Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <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>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

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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Cbus Property has now leased more than 40% of its $1.25 billion Collins Arch development at 447 Collins Street.
Its latest deal for almost 20,000 square metres including a third tenant for the mixed-use precinct.
Top 10 Australian law firm Gadens has secured 5,000 square metres of NLA commercial space over levels 11-13, equating to just over 10% of the 49,000 square metres available.
More than 40% of the leasing space is now committed, with Gadens joining King &amp; Wood Mallesons (KWM) and HWL Ebsworth.
KWM secured 8300 square metres across levels 23 to 27 in June, with HWL Ebsworth securing 6500 square metres across levels eight to 10 in October.
The commercial space lies in the western tower of Collins Arch.
The development will also house a five-star hotel in the eastern tower with a luxury residential component above crowned by two luxury penthouses and resident amenity linking the dual towers across Melbourne’s first sky bridge.
Taking up the entire city block between Collins Street, Williams Street, it has been designed by Woods Bagot and SHoP Architects.
<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/2016/12/20/Cbus%20Property_Collins%20Arch_view2.jpg" alt="">
Colliers national director of office leasing Andrew Beasley said the 447 Collins St address resonated internationally.
”The view south across Melbourne’s Yarra River and Port Phillip Bay and Collins Street-facing northern vista are just part of what makes Collins Arch a major drawcard,” Beasley said.
Construction has commenced on <a href="https://www.collinsarch.com" target="_blank">Collins Arch</a>, with completion due in 2019.
Expressions of interest are currently being accepted for both commercial leasing and the luxury residential apartments, including two sky bridge penthouses.
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j.ballantyne1990-6AQqhLzZaK

Collins Arch, Melbourne signs up third law firm office tenants

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The Coles supermarket in the NSW Southern Highlands town of Moss Vale has been sold to MPG Funds Management for $9.45 million.
Located at 13-19 Kirkham Street, the property comprises a 2,500 square metre freestanding Coles supermarket – the only full line supermarket servicing the catchment.
The property, which is situated on a 7,199 square metre strata title site, is currently leased to Coles until 2025, generating an estimated income of $561,547 per annum.
CBRE’s Justin Dowers and Nick Willis, who negotiated the sale on behalf of a private Victorian investor, said the sale reflected one of the strongest freestanding supermarket transactions in New South Wales this year translating to a yield of 5.9%.
MPG Funds Management’s Brett Gorman said the property’s strong tenancy profile presented an attractive addition to the MPG Retail Brands Property Trust, which targets well-known tenants on long term leases.
The sale follows the recent transaction of Dan Murphy’s in Wagga Wagga through CBRE on a 5.3% yield to a private Sydney based investor.
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Coles in Moss Vale sells for $9.45 million

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National Australia Bank (NAB) and realestate.com.au have announced a five year partnership aimed at combining the property search with securing finance.
“By partnering with NAB, we are building a truly innovative solution that will marry property search and property finance,” said Tracey Fellows, CEO of REA Group, which operates realestate.com.au.
“We will be assisting home buyers throughout their entire property journey, whether it be buying, renting, investing or selling.”
Anthony Cahill, COO at NAB, said that the partnership would combine online property searching and home lending in a manner unseen both nationally and globally.
“We’re combining our respective expertise to deliver more to Australian property buyers and create a game-changing experience,” he said.
With the partnership just announced, details on the exact products to be offered have yet to be announced.
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Realestate.com.au website partners with NAB to offer home loans

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The NSW government has committed to the largest ever government agency leasing deal in Western Sydney, with more than 62,000 square metres of A-Grade office accommodation to be built by Walker Corporation at 4 Parramatta Square.
The new building will accommodate at least 4,000 public service roles, including more than 1,600 planning and environment roles relocating directly from the Sydney CBD by 2019.
Minister for Finance, Services and Property, Dominic Perrottet, said the development would establish a major public service base in Parramatta, the heart of Sydney’s second CBD.
The development will bring together around 2,500 roles from the Department of Planning and Environment, the Office of Environment and Heritage and the Environment Protection Authority, creating a Western Sydney Planning and Environment “hub” and improving opportunities for these agencies to work together.
