&amp;prodno=6554.0&amp;issue=2011%9612&amp;num=&amp;view=" target="_blank">70% of total household wealth is held in property.</a> So how will the market for unit and strata title apartments hold up when the core notion of housing – a secure place to live and a repository for wealth in retirement – is threatened by these laws?
I think it’s possible values for strata title property could fall. Particularly if there are insufficient safeguards or these laws are poorly implemented. And you can just see the inevitable TV news coverage: imagine the first elderly resident forcibly removed from their home to make way for the bulldozers. What a bad look. And not just for the resident, but for market confidence in strata as a class of investment asset.
I’m not suggesting that these laws don’t need reform, they clearly do. But the danger here is that by setting ‘neighbour v neighbour’, the popularity of strata living could tumble.
At the very least, substantial processes and dialogues among the lot owners will be required for any strata schemes where sale, demolition or redevelopment are being considered. At Housenet, <a title="Strata Pages Tool" href="https://blog.housenet.com.au/body-corporate-hard-work-not-with-this-strata-management-tool/" target="_blank">we’ve been thinking about this for a while</a>. Which is why we created our <a title="Strata Pages" href="https://www.housenet.com.au/strata" target="_blank">‘strata pages’ feature</a> – a free management tool for lot owners and managers. Strata schemes can create private online social networks that are a big help with:
<ul>
<li>
Communication
</li>
<li>
Ready access to strata scheme information
</li>
<li>
Rumours and disputes
</li>
<li>
Managing events and maintenance
</li>
<li>
Dialogue and relationships between lot owners
</li>
</ul>
Clearly strata lot owners in NSW – and perhaps elsewhere if these reforms are adopted by other states – will have a lot to talk about in coming months and years. Let’s hope they’re implemented with care and that all lot owners get a fair outcome.

<hr>
Darren Moffatt is founder and chief executive of Housenet.com.au and is a property and social media enthusiast.
This article was originally published at <a href="https://www.housenet.com.au/">Housenet</a>. You can read the orignal article <a target="_blank" href="https://blog.housenet.com.au/strata-law-wars-why-neighbours-can-now-force-you-from-your-home-unit/">here</a>.
 
 
 
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The war on strata law: Are apartment owners the housing market's ‘second-class citizens’?

