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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

<html><body>
Housing affordability for first home buyers loomed large in the news this week, largely because properties in Sydney and Melbourne are selling for more than many first timers can afford.
But if you’re a first home buyer, is this really a time to panic just because you missed out at a couple of auctions?
If there’s 20 bidders at an auction, 19 miss out.
If you’re committed, you still have to save as much deposit as you need, and enough to cover the stamp duty and conveyancing costs. If you don’t have enough, you have to save more.
You also have to monitor your ability to pay the cost of the loan. So be realistic about how much income you can rely upon and what it takes to service your mortgage.
Or, could you do what most home buyers do and buy a cheaper property?
If you don’t want to adjust your goals downwards, you’ll have to adjust upwards your deposit, stamp duty and loan repayment equations.
Also, use an online loan calculator before saying yes to a low-equity mortgage. If housing values weaken again, 20% equity feels better than 10.
On a policy level, would you like to see governments releasing more land to meet demand? Or should government promote more competition in the mortgage market, creating more options for more consumers?
Should New South Wales reinstate the First Home Owners Grant for existing homes?
Regardless, I do wonder if the affordability story is the whole story. Might it have more to do with where people want to buy and less to do with a generation missing out?
Stephen Koukoulas, an economist writing in Business Spectator, uses Reserve Bank numbers and finds that new home loan repayments as a percentage of household income is around the same now as it has been for 30 years. He concludes, “There is no evidence of a first home buyers’ affordability problem.”
He goes further: the prices of so-called cheap city properties bought by older generations were offset by the high interest rates; the rising Sydney house prices are offset by the historically low interest rates.
Interest rates and property markets fluctuate, but households and lenders stay within basic serviceability ranges.
This may not be the desired conclusion for those who have set their hearts on buying somewhere beyond their resources. And it doesn’t fit with the idea of a generational conflict where one cohort is ‘shut out’.
Actually, every first home buyer finds it hard – people in my generation bought modest first homes with interest rates at 20%.
Perhaps the current first home buyers would be better served by recognising the opportunity rather than the problem? At 4.8%, a mortgage is currently cheaper than it will be again in our lifetimes.
This is a massive, historical opportunity. So forget about scapegoats and do what you need to do: which is boost your deposit, set your sights on what is affordable and think in steps – it’s a long road.
What do you think?

<hr>
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" rel="nofollow" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
You can contact Mark on <a target="_blank" href="https://twitter.com/markbouris" rel="nofollow">Twitter</a>.
</body></html>