Around 1,600 Department of Finance, Services and Innovation roles already located in Western Sydney will also be co-located in the new building.
The selection of Walker Corporation as preferred proponent followed an expressions of interest process and subsequent detailed tender phase.
Development approval for the site has been obtained and construction work is expected to commence in March 2017.
Since 2014, the government has announced the relocation of more than 4,200 public service roles from the CBD to Western Sydney.
This includes more than 1,800 jobs from the Department of Education, which will be relocated to 105 Phillip Street, Parramatta in 2018.
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NSW government jobs bound for Parramatta Square

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GUEST OBSERVATION
Whether or not we end up in surplus in five years’ time, <a href="https://www.budget.gov.au/2016-17/content/myefo/html/" target="_blank">yesterday’s Mid Year Economic and Fiscal Outlook (MYEFO)</a> exposes nasty political problems for the Turnbull government in the here and now.
Real GDP growth for 2016-17 has been sensibly but shockingly revised down to 2% – the lowest outcome since the global financial crisis, the second lowest in 16 years and the third lowest since the long upswing began in 1991/92. Sensible, because we know, from the third-quarter GDP numbers and other indicators this year, that the upswing in residential investment has peaked before (and perhaps well before) an upswing in business investment has begun.
Shocking, because if labour productivity continues to run a little above 1% – as it has for the last four years – the implied growth in employment of 1% or so will probably not be enough to stop unemployment rising. The MYEFO projects the unemployment rate in the June quarter next year at 5.5% – lower than today and lower than the average of 5.8% over the last four years.
Yet, at 2.6% year average GDP, growth in those four years has been markedly stronger than the 2% MYEFO now projects for 2016-17. Even with the projected decline in the participation rate, the MYEFO unemployment forecast will be a struggle.
Disappointing GDP growth is political problem number one for Malcolm Turnbull and Treasurer Scott Morrison. Problem number two is the implacable persistence of substantial federal deficits.
These deficits limit the government’s response to problem number one. In 2012-2013 government receipts were 23.0% of GDP, payments 24.0% of GDP, and the deficit 1.2% of GDP. Labor lost office a little over nine weeks after the end of that fiscal year.
In these latest projections for the 2016-17 Budget, four years on from 2012-2013, receipts are expected to be 23.3% of GDP, payments 25.2% of GDP and the deficit 2.1% of GDP. Compared to 2012-13, receipts have increased 0.3% of GDP, spending 1.2% of GDP and the deficit 0.9% of GDP. Receipts are up, but spending is up even more and so is the deficit.
There are plenty of reasons for this woeful fiscal performance, mostly to do with modest increases in profits and wages and the tax-minimisation policy of former Treasurer Peter Costello. But these reasons are not ones that square with Treasurer Morrison’s rhetoric, or which can any longer be laid at the door of the previous Labor government.
Nor does the MYEFO give any confidence that the troubles of the Turnbull government will soon be eased. The path to the return to surplus depends completely on increasing tax revenue.
Spending as a share of GDP is now, according to these MYEFO projections, locked in at 25.2% of GDP right through to the end of the forward estimates period (and beyond the next election) in 2019-20. The projected decline of the deficit arises only because tax receipts are expected to increase over that period by 1.6% of GDP.
A slow economy, a rising tax take, perhaps rising unemployment, and not much room to move. 2017 won’t be cheerful for the prime minister or treasurer – or for the rest of us.
John Edwards<a href="https://theconversation.com/profiles/john-edwards-89846"></a> is nonresident fellow at the Lowy Institute for International Policy and Adjunct Professor with the John Curtin Institute of Public Policy at <a href="https://theconversation.com/institutions/curtin-university-873" target="_blank">Curtin University</a>
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/there-are-two-big-political-problems-buried-in-the-latest-budget-update-70595" target="_blank">original article</a>.
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jchancellor-FAypfDUnLy

The two big political problems buried in the latest budget update: John Edwards

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GUEST OBSERVATION
The December RBA minutes are consistent with the recent narrative out of the RBA which points to policy on hold, according to Commonwealth Bank's economic update.
The level of inflation and spare capacity in the economy gives the bank scope to cut rates if the economic data makes the case.
But today’s minutes suggest it would take a shift in the economic landscape for the cash rate to move lower from here.