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With an early, devastating start to the bushfire season in <a href="https://theconversation.com/sydney-fires-caused-by-people-and-nature-19327" target="_parent">New South Wales</a> and Queensland, recent disasters in Victoria and Tasmania, and projections that current trends will continue under climate change, it is time to look beyond emergency responses and controlled burning. The calls for a broader perspective on bushfire management are <a href="https://theconversation.com/reducing-bushfire-risk-dont-forget-the-science-19065" target="_blank">mounting</a>.
Bushfire risk is both a spatial planning and an emergency management challenge. The majority of bushfires start close to the urban fringe. Most of the financial losses come from damage to private property and public infrastructure. If the object is to cost-effectively manage the risks to people, property and infrastructure, it is not enough to focus only on emergency management and disaster recovery.
<a href="https://www.nccarf.edu.au/publications/limp-leap-or-learn" target="_blank">Our research</a> shows that spatial planning, including conventional land use and a wider range of legal instruments, is a critical tool for adapting to climate change, particularly the increased frequency, intensity, and altered distribution of bushfires.
New standards for bushfire-prone areas
The <a href="https://www.royalcommission.vic.gov.au/" target="_blank">Royal Commission</a> into the 2009 Victorian bushfires recommended development be substantially restricted in areas of highest bushfire risk and that planning provisions give clear priority to the protection of human life.
A host of amendments to planning laws in Victoria were directed towards these recommendations. These provide important lessons for the rest of the country.
A key initiative was state-wide <a href="https://services.land.vic.gov.au/maps/bushfire.jsp" target="_blank">bushfire hazard mapping</a>. This now forms a core part of all Victorian planning schemes. Land in bushfire-prone areas must undergo specific risk assessment during development assessment. Development can only proceed if the level of risk to human life, property, and community infrastructure is acceptable.
The assessment of what constitutes an “acceptable level of risk” is teased out in specific planning provisions. It generally involves a combination of defendable space and construction standards. These limit the amount of discretion available to development assessment agencies.
Development approvals in bushfire-prone areas must now include conditions requiring the maintenance of bushfire mitigation measures. These include construction standards, defendable space, water supply and access. In new subdivisions, construction standards and building envelope information must be included on the property title, to alert future owners of these requirements.
The emphasis on protecting human life should help in minimising risks. But land use planning for bushfire also needs to consider other priorities, such as native vegetation and biodiversity conservation. Achieving this balance will require local councils to have the courage to say no to development proposed for high risk, high conservation value areas, rather than managing risks through through vegetation removal.
Existing communities – is retreat the answer?
These changes account for new development, but what about people already living in bushfire prone areas?
Even where communities are destroyed, there is intense political pressure to commit to rebuilding in the same location. This is fine for areas where future risks can be managed effectively (without compromising other policy goals like conservation). But high risk areas may need other strategies. The Bushfires Commission recommended the government consider retreat for exceptionally high risk areas.
But the <a href="https://www.rdv.vic.gov.au/fire-recovery-unit/fru-news-room/voluntary-buy-back-community-consultation-process" target="_blank">property buyback scheme</a> that followed was voluntary and lacked strategic focus. The result was a lower concentration of properties in high risk areas. This arguably just spreads emergency resources more thinly.
Mandatory retreat policies are rare, and would probably be overkill as a response to fires. An alternative could be designating hazardous areas as “future acquisition”, as previously occurred in the Dandenong Ranges near Melbourne. This would give current owners the security to remain, but give local or state government the power to acquire land when the owners decide to leave.
Insurance can also <a href="https://theconversation.com/fire-and-flood-how-home-insurance-can-help-us-adapt-to-climate-change-17568" target="_blank">help shift development</a> to less risky areas. Governments need to harness this power to drive behavioural changes. Insurance policy pricing and coverage can send price signals about the riskiness of certain areas, and influence property choices.
Some policies require the property owner to rebuild in the same location following fire. But there are examples, such as floods and earthquakes, where insurers permit policyholders to apply their payout to rebuilding elsewhere.
Short of mandatory retreat policies, there are other ways of influencing the behaviour of property owners and buyers. For example, notations on a property’s title or similar information in sale contracts and rental agreements can indicate the bushfire attack level of the property’s construction. Similarly the number of times bushfire has affected the site can alert future occupants of the risks.
Levies on at-risk properties such as those applied in Victoria can also provide market signals about the full costs of living in certain locations, as well as raising the revenue required to support emergency services to these areas.
None of these tools may be popular with property owners who fear cuts to property value, or new imposts. But they are important complements to the current risk management strategies for bushfire-prone areas.
 
Jan McDonald is professor of environmental law at the <a href="https://www.utas.edu.au" target="_blank">University of Tasmania</a>.
Andrew Macintosh is associate professor  at the ANU College of Law and the ANU Centre for Climate Law and Policy at the <a href="https://www.anu.edu.au/" target="_blank">Australian National University</a>.
Anita Foerster is research fellow at the <a href="https://www.utas.edu.au" target="_blank">Univeristy of Tasmania</a>.
Jan, Andrew and Anita receive funding from the <a href="https://www.nccarf.edu.au/" target="_blank">National Climate Chanage Adaptation Research Facility</a>. 
This article was originally published at <a href="https://theconversation.com">The Conversation</a>.
 
