For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.

At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.

It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.

The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.

After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.

In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.

[smartcode_project:default project_id=147685 project_image_fid=359136]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.

"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.

"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."

The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.

Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.

The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.

[smartcode_project:default project_id=147685 project_image_fid=359127]

The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.

Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.

"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.

"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."

On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.

Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.

[smartcode_project_cta:default project_id=147685]

Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.

That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.

John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.

"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.

"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."

[smartcode_project:default project_id=1979 project_image_fid=363268]

Equitifund isn't just commenting on Melbourne's property market, it's investing in it.

The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.

The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.

[smartcode_project:default project_id=1979 project_image_fid=363229]

The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.

Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.

Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.

[smartcode_project:default project_id=1979 project_image_fid=363284]

The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.

Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.

"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.

"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."

He said rising construction costs are also changing the way buyers assess completed developments.

"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."

[smartcode_project:default project_id=1979 project_image_fid=363228]

According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.

"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.

"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."

He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.

"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."

[smartcode_project_cta:default project_id=1979]

Why now is the time to buy in Melbourne's premium apartment market

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

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

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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Stockland has created one of the most sustainable project homes ever built in Australia at its Willowdale residential community at Denham Court in south west Sydney.
It seeks to encourage more environmentally friendly home design and construction.
The two-storey family home has been designed, built and recently certified to the 8 star NatHERS rating, which means the house is designed to achieve close to net zero emissions through its range of energy-saving and ecologically sustainable features.
The Willowdale Community Place is a display home that shows dream homes can save thousands of dollars every year with energy saving inclusions that maximise the warmth of the sun through winter and minimise the impact of the sun’s heat through summer.
It allows customers to choose the energy saving features they would like to include in the construction of their homes.
Andrew Whitson, CEO Residential at Stockland, said the aims was making suburban communities greener.
"Both in a physical sense with more green, open, public spaces, parks, playgrounds, walking trails and cycleways; and showing customers how they can save money over a lifetime through more energy-efficient home design and construction.
“This is not a concept house; all ‘eco’ features, fittings and inclusions are commercially available right now. For example, for a medium-sized home, installing solar panels will cost around $7,000 upfront. On a yearly basis, solar will save that same house between $1,000 and $2000 in energy costs, meaning they will recoup their investment within five to seven years and reaping ongoing cost savings for many years after that.”
NSW Environment Minister Mark Speakman said the NSW Government was committed to making more energy efficient homes the norm.
“Projects like Willowdale set the standard for how communities, industry and government can work together to develop great places to live that are good for the environment,” Mr Speakman said.
Stockland has so far sold more than 1,000 residential lots at Willowdale.
On completion, Willowdale will comprise around 3,300 homes, a neighbourhood shopping centre anchored by a full-line Coles supermarket and specialty stores.
Stockland has also made provision in the masterplan for 25 hectares of parks and playgrounds and the inclusion of a new state primary school.
Key sustainability features of the Willowdale Zero Emissions House:
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="213">
Sustainable energy-saving features (for a 25 square home)
</td>
<td valign="top" width="213">
Approximate cost
</td>
</tr>
<tr>
<td valign="top" width="213">
5kW solar energy system
</td>
<td valign="top" width="213">
$7000
</td>
</tr>
<tr>
<td valign="top" width="213">
Double glazing upgrade
</td>
<td valign="top" width="213">
$6000 extra
</td>
</tr>
<tr>
<td valign="top" width="213">
Draught sealing
</td>
<td valign="top" width="213">
$2000
</td>
</tr>
<tr>
<td valign="top" width="213">
Insulation upgrade
</td>
<td valign="top" width="213">
$2000 to $3000
</td>
</tr>
<tr>
<td valign="top" width="213">
External shading (east and west)
</td>
<td valign="top" width="213">
Cost neutral if offset by not buying expensive heavy internal blinds
</td>
</tr>
<tr>
<td valign="top" width="213">
Heating and cooling system
</td>
<td valign="top" width="213">
Typical standard inclusion, so cost neutral
</td>
</tr>
</tbody></table>
Other sustainability features:
<ul>
<li>Designed for Silver Livable Housing Australia Compliance and designed to a Silver Level Livable Housing Australia (LHA) rating.</li>
<li>Automatic Edmonds Odyssey home ventilation system which provides energy efficient ventilation. Odyssey air exchange system reduces air conditioning usage through intelligent air exchange between inside and out.</li>
<li>Ecomax concrete, which significantly lower embodied energy than standard concrete. Use of recycled materials and by-products.</li>
<li>Rainwater tank with grey water treatment system to meet the demands of flushing toilets, washing machine and garden maintenance Collection, storage and local reuse of rainwater to serve WCs and outside irrigation. Grey water system captures and reuses domestic waste water (hand basins, laundry and showers) for use in irrigation.</li>
<li>Solar gas boost hot water system</li>
<li>Low Volatile Organic Compounds paint which minimizes outgassing</li>
<li>Tapware specified to the highest water efficiency standards rating available: 6 Star WELS rated tapware with 4 litres per minute of water consumption.</li>
<li>Vegetable garden, compost bin and worm farm</li>
<li>Weather seals to external doors and windows to minimize unwanted outside air entering the home</li>
<li>Energy efficient internal LED lighting</li>
<li>Low maintenance and water tolerant plants used in landscaping</li>
<li>R0.5 Waffle pod concrete is poured over insulating pods providing thermal mass to store energy. The insulating pods reduce heat loss to the ground in winter.</li>
<li>Wall wrap and insulation to internal and external walls, roof and floor.</li>
</ul>
Customers can register their interest in acquiring a block of land at <a href="https://www.stockland.com.au/willowdale" target="_blank">www.stockland.com.au/willowdale</a> or by visiting the on-site Willowdale Sales and Information Centre.
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j.ballantyne1990-6AQqhLzZaK