mbouris-tauSvXGAM2

First home buyers have no cause to panic: Mark Bouris

<html><body>
Homes were destroyed yesterday as the bushfires raged through Sydney's Blue Mountains, and it isn’t the first time that property owners’ fears have been brought to the surface.
In Springwood and Winmalee in New South Wales, west of Sydney, a number of houses were reportedly destroyed, according to the Rural Fire Service.
Almost 600 firefighters were battling up to 80 bush and grass fires yesterday, 31 uncontained, across the afternoon, The Australian reported.
Around 8,700 homes west, south west and north of Sydney suffered power outages. This morning, reports were coming in from ABC radio with Blue Mountains mayor Mark Greenhill saying a number of properties are lost. ‘‘It’s a scene of utter devastation," Greenhill told the ABC from Emma Parade. "There are at least a dozen home lost right where I'm standing now. We’re seeing just house after house after house that’s gone."
<blockquote class="twitter-tweet">
Salt Ash fire seemed over until this house went up 20 minutes ago. 5 fire trucks now here. But house is gone <a href="https://t.co/T4PRfv3dxP" target="_blank">pic.twitter.com/T4PRfv3dxP</a>
— Sean Berry (@Seanberry7news) <a href="https://www.propertyobserver.com.au/https://twitter.com/Seanberry7news/statuses/389472750659588098" target="_blank">October 13, 2013</a>
</blockquote>
For those currently unsure of where the fires are, this <a href="https://google.org/crisismap/2013-nsw-bushfires" target="_blank">bushfire map</a> is being regularly updated by the NSW Rural Fire Services due to intermittant site outages on their official website.
Even those some distance away from the Blue Mountains reported seeing the “orange glow” of the bushfires. These photos below come from residents in western Sydney suburb, and popular investment spot, Whalan, who shared them with Property Observer (also see our gallery below). While the fire is unlikely to reach these homes, it certainly has many asking how they can protect themselves in case.
<img width="470" height="262" src="/images/stories/2013/10/17/one.jpg" alt="one">
Photo above by Lisa Blundell
<img width="470" height="286" src="/images/stories/2013/10/17/foru.jpg" alt="foru">
Photo above by Nicole Brown
When purchasing a property
Every transaction needs to be entered into with your eyes wide open. That includes knowing the risk of bushfire, floods, cyclones and other natural disasters.
Currently, in Victoria, vendors are now required to <a href="https://www.propertyobserver.com.au/residential/victorian-vendors-to-disclose-threat-of-bushfire-to-residential-land-enzo-raimondo/2012061455127" target="_blank">disclose whether a property is on bushfire prone land</a>. You can also check the details of the land online via this <a href="https://services.land.vic.gov.au/landchannel/content/addressSearch" target="_blank">state government portal</a>.
In New South Wales, a section 149 certificate can be applied for from the correct governing council. This does come at a small cost for the purchaser. For instance, the <a href="https://www.cityofsydney.nsw.gov.au/development/application-guide/application-process/zoning-certificates" target="_blank">City of Sydney charges between $50 and $80</a> for these certificates. If you're intending to develop, rebuild or put a granny flat on the block, the <a href="https://www.rfs.nsw.gov.au/dsp_content.cfm?CAT_ID=1009" target="_blank">NSW Royal Fire Service has some useful information online</a> about which hoops you may need to jump through, and details to be aware of.
Your current property
To create your own property bushfire survival plan, there's a <a target="_blank" href="https://www.rfs.nsw.gov.au/file_system/attachments/Attachment_BushFireSurvivalPlan.pdf">document from the government</a> available that covers everything from clothing to consider, to deciding whether you should leave your home. It’s worth having a read through, particularly if you’re in a more regional area.
The guide recommends that you ask yourself the following questions to determine the property's level of risk.
Ask:
1. Do you live within a couple of streets of bushland?
2. Does your local area have a history of bush fires?
3. Do you have many trees and shrubs around your home?
4. If you need to leave your home, do you need to travel through bushland?
5. Is your Bush Fire Survival Plan more than one year old?
Bushfire maps can also help you determine if your area is potentially at risk.
<blockquote class="twitter-tweet">
Driving through Yellow Rock, rows and rows of gutted homes. Locals guess 150 homes gone on one road. <a href="https://twitter.com/NewsTalk2UE" target="_blank">@NewsTalk2UE</a> <a href="https://t.co/X7IDsQNrwN" target="_blank">pic.twitter.com/X7IDsQNrwN</a>
— Michelle Taverniti (@M_Taverniti) <a href="https://www.propertyobserver.com.au/https://twitter.com/M_Taverniti/statuses/390947028093501441" target="_blank">October 17, 2013</a>
</blockquote>
Preparation tips to protect against bushfires
- Cut back overhanging trees or shrubs and dispose of cuttings appropriately
- Check the condition of your roof and replace damaged or missing tiles
- Non-combustible fences are most effective
- Clean leaves from the roof, gutters and downpipes
- Fit quality metal leaf guards
- Enclose underfloor areas
- Plant trees and shrubs that are less likely to ignite due to low oil content
- Consider installing a Static Water Supply sign if you have a water tank, dam or swimming pool
- Store wood piles well away from the house
- Keep grass cut
- Make sure pressure relief valves on LPG cylinders face away from the house
- Ensure you have a hose long enough to reach your entire home
- Store flammable items away from the house
- Check the condition of external walls/cladding and seal gaps
- Choose a non-combustible doormat
- Metal flywire screens should be attached to the outside windows and doors
When the fires have passed, don't let your guard down. You will need to patrol and ensure no embers or sparks can affect your property.
<blockquote class="twitter-tweet">
Great advice from South Warrandyte Fire Bridgade RT <a href="https://twitter.com/GlobalCareAu" target="_blank">@GlobalCareAu</a>: Help some1 prep their house 4 bushfire season <a href="https://t.co/5X3mZzlWOF" target="_blank">https://t.co/5X3mZzlWOF</a>
— QldFire (@QldFire) <a href="https://www.propertyobserver.com.au/https://twitter.com/QldFire/statuses/390634908735254528" target="_blank">October 17, 2013</a>
</blockquote>
Always ensure that all fire alarms are adequately installed with the correct batteries and that home and content insurance is in place that covers you in the event of a fire. If there are tenants in the property, ensure that they are prepared in the event of a bushfire, and that they are provided with as much information as possible.
Grants from the government are occasionally available for those most badly affected. For instance, in Tasmania these are the <a href="https://www.bushfirerecovery.tas.gov.au/people_and_communities/red_cross_bushfire_appeal/stage2" target="_blank">current listed grants </a>for property owners, tenants and local communities. They include up to $10,000 to assist with rebuilding a property and $5,000 for tenants to assist with replacing their contents.
In Western Australia, this <a href="https://www.legalaid.wa.gov.au/LegalAidServices/publications/Documents/WA%20Bushfires%20Renting.pdf">l</a><a target="_blank" href="">egal aid document</a> lays out the rules between owners and tenants.
"If you own the house and it is now unfit for the tenant to live in, you cannot make a tenant move out immediately so try to work out an agreement with them," the document states. It also covers an outline of the rules surrounding bonds and commercial tenancies.
Observer Jo Chivers has also previously written on the subject of the <a target="_blank" href="https://www.propertyobserver.com.au/developments/the-impact-of-bushfire-zoning-on-your-development-jo-chivers/2013052361604">impact of bushfire zoning on your development</a>. 
Views of the fire around Sydney
{yoogallery src=[images/stories/2013/10/18/fire]}
All our thoughts go to those currently affected.
</body></html>