To recap, the RBA left the cash rate unchanged at 1.5% at the December board meeting. And the final paragraph contained an unchanged neutral bias.
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This was reaffirmed in today’s minutes.
Namely, that: “having eased monetary policy earlier in the year, the Board judged that holding the stance of policy unchanged would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
"In our view, there is a paragraph in the December minutes that contains the thumb print of new governor Philip Lowe," the updated stated.
The key lines being that the board discussed the “effect of lower interest rates on asset prices and the decisions by households to borrow, particularly given the already high levels of household debt”.
“The Board had sought to balance the benefits of lower interest rates in supporting growth and achieving the inflation target with the potential risks to household balance sheets.”
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"Members recognised that this balance would need to be kept under review.”
These are indications that the RBA, under Governor Lowe, is placing a little more emphasis in policy settings on asset prices and financial stability than it did under former governor Stevens.
Here we recall that there have been a series of developments since RBA governor Lowe took the helm that mean the hurdle for more policy easing is a notch higher than it was under Glenn Stevens.
First, there were tweaks to the RBA’s policy framework. The inflation target was reaffirmed as 2-3% per annum.
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But “on average over the cycle” was replaced with “over time”. There was also a drafting change that, at least cosmetically, makes the link between monetary policy and financial stability a little more direct.
These two changes point to a central bank that appears more willing to tolerate inflation outside of the target band for a little longer than they may have done in the past.
On the international economy, the bank is a little more upbeat than previously, noting that developments had been “more positive” in recent months and that the Chinese economy had “remained resilient”.
The RBA is a little more hawkish on global inflation, noting that the outlook is more “balanced” than it has been for a while.
On the domestic economy, the RBA noted that, “year-ended growth was expected to decline”. Here we note that the December board meeting predates the QIII GDP ‘shocker’.
And while the RBA was expecting a soft print, the 0.5% fall in GDP would not have been in their growth profile.
As such, we expect the bank to downgrade their GDP forecasts in the February statement on monetary policy (SMP).
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Growth is expected to pick up to be “above potential” later in the forecast period as the impact of declining mining investment on the economy wanes.
"We agree and would add that on our estimates we are about 85% through the expected decline in mining investment," the update stated.
The RBA lacked conviction in its assessment on the labour market by indicating that there was still “considerable uncertainty” about its “momentum”.
Clearly the bank is struggling with the rare combination of a downward trend in both employment growth and the unemployment rate.
On that score, last week’s comprehensively strong November employment report will settle some nerves in Martin Place around the health of the labour market.
The pulse of jobs growth was easing into the November print (which predates the December board meeting) so the solid increase in jobs over the month (all full-time), coupled with a lift in participation and fall in the underutilisation rate would have been a welcome update.
Interestingly, the RBA mentioned a new hours-based measure of labour market underutilisation that had declined to a similar extent as the unemployment rate.
The Bbank stuck to the recent script on the housing market by noting that: “Conditions had strengthened overall over preceding months, although there was considerable variation across the country.”
On the AUD, the Board had very little to say which is probably related to their satisfaction with what has been happening.
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Commodity prices have been firming, but since mid-November (i.e. over the past month) the AUD has fallen 41⁄4% against the USD and 13⁄4% on a TWI basis.
The fall largely reflects USD strength which is the ideal outcome for the Australian economy at the moment.
The Outlook
With no meeting in January, the next RBA Board meeting is seven-odd weeks away.
There will be a lot of economic data out between now and then. And overlying that, financial markets will continue to adjust to the new economic paradigm under a Trump presidency.
We think that the RBA faces a tough job in returning inflation to target. But new Governor Philip Lowe looks more willing to tolerate inflation outside of the target band if it reduces the risk of financial imbalances and the further build of up debt in the household sector.
In addition to today’s minutes, governor Lowe’s comments from his CEDA address in November that: “It is unlikely to be in the public interest, given current projections for the economy, to encourage a noticeable rise in household indebtedness, even if doing so might encourage slightly faster consumption growth in the short term” are still ringing in our ears."
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"To us, Lowe’s comments are a strong hint that the governor doesn’t want to take the cash rate lower. And he reminded us today that the cash rate had been “lowered in aggregate by 31⁄4 ppts” over this easing cycle," the update stated.