8 star energy-efficient home by Stockland at Denham Court

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<img src="https://counter.theconversation.edu.au/content/68979/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
For the past three decades the yields on long-term bonds have been on a downward trend. This has dramatically reversed since the election of Donald Trump, with more than a trillion dollars wiped off the global bond market in the past week and a half.
But it’s not just investors that are impacted by this spectacular reversal. The bond market is a backbone of the global financial system, meaning the sell off has implications far and wide, from economic growth through to real estate prices. 
<h2>What’s happening in bond markets</h2>
Bonds are a type of long-term debt - companies and governments sell bonds to investors and these will in turn be bought and sold on the bond markets. 
The thing to look at with bonds is the market price, which is reflected in the yield quoted or price paid when a bond is bought and sold. Investors in bonds receive their returns in regular interest payments and the return of principal when the bond matures. 
As the price of the bond rises, the yield will drop. With the price of bonds steadily rising during the 30 year bull market, yields have fallen away significantly, bringing down the interest rates around the world.
<a href="/images/2016/11/21/image-20161117-19371-72i9pu.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/21/image-20161117-19371-72i9pu.png" alt="">
<h4>
US 10 Yr Treasury Yield. 
</h4>
<h2>Why we pay attention to the bond market</h2>
The price of bonds filters through into the rest of the economy. This is because government bonds are considered relatively risk free, and so act as a benchmark for pricing (relatively more risky) securities in all other markets. 
A company’s shares, for example, are expected to yield the risk-free rate (what a government bond would yield) plus an additional amount to compensate investors for their riskiness - called the “equity risk premium”. Investment in corporate bonds can be expected to yield the risk-free rate plus a premium for taking on the added default risk. 
The US bond market is especially important, as it is the largest and its prices act as a benchmark for interest rates globally. Rising bond yields in the US signal a number of things - higher expected inflation from the touted tax cuts and higher spending, and the need to borrow to fund this expansion. All of this puts further downward pressure on bond prices and upward pressure on interest rates, increasing yields. 
Overall, bond prices serve as a “barometer” of what the market is “thinking”. Especially what it thinks will happen in the future, as the relation between long term interest rates and short term interest rates has a mechanical effect on future interest rates. 
<h2>What this could mean</h2>
The sudden increase in bond yields, most notably the 10 Year US Government bond yields, has broad implications for the economy.
Mortgage rates are tied to the 10 year bond yield, for example, meaning borrowers will need to pay more for housing loans. This won’t happen overnight and we will have to wait to see the long-term effect on real estate prices.
But taking in past history, here are a range of possibilities from the end of the bull market.
First, when long-term interest rates are higher than short-term interest rates, the market expects interest rates in the future to be higher. This suggests that this market sell off isn’t an aberration, we can expect higher yields and lower bond prices in the future, and this trend will continue.
Second, long-term bond yields generally reflect an economy’s long-term real growth rate plus a premium for inflation. Inflation measures around the globe have been quite low and central banks have struggled to reach their inflation targets. Rising bond yields could mean the growth starts to tick up.
Third, there will be more uncertainty in global markets until the implications of a Trump presidency are known. Investors will expect a greater return to investment in US government bonds because of this heightened uncertainty. So yields on long-term US Treasuries are likely to stay up and even increase further in the foreseeable future. But even so interest rates are still low by historical standards.
Fourth, new borrowing for housing will be more costly. The risk of rising interest rates on existing mortgages has been mostly shifted elsewhere in the US economy. Let’s hope that the institutions or individuals holding that risk fare better than the institutions which collapsed during the savings and loans crisis in the US in the late 1980s.
Fifth, this is a permanent change in the nature of global interest rates. Rising bond yields could push up interest rates. Australia’s Reserve Bank Governor Phillip Lowe has signalled no further interest rate cuts unless inflation drops well below its current 1.5 percent level.
Christine Brown is professor and head of the Department of Banking and Finance, Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/christine-brown-316660" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