jduke-EHk3XBmHkn

Protect your property from bushfires

<html><body>
Higher density housing is often viewed as an investment opportunity but like all property the outcome depends heavily on a range of factors.
This is apparent when the suburbs of Melbourne are ranked by their indicative gross yield over the past year for units. Using the RP Data Scorecard, the data applies to the year ending September and only includes suburbs with at least 500 dwelling to reduce variability.
Inner city <a target="_blank" href="/news">Carlton </a>tops the list with a yield of 6.9%. The neighbouring <a target="_blank" href="/news">CBD</a> is fourth on the list with a strong 5.9% which underscores why demand from investors is helping to drive the inner city high rise market.
Carlton has a lower rent than the CBD with a median asking price of $360 compared to $450.
The other three suburbs in the top five are at the more affordable end of the market from the perspective of median asking rents but still provide healthy yields. <a target="_blank" href="/news">Broadmeadows</a> has a median rent of $310 per week and a yield of 6%, <a target="_blank" href="/news">Melton</a> a median rent of $255 and yield of 5.8%. Neighbouring <a target="_blank" href="/news">Melton South</a> a median rent of $240 and yield of 5.6% has been recorded.
Does this make these suburbs good investment opportunities? That really depends on the actual property on offer and whether you are seeking a high weekly rent or a larger capital gain.
 
<hr>
 Robert Larocca is Victorian housing market specialist for <a rel="nofollow" href="https://rpdata.com/" target="_blank">RP Data</a>.
 
 
</body></html>

rlarocca-zWhvjay44N

The best Melbourne suburbs for unit and apartment yields: Robert Larocca

<html><body>
Last week’s employment data showed a fall in Australia’s workforce participation rate to 64.9%, the lowest for seven years.
If the rate had been maintained at the level of three years ago, unemployment would have been around 6.6% in September, according to some estimates. Labor thus left office with workforce participation having peaked and begun declining on its watch. It’s now a challenge the Coalition has inherited, and a significant one.
The reasons why fewer of us are in, or seeking, paid employment?—?in particular, whether it’s the long-awaited impact of ageing on the workforce?—?aren’t clear (theAFR’s David Bassanese <a rel="nofollow" target="_blank" href="https://www.afr.com/p/business/companies/ageing_only_one_part_of_workforce_RdlA0fb6pyjz3lRSaDpC1M">had a good go this week</a>). In a speech nearly a year ago on the labour market, Reserve Bank Deputy Governor Phil Lowe <a rel="nofollow" target="_blank" href="https://www.rba.gov.au/speeches/2012/sp-dg-091012">told an audience in Hobart</a> that:
<blockquote>
“One interesting aspect of the recent outcomes is that despite only modest overall employment growth, the unemployment rate has not moved up, as had been widely expected. Part of the reason for this is that there has been a decline in labour force participation?—?that is, in the share of the working-age population either with a job or looking for a job. While one always needs to interpret short-run movements with caution, the current participation rate is around half a percentage point lower than the average of the past five years. This stands in contrast to the general upward trend in participation over the past 30 years. “The Reserve Bank has recently spent some time trying to understand what is happening here and what it says about the balance of supply and demand in the labour market.”
</blockquote>
Some of this work looked at demographic changes, high levels of structural change in many industries delaying the re-entry of workers (especially men) and the weakness in construction which traditionally has high levels of self-employed workers. But from the lack of a firm conclusion in this speech, the RBA remains as puzzled, as are many other economists.
Tuesday’s minutes of the <a rel="nofollow" target="_blank" href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2013/01102013">Reserve Bank’s October meeting</a> carried this tantalising paragraph:
<blockquote>
“Members were briefed on longer-run changes in the industry composition of output and employment. The share of economic activity occurring in service industries had increased over time. Employment in services had recorded a greater increase than in goods-related industries, in part reflecting slower productivity growth in service industries. Over the past decade, the bulk of the increase in employment had been in service industries.”
</blockquote>
This is understood to have been a briefing based on an earlier request from the board. There’s no research being prepared for a later article in the quarterly bulletin or a speech by a senior official, such as Governor Glenn Stevens (who speaks in Sydney on Friday) or Lowe, who is out in public in Melbourne the following week.
The reason for the request isn’t known, but it could be linked to the way the labour market has softened since mid-year, especially with a noticeable fall in the participation rate. The minutes made this observation about the labour market:
<blockquote>
“The labour market had softened further in recent months. The unemployment rate had increased to 5.8 per cent, the participation rate had declined and the level of employment was little changed from earlier in the year. Members noted that hours worked had increased. Although the hours worked data are volatile, possible explanations for the increase included changes in sectoral employment shares, increased hours for existing staff as firms attempted to contain labour costs or reluctance of firms to take on new staff. Forward-looking indicators of labour demand remained soft and the Bank’s liaison suggested that employment intentions had been subdued in recent months, most notably in mining and mining-related sectors.”
</blockquote>
The Howard government was aware of the need to continue to push participation. Joe Hockey defended government assistance for working women in the face of opposition from social conservatives on the basis that “we’re running out of workers”. That government also tried to reduce the price of labour, via Workchoices, thus bringing underskilled workers into or back into the workforce (which had, as Treasury predicted, a negative impact on productivity).
With Workchoices dead, buried, cremated, staked through the heart and shot into space by Tony Abbott as opposition leader, that option isn’t currently available. Now in government, the Coalition does see its PPL scheme as providing a greater participation incentive than the Labor scheme it wants to replace. But addressing participation traditionally requires the rather mundane work of improving training, making jobs more interesting and lowering barriers to older workers (something Labor tried to do) and increase mobility, something Abbott has flagged previously via clunky incentive schemes to encourage workers to move to mining states?—?now useless given mining is shedding workers. And bear in mind high property prices in Sydney and Melbourne might be an increasing disincentive all of their own.
In many respects the weak participation rate is more important than abolishing the mining tax or the carbon tax. In the medium to longer term, higher levels of workforce participation boosts employment, standards of living and tax revenues (especially from the GST) and helps underwrite a higher level of demand in the economy. What the Coalition Employment Minister Luke Hartsuyker does on the issue will have a significant bearing on future budgets and economic growth.
 
