National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

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The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

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Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

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Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

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Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

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Joel Robinson

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

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Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

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One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

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There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

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The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

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The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

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After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

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Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

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Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

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Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

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?

For the first time in a long time, Australia's inflation story is starting to look more like a landing than a fight.

The latest Consumer Price Index figures from the Australian Bureau of Statistics showed annual inflation eased to four per cent in May, down from 4.2 per cent in April. On the surface, that might not seem like a major move. Inflation remains above the Reserve Bank's target range and some categories continue to record stubborn price growth.

But the significance of this result lies less in where inflation sits today and more in what it means for where interest rates are likely heading next.

The biggest takeaway is that inflation continues to move in the right direction.

Markets had been bracing for another sticky result after a period where progress appeared to stall. Instead, headline inflation came in softer than expected, helped by falling fuel prices and easing transport costs. Annual transport inflation halved from 6.6 per cent in April to 3.3 per cent in May, while automotive fuel prices fell 11.9 per cent during the month following lower oil prices and the impact of reduced fuel excise measures.

While petrol prices don't solve Australia's affordability challenges, they are one of the most visible and immediate costs for consumers. Falling fuel costs feed through the economy quickly, helping ease pressure on household budgets and business operating expenses.

The ABS data also showed headline inflation is now sitting at its lowest annual level in several months, reinforcing the broader trend that price growth is gradually moderating.

That trend is important because it aligns with what many economists and lenders have been saying for the last month.

Prior to this week's inflation data, ANZ, NAB and Commonwealth Bank had all shifted their forecasts, now believing the Reserve Bank had likely reached the peak of the interest rate cycle. Following the May inflation release, ANZ reaffirmed that view.

In its latest economic update, ANZ said it expects quarterly trimmed mean inflation to come in at 3.7 per cent for the June quarter, slightly below the Reserve Bank's forecast of 3.8 per cent. Importantly, the bank said that outcome, when combined with slowing economic activity, "supports our view that the cash rate has peaked".

The Reserve Bank has spent the better part of three years attempting to bring inflation under control through higher interest rates. If Australia's major banks are correct and rates have now peaked, the conversation shifts from how much higher rates could go to when they might begin coming down.

Westpac's caution comes from underlying inflation. The trimmed mean, the measure most closely watched by the Reserve Bank, increased from 3.4 per cent to 3.6 per cent annually. Housing inflation remains elevated at 6.5 per cent, reflecting ongoing increases in rents, electricity costs and new dwelling construction.

Electricity prices remain particularly problematic, rising 21.1 per cent over the past year following the removal of government rebates.

Housing construction costs are also showing signs of renewed pressure. ANZ noted new dwelling costs rose 0.9 per cent in May and are now running at an annualised pace of 8.6 per cent over the past three months. Builders continue to face higher labour, fuel and material costs, a reminder that inflationary pressures have not completely disappeared.

Housing affordability has deteriorated largely because of higher interest rates rather than higher property prices alone. Even modest reductions in mortgage rates would improve borrowing capacity, increase buyer confidence and reduce repayment pressure on existing homeowners.

While August is far from a certainty, the latest inflation result has strengthened the view that the next move in rates is more likely to be down than up. For borrowers, buyers and the development sector, that alone represents a significant shift from the conversation that dominated much of the past two years.

The inflation result the property market was waiting for

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A $100 million plus medium density apartment development has been announced for a 44,000 sqm site in Melbourne's Spotswood.
The site, part of the former Don and Gilbertsons land, is bounded by West Gate Freeway, New Street, and Kyle and Blackshaws roads.
Greg Jensz, industrial director, Savills said smaller, popular pockets like Spotswood have been a key target for developers looking to capitalise on the gentrification process.
"Any opportunities within 10k of the CBD are going to be looked at seriously by developers and especially those that can offer scale," he said.
 "The redevelopment of Precinct 15, which this property forms part of, offers one of the most significant urban renewal opportunities in Melbourne given its size.
"The adoption of Amendment C88, lodged with Hobsons Bay Council, to rezone Precinct 15 from its current industrial zones to residential, paved the way for a proposed 3000 dwellings and a 5500 square metre Neighborhood Activity Centre, associated open space areas and a community facility."
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$100 million apartment project for 44,000sqm Spotswood site