The risks over the next year continue to lie with a cut and the market is pricing in a small (10%) chance that policy is eased again.
But the house view is that those risks don’t materialise and we have policy on hold at 1.5% over 2017.
Gareth Aird is senior economist with Commonwealth Bank.
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Market pricing implies 10% chance interest rates will go lower: Gareth Aird

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GUEST OBSERVATION
The Reserve Bank board minutes make for interesting reading, although there was no significant surprise in views.
Board members were upbeat about the improvement in the global economy – particularly China and were also aware of the likelihood of the weaker domestic September quarter economic growth result.
Interestingly, policymakers highlighted a couple of concerns at the time of the December 6 Board meeting – in particular the complications of “an appreciating exchange rate” on rebalancing the economy and “uncertainty about the moment in the labour market”.
Since the board meeting the Australian dollar has lost well over two cents (2.4%) against the US dollar and is even 1.3% lower against the trade weighted index.
Importantly the latest round of employment data showed a substantial rebound in full-time employment.
No doubt it is still early days but the improvements would give policymakers a degree of comfort.
Looking forward it is likely that the lift in commodity prices should support medium-term employment in the commodity states.
The focus for central bank official would be on how the business investment profile shifts over the coming year.
It is clear that a lift in non-mining business investment will be need to support broader economic growth.
Overall inflation remains well contained despite the lift in commodity prices.
Simply interest rate settings are likely to remain stable until well into 2017.
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Members noted that the international environment had been more positive in recent months, while observing that significant risks to the outlook for global activity persisted.
The Chinese economy had remained resilient, supported by expansionary fiscal policy and rapid growth in financing.
“There was still considerable uncertainty about the momentum in the labour market,” the minutes said.
The unemployment rate had declined over the past year, as had measures of excess capacity that accounted for the number of additional desired hours of work.
Part-time employment had grown strongly over the previous year, but employment growth overall had slowed.
Members noted that there was expected to be excess capacity in the labour market for some time, which was consistent with further indications of subdued labour cost pressures.
This suggested that inflation would remain low for some time before returning to more normal levels.
“Members noted that these factors had assisted the economy in its transition following the mining investment boom and that an appreciating exchange rate could complicate the adjustment.”
“Housing market conditions had strengthened overall over preceding months, although there was considerable variation across the country and between houses and apartments. Housing credit growth had picked up a little, particularly for investors.”
“Prices for a number of Australia's key commodities, including coking coal, iron ore and base metals, had increased noticeably over the June and September quarters, which had contributed to the increase in Australia's terms of trade of about 6% over that period.
“3Commodity prices had risen further over November, suggesting that an increase in the terms of trade in the December quarter was likely.
“Taking into account the information that had become available over the previous month, and having eased monetary policy earlier in the year, the Board judged that holding the stance of policy unchanged would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
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The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.
CommSec expects the Reserve Bank to remain on the interest rate sidelines for an extended period.
Could the next move in interest rates be a rate hike rather than a rate cut? It’s important not to get too far ahead of ourselves.
Inflation is still historically low. And while there is speculation of growth-focussed policies in the US, they haven’t been fleshed out.
However you get a sense that inflation has reached an inflexion point.
Savanth Sebastian is senior economist with CommSec.
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RBA board members upbeat about improvment in global economy: Savanth Sebastian

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GUEST OBSERVATION
The new governor of the Reserve Bank Philip Lowe has used the minutes to the December board meeting to clearly lay out his delicate policy challenge over the next year.
We have been used to monetary policy being largely driven by changes in the inflation outlook or prospects for economic growth.
While these factors remain entirely relevant for the bank, the minutes note that the board members took time to assess the policy decisions made since the latest easing cycle began in late 2011.
The key issue for discussion was around the impact of lower interest rates on asset prices and borrowing decisions.
The definitive quote is: “Over recent years the board had sought to balance the benefits of lower interest rates in supporting growth and achieving the inflation target with the potential risks to household balance sheets. Members recognised that this balance would need to be kept under review.”
I think this observation, which figures so prominently in the minutes, is signalling that the hurdle to even lower rates which would be aimed at boosting demand is very high.
With housing markets in the south-east remaining vibrant the risks of further cutting rates appear to be quite concerning for the board.