If the ‘bond market rout’ continues it could impact home prices

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GUEST OBSERVER
The Australian Taxation Office (‘ATO’) released Taxation Determination TD 2016/16 — Income tax: will the ordinary or statutory income of a self-managed superannuation fund be non-arm’s length income under subsection 295-550(1) of the Income Tax Assessment Act 1997 (ITAA 1997) when the parties to a scheme have entered into a limited recourse borrowing arrangement on terms which are not at arm’s length.
TD 2016/16 confirms the ATO’s view that where an SMSF trustee enters into a limited recourse borrowing arrangement (‘LRBA’) on non-arm’s length terms, it is necessary to consider whether the self managed superannuation fund (‘SMSF’) has derived more ordinary or statutory income under the scheme than it might have been expected to derive had the parties been dealing with each other at arm’s length in relation to the scheme.
Non-arm’s length income (NALI) will only arise in those cases where the answer to this question is affirmative.
In answering this question, it is necessary to identify both the steps and the parties in relation to the scheme.
This also requires an analysis of what the arm’s length borrowing terms would have been (‘hypothetical borrowing arrangement’).
It is then necessary to analyse whether it is reasonable to conclude that the SMSF trustee could have and would have entered into the hypothetical borrowing arrangement.
The ATO view is that where it is reasonable to conclude that the SMSF trustee could not or would not have entered into the hypothetical borrowing arrangement, the SMSF will have derived more ordinary or statutory income under the scheme, and this income will be treated as NALI.
Accordingly, where s 295-550(1) applies, the total amount received by an SMSF trustee from the arrangement, after any applicable deductions to the extent they are attributable to that income, is taxed at the highest marginal tax rate plus the temporary budget repair levy (currently 47%), instead of the concessional tax rate that typically applies to SMSFs.
This rate applies even if the SMSF is in pension phase (subject to the proposed $1.6 million balance cap).
TD 2016/16 states at [22] that:
where the SMSF can objectively establish with evidence that it could have and would have entered into the hypothetical borrowing arrangement, a comparison can then be made of the SMSF’s ordinary or statutory income from the scheme (where the parties have not been dealing with each other at arm’s length and have entered into an LRBA on terms which are not at arm’s length) and the income under the hypothetical borrowing arrangement.
The example provided in TD 2016/16 represents an extreme loan arrangement that provides limited practical guidance for the vast majority of related party LRBAs that may be almost but not quite in line with the safe harbour provisions set out in <a href="https://www.dbalawyers.com.au/announcements/ato-releases-safe-harbours-non-bank-smsf-limited-recourse-borrowing-arrangements/">PCG 2016/5</a>. The example in TD 2016/16 includes the following facts:
<ul>
<li>the loan to value ratio (‘LVR’) is 100%;</li>
<li>the interest rate is nil;</li>
<li>the loan term is 25 years, with no repayments required until the cessation of the loan term; and</li>
<li>a mortgage is provided in respect of the property.</li>
</ul>
These facts are clearly not consistent with an arm’s length loan arrangement. The facts from this example are then compared with a hypothetical borrowing arrangement example (which reflects the ATO’s safe harbour guidelines for real estate in PCG 2016/5, ie, 70% LVR, 15-year term, interest at 5.75% p.a. for the 2016 financial year, monthly repayments and security over the property).
Therefore, when determining what is an arm’s length hypothetical borrowing arrangement, the ATO is likely to refer to the safe harbour terms set out in PCG 2016/5 as a starting point (as per the example in TD 2016/16).
Alternatively, an SMSF trustee can obtain and maintain written evidence that demonstrates that the LRBA terms are consistent with an arm’s length dealing in the same factual circumstances.
In TD 2016/16, the ATO states that the rent of $1,000 per week derived from the property is not sufficient to make monthly principal and interest repayments at the rate determined under PCG 2016/5 of $5,800 per month.
The ATO then goes on to conclude that the SMSF trustee could not and would not have entered into the hypothetical borrowing arrangement for a number of reasons, including because once the weekly rental and any future capital gains are taken into account, the property would not be earnings accretive. (‘Accretive’ is commonly defined as growth or increase by gradual addition over time.)
The ATO’s methodology, however, for determining that the property would not generate sufficient future earnings or capital gains is not outlined in TD 2016/16.
The requirement that a property be earnings accretive from the outset of an LRBA requires further consideration and analysis.
The determination of the future capital growth of a particular property would, for instance, involve an analysis of property prices in the area over the proposed ownership period and forward projections of capital appreciation and net income flows.
An SMSF trustee must formulate and implement an investment strategy under s 52B of the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SISA’) that considers the:
<ul>
<li>risk and likely return from the SMSF’s investments having regard to its objectives;</li>
<li>diversification of the SMSF’s investments and the risks of inadequate diversification;</li>
<li>liquidity of the SMSF’s investments and cash flow requirements; and</li>
<li>ability of the SMSF trustee to discharge any existing and prospective liabilities.</li>
</ul>
Furthermore, the earnings and growth from the asset acquired using an LRBA may not necessarily be the main funding source to repay borrowings.
Contributions, rollovers and the admission of further members can also provide the necessary funding.
On the basis that an SMSF trustee has given due consideration to the investment strategy factors outlined above, and has a plan to repay the borrowing on arm’s length terms (as well as meeting any other existing and prospective liabilities), the SMSF trustee is investing in a manner that is consistent with the SISA requirements.
Furthermore, if the LRBA was on arm’s length terms and this could be clearly substantiated, the fact that a property was negatively geared would not, by itself, be sufficient to give rise to NALI.
There is no basis under superannuation or tax law for the position that a borrowing must be repaid from income or gains derived from the asset acquired with that borrowing for the parties to be dealing on arm’s length terms; albeit this may in fact occur in many conservatively leveraged LRBAs.
TD 2016/16 also states that the ATO will consider whether an LRBA is ‘an optimal use’ of the SMSF’s assets. Again, this statement does not reflect the obligations placed on SMSF trustees under superannuation or tax law.
An SMSF trustee is certainly required to invest in a prudent manner and in the best financial interests of members.
Determining, however, what is an ‘optimal use’ of the SMSF’s assets is a subjective exercise that is difficult to quantify or enforce, and that goes beyond the duty to exercise the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with the property of another for whom the person felt morally bound to provide for under s 52B of the SISA.
While the legislation provides certain prohibitions or limitations on particular forms of investments, eg, the 5% limit on in-house assets in pt 8 of the SISA, the legislation does not seek to influence a trustee’s choice of investment.
If the ATO views SMSF trustee investment decisions through a prism that requires optimal positively geared investments that generate an accretive return from the date the particular asset is acquired, SMSF trustees will be held to a standard above that required by superannuation and trust law and will find it increasingly difficult to identify asset classes in which to invest, given the risk of a negative return inherent in all but the most conservative of investments.
Fortunately, the ATO’s view expressed in TD 2016/16 regarding optimal positively geared investments, appears to be limited to related party LRBAs at this time.
Parties to an LRBA who are dealing on arm’s length terms can substantiate their position by retaining sufficient evidence to demonstrate that each aspect of the LRBA as a whole has been benchmarked to commercial terms in substantially the same circumstances.
In particular, an SMSF trustee must ensure that the interest rate, LVR, loan term and security provided as well as the other terms of the borrowing are consistent with an arm’s length dealing.
In forming its view, an SMSF trustee must take into consideration all these factors to ensure it can support the position that the LRBA terms have been continually maintained on an arm’s length basis.
Importantly, a written loan agreement and related documents should be prepared and should reflect the arm’s length terms.
The parties must also act in accordance with the terms of that agreement, eg, ensure regular monthly repayments are being made (at least from 31 January 2017).
SMSF trustees should also obtain quotes from banks, mortgage brokers and from other sources to support the arm’s length terms.
As a result of the latest ATO views expressed in TD 2016/16, SMSF trustees undertaking related party LRBAs should also seek to document cash flow projections in respect of any proposed acquisition that reflects a positive cash flow and capital appreciation wherever possible to minimise any NALI risk.
TD 2016/16 replaces the ATO view outlined in ATO ID 2015/27 and 2015/28, which have been withdrawn. PCG 2016/5 has also been revised following the release of TD 2016/16.
Broadly, the key change is the ATO’s clarification in TD 2016/16 regarding the need to establish a hypothetical arm’s length borrowing arrangement in determining whether NALI applies.
TD 2016/16 is a public ruling that can be relied on by taxpayers and is binding on the Commissioner.
SMSF trustees with related party LRBAs have until 31 January 2017 to ensure that each LRBA is either benchmarked to the LRBA guidelines provided by the ATO in PCG 2016/5 or arm’s length benchmark evidence has been obtained to support the terms of their arrangement.
This benchmark evidence should demonstrate that the parties are dealing on arm’s length terms and preferably moving forward should be accompanied by cash flow projections.
Daniel Butler is director and Rebecca James SMSF lawyers, DBA Lawyers. They can be contacted <a href="https://www.dbalawyers.com.au" target="_blank">here</a>.
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ATO’s revised view on LRBAs and the NALI risk