<hr>
 This article first appeared on <a target="_blank" rel="nofollow" href="https://www.crikey.com.au/">Crikey</a>.
 
 
</body></html>

jake-cSmGT7VXVf

Economists stumped as Australia's participation rate falls to a seven-year low

When it comes to choosing the right investment property, there are a number of different approaches and it can understandably be a confusing environment for many. Emails continually come in to the Property Observer editorial inbox from readers looking at buying in different states, unsure about locations, or just wanting some guidance.

Here, we will briefly run through how to start considering your approach to selecting an investment property. Over the next few weeks, the Property Observer team will tear apart each part in the process to show you just how to replicate the process.

1) Your personal situation

- What are your goals in life?

- What do you hope to achieve with property?

- How will you achieve this?

Figure out what this look like in terms of a time frame (how long do you have?) and how much you need (what return does it need to give me?). Consider cash flow and capital growth, and decide whether you&#39;re requiring a positive cash flow right now, or in the future, or if you&#39;re willing to pay out each week and hope for some capital gain.

Understanding what the property needs to do to fit into your portfolio is absolutely critical. There is little point buying a property that has terrible cash flow, but fantastic long-term capital growth potential, if your plan is to improve your current living situation. Similarly, if you have your heart set on renovating for capital gain, it&#39;s unlikely you&#39;ll want to be buying in a brand new estate. You might want to read Margaret Lomas&rsquo; response to an investor who <a href="https://www.propertyobserver.com.au/residential/ask-margaret-should-i-buy-off-the-plan-or-an-existing-property/2013062862801" target="_blank">asks whether they should buy established or new</a>.

Consider your appetite for risk - are you willing to buy in a mining town that may experience a significant downturn for the chance of strong cash flow? Your &#39;sleep at night&#39; factor is a critical part of this.

You will also want to assess your borrowing capacity, current financial situation and similar. This may require the services of some form of adviser, broker, financial planner or investment mentor. Investors are advised to ensure they check carefully about who they do business with.

2) Turn to the &#39;macro&#39;

- Are you comfortable buying in another state?

- How are the states/territories performing?

- Where do they sit on the property clock?

There are thousands of suburbs across Australia, and there&#39;s no way you can check them all. Property buyers should become familiar with the concept of the property clock and try to place each of the different states and territories onto this diagram as part of their initial analysis.

For investors wanting to learn more about the property clock, observer Jo Chivers wrote about <a href="https://www.propertyobserver.com.au/developments/learn-where-your-region-sits-on-the-property-clock-before-you-begin-your-development/2011110252187" target="_blank">working out where your region sits on this clock</a> before considering development.

Remember that buying low and selling high is a common investment mantra, but that it can be difficult to see where the bottom is and when the top has passed until later down the track.

You will also want to cultivate an understanding of the different overall forces within each state and territory. Understand how changes in the public service may affect the ACT, for instance.

3) Digging down

- What can you afford versus what is available?

- What are the overall plans for the state/territory selected?

- How do the areas stack up based on your statistics?

Here, your price point and borrowing capacity will become even more important. As you try to choose a region or more localised area (such as, for instance, Sydney&#39;s western suburbs) you may find that your price point helps you refine this quickly. Other statistical indicators, relating to your strategy, can also help you shortlist. This may include rental yield, proportion of houses v apartments, income growth and a number of other statistics that investment experts regularly hang their hats on.