That view has certainly been a key aspect of our view that the cash rate was likely to remain on  hold for an extended period following the (inflation-motivated) rate cut in August.
Observations around the economy were broadly in line with the governor’s statement on December 6.
At the time of the meeting the board was unaware that the Australian economy contracted by 0.5% in the September quarter.
However it was aware that growth in the September quarter was likely to be weak and certainly weaker than had been expected at the time of the November statement on monetary policy.
However, as we saw in the government’s mid-year economic and fiscal outlook which printed yesterday the official forecasts (not necessarily exactly held by the RBA) imply average quarterly growth rates of 0.8% in the December(2016), March ( 2017) and June (2017) quarters.
Hence the minutes still refer to “growth picking up to be above potential later in the forecast period”.
The views on the labour market are less confident than we saw in the last set of minutes – “there was still considerable uncertainty about the momentum in the labour market”.
Having noted this quote it is however interesting that the detailed discussion on the labour market seeks to align the fall in the unemployment rate with a similar hours-based measure, providing more credibility to that fall.
The commentary on the housing market remains upbeat while recognising that there was considerable variation across the country and between houses and apartments.
There is also some positive commentary around the consumer.
We now know that consumer spending in the September quarter was well below average but the minutes point out that since then retail sales have grown at an above average pace and liaison with retailers suggested that trading conditions had remained “steady”.
The minutes are also seeking to paint a better picture for non-mining investment than the downbeat capital expenditure survey that printed in late November – “Over the past few years the national accounts had tended to report stronger outcomes [than the capex survey]”.
The commentary around China remains unchanged with activity being supported by accommodative policy although longer term risks associated with rising debt remain elevated.
The minutes had no real insights into the outlook for the US or markets. Uncertainty around Mr Trump’s policy agenda remains the challenge.
With the negative GDP print for September not being known at the time of the meeting this was always going to be a difficult set of minutes to write.
In the event the board has chosen to highlight in the minutes aspects of the discussion that provide a reasonably upbeat assessment of the economy: growth is expected to bounce back; spare capacity in the labour market, while ongoing, appears to have been reduced; the housing market has strengthened; consumer spending and non- mining investment prospects have improved.
However of most significance is the policy commentary that, I believe, implies a fairly clear signal that monetary policy is now representing asymmetric forward risks with the benefits to spending from the lower rates not compensating for instability in asset markets. Of most concern here are the elevated levels of household debt.
It has been Westpac’s view for some time that rates are likely to remain on hold through 2017 and 2018 and the discussion in these minutes gives no reason to qualify that view.
Bill Evans is the chief economist with Westpac.
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RBA won't risk financial stability with another rate cut in 2017: Bill Evans

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Carol Schwartz has been appointed to the Reserve Bank of Australia (RBA) board, replacing Heather Ridout.
She describes herself as "a dove with a hawk's wings" when it comes to prioritising economic growth and inflation.
"It's a balance, isn't it," Schwartz said in an interview with Bloomberg.
"You have to be very careful about growth, you always have to have an eye for growth. But at the same time, obviously, inflation has an impact that one has to be incredibly aware of."
Schwartz, with a background in property and retail, will commence a five-year term from mid-February.
Schwartz has previously served as a non-executive director of the Bank of Melbourne, the chair of Industry Superannuation Property Trust and as national president of the Property Council of Australia.
Three of the RBA's nine board members are women.
Schwartz said the real estate industry must always be "vigilant" about the outlook: "Looking out for signs of overheating as well as looking out for signs of great opportunity.
"The property market always has pockets of opportunity, but at the same time one needs to be aware of those areas where things may be overheating and take a step backwards."
"The economy is patchy," Schwartz said, when asked for her take on it.
"As it always is. You've always got areas that are doing well and areas that aren't doing so well, and periods of time even in one year, particularly in retail where you might have several good months and then unexpectedly several bad months. And there are a lot of factors that impact on that."
Her current directorships include Stockland, Qualitas Property Partners and Trawalla Group.