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A house at Riverview, near Ipswich, has been sold for $222,250, the cheapest weekend result across the country.
Located at <a href="https://www.realestate.com.au/property-house-qld-riverview-124866926">15 Station Road</a>, the 971 sqm property is fully fenced with side access to the back yard.
It offers two bedrooms, one bathroom as well as a living room and dine in kitchen and a separate toilet.
Main road location allows advantageous reach of the local bus, rail and motorway links with Riverview station 50 metres away with the multi-level shopping centre 3.5 kilometres away.
Similarly a three bedroom house at <a href="https://www.realestate.com.au/sold/property-house-qld-riverview-124893314" target="_blank">9 Maryanne Street</a>, Riverview (below) was sold March this year for $253,000.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/4/9%20Maryanne%20Street.jpg" alt="">
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Riverview, Ipswich dual-allotment house sold for $222,250

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It is not an easy exercise to calculate the costs of natural disasters like cyclones and floods or the broader economic impact.
But there is a general course of events. Natural disasters result in damage to property and infrastructure and interrupt and delay spending and production.
Some of the costs are recouped from insurers, governments, charities or private organisations.
Depending on the size of the event, share prices of insurers, transport operators and miners may fall, negatively affecting shareholders. Insurers may seek to lift premiums if insurance payouts are high, affecting other policyholders. While economic activity falls when natural disasters hit, rebuilding work serves to boost economies in ensuring weeks and months.
Cyclone Debbie crossed the north Queensland coast on March 28 as a Category four system at Airlie Beach in Queensland near Bowen and Mackay. The cyclone was then downgraded, eventually to a tropical low, moving south-west and then south east to the Gold Coast and northern NSW.
 The Insurance Council declared a catastrophe for damage caused by Severe Tropical Cyclone Debbie and then extended the catastrophe declaration for northern NSW for flooding caused by the cyclone.
The high rainfall continues to flow through river systems, creating the risk of further flooding. Rockhampton is currently bracing for flooding either late on April 5 or April 6.
Clearly no price can be placed on the tragic loss of life caused by the floods. How will the cyclone and floods affect the economy?
Cyclone Debbie and resultant floods have damaged vegetable and sugar cane crops, residential and commercial property, farms, transport infrastructure, tourism facilities and delayed coal and beef production.
The broader economic impact of the cyclone and floods should be limited as they hit late in the first quarter and early in the second quarter. The main question is how quickly coal production resumes. A prolonged delay would negatively affect June quarter economic growth although this will be offset by repair and rebuilding work later in the quarter and coming quarters. 
Coal transport: Rail operator Aurizon said the Blackwater system will re-open later this week. The Newlands rail system will re-open in 2-3 weeks. The Goonyella rail system may re-open in 5 weeks. The West Moreton system has re-opened. The Moura rail system may re-open in 2 weeks.
QCoal has declared force majeure on two coal shipments due to load this week due to the rail disruptions. Force majeure is defined as an “act of God” or “unforeseeable circumstances” that prevent a contract being fulfilled. Jellinbah Group and Yancoal are also amongst those that have declared force majeure on shipments.
 Insurance impact: The Insurance Council says the “level of catastrophe has not been seen since ex-Tropical Cyclone Oswald in 2014, when storms and flooding affected large parts of Queensland and NSW and caused insurance losses of almost $1.2 billion.” 
Vegetables: The National Farmers Federation has cited industry groups estimating damage to crops of up to $1 billion. Prices for a raft of vegetables will rise considerably in coming months.
Beneficial rainfall: Many parts of inland Queensland received favourable rains, including beef properties around Rockhampton and Moura. Before the floods around 80 percent of Queensland was drought declared.
Queensland property: About 600 residences throughout northern parts of the state have been ruled uninhabitable since Cyclone Debbie hit the coast on Tuesday. The Courier Mail has reported that 76 residences are deemed uninhabitable in the southeast, although the indications are this is likely to go up by 250-300 in coming days.
State &amp; territory assistance: Concessional loans and grants have been provided by state and commonwealth governments to primary producers, individuals and businesses. Financial assistance is also being made available to local government authorities to restore damaged essential public infrastructure.
A Disaster Recovery Payment is administered through Centrelink and provides $1000 per adult and $400 per child for people with damaged homes
NSW impact: Disaster zones were declared in the Tweed, Lismore, Byron, Richmond Valley, Kyogle and Ballina local government areas.
Sugar: The peak body for Australian sugar growers, Canegrowers, has noted: “ With the harvest due to start in less than two months, surveys are indicating cane losses of up to 35 per cent in the Proserpine region ($50 million), 20 percent across the Mackay region ($81 million) and 20 percent in Plane Creek ($18 million).” It also notes that: “The mills and sugar terminals appear to have escaped serious damage. 
Coking Coal: From CBAs Mining and Energy Commodities Strategist, Vivek Dhar: “BHP Billiton said almost all of its coking coal mines in Queensland were affected by Cyclone Debbie. These mines “have crews returning to work to begin dewatering and preparation for return to operations.” The South Walker Creek (around 2 per cent of global exports) was the exception. The company also said that “the Hay Point [port] terminal is ready to receive coal from the mines and can begin shipping operations once the harbor master provides clearance.” If the damage from Cyclone Debbie is limited mostly to the rail system, the resumption in Australian coking coal exports could be counted in weeks.”
“The repair estimates suggest that 13-17 million tonnes (Mt) of seaborne coking coal supply (around 4-6 percent of global exports) and 2-5Mt of seaborne thermal coal supply (around 0.2-0.5 percent of global exports) may be lost this year. Some of the lost volume will likely be mitigated by drawing down on port stockpiles and increased haulage rates through the remainder of 2017.”
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 Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>. 
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The cost of Cyclone Debbie and catastrophic flooding