 <img width="1" height="1" alt="The Conversation" src="https://counter.theconversation.edu.au/content/19377/count.gif" style="font-size: 0.8em;">
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New building standards and policies required for bushfire prone areas

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Federal Treasurer Joe Hockey says raising Australia’s debt ceiling from $300 billion to $500 billion will stave off a United States-style debt crisis. After the government announced it would introduce legislation to raise the debt ceiling, the Labor opposition offered a compromise of a rise to $400 billion. Hockey says that’s inadequate, and matters are coming to a head as the government <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2013-11-13/carbon-mining-tax-parliament-legislation-tony-abbott/5087200">introduced legislation</a> to Parliament yesterday.
So what are the consequences of raising the debt ceiling in Australia and what should it be raised to? We asked the economists?—?who think much of the debate on this issue is a beat-up …
Steve Keen - Economics professor at University of Western Sydney:
We should be raising the debt ceiling. It’s sensible for the government to borrow money to finance part of expenditure, particularly if that involves infrastructure and development, which we’ve let wane badly in the last 20 years.
Putting a number on what we should raise the debt ceiling to is a bit like saying how many cards should there be in a playing deck. The government can issue as much money as it likes. The fact we have a numerical debt ceiling rather than one related to GDP is silly. There’s no real point where a government that issues its own currency has a debt ceiling, but if we have one it should be related to GDP rather than an absolute number, and it should be at least five times what it currently is.
It’s insane to worry about the government debt. The level of government debt is less than Australian credit card debt. There’s been a total beat-up of the debate in the last three years.
Michael Knox - Chief economist and director of strategy at Morgans:
Australia should raise its debt ceiling. We have around about four years before we get back to balancing the budget, so we need to borrow more money and we also need to finance the existing stock of debt which we have.
The amount by which the debt ceiling is raised shouldn’t be an issue. You’ve got the side of politics that wants to increase the debt ceiling and say they want to move towards a balanced budget in four years. Unless the other side wants to move towards a balanced budget earlier, there’s no rational reason not to increase the debt ceiling.
I can understand why this might happen in the US context, but I can’t understand why it is happening in the Australian context. The side of politics in the US that tried to limit the debt ceiling has done it in order to reduce government spending. In Australia you’ve got the side of politics that usually wants to increase spending trying to limit the increase of the debt ceiling. It’s inherently contradictory.
Frank Gelber - Chief economist at BIS Shrapnel:
This is a non-issue. We need to raise the debt ceiling. Now it’s in the political arena. The question is by how much. Do you raise it by $200 billion, or do you raise it by a little less so you have to discuss it again sooner?
I don’t have an opinion on how much the debt ceiling should be raised by, but we’re going to need the $500 billion eventually. The debt ceiling will be raised, 100 [billion] gives them years to raise it again if they need. The question is whether you have to justify every incremental raise. In practical terms I don’t think it’s going to make a big difference to our credit rating.
<hr>
This article first appeared on <a href="https://www.crikey.com.au/">Crikey</a>.
 
 
 
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Economists debate: Should Joe Hockey increase the debt limit?

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According to data released by the ABS earlier this week, the amount of loans financed to first home buyers in September recorded a new low at only 12.48%.
This week’s exclusive piece is putting the spotlight on this data and whether or not it’s a true reflection of what’s going on in the market.
Many property forums are arguing that first home buyers are no longer ticking the first home buyers box, and therefore skewing the statistics.
Todd Hunter of wHeregroup says he would like to know who came up with this data and where it came from on his latest <a target="_blank" href="https://www.wheregroup.com.au/blog/are-they-are-they-really/">blogpost.</a>
Professionals active in the property sphere were asked the following question.
Do you agree with the first home buyer statistics? Why or why not?
 