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Carol Schwartz joins RBA board

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Minutes of the Monetary Policy Meeting of the Reserve Bank Board
Sydney – 6 December 2016
Members Present
Philip Lowe (Governor and Chair), Guy Debelle (Deputy Governor), John Akehurst, Kathryn Fagg, John Fraser (Secretary to the Treasury), Ian Harper, Allan Moss AO, Heather Ridout AO, Catherine Tanna
Others Present
Christopher Kent (Assistant Governor, Economic), Chris Ryan (Acting Assistant Governor, Financial Markets), Luci Ellis (Head, Financial Stability Department), Alexandra Heath (Head, Economic Analysis Department)
Anthony Dickman (Secretary), Andrea Brischetto (Deputy Secretary)
Domestic Economic Conditions
Members commenced their discussion of the domestic economy by noting that the unemployment rate was unchanged at 5.6 per cent in October, somewhat more than ½ percentage point below its peak in mid 2015.
Despite a rise in full-time employment in October, all of the growth in employment over 2016 had been in part-time employment, with an increased share of people in the labour force reporting that they would like to work more hours.
Members discussed various measures of labour underutilisation, including those that account for the number of hours sought by the unemployed and the additional hours desired by those who are underemployed (and who are also recorded as actively searching for additional hours).
Such hours-based measures of underutilisation had declined to a similar extent as the unemployment rate since late 2015 and, unlike the heads-based measure, had not increased recently.
Wage growth had remained low and continued to be lower than implied by the historical relationship with the unemployment rate.
The wage price index (WPI) had increased by a little less than expected in the September quarter and year-ended growth in the WPI had eased a little further.
Although there had been some evidence from enterprise agreements that growth in construction wages had picked up recently, these agreements covered a relatively small share of the total workforce.
Members noted that the September quarter national accounts would be released the day after the meeting.
Based on recent data, GDP growth was likely to be weaker than expected at the time of the November Statement on Monetary Policy and lower in year-ended terms than estimates of potential growth.
Consumption growth was expected to have remained below average in the September quarter.
The volume of retail sales, which represent around one-third of total consumption, had been little changed in the quarter, pointing to continued weakness in growth of goods consumption.
In contrast, in recent months, the value of retail sales had grown at an above-average pace and liaison with retailers suggested that trading conditions had remained steady.
Households' perceptions of their personal finances had remained at above-average levels.
Members noted that the work done on residential construction had fallen in the September quarter, suggesting that the national accounts measure of dwelling investment was likely to have declined in the same period.
Although residential building approvals had declined sharply in October, the significant amount of work in the pipeline suggested that the level of dwelling investment activity would remain high.
Nevertheless, the contribution of dwelling investment to growth was expected to decline over the forecast period.
Overall, conditions in the established housing market had strengthened over recent months. Members noted, however, that supply and demand conditions had continued to vary across the country.
In Sydney and Melbourne, housing price inflation had picked up and auction clearance rates were at high levels.
Outside of Sydney, increases in prices of apartments had generally been smaller than increases in prices of detached houses.
Investor housing loan approvals had picked up noticeably and credit growth had also increased a little over recent months, particularly in New South Wales.
In contrast, housing market conditions had remained weak in Perth. Rental markets had been subdued overall and continued to be particularly weak in Perth.
Business investment looked to have been a little weaker than expected in the September quarter.
The ABS capital expenditure survey and separate data on non-residential building work done had suggested that mining investment fell in the quarter. Further falls were anticipated, but the subtraction from GDP growth in 2016/17 was expected to be smaller than in 2015/16.
Capital expenditure for the non-mining activity covered by the survey, which is less than half of the activity covered in the national accounts measure of non-mining business investment, was little changed over the year to September.
Capital expenditure survey data on investment intentions continued to point to a decline in non-mining investment in 2016/17.
Members also noted that, over the past few years, the national accounts had tended to report slightly stronger outcomes for non-mining business investment than implied by the data on capital expenditure intentions.
Non-residential building approvals had increased in recent months, but the pipeline of non-residential construction work was low.
Private sector survey measures of business conditions and non-mining capacity utilisation had been above their long-run averages, but had eased since earlier in the year.
Export volumes increased in the September quarter, led by service exports.
Prices for a number of Australia's key commodities, including coking coal, iron ore and base metals, had increased noticeably over the June and September quarters, which had contributed to the increase in Australia's terms of trade of about 6 per cent over that period.