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<img src="https://counter.theconversation.edu.au/content/68791/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The UK has long been in the grip of a housing crisis. Back in 2004, respected economist Kate Barker carried out a major review of housing, concluding that if the low rates of construction continued, it would increase levels of homelessness and continue to make housing less affordable. 
Ten years later, it’s clear that these urgent warnings fell on deaf ears. In 2004/05, when Barker’s report was published, 205,000 houses were built in the UK. In 2014/15, only 153,000 homes were constructed. As each year passes, the backlog of demand for housing grows larger, leading to rising house prices and greater numbers of households in rented accommodation. 
Currently, almost 80 percent of all new dwellings are built by private house builders. In 2014/15, just ten companies were responsible for nearly half of the new homes developed. But it has not always been this way. In the 1960s and 70s, there were several years when local authorities and housing associations developed more houses than all private companies put together. 
Prioritising profit
The issue of who builds housing matters, because government has so little control over the decisions and actions of private house builders. And since the 2008 recession, what has become clear is that the biggest house builders have been growing their profits much faster than they have been building new houses. 
Our recent research shows that from 2012 to 2015, the number of new houses built by the five largest private house builders grew by 31 percent. Meanwhile, their revenues increased by 76 percent, and their end-of-year profits (after taxation and various other deductions) increased by over 200 percent. It seems that maintaining the scarcity of new housing keeps sale prices high, which removes the incentive to significantly increase the number of dwellings being built.
Of course, profit-making can be helpful, if firms then reinvest in more house building. But in 2015, the five biggest house builders returned 43 percent of their annual profits to shareholders in dividends. Our research suggests that if this had been reinvested in building more homes, nearly 9,000 extra houses could have been built – equivalent to a 6 percent increase in annual output.
It could also be argued that shareholder investment makes such house building possible, and that dividends are a fair price to pay. Yet this still leaves us with an uncomfortable conclusion; that an increase in housing supply depends on whether just a few companies decide to reinvest or pay out to shareholders.
Changing direction?
For many years after the 2008 financial crash, senior politicians did little to highlight or address this issue. But recent announcements by the government suggest a shift in political direction. Sajid Javid, the government minister responsible for housing, recently declared that “the big developers must release their stranglehold on supply”. 
This echoes the more general statements made by the new prime minster: Theresa May has suggested that her government will intervene in dysfunctional markets – and the market for new houses could well be the first in line. 
The forthcoming Autumn Statement promises increased government investment in housing. A series of new measures were recently announced, including the £3 billion Home Building Fund. This will be targeted at small and medium-sized developers, and may work to lessen the dominance of the large firms. 
What does not seem to be on the government’s agenda, however, is the introduction of measures that would increase building by local authorities, housing associations and other non-profit bodies – in spite of proposals by sector representatives which outline how this could be achieved. 
The government could do much more to increase public sector house building. Possible measures include allowing not-for-profit and public bodies to use more of their reserves for housing, and lifting borrowing restrictions. A wide range of economists have advised the government to borrow for investment in physical infrastructure. 
Housing is not currently categorised as infrastructure, but treating it as such could generate economic gains, while addressing the growing shortfall in housing. What is for sure is that the house building industry on its own will not supply the homes which the UK so desperately needs.
Tom Archer is PhD Candidate, Sheffield Hallam University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/tom-archer-315893" target="_blank">here</a>.
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Big housebuilders won’t dig a way out of the housing crisis on their own