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Who'd have thought downsizing and the issue of empty bedrooms in suburbia will soon become a red hot 2017 Federal Budget issue.
Its because the government is looking at proposals to encourage ageing homeowners to downsize to free up more affordable stock for young families.
The likely May budget package was first floated two years ago by Scott Morrison when he was social services minister.
It is hoped breaking down a few barriers will encourage older Australians to down­size homes, thereby releasing more stock to the market and also unlocking billions in capital.
The government has advice from the Productivity Commission that estimates 15 per cent of older Australians want to move.
But seemingly not until the government addresses one of the big impediments on why they stay in large homes long after their children have left. 
After selling their home the elderly can lose some of their part-pensions under the asset test. 
The latest thinking is that some of the windfall sale proceeds pocketed after selling could be quarantined from the assets test.
There's also prospective exemptions coming to the $1.6 million cap on tax-free super retirement funds, and the $100,000 annual cap on non-concessional contributions.
Research from the Centre for Independent Studies (CIS), says some 80 per cent of retirees own their home with the overwhelming majority having no mortgage, so their prospect of surplus funds is real.
The CIS estimate the amazing value of pensioner home equity at $625bn - which is around a third of the countries' superannuation savings pool. 
Scott Morrison won't force older Australians to move house, given the emotional and ­financial investment in family homes, but incentives could free up an estimated 50,000 properties a year.
His focus will be on removing disincentives along with measures to boost the supply of enticing over-55s housing.
Obviously there's more than just these impediments as I recently noted stamp duty is a barrier, but that is a matter for the states since stamp duty didn't disappear after Canberra introduced the gst.
It will be interesting whether the package addresses the big difference in house prices - and prospect of easier surpluses - across Australia. CoreLogic puts Sydney's median house price at $895,000, compared with $680,000 in Melbourne, $635,000 in Canberra, $530,000 in Darwin, $520,000 in Brisbane, $500,000 in Perth, $455,000 in Adelaide and $383,000 in Hobart.
The Property Council of Australia calculates there are 530,000 seniors who receive the full-rate age pension, who are aged over 75 and own their homes exempt from the asset test. If they sell, these seniors lose $3 a fortnight for every $1000 of assets over the asset test threshold, which is $250,000 for singles and $375,000 for couples, and higher for non-home owners.
Exempting $100,000 of the house sale proceeds from the asset test would encourage about 17,000 house sales annually, the PCA suggested, rising to 50,000 houses if the exemption was $200,000.
 This article first appeared in the Daily Telegraph.
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jchancellor-FAypfDUnLy