Commodity prices had risen further over November, suggesting that an increase in the terms of trade in the December quarter was likely.
Oil prices had increased over recent months, partly in response to announcements by OPEC about reductions to supply.
International Economic Conditions
Growth in GDP of Australia's major trading partners had picked up a bit over recent months, although growth remained a little below average.
Members noted that there had been a general improvement in survey measures of global business conditions.
They also noted that the downside risks to global inflation appeared to have diminished somewhat, in part because commodity prices had increased significantly over 2016 to date.
Prospects for fiscal expansion in some countries had also contributed to expectations that inflation would increase.
However, inflation had remained below most central banks' targets and monetary policies had continued to be accommodative.
Economic activity in China had continued to be supported by accommodative financial conditions and public spending, particularly on infrastructure.
However, high and rising levels of debt remained a risk to the outlook over the longer term.
Members observed that measures had been introduced to dampen housing price inflation in a number of cities and that this posed an additional risk that growth in housing market activity might be lower in the period ahead.
Producer prices had increased over the preceding year, following declines over several years, and measures of consumer price inflation had edged higher.
In the United States, GDP growth had been around estimates of potential over the past year.
While business investment had been weak, consumption growth had continued to be supported by strong labour market outcomes.
Members noted that it was too early to know much about the effect of the outcome of the US Presidential election on the outlook for US economic activity and inflation, or the potential spillovers to other economies.
There was uncertainty about the policy agenda of the incoming administration.
A range of estimates suggested that the plans for fiscal policy could provide a boost to economic activity over the next few years and place some upward pressure on inflation.
Working in the other direction, however, if policies were enacted to restrict trade, there could be significant adverse effects on the economic outlook in the United States and beyond.
Economic activity in the euro area had continued to recover. Members noted that some economies in the euro area were facing larger structural challenges than others.
In Italy, the level of GDP remained lower than it had been prior to the global financial crisis, non-performing loans had remained at a high level and gross public debt was around 135 per cent of GDP.
Labour market conditions had continued to tighten in most advanced economies. In the United States, this had led to a modest pick-up in nominal wage growth, but unit labour costs had been rising at an above-average rate.
Growth in wages and unit labour costs had also been above average in Japan.
In the United States, core inflation had been only a little below the Federal Reserve's goal during 2016, while core inflation in Japan had moderated over the course of the year to date and inflation expectations had remained relatively low.
In the euro area, inflation had remained lower than the target of the European Central Bank, but measures of longer-run inflation expectations had stabilised.
Financial Markets
Members commenced their discussion of financial markets by noting that there had been some large market movements following the outcome of the US Presidential election, but that movements had been generally orderly and the increase in volatility had been short-lived.
US Treasury yields had risen sharply following the outcome of the US Presidential election, reflecting the assessment in financial markets that the Trump administration's policies overall were likely to boost growth and inflation, although there was considerable uncertainty around this.
Sovereign bond yields had also increased in the other major economies, though by less than in the United States. Members observed that the increase in US Treasury yields, while large, was not as large as some other movements in recent decades and yields remained very low by historical standards.
The US Federal Open Market Committee (FOMC) left the policy rate unchanged at its November meeting. Members noted that markets had fully priced in an increase in the policy rate at the FOMC's December meeting and expected a steeper, although still gradual, path for future rate increases owing, in part, to the fiscal stimulus expected to be pursued by the Trump administration.
European sovereign bond spreads to German Bunds had widened ahead of the Italian referendum and upcoming elections in some other countries.
There had been little movement in corporate bond spreads in the major economies in the previous month.
Share market indices in the United States fell immediately following the outcome of the US Presidential election, but very quickly recovered to be higher over November as a whole.
The sectoral pattern of movements across US stocks reflected the expected effects of the Trump administration's policies as well as higher oil prices.
In Japan, the depreciation of the yen and better-than-expected growth had contributed to a rise in share prices. European share prices had declined slightly in November.
Emerging market bonds and equities were generally sold off following the outcome of the US Presidential election, reflecting market expectations of a possible increase in trade protection and increased US dollar debt-servicing costs for firms in emerging market economies, given higher US yields and exchange rate depreciations against the US dollar.