You will want to be taking the list of wider areas that you can afford and going through them, checking for overall drivers and growth prospects in the areas. If they&#39;re largely driven by tourism, then you&#39;ll want to understand the potential fluctuations in this labour market, and how this may flow-on to your investment property.

It will also be worth looking at government plans on a wider scale to try and pinpoint areas of growth. If, for instance, a rail line is being put through a whole area and there is significant infrastructure investment, then you may want to consider it more highly. Be wary though, sometimes these initiatives are reactive, rather than proactive - that is, they are put in as a result of growth rather than in expectation of it.

Understand where these areas sit in relation to the rest of the state/territory. Understand its distance from major employment hubs, and how it differs or is similar to other areas.

4) Localising your knowledge

- What are the plans for the areas?

- How do the dynamics work within the local government area (LGA)?

- What are the locals saying?

- What are the statistics saying? We have free data available here.

When you have chosen a broader area, such as an LGA, in your price point, you&#39;ll want to become aware of how the individual suburbs work and the reputations of each.

For instance, in Sydney&#39;s Hills District, Castle Hill is a more expensive suburb with a busy, mini-city like atmosphere where the properties are tightly held. Beaumont Rise, however, is a brand new estate with smaller plots. In quickly developing areas, such as these ones, you&#39;ll want to know the inner-LGA dynamics.

One way to do this is to speak to the locals yourself, discuss with real estate agents, buyer&#39;s agents and property managers, and to call the local council. Ask about upcoming plans for the area, any new developments and similar. Get to know what the people, on average, tend to be like across the region. Jump onto the <a href="https://www.abs.gov.au/websitedbs/censushome.nsf/home/quickstats" target="_blank">ABS&#39; QuickStats Census data</a>, or <a href="https://home.id.com.au/" target="_blank">.id informed decisions</a>&nbsp;to get a statistical understanding, but start reading into the local culture as well. Crime statistics and reading the local paper can also be quite revealing.

Getting an idea for how quickly properties can be developed in the local area is important, as supply/demand statistics will underpin much of your investment strategy. If there is endless developable land, then you might want to have a closer look.

5) Understanding your specific suburb

- What is the good v bad side?

- What is the price ceiling and what are different properties worth?

- Which properties are most desirable?

- Check the level of amenity

When you have a small area to deal with, there is still a &#39;good side&#39; and a &#39;bad side&#39;. Some suburbs have streets where prices range from $1.2 million plus to $500,000, often due to views or busy streets or a combination of factors. This is often referred to as &#39;pricing disparity&#39;.

You need to get a quick knowledge of the worth of properties in the suburb so that you don&#39;t pay too much and can identify a deal quickly when it comes along. You&#39;ll also want to ensure you&#39;re on the right side of a suburb, or the street that doesn&#39;t have an inbuilt &#39;value ceiling&#39; due to unchangeable factors, such as a noisy train line.

To do this it&#39;s worth looking at comparable sales, visiting home opens and, again, speaking to local experts. You will also want to attend auctions if it&#39;s a popular selling method within the suburb. Keep your eyes and ears open, and keep detailed records of what has been selling, comments that other buyers have been making and their reactions to different types of properties. Ideally, you will want to know how the addition of a room, or a pool, or a car space, affects the value of a property.

Observer David Airey wrote about <a href="https://www.propertyobserver.com.au/residential/what-is-the-best-way-to-judge-the-value-of-your-property-david-airey/2013072863556" target="_blank">how to figure out the value of a property</a> in a recent column, while Patrick Bright also told us that <a href="https://www.propertyobserver.com.au/residential/how-to-determine-a-property-s-true-value-patrick-bright/2012121258406" target="_blank">inspecting 100 comparable properties</a> is one way to do this due diligence.

Find out where most of the renters live, and what the renter/owner occupier split looks like. You&#39;ll also want to know how this suburb compares with the averages of the wider area you previously researched.

Get to grips with the local demographic. See how this differs from what you saw in step four. If your chosen suburb is filled with families, then you&#39;ll potentially want to be looking at family-friendly stock. But are they a young family? Do they tend to have two children or three? Are the parents professionals? In different suburbs, the desire for certain types of properties differs. Understand what is desirable currently, but also down the track when you might be inclined to sell.

Check out the local development applications. If there&#39;s a big apartment block going up in the suburb, this isn&#39;t necessarily a negative thing for you. However, you&#39;ll want to know what the impact may be.

Consider tools such as WalkScore, Google Maps and NearMaps to shape the area&#39;s dimensions in your mind. Decide where the &#39;best&#39; pockets of the suburb are - where demand is highest. Then consider how your investment requirements fit around this. It&#39;s often worth heading out there yourself for a look, but remember not to be blinded by emotion.

The next steps

Remember to keep all your details together so you can refer to them when necessary. Every investor has a different strategy and a unique approach to the type of property they buy, and the reasons behind it, and the savviest investors regularly refine their process.