 
Paul Biller – Principal of <a href="https://www.1stcity.com.au/" target="_blank">1st City Hasemer &amp; Caldwell-Eyles<img src="/images/stories/2013/11/15/biller-profile.jpg" alt="biller-profile" style="float: right;" height="200" width="150"></a>
FHB LEVELS PLUNGED SINCE THE GOVERNMENT REPLACED FHB GRANTS WITH INCENTIVES
Yes, I agree with these statistics. There is no benefit to a first home buyer no longer ticking the first home buyer box.
Australia’s housing market is experiencing its strongest run in years. Investors and changeover buyers are being drawn back to the market following interest rate cuts and the positive outlook for housing. Yet despite historically low interest rates, rising prices are raising fresh concerns about housing affordability for first home buyers. Just one-in-eight borrowers were first home buyers in September - the lowest proportion in more than two decades.
First home buyer levels have plunged recently in some states by more than 10% since the government replaced first home owner grants with incentives to buy only brand new properties, however the bulk of first home buyers are still buying established dwellings because they are more affordable.
When the government announces it is putting an end to an incentive and telegraphs it, a lot of home buyers bring their plans forward. The result of the rush to get in before October 2012 means that many buyers who would have been in the market now, purchased last year instead. As a result of the new policies, the Australian Bureau of Statistics shows that first home buyers are becoming scarcer. There is too much competition with investors who are looking at the same properties and taking the opportunity to borrow with the lowest interest rates in 50 years and with a shortage of rental accommodation pushing up yields.
Other factors include stamp duty and the size of deposit required and ability to save for it. While monthly mortgages were becoming more affordable, first home buyers were struggling to put down a deposit as property prices continue to rise.
 
Jessica Darnbrough - Spokesperson for <a href="https://www.mortgagechoice.com.au/?" target="_blank">Mortgage Choice</a><img src="/images/stories/2013/11/15/jessica.darnborough-profile-2.jpg" alt="jessica.darnborough-profile-2" style="float: right;" height="200" width="150">
ABS STATISTICS COULD BE SIGNIFICANTLY LOWER THAN WHAT IS HAPPENING IN REALITY
 
The data from the Australian Bureau of Statistics is as true as it can be. The Australian Bureau of Statistics report on the data that is available to them.
That said, today, some of the states have removed the first home owners grant for established dwellings. As a result, many first home buyers who are purchasing existing properties do not have to declare that they are buying for the first time.
According to a recent survey by Mortgage Choice, 70.9% of recent first home owners said they had purchased an established dwelling. With this in mind, it is reasonable to assume that the first home owner numbers as reported by the Australian Bureau of Statistics could be significantly lower then what is happening in reality.
Next page: Kevin Lee and Ben Kingsley
 
 
<hr class="system-pagebreak">
Kevin Lee - Buyers agent at <a href="https://www.smartpropertyadviser.com.au/?" target="_blank">Smart Property Adviser</a>
<img src="/images/stories/2013/11/15/kevin-lee-profiel.jpg" alt="kevin-lee-profiel" style="float: right;" height="200" width="150">
FORGET THE 12.48% - WHO, WHAT, WHERE AND WERE THE OTHER 87.52%?
It never ceases to amaze me that first home buyers regularly receive a disproportionate amount of media and government attention when compared to the actual percentage of the total property market that they account for.
Could I be so bold as to suggest that this group is a 'political football' and therefore the recipient of so much government 'spin'. But they will never, ever save the country - how can they?
Forget the 12.48% who bought their first property - who, what, where… were the other 87.52%?
That's the number one question our politicians, policy makers, bureaucrats and property professionals should be focused on. With the right assistance/incentives this second group could (and should) have a much larger impact on the Australian economy.
However all the press is devoted to the precious few home buyers who are having their first go at becoming a rate payer. Weird isn't it!
By definition, most of this 12.48% won't do much for the next six or seven years. Sure they'll struggle to make their monthly repayments, buy some furniture, have a kid or two, maybe buy a new car, and send their kids to schools in the area.
Don't try to tell me that the other 87% of purchasers don't contribute in the same way?
It matters nought whether the purchaser is an owner occupier or investor - the end result is always the same.
Whether you purchase a property to live in yourself - or for someone else to live in - there's still a household to be formed, things to buy, kids to go to school, and people who will live a life there.
Let's face it, governments devoid of any real ideas, balls or brains created incentives for a minority group to stop renting and purchase their own home. First home owner grants of $7,000, then $10,000 then $14,000 ... but wait there's more. Buy now and we'll also throw in free stamp duty - in NSW that's a potential saving of another $23,000.
So the government spends millions of dollars to entice maybe 100,000 extra people to join this minority group. Why? Because this is what financially un-educated people do.
Smart people - those people with a financial education - set goals and take the necessary action to reach those goals. They get other people to pay off their debt for them.
Little do these bureaucrats know that many savvy first time buyers were in fact buying their first investment property, all they had to do was comply with the rules and live in the property for a very short period.
If these bureaucrats had any clue, they would incentivise all people who are trading up or down by removing (or at least reducing) the two most insidious taxes ever created: stamp duty and land tax. The average Sydney couple buying a modest home or investment property for $700,000 pays just over $27,000 NSW stamp duty for the privilege.
That's equivalent to furnishing that property, a pretty special holiday or a whole mouth full of dental work. Our economy would be so much stronger if that $27,000 was spent on goods and services for the individual, instead of employing another pencil pusher.
They were supposed to eliminate those state based taxes with the introduction of the GST, but our governments are like heroin addicts - their addiction to the tax is on the same level; they will do anything to get it and just can't give it up.
 