The depreciation of the Mexican peso against the US dollar was particularly marked. Several emerging market central banks had intervened in the foreign exchange market. The US dollar had also appreciated against most advanced economy currencies.
A notable exception was the appreciation of the UK pound against the US dollar during November.
The Chinese renminbi had appreciated on a trade-weighted basis over November, but had depreciated against the US dollar.
Net private sector capital outflows had increased over the September quarter and the Chinese authorities had recently introduced a number of measures to increase scrutiny of capital outflows.
Members noted that the Australian dollar had depreciated by 2 per cent against the US dollar since the previous meeting but had appreciated against the yen and some other Asian currencies, to be little changed on a trade-weighted basis.
Australian government bond yields and share prices rose in November.
As in other markets, resource stocks had outperformed the broader market, reflecting higher commodity prices, while high-dividend yielding stocks had fallen owing to higher bond yields.
Australian banks' bond issuance was above average in November and strong in 2016 overall.
Banks had issued more longer-term bonds in recent years in response to increased demand from investors searching for yield and the forthcoming introduction of new prudential requirements.
Members noted that banks' deposit rates had been little changed during November.
While the cost of new bond issuance had increased, it remained below that seen at the start of 2016.
Some banks had announced increases to advertised lending rates, mostly for housing and in particular to investors.
Pricing in domestic financial markets indicated that market participants did not expect a reduction in the cash rate at the December meeting.
Considerations for Monetary Policy
In considering the stance of monetary policy, members discussed the policy decisions made throughout the easing phase since late 2011, during which the cash rate had been lowered in aggregate by 3¼ percentage points.
The lower rates had helped support the economy in the transition following the mining investment boom and, more recently, had been in response to lower-than-expected inflation.
Members discussed the effect of lower interest rates on asset prices and the decisions by households to borrow, particularly given the already high levels of household debt.
Over recent years the Board had sought to balance the benefits of lower interest rates in supporting growth and achieving the inflation target with the potential risks to household balance sheets.
Members recognised that this balance would need to be kept under review.
Turning to the policy decision for the December meeting, members noted that the international environment had been more positive in recent months, while observing that significant risks to the outlook for global activity persisted.
The Chinese economy had remained resilient, supported by expansionary fiscal policy and rapid growth in financing.
International financial markets had interpreted the outcome of the US election, specifically the implications for infrastructure spending, as being positive for growth and inflation in the United States.
At the same time, there were increased expectations that the Federal Reserve would increase policy rates at the next meeting of the FOMC.
Rising commodity prices had also contributed to an assessment that the outlook for global inflation was more balanced than it had been for some time, although inflation remained below most central banks' targets.
Domestically, data that had become available over the previous month indicated that GDP growth in the September quarter was likely to be lower than the forecast at the time of the November Statement on Monetary Policy.
Year-ended growth was expected to decline before picking up to be above potential later in the forecast period, supported by low interest rates and the lower exchange rate since 2013.
Members noted that these factors had assisted the economy in its transition following the mining investment boom and that an appreciating exchange rate could complicate the adjustment.
Falls in mining investment were expected to subtract less from GDP growth over time and resource exports were expected to continue to make a substantial contribution to growth.
There was still considerable uncertainty about the momentum in the labour market. The unemployment rate had declined over the past year, as had measures of excess capacity that accounted for the number of additional desired hours of work.
Part-time employment had grown strongly over the previous year, but employment growth overall had slowed.
Members noted that there was expected to be excess capacity in the labour market for some time, which was consistent with further indications of subdued labour cost pressures.
This suggested that inflation would remain low for some time before returning to more normal levels.
Housing market conditions had strengthened overall over preceding months, although there was considerable variation across the country and between houses and apartments.
Housing credit growth had picked up a little, particularly for investors.
The supervisory measures that had strengthened lending standards in the housing market had led some lenders to take a more cautious attitude to lending in certain segments.
At the same time, the increase in global bond yields had led some lenders to increase their rates on fixed-interest rate loans.
Taking into account the information that had become available over the previous month, and having eased monetary policy earlier in the year, the Board judged that holding the stance of policy unchanged would be consistent with sustainable growth in the economy and achieving the inflation target over time.
The Decision
The Board decided to leave the cash rate unchanged at 1.5 per cent.
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