Which parts of the process would you like fleshed out more? We&#39;ll be delving into the different research techniques for you, how to decide the good versus the bad side of a suburb, and how to tell if a property really is comparable.

Email: <a href="mailto:jduke@propertyobserver.com.au">jduke@propertyobserver.com.au</a>

Five steps for choosing the right investment suburb

<html><body>
I've often been confused by those TV shows where a caller dials in and asks: "Should I buy shares in this company?" or "should I buy a property in this suburb?", particularly when the panellist immeditaley fires back "No, but what you should be doing is...". The obvious problem with this type of financial advice is that there is no consideration of personal needs, financial goals or circumstances. And so it is with the present debate about whether it is a good time to buy a house.
In Australia, renting is usually 'cheaper' than buying in terms of monthly cashflow, so it can definitely make sense to rent where you live and invest your dollars elsewhere. I've long been a strong advocate of this idea, particularly in an age where people are changing jobs and careers far more often than ever before.
One problem is that plenty of people rent and then never invest in anything at all. It would be helpful in Australia if we moved towards longer lease terms or commercial style leases to allow renters more stability and certainty. Another common problem is that, as I specifically warned, it's all well and good to say that you will simply wait for prices to become cheap before buying somewhere to live, but what if prices don't behave themselves? Markets are rarely as predictable as people seem to believe.
And for Sydneysiders, so it is. By the time this cycle is over prices could easily be 40% higher than where they were five years or so ago, pricing many out of our market forever.
Is it a good time to buy if you are likely to have to move in a couple of years, though?
Possibly not. Stamp duty, legal fees and agent fees are material transaction costs that will likely see you fail to benefit from a short ownership period. Sure, you can retain a first property as an investment and some do this well - including my wife in fact, who still owns her first house bought aged 21. This can be great if you're able to buy in a well-located suburb, but the prospects for capital growth in outer and fringe suburbs, in my opinion, are often highly questionable.
The contrast with, say, a 35 year old buying a pure investment property via an SMSF, is stark. Knowing full well that the investment is likely to entail a multi-decade time horizon, the buyer is far less likely to be concerned with short-term market fluctuations. It's not that they would be completely emotionless if there was a sharp market correction, but they would likely be as close to that state as it would be possible to be.
Buying regularly, and buying more in the sales
On one TV panel investment show, the author of Motivated Money (I probably learned more useful information on Aussie share market investment from this one short 130 page book than from many years of reading other information) Peter Thornhill was asked what he hoped for the share markets in coming months. The other pannellists had variously offered the usual platitudes such as "cautiously optimistic for moderate gains", "a stabilising economy" or "firming growth".
Thornhill said simply: "Another GFC". The presenter of the chuckled nervously. Thornhill re-iterated: "I'm serious". He was never invited back on the show.
What Thornhill was getting at, albeit in his usual controversial and confrontational manner, is that market downturns can represent fabulous buying opportunities. His favoured strategy includes buying shares regularly (in particular, in low cost diversified LICs with exposure to financials and industrials, which tend to pay strong dividends and outperform the resources index and REITs over time) rather than obsessing over trying to time the market.
Thornhill warns very strongly that people tend to massively over-estimate their abilities in weather forecasting: "Market timing, for most of us, is no better than genuine guesswork".
Notably, property investors engage in far fewer and generally far larger transactions, so correspondingly buying well becomes far more important. Share investors can more easily average or smooth their results through regular purchases which buy more units when the markets are despondent and PE ratios are low and vice-versa.
And when the market does really tank, Thornhill will simply have some money set aside or in reserve for buying much more heavily, engaging sensible and considered leverage via margin loans at favourable rates, in order to to buy very hard into 'old favourite' stocks like Wesfarmers (WES) and Commonwealth Bank (CBA) when they are 'on sale' at $15 and $30 as the were in 2008/2009.
Thornhill stresses the importance of focussing on the growing income stream from a share portfolio - resulting in an investment strategy rather than price speculation - as opposed to the day-to-say share price fluctuations and unending market commentary. And imagine the dividends yielded from those 2008/2009 purchases today - 10-15% depending on your entry price, not to mention supersonic capital growth.
Dealing with market downturns
Always keen to learn whatever I possibly can about investment pyschology, I felt that this must be a man worth looking up, and over a coffee in Woollahra (actually, over several coffees in Woollahra) I was keen to explore whether Thornhill really dealt with market crashes in such a relaxed manner. His response was that, truthfully, "you would not be human if you did not feel the impact of a market crash". But, rationally, markets do recover over the long term, and after a crash when markets are despondent is often a great time to buy quality investments.
Does it bother me than Thornhill is 100% a shares man and essentially anti-property? Not at all. I've always preferred a balance, and believe that if you are prepared to research property markets thoroughly and buy counter-cyclically (such as in Sydney in 2007 or around London in the 1990s) you will also get great results over the long term.
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;" width="320" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6bl-dwelpri-small.gif?accessed=2013-10-16-06-09-36" height="255" alt="Dwelling Prices graph">
I tend to agree that if you're starting out with several million dollars then the great appeal (yet double-edged sword) of property market leverage is greatly diminished. However, so many of us (including me) started out with absolutely nothing, which is why property markets and the associated leverage available can seem more attractive.
Note the importance of focussing on income-generating ownership assets, such as shares and property. There are plenty espousing the benefits of shorting the market in recent times, yet they are getting their timing badly wrong and getting badly burned time and time again.
Just as bad are the usual swathe of broker "buy recommendations" in speculative mining shares resulting in woeful erosion of capital over a period of several years where simply owning the index has been generating fabulous returns. Before considering broker recommendations, look at what exactly same brokerage firms were tipping over the last 24 months - if you find more than half a dozen 'buys' which have collapsed in price, look elsewhere for advice.
As for gold, which pays no income, how badly is that strategy faring since its peak as compared to Thornhill's outstanding income-generating portfolio? Assets with growing income streams will always dominate over the long haul.