Downsizing a red hot 2017 Federal Budget issue

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GUEST OBSERVER
The RBA’s decision to leave the cash rate unchanged today came as no surprise. 
The competing forces of below target inflation and soft employment growth against rampant property markets in Sydney and Melbourne mean policy is on hold for the foreseeable future. 
The most interesting feature in the Governor’s Statement today was the second last paragraph, which was new. The entire paragraph was devoted to a discussion on lending for housing. The Governor noted that growth in household borrowing to purchase dwellings, “continues to outpace growth in household income”. And that, “a reduced reliance on interest-only housing loans in the Australian market would be a positive development.” 
Lowe’s comments come in the wake of APRA’s additional supervisory measures, announced last Friday, to address risks that continue to build within the mortgage lending market. The new rules will limit new interest only lending to 30% of new lending (currently ~40%) and limit the number of loans with high LVRs. At the margin, the changes should cool investor-related demand for housing, but not sufficiently so to put a rate cut back on the table. 
The Governor is a little more downbeat on the labour market, noting that, “some indicators of conditions in the labour market have softened recently.” The February labour force data (published two weeks ago) showed employment contracted over the month and the unemployment rate lifted to 5.9%. As such, the March data (due 13 April) takes on added significance because another weak employment report would see the RBA’s forecasts for jobs and wages growth tested. 
The rest of today’s Statement contained only cosmetic changes compared with the March Statement.
<a href="https://www.propertyobserver.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.38.45%20AM.png" target="_blank">Click to enlarge</a>
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The outlook 
The consistent message from the RBA over the past two months has been that rate cuts are off the table. Very strong dwelling price growth and growing concerns around the level of household debt mean that the cash rate is unlikely go lower unless there is a sustained loss of momentum in job creation. 
Of course the debt burden faced by households would be lessened with lower rates. But the historical experience in Australia has shown that debt has risen as a share of income as rates have fallen. Further rates cuts at this point would simply encourage more borrowing that would ultimately go into bricks and mortar. That said, we very much doubt that the RBA would use its main policy lever to slow activity in the housing market while inflation is below target and spare capacity in the economy is elevated. It would be a very unusual move if it did, particularly given the latest round of supervisory measures announced by APRA. 
The market is pricing in a non-trivial 41% change of a rate hike within the next 12 months. But we cannot make or see the case for policy to be tightened. As such, we continue to expect the RBA to be on hold over 2017 and well into 2018. 
Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905">here</a>.
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RBA on hold and neutral bias reaffirmed: Gareth Aird

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<div class="column">The Australian economy is very much a Curate’s egg at present – it is good in parts. Manufacturing is doing well and business conditions generally are favourable.</div>
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<div class="column">But consumers are more cautious. Retail spending is soft while job markets are mixed, as are housing markets. So as you would expect the Reserve Bank is a little more considered when discussing the position of the Australian economy.</div>
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 But the Reserve Bank is by no means downcast, rather it is probably a little disappointed that the economy is largely marking time.</div>
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 The Reserve Bank sets policy by looking at where inflation is going to go. Inflation is still tipped to move above 2 per cent so clearly the Bank won’t be cutting rates any time soon. Housing has dominated the commentary. The Reserve Bank has added its voice to the need for lenders to be careful in assessing the serviceability of loans. And the Bank believes it would be positive if there was less reliance on interest only loans for home purchase.
Perspectives on interest rates</div>
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<div class="column">The Reserve Bank has left the cash rate at 1.50 percent. The previous move was a rate cut in August 2016 (25 basis points). There have now been 12 rate cuts since November 2011, with the Reserve Bank cutting rates from 4.75 percent to 1.50 percent. The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 per cent to 4.75 per cent.
What are the implications of today’s decision?</div>
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<div class="column">The next move in interest rates is still more likely to be a rate hike than a rate cut. But in our view, policy is unlikely to change over 2017, so any rate hike is some way off.</div>
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<div class="column">The Reserve Bank believes inflation will push into the 2-3 per cent target band. And economic growth is expected to lift over the year. Add in the fact that home prices are recording solid gains in many capital cities and it seems clear that rate cuts are off the agenda.</div>
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 Then there is the global environment. Global economic growth has improved and deflationary risks have receded. The US is lifting interest rates. And there are early signs that the Euro zone will reduce stimulus later this year. So the global environment supports the domestic policy leaning.</div>
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 The Reserve Bank is expected to maintain its neutral  policy stance for now. Inflation is still low, economic indicators are more mixed and the higher Australian dollar is acting as a modest cap on economic growth.</div>
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<div class="column">The Reserve Bank will especially watch the following in coming months: the upcoming French presidential election; US fiscal policy (the flagged tax cuts); Chinese economic activity; commodity markets; Australian home prices; inflation expectations; and the local job market.</div>
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<div class="column">We expect the Reserve Bank to stay on the interest rate sidelines for the 2017 year. </div>
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<div class="column">Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</div>
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Reserve Bank softens its views on the economy: Craig James