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Sydney had a stellar weekend with strong prestige property sales.
An off the plan penthouse offering at the luxury development Opera Residences on Circular Quay <a href="https://www.operaresidences.com.au/" target="_blank">sold for $27 million</a>, bettering a $26 million adjacent sale announced just a few days earlier.
The sale of the last 280sqm penthouse (below) occurred on Saturday at the official launch of the 109 apartments to be built on Macquarie Street by Chinese developer Macrolink and its local joint venture partner, Landream. 
<img src="/images/2016/11/21/700_penthouse.jpg" alt="" width="520" height="316">
A local family from the Sydney's lower north shore secured the 19th level with views of the Harbour Bridge, Opera House and the Botanical Gardens. 
There was also confirmation of a <a href="https://www.realestate.com.au/property/54-wunulla-rd-point-piper-nsw-2027" target="_blank">$60 million plus sale of Altona</a>, a Point Piper harbourfront home (lead image pictured above).
It was sold by the low key Wang family to the Huang family from Hunters Hill. 
The Wang family had bought the prized harbourfront home for $52 million in 2013, so with few only minor renovations have made a handy profit.
Its sale did not require Foreign Investment Review Board approval by the resident Australians.
The iconic Victorian Italianate home sits on a 2400 sq m holding.
Sydney dominated the weekend auction scene too.
A $5.9 million pre-auction sale was secured at Mosman.
<img src="/images/2016/11/21/Screen%20Shot%202016-11-21%20at%209.26.08%20AM.png" alt="">
The <a href="https://www.realestate.com.au/property/6-lavoni-st-mosman-nsw-2088" target="_blank">6 Lavoni Street offering</a> (above) has sold at $5.55 million in September 2015.
In Sydney, 1,064 auctions were held this week, down from 1,089 over the previous week. The preliminary clearance rate of 81.2 percent is slightly down from 81.4 percent last week, however still higher than the corresponding week last year, when a clearance rate of 56 percent was recorded across 1,116 auctions.
The North Sydney and Hornsby region recorded the strongest clearance rate of 90 percent, while also recording the highest volume of auctions of all the regions with 149 offerings.
Next weekend the Sydney market will host its peak spring Super Saturday of auctions with more than 950 homes due to go under the hammer, according to Domain.
There were 2,950 auctions held across the combined capital cities, with only a small increase over the 2,897 reported capital city auctions last week.
The number of auctions are tracking at the highest level since March.
"There has been no indication that clearance rates are starting to ease as we approach summer," said CoreLogic's Kevin Brogan.
"However, when compared to last year, auction volumes continue to track lower with vendors still seemingly reluctant to place their properties on the market despite such strong selling conditions.
"There were 3,166 auctions reported over the corresponding week last year, with a clearance rate of 59.5 percent, which is a substantially lower rate of clearance when compared to the higher rate that has remained consistent since July."
This week’s preliminary clearance rate remains healthy at 75.6 percent, decreasing only slightly over last week’s final clearance rate of 75.8 percent.
In Melbourne, a preliminary auction clearance rate of 79 percent was recorded across 1,299 auctions this week.
Last week, Melbourne’s final clearance rate was recorded at 76 percent across 1,329 auctions, while this time last year, 1,510 properties were taken to auction across Melbourne and a clearance rate of 67 percent was recorded.
Melbourne's top sale was a contemporary home at St Kilda.
<img src="/images/2016/11/21/Screen%20Shot%202016-11-21%20at%209.28.25%20AM.png" alt="">
The five bedroom 1880s home with modern extension at <a href="https://www.realestate.com.au/sold/property-house-vic-st+kilda-123935874" target="_blank">10 Charlotte Place</a> fetched $4.4 million.
The Essendon midfielder Dyson Heppell sold his Moonee Ponds house after its weekend auction.
It was his renovation project spent during his year banned from football.
A $2.65 million sale was secured for the 1910 house which the 24-year-old transformed while serving his AFL doping ban,
The property had been bought in September 2015 for $1.74 million with Heppell naming it Albertus after his grandfather..
The selling agent Rebecca Towns of Brad Teal had been quoting $2.5 million to $2.65 million for the four-bedroom home.
The preliminary clearance rate in Brisbane this week was 47 percent, down from 53 percent over the previous week. Auction volumes were higher this week with 260 auctions held, up from 196 last week.
Brisbane had the nation's cheapest sale over the week at Beenleigh when a <a href="https://www.realestate.com.au/property-townhouse-qld-beenleigh-123832474" target="_blank">three bedroom townhouse fetched $230,000</a>. 
<img src="/images/2016/11/21/Screen%20Shot%202016-11-21%20at%209.29.39%20AM.png" alt="" width="502" height="348">
It was a mortgagee sale.
It last sold at $112,000 in 2002.
A total of 135 Adelaide homes were auctioned this week and the preliminary auction clearance rate of 68 percent is just higher than the 67 percent from the previous week across 133 auctions.
It was higher than the equivalent week last year, when 64 percent of auctions were successful.
In Perth, 72 auctions took place this week, with 35 results reported so far. Perth’s preliminary clearance rate of 48.6 percent across these 35 results is higher than both last week’s result (37.5 percent) and the clearance rate from one year ago (31.3 percent).
Canberra’s preliminary auction clearance rate of 71 per cent this week is lower than last week, when the final auction clearance rate was 76 percent and higher than the 61 percent recorded last year. 
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Sydney's stellar weekend of prestige property sales