<hr>
Pete Wargent is the co-founder of <a rel="nofollow" target="_blank" href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a rel="nofollow" target="_blank" href="https://petewargent.blogspot.com/">blogger</a>.
His new book '<a rel="nofollow" target="_blank" href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>' is out now.
</body></html>

pwargent-M4siyDbqQY

Is now a good time to be buying property? Pete Wargent

<html><body>
Well, the market seems to now be in agreement. We are officially, whatever that means, in a sustained upward phase or “boom”.
By our reckoning Inner Melbourne at the top end has been in a “boom” since October of last year (2012).
As the realisation of this hits buyers, the questions we are getting have changed from: “How’s the market going, Mal?” to: “When is it all going to end, Mal?
Our answer is: “Who knows?”, and also: “We think you’re actually asking the wrong question.”
Well, you’re asking the wrong question if you want an informed answer. Because, if we ‘experts’ had little absolute idea as to when the market started, it’s unlikely we should know when it will end.
In any case, is it that relevant anyway? For all we know, the ferocious rise of this current market phase may have already eased. On the other hand it could run, as per 2009, for 18 months, or for another six to 12 months as in 2007, or another 13 years as it did from 1994.
We leave prognostications of the future to the economists, as well as to the media commentators who manage to expound at length on the market on evidence about as skimpy as that used by pre-game footy commentators.
The really useful and good buying question, in our opinion, is not a general market-based one – it’s a specific property-based one: Is this home you are currently looking at a good buy?
More specifically, is it a good financial buy?
Let’s test some theories on the recent ups and downs of the market. In the previous boom markets, who made the good decisions?
Did those who bought homes in 2002 or 2005 or 2009 make good or bad buying decisions?
Did those who bought on the precipice of the falls in 2007 and 2010 make good or bad buying decisions?
The financial wisdom of proceeding rarely relates to overall timing. It relates more to the individual circumstances.
You can still buy very well in rising markets if you have the right fundamentals – the right land content, the right location and the right floorplan.
These are things you can control – unlike the ups and downs of the market. And these are what determine the wisdom of your decisions. We are happy to provide a solid list of buys we purchased in 2007 that had solid property fundamentals, and that were sold over the next five years with a significantly increased price.
The fact is, we have no idea when or indeed if the current “boom” will end.
Our predictions always relate to a longer term picture, as it is impossible to get the short term right anyway. The longer term picture says that the population increase from China, then India and then Indonesia, is fuelling demand for our schooling, space, minimal corruption, safety of money and person, stable politics, pollution and our relaxed lifestyle.
In terms of supply – well they ain’t making any more land! The auctioneers are right on that one.
And in terms of price – are we as a community going to build to increase or decrease our overall wealth and wealth generation possibilities?
So in this current boom, forget about when it’s going to end, and think instead about whether you are asking the right question with regards to making good decisions and buying well for the long term.
 
<hr>
 Mal James is principal of<a title="James Buyer Advocates" href="https://www.jamesbuyeradvocates.com.au/" target="_blank" rel="nofollow"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million.
Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
</body></html>

maljames-vHwm28JUAa

Is the market too expensive? Maybe you aren't asking the right questions: Mal James