Ben Kingsley – Chair of <a href="https://www.pipa.asn.au/%E2%80%8E" target="_blank">Property Investment Professionals of Australia</a> (PIPA)<img src="/images/stories/2013/11/15/ben-kingsley-profiel.jpg" alt="ben-kingsley-profiel" style="float: right;" height="200" width="150">
THIS DATA IS NOW OVER SIX WEEKS OLD AND THE MARKET FOR FHB IS ON THE IMPROVE
I see no beneficial reason or hidden agenda by the ABS to alter the statistical reporting of this data.  The ABS do a great job in capturing and reporting this data on a monthly basis and have done so for many years now.  This housing finance series attempts to enumerate all providers in its scope of collecting this data and in the early 2000s the collection of this data was handed over the Australian Prudential Regulatory Authority (APRA), so the coherency and consistency of the data has remained robust over this period. The claims that first home buyer borrowers are choosing not to report their status as first home buyers on their loan applications to lenders doesn't make sense to me.  First home buyers have access to grants and/or incentive scheme across each state and territory at the moment, and lenders are heavily involved in the implementation of these grant and incentive as part of the lending application process, so first home buyers are almost certainly known to lenders and reported as such in this data in my view. Within our business in Melbourne, our observations of the soft activity by first timers in the market and also the number of first home buyers we are arranging finance and providing buyers agency services for supports this September reading.  However we need to recognise this data is now over six week old and the market for first home buyers in definitely on the improve and I'd expect this number will be the bottom of this cycle for first home buyers and the remainder of the year we will see an improve and 2014 I see even further growth in first home over grant numbers active in the market.
Nest page: Todd Hunter and Andrew Wilson 
 
<hr class="system-pagebreak">
Todd Hunter - Director at <a href="https://www.wheregroup.com.au/%E2%80%8E" target="_blank">wHeregroup</a><img src="/images/stories/2013/11/01/todd-hunter-profile-2.png" alt="todd-hunter-profile-2" style="float: right;" height="171" width="144">
THERE IS NO WAY TO ACTUALLY GAUGE WHO IS A FIRST HOME BUYER AND WHO IS NOT

It’s being bantered all over the press everywhere, the property market has out priced first home buyers and they have magically disappeared from the market place. They are gone and don’t look to return anytime soon. Are they?
 