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GUEST OBSERVER
The RBA provided no surprises following its April board meeting leaving the official cash rate on hold at 1.5 percent.
The RBA remains more confident regarding global growth, sees Australian economic growth as moderate, regards the labour market as being mixed, sees a gradual rise in underlying inflation and continues to see conditions in the housing market as varying considerably across the country, but sees recent regulatory measures as reducing the risks associated with high and rising household debt.
This note looks at the outlook for the cash rate, the impact of bank rate hikes and the implications for investors.
RBA likely on hold well into 2018
Our assessment is the cash rate has probably hit bottom after falling from 4.75% in 2011 to a record low of 1.5% last year and that the next move will be a rate hike but not until second half 2018. Another rate cut looks unlikely because:
<ul>
<li>economic growth is okay – having bounced back in the December quarter after a temporary slump;</li>
<li>national income is up from its lows thanks to higher commodity prices;</li>
<li>the RBA expects underlying inflation will gradually rise;</li>
<li>the Sydney and Melbourne residential property markets are uncomfortably hot with prices up 19 percent and 16 percent respectively over the last year and 75 percent and 50 percent respectively over the last five years posing financial stability risks if prices and household debt continue to rise.</li>
</ul>
By the same token it’s too early to be thinking about hikes as unemployment and underemployment at over 14 percent are way too high;
<ul>
<li>this is maintaining downwards pressure on wages growth which is at record low of 1.9 percent year on year (in terms of the historical record for the Wage Price Index); </li>
<li>the $A remains too high and is up from January last year;  </li>
<li>underlying inflation risks staying below target for longer –  reflecting low wages, the rise in the $A and competition;  </li>
</ul>
There are risks around economic growth as the contribution  to growth from home building is likely to slow this year and retail sales growth is weak at a time when mining investment is still falling; and bank “out of cycle” mortgage rate hikes have delivered a (“modest”) de facto monetary tightening any way.  The RBA has to set interest rates for the average of Australia so raising interest rates just to slow the hot Sydney and Melbourne property markets would be complete madness at a time when overall growth is still fragile, underlying inflation is well below target and property price growth elsewhere is benign or weak.
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The best way to deal with the hot Sydney and Melbourne property markets and excessive growth in property investor lending into those markets is through tightening lending standards, which APRA has just moved again to do.  By the second half of 2018 the drag on growth from falling mining investment is likely to have ended, stronger global growth should have started to help Australian growth and stronger employment growth should have started to benefit full time jobs and wages and the threat around below target underlying inflation should have subsided. All of which should allow the RBA to start raising interest rates. But on current indications it’s hard to justify RBA rate hikes before then.  
But what about bank out of cycle rate hikes?  
The banks have recently raised rates for property investors and on interest only loans by around 0.25% and for principal and interest owner occupier loans by around 0.03%. The stated drivers were higher funding costs (presumably following the back up in global bond yields over the last six months) and regulatory pressure to slow lending to investors and higher risk borrowers. More moves may lie ahead if global borrowing costs rise further but again would be focussed on investors &amp; interest only mortgages and in the absence of RBA rate hikes are likely to be small as only 20-30% of bank funding is sourced globally. But it’s worth putting “out of cycle” moves in context:
 The RBA is still in control. “Out of cycle” bank moves have been a regular occurrence since the GFC and yet this did not stop mortgage rates falling to record lows in response to RBA rate cuts. As can be seen in the chart below the virtually fixed 1.8% gap between the standard variable mortgage rate and the cash rate only applied from 1997 to 2007, prior to that the relationship was far less stable so “out of cycle” moves are nothing new. The chart shows that changes in the cash rate remain the main driver of mortgage rates. If the RBA wants to lower mortgage rates again it can just cut the cash rate till it gets the mortgage rates it wants. 
<a href="https://www.propertyobserver.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.08.16%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.08.16%20AM.png" alt="">
  So far the changes in owner occupier rates are unlikely to have much economic impact because 3 basis points is trivial compared to the 200 basis point rise in mortgage rates that occurred in the 2009-10 monetary tightening cycle. So don’t expect much impact on consumer spending albeit there is negative psychological impact.
Changes in investor rates have less impact on spending in the economy because they are tax deductible and investors are less sensitive to rate moves. That said investor rates have gone up by around 0.52% compared to owner occupier rates since 2015 and this will eventually have some dampening impact on investor demand.
House prices
While strong population growth means that underlying property demand remains strong, the threats to the hot Sydney and Melbourne property markets are building: more macro- prudential measures to slow lending to investors and to more risky borrowers have been announced; the banks are raising rates out of cycle particularly for investors; the May budget is likely to see a reduction in the capital gains tax discount; all at a time when the supply of units is surging; and home prices are ridiculous. Taken together these moves are likely to result in a significant dampening impact on home price growth. 
<a href="https://www.propertyobserver.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.11.05%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.11.05%20AM.png" alt="">
We continue to expect a significant cooling in price growth in Sydney and Melbourne this year followed by 5-10% price falls commencing sometime in 2018 after the RBA starts to hike rates. By contrast Perth and Darwin are getting close to bottoming (as the mining investment slumps nears its low) and other capital cities are likely to see continued moderate growth. Unit prices are most at risk given the increasing supply of units.
Will rate hikes crash the economy?
There seems to be a view that household debt is now so high that any hike in interest rates will cause mass defaults and crash the economy. This is nonsense. Yes household debt is up but not dramatically since the GFC and interest payments as a share of household disposable income are at their lowest since 2003. Mortgage rates would need to rise by nearly 2% to get the interest servicing ratio back to its most recent 2011 high - which slowed but did not crash the economy. And most Australians are ahead on their debt payments. 
Finally, the RBA will move gradually when it does start to raise rates and knows households are now more sensitive to rate moves and so it probably won’t have to hike rates as much as in the past to cool any overheating in the economy.
<a href="https://www.propertyobserver.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.12.12%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/4/Screen%20Shot%202017-04-05%20at%208.12.12%20AM.png" alt="">
Implications for investors
There are several implications for investors. First, bank term deposit rates are set to remain very low. As a result, there is an ongoing need to consider alternative sources of income. Second, be cautious of the Sydney and Melbourne property markets, particularly units. Third, remain a little bit wary of the $A as an on hold RBA at a time when the Fed is likely to hike rates another two or three times this year could put downwards pressure on the $A.
So retain some exposure to unhedged global shares. Finally, with low interest rates growth assets providing decent yields will remain attractive. This includes unlisted commercial property and infrastructure but also Australian shares which continue to offer much higher income yields relative to bank term deposits.
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<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds. 
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Can’t see an official rate hike until second half 2018: Shane Oliver