<html><body>
The arrival of new major international brands and the continued refurbishment of major city centre retail destinations have seen Australia's prime CBD retail districts maintain their status as amongst the most expensive in the world.
Sydney's Pitt Street Mall was ranked the eighth most expensive retail strip in the world, with rents in the mall averaging US$871 per square foot, according to the annual Colliers International 2013 Global Retail Highlights Report. The figures were based upon the currency exchange rate in March 2013.
Colliers International head of retail, Michael Bate said “The CBD continues to be the first location of choice for major international retailers coming to Australia… Generally, new entrants seek a flagship location in either the Sydney or Melbourne CBD, followed by smaller stores in top performing regional shopping centres".
Among some of the major brands to arrive have been Apple, Zara and Topshop, while others like Tiffany &amp; Co have been expanding their presence.
However, the report noted that new-to-market retailers must now consider options outside of the CBDs, where they would traditionally choose to locate stores. The biggest rent mover in the report was Brisbane Mall, which saw rents rise 5% to US$431.64 per square foot over the same time last year. Rents on Melbourne's Bourke Street Mall were steady at US$677.08 per square foot, while on Adelaide's Rundle Street Mall they fell 8.3% to US$265.99 per square foot.
</body></html>

kjiminez-eaYKfU7qd2

Australia's CBD retail districts among the world's most expensive: Colliers

<html><body>
In addition to listed REITs which own property in the US there are also mortgage REITs which own mortgages and mortgage backed securities.  Assets of mortgage REITs total US$500 billion.  They have a market cap of US $60 billion compared with a market cap of US $550 billion for property REITs.  
In the current interest rate environment mortgage REITs borrow short-term and invest in longer term mortgage backed securities.  They are potentially highly sensitive to interest rate changes.  Gearing employed has been beneficial as borrowing rates kept falling.  Gearing has meant that returns have been strong.  
The quantitative easing (QE) policy adopted by the Federal Reserve in the US has involved purchases of mortgage backed securities which has accentuated the strong return. When QE tapers and borrowing costs rise then the returns will decline. Federal Reserve Governor Stein, US Financial Stability Oversight Council and now the IMF have highlighted this vulnerability.  Mortgage REITs are not the subject of regulatory oversight of capital adequacy.  
When interest rates rise, the risk of falls in market value will increase.  Greater gearing means greater risk. Average gearing is 8.5 times.  
In Australia debenture issuers which share some attributes with mortgage REITs are regulated by ASIC.  Following failure in the sector, ASIC have foreshadowed tighter controls, including a minimum capital ratio adequacy of 8%.  
Failure of financial institutions in the global crisis arose from inadequate equity capital, being excessive gearing, systemic risk of sectors in the financial systems and inadequate liquidity.  
Counter cyclical prudential regulations including capital adequacy are the preferred response supporting public pronouncements about mortgage REITs.
 
<hr>
 Ken Atchison is managing director of <a href="https://www.atchison.com.au/" target="_blank" rel="nofollow">Atchison Consultants</a>.
 
 
</body></html>

katchison-p6oi8fSFSF

The vulnerability of unregulated US mortgage REITs: Ken Atchison

<html><body>
The Australian dollar hit a four-month high of $US0.9539 overnight, as the US debt ceiling approaches and credit ratings agency Fitch puts the US on a negative watch warning.
Tomorrow, the United States is scheduled to breach its debts ceiling, which would force the US Treasury to default on its debt.
This would have a dampening effect on the value of the US dollar, which would make the Australian dollar more expensive by comparison, UNSW economist James Morley said.
“An exchange rate back above 97 US cents for the Australian dollar is in theory possible – indeed, if there is a default, it is quite easy to imagine that the Aussie and greenback would hit parity once again.”
Since the start of September, the Australian dollar has appreciated nearly 6% against the greenback. A lot of this could be thanks to American policy, Morley says.
“We were in a situation where financial market expectations about Australian interest rates were the biggest driver of the Australian dollar, which had fallen about 20% off its peak last year.
“Now, however, US monetary policy is driving its rise again.”
But it’s not the only factor. The RBA has had an influence too.
“The RBA had been in an easing cycle, but expectations have shifted away from any further cuts,” Morley says. “The data out of China is stronger than expected, and the RBA is making sounds that they’re not going to ignore big increases in house prices if the economy is weak. They don’t want to fuel an asset-price boom.”
This morning, Fitch warned the US could lose its top-grade AAA credit rating.
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default," Fitch said in a statement.
Morley says the ratings agency is reflecting the “very obvious”, but any move towards a downgrade by it is consequential, as it affects the borrowing costs for the US government.
Overnight, House Speaker and Republican Jon Boehner tried twice to get government funding bills through the lower house, but both bills failed to get enough support to pass.
White House spokesman <a rel="nofollow" href="https://www.reuters.com/article/2013/10/15/us-usa-fiscal-whitehouse-idUSBRE99E0PH20131015">Jay Carney said</a> while progress was being made, “we’re far from a deal at this point”.
An American default would have catastrophic global consequences, but Morley is expecting a deal at the last minute.
“There’s not a lot of incentive for Obama to negotiate at this point, as he’s not going to pay a political cost for what the public sees as a responsibility of Congress. The Republicans don’t want this on their hands, so they’ll leave it until the last moment to back down.”
The Australian dollar pulled back slightly this morning – at 11am, it was buying $US0.95.
<iframe src="https://cf.datawrapper.de/pxC7J/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="450" height="300"></iframe>
 
<hr>
 
 
This article first appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
</body></html>

Latest Investing Insights

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

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Investing Insights

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

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News