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Sunshine North had its second ever million-dollar house sale at weekend auction.
The <a href="https://www.realestate.com.au/property-house-vic-sunshine+north-123870094" target="_blank">32 Troon Crescent property</a> (above) fetched a record price of $1.05 million.
Douglas Kay Sunshine’s Peter Kay said the price eclipsed the suburb’s earlier May record of $1 million, set when the agency sold <a href="https://www.realestate.com.au/sold/property-house-vic-sunshine+north-122389922" target="_blank">17 Taniyah Place</a>.
Four buyers competed for the five-bedroom Troon Cres home.
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Record price set in Sunshine North, Victoria

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Australia’s richest woman Gina Rinehart didn't get to offload her redundant Brisbane riverfront property.
The 61 Sutton St, Chelmer home had been listed with Place Graceville agent Peter May for weekend auction.
The advertisement for the two level luxury four-bedroom home now states it is for sale, with no disclosed asking price.
Set 7km to the CBD, the architecturally designed home has floor to ceiling glass.
Ms Rinehart’s Wingfield Avenue Pty Ltd bought the property in March 2010 for $3.175 million. It’s previously been rented out for $2000 per week in 2012.
Rinehart spent a record setting Brisbane price elsewhere on the river.
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Gina Rinehart's Chelmer listing still for sale

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Brisbane had the nation's cheapest sale over the week at Beenleigh when a three bedroom, two bathroom townhouse fetched $230,000 at Harcourts auction. 
It was a <a href="https://www.realestate.com.au/property-townhouse-qld-beenleigh-123832474">mortgagee sale</a> of the 116 sq m offering.
It last sold at $112,000 in 2002.
The 1998 townhouse is located within a security complex on Harburg Drive.
It was last advertised for rent in 2012 at $320 a week.
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jonathanchancellor-7SQnKwU6yx

Beenleigh mortgagee sale was nation's cheapest result

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The Channel Nine television series, The Block is more about entertainment than real estate.
But there are always important takeouts from the stressfully quick renovation which concluded with the Sunday night showing of its rather laboured auction finale.
The location of this year's Port Melbourne offerings was brave, not because it sat in the capital city attracting negative headlines around the increasing potential of an oversupply in apartments.
The choice pushed the envelope because Ingles Street is still very much an industrial location, so a b-grade location in most buyers' mind.
For Sydneysiders it would be like flogging prestige apartments on say Canal Road, Tempe.
Notwithstanding the nearby rubbish tip, it will be a cosmopolitan suburb, but not in the immediate future.
Its massive residential development potential is only now kicking in.
Everywhere one looked from the heritage Block apartments, there's development which is potentially a good outcome, but also a poses a risk, and at least a disruptive period for potential buyers.
It will be many years before there is anything like a village atmosphere, so the art deco office apartment offerings were only ever going to appeal to a small number of owner occupiers.
Indeed four of the five apartments were sold to investors including the winning one fitted out very well by the young Queenslanders, Will and Karlie. 
Dan and Carleen Foley’s apartment was bought by a young family of owner-occupiers.
Will and Karlie's ground floor garden apartment sold for $2.6 million, some $715,000 over its conservative reserve. Remarkably the pair only had the ground floor apartment because they came last in a challenge among the contestants.
I am a huge fan of garden apartments as they are a rarity, so should typically always make for good prices and price growth.
With some 200 sq m internal space, plus alfresco deck and lawn, it was the biggest price any apartment on The Block has ever secured, beating the $2.47 million paid in 2014 for an apartment in the converted cinema complx in upmarket Albert Park.
All five sales did much better than the current price per square metre record for Port Melbourne that sits around $7,000. 
There's no doubting the depreciation benefits attracted the investors. 
Buyers secured likely tax deductions upwards of $80,000 in the first year, totalling more than $2 million after 11-plus years of ownership.
Investors were accordingly out in force, lured by the tax treat that investors receive from depreciation.
It was interesting the only criticism of the apartments came not from the posse of buyers' agents, but rather the Melbourne radio comedian, Dave Hughes who got inside by pretending to be a potential buyer. He turned up with his cheque book, and registered for the right to bid, though never raised his auction paddle.
His major issues centred around the height of the ceilings, noting the ground floor apartment, renovated by Karlie and Will, was his obvious preference due to the high ceilings, which then disappointed elsewhere in the apartment complex conversion.
He suggested the apartment won because the ceilings were really high, and as "you got up higher the ceilings get lower and lower."
The comedian was also critical of the parking facilities.
"You've got one car port and you've gotta walk quite a way to get to the car port.
"There's no parking people!"
The 1920s converted soap factory office was, he however acknowledged, "extraordinary."
This article first appeared in the Saturday Daily Telegraph.
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Garden apartments are property winners