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GUEST OBSERVER
As universally expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.50 percent.
As we anticipated in our preview, two key changes are prominent in this month’s statement by the Governor.
Firstly, the commentary around the domestic economy is somewhat less upbeat. The growth performance is described as “ongoing moderate growth.” In particular the commentary around the labour market is downbeat. It is recognised that some indicators of conditions in the labour market have softened recently; the unemployment rate has moved a little higher and employment growth is modest. The forward looking indicators continue to be pointing to continued growth in employment although the use of the words “still point” provides some hint that the Bank is less committed to that prospect. Further, the Governor notes that “wage growth remains slow.”
Considerable attention is given to the housing market. While the theme that conditions vary markedly around the country is maintained the Governor speaks for the first time around “the risks associated with high and rising levels of indebtedness.” The minutes to the March meeting referred to “a build-up of risks associated with the housing market” and today’s statement just emphasises the Bank’s concern in this regard. In the March statement the Governor noted: “supervisory measures have contributed to some strengthening of lending standards.” In this statement he significantly raises the bar and asserts that: “lenders need to ensure that the serviceability metrics that they use are appropriate for current conditions … [including] a reduced reliance on interest only housing loans.” This is a much more direct statement setting the scene for expected further pressure on the banks from the regulators.
As has been the case in previous statements the currency is quoted as “an appreciating exchange rate would complicate this adjustment.”
Conclusion Since August last year we have argued consistently that rates will remain on hold over the course of 2017 and 2018. We do expect that macro prudential and banks’ self-regulatory policies will be successful in taking most of the heat out of the housing market over the course of the remainder of this year. Even though spare capacity is expected to persist in the labour market and low wage and inflation conditions remain the Bank will not opt for further policy easing given the risks of reigniting house prices.
With Australian interest rates steady and US rates continuing to rise (two Fed hikes expected this year) supplemented by a turnaround in commodity prices the stimulus required for the domestic economy is likely to come through a more competitive Australian dollar than lower interest rates. 
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA holds rates steady, more concerned about the labour market: Bill Evans