I personally would like to know who came up with this data and where it came from. In New South Wales since the first home owners grant and the stamp duty concession was abolished, with the exception for new properties, there is no way to actually gauge who is a first home buyer and who is not. There are no forms to fill in, no boxes to tick on the loan application form, no sections to fill in on the land transfer. So I ask, how do they know this?
 
It sounds like some fancy media or marketing hype that someone has conjured up and now the media herds are running with it like no tomorrow. For those who have ever dealt with the wHeregroup, you would have had contact with one or both Rebecca’s. Well Rebecca - my personal assistant - has recently purchased her first unit. Now this unit was in the Sutherland Shire but was not new. Rebecca wanted to live in the Shire so rather than buy a new house and land package in the western suburbs, where there is available land, she opted to pay the stamp duty and live where she wanted to live. As the $7,000 grant is no longer available, her transaction went through undetectable as a first home purchase. In the past I have exposed inaccuracies in the stats and supposed property indexes. I wrote a <a href="https://www.wheregroup.com.au/blog/the-median-measurement-is-misaligned/" target="_blank">blog</a> on the median house price and how the figures can be easily skewiff.
 
Well it appears that this fictional statistic has also been skewiff, and it’s such an easy fix. All we need is a box ticked on the land transfer so the type of purchaser can be calculated correctly.
 
I do agree, however, that it is becoming increasingly more difficult to first home owners to get into the market; especially in the Australia’s capital cities, but come on lets not over exaggerate things, lets find solutions. It may mean that first home buyers may need to take a different tact in investing in property, whereas they may have to buy a cheaper investment property or two in large regional areas where house prices are still around the $300,000 – $350,000 mark and increase their wealth in those properties. So that when they sell they have a much larger deposit for their home. As the game changes so must your game plan. But one thing’s for sure, what we certainly don’t need is a whole bunch of negative inaccurate hype deterring our future generation from buying property.
These comments originally appeared on Todd Hunter's blog.
 
Dr Andrew Wilson - Senior Economist for Australian Property Monitors
Latest ABS data seems to indicate increased underlying barriers to home ownership <img src="/images/stories/2013/10/04/AndrewWilson-profile.jpg" alt="AndrewWilson-profile" style="float: right;" height="150" width="125">
trengthening housing markets and rising prices can be bad news for first home buyers waiting in the home ownership queue.
With prices rising faster than savings this can lengthen the queuing duration for first home buyers or alternatively necessitates revised property type and location choices.
Increased investor activity can also be a barrier for first home buyers as these groups tend to compete with each other for similar properties.
Latest ABS home loan data seems to indicate increased underlying barriers to home ownership and have fuelled the flames of first home buyer doomsaying. But a closer look at the data reveals a more positive environment, particularly on a local market-by-market basis.
The ABS reported that the proportion of first home buyers approved over September in New South Wales is the lowest on record at just 4.1 percent market share of home purchase loans. No real surprise here as significant first home buyer activity has been brought forward over the past two years as a consequence of state government changes to first home buyer incentives.
Similarly in Queensland low first home buyer activity is a consequence of demand brought forward over the past year due to changes to local incentive schemes. And Victorian first home buyer activity is also predictably waning following a recent surge in activity as the local state government followed the lead of other states and changed its incentive programs.
First home buyer activity in other state markets however remains consistently alive and well. In Western Australia the proportion of first home buyers in the market is a nation-leading 20.6 percent and clearly above the long-term average for that state. Similarly in South Australia the proportion of first home buyers at 14.7 percent remains above the long-term average for that state.
Tasmania first home buyer activity over September remains just below the long term average market share.
Expect first home buyer activity to gradually recover in New South Wales, Victoria and Queensland as underlying demand increases driven by Australia’s ever-resilient aspiration for home ownership.
 
Property Observer is looking into how ABS compiles this data and will publish a follow-up piece.
 
<a target="_blank" href="mailto:ntrotman@propertyobserver.com.au">ntrotman@propertyobserver.com.au</a>
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