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GUEST OBSERVER
It had to happen sooner or later when we start to see real estate sales reach levels never witnessed before, which is exactly what is happening now on Sydney’s lower north shore where sale prices are running amok.
The saying that real estate is not an exacting science is so true when one looks closely at real estate prices where the heat is now a blow torch and property valuers are having a lot of difficulty justifying selling prices to the lenders. For example; on a recent sale we made the valuer appointed by the lender submitted his valuation 10 per cent below the purchase price.
These are markets we have never seen where in the past Sydney would boom as one. This time what we have seen are scattered booms, with the other areas reporting solid results with nothing out of the ordinary.
One million dollar markets have jumped to two million dollar markets; two million dollar markets are now three and three million dollar markets are now four million dollars and so on. I must admit the progression from slow and steady to fast and furious has caught many by surprise although for purchasers we are now in the final selling stages for 2016.
To the untrained eye, it seemed like just another property market run. To the trained however, it resembles a “Houston, we have a problem.” For example, clearance rates on the lower north shore are now well into the 90 per cent zone which is the highest recorded in years.
It will be interesting to watch how the Reserve Bank of Australia (RBA) responds following their last commentary on Melbourne Cup Day. “In the established housing market, conditions had eased relative to a year earlier, although there had been some signs that conditions had strengthened a little more recently. Housing price growth in Sydney and Melbourne had increased in recent months and auction clearance rates in these two cities had risen.
In contrast, turnover and housing credit growth had been noticeably lower than a year earlier and the value of housing loan approvals had been little changed in recent months. Conditions in the rental market had continued to soften, particularly in Perth, where population growth had been easing and the rental vacancy rate had risen.’’
When you look at the respective market data we are witnessing some amazing data shifts. In Mosman, CoreLogic report that the average hold period is now out to 10.5 years where 3 years ago this sat at 7.5 years, so next year we can expect to see this blow out further to 12.5 years. The percentage of stock is another fascinating statistic where over the past year the percentage of stock offered is down to an all-time low for houses at 5.5 percent where ten years ago it sat at 10.00 per cent.
For apartments in Mosman the average hold is getting longer and now sits at 9.8 years and the percentage of stock on the market sits at a record low of 3.4 percent. These are the property accelerants that are driving prices up as stock levels are at record lows across Sydney. Whilst it is being reported that Sydney prices have climbed another 12.1 percent over the last year some areas would be double that plus some more.
Last week, Sydney boasted a clearance rate of 84.2 percent, although CoreLogic reported the number of properties currently listed for sale in Sydney was 10.1 percent down from the same period last year.
Now this is where it gets confusing when you look at household debt which is peaking at record highs and some suggesting that this is to be expected with a record low cash rate. How could this be expected when we have never had a record low cash rate before?
Lending remains strong and currently sits well above inflation and wage growth. Although it must be said that our banks are now in a much stronger position, and they will need to be. During 2016, liquid assets have made up around 20 per cent of the major Australian banks total assets which is up from an average of 15 per cent prior to the Global Financial Crisis (GFC). Although it should be added that since the GFC property values have climbed to new record highs.
So, I am in the school of thought that the major banks will start hiking rates upwards in 2017 to start slowing down the property markets although it should be noted that those who have mortgages have been stress tested at 7.00 percent.
Last year, we observed a fall in interest – only loans which are now on the rise again and that is a very dangerous sign. A recent survey by Digital Finance Analytics (DFA) revealed that four – in – ten interest – only borrowers had absolutely no idea when, or how, they will start to repay the principal and that 90 per cent are hoping to roll indefinitely their interest – only term.
Now this will have just the one ending as the banks will start rolling the clients as they should not have been approved in the first place. The Australian Prudential Regulation Authority (APRA) must take a long and hard look at interest – only loans as they are dangerous with a capital D!
In 2014 on this day there were 115 houses in Mosman on the market, this day last year 74 and today 54. For Mosman apartments they have reduced from 73 in 2014, 61 in 2015 and 42 today.
MOSMAN – 2088
Number of houses on the market this time last year – 74
Number of houses on the market last week – 57
Number of houses on the market this week – 54
Number of apartments on the market this time last year – 71
Number of apartments on the market last week – 49
Number of apartments on the market this week – 42
CREMORNE – 2090
Number of houses on the market this time last year – 15
Number of houses on the market last week – 6
Number of houses on the market this week – 5
Number of apartments on the market this time last year – 18
Number of apartments on the market last week – 24
Number of apartments on the market this week – 21
NEUTRAL BAY – 2089
Number of houses on the market this time last year – 8
Number of houses on the market last week – 7
Number of houses on the market this week – 8
Number of apartments on the market this time last year – 33
Number of apartments on the market last week – 28
Number of apartments on the market this week – 27
 
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000.
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