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A group of former Leighton Properties executives have launched a new Sydney-based development company.
The company, to be known as Avenor, will focus on the development of large residential / mixed-use precincts and institutional grade commercial office projects in Australia’s major capital cities in partnership with domestic and international capital partners.
Peter Clemesha, Stephen Rayleigh and James Paver were executives with Leighton and they have also brought over other former-Leighton Properties employees Nathan Andersen (Queensland development director), Richard Bradley (head of project management), Kelvin Steel (health projects) and Andrew Coward (head of strategy and corporate affairs).
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/14/Photo_2.jpg" alt="">
The company’s founding partners have previous experience developing many projects across Australia, including the Chifley Tower and 135 King Street in Sydney, 177 Pacific Highway, North Sydney, Eclipse Tower and One Parramatta Square (‘1PSQ’) in Parramatta, ‘Erko’ in Erskineville and the ‘Aqua’ residential tower in Bondi Junction.
Clemesha said that Avenor is taking an active approach to securing new development projects.
“We are excited to be involved in these major projects and look forward to developing long-term ongoing relationships with new and existing capital partners on further development acquisitions we are currently pursuing,” he said.
“Avenor is uniquely placed to draw upon our wide depth of experience delivering tenant-led commercial developments and large, complex residential precincts for a number of different property groups.
“Our intention is to leverage our highly skilled team’s combined experience, in order to become a major tier- one developer with national presence.
“We’re actively working with our capital partners and will be focussing on delivering enhanced returns whilst still maintaining a diligent approach to risk management, design and project delivery.”
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New development firm launched by former Leighton executives

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Fife Capital has expanded its presence in Queensland’s industrial market, securing two facilities in the Brisbane suburb of Darra for $29.45 million.
CBRE’s Ed Bull and Cushman &amp; Wakefield’s Corey Bott negotiated the sale of 2642–2666 Ipswich Road on behalf of Cambooya Pty Ltd.
Comprising 9,732 square metres over two modern corporate industrial facilities, the property is securely leased to two tenants, including two ASX-listed subsidiaries – Ensign Services and Multispares Limited.
Bull said the formal on marketing campaign yielded over 50 enquiries due to the quality of the investment offering.  
"This opportunity to acquire a secure investment backed by majority ASX-listed subsidiaries drew interest from a vast pool of buyers, including local, domestic and foreign purchasers," Bull said.
"In addition to its attractive tenancy profile, the property also benefits from an enviable location in close proximity to the Ipswich Motorway – one of south east Queensland’s major arterial roads."
Covering a total site area of 23,463 square metres, the property is located in the heart of one of the industrial precinct, with the Ipswich Motorway upgrade and ConnectWest Business Park project attracting more tenants to the area.
"The western corridor is already one of Brisbane’s most sought after industrial precincts, with major tenants including Toll, Cascade, Australia Post and Coca Cola Amatil," Bott said.
"Ongoing projects in the area will continue to drive growth in this thriving precinct and subsequently fuel investment activity.”
Each tenancy comprises a mix of corporate accommodation over two levels and adjoining clear span warehouse, with roller door access and concrete hardstand areas.
 
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