One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

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FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

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>

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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?

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GUST OBSERVER
We have compared some sales data on Airlie Beach and Cannonvale units against Mackay units. 
When looking at the Mackay unit sales (not Mackay Harbour),  the number of sales has dropped from a high 215 sales in 2013 to financial year 2016 only recording 40 sales (median price $283,000). Mackay Harbour achieved 7 sales throughout the 2016 financial year, which was down from 30 sales in the 2011 financial year (median price $465,000). Cannonvale units have bounced back a little in the number of sales with 78 recorded sales, up from 52 sales in the 2015 financial year (median price $290,000 – up from $250,000).
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Airlie Beach unit sales have been reasonably consistent last year with 72 sales, which is down from 84 in the previous year. 
The median price has dropped to $348,000. It is interesting to see the difference in the median prices for the units at Mackay comparing to Airlie Beach. In my mind, the units in Airlie Beach still represent great value for money when you can get an excellent ocean view starting as low as $230,000. The tourism numbers coming into the region are still going very strong and this is reflecting on the gross income on the holiday let apartments. 
Stephanie Bacon from our sales team has a severely reduced apartment at the Port of Airlie for only $635,000 which has income statements of an identical unit in the complex that is 100 percent holiday let for well over $80,000 per annum.
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On a net basis this is around 4 percent which is very unusual for holiday letting properties in Airlie Beach. 
Most holiday let apartments return between 2 percent and 3 percent nett. 
Add the fact that the complex is one of the highest rated complexes in the area and it could be the best buy in your portfolio. <a href="https://campaign.raywhite.com/collect/click.aspx?u=9GxQQ+FJ4ndpBD8fNX7G8KClk3SSuzTl45qNoLo6BuasQ/3DOXSINysEh1ywyRwxrIldNM9w6T4ciReJKplyDA==&amp;rh=ff0096295de6c5cc6f21e214cf46a47315f84bb7" target="_blank"></a>
 Mark Beale is principal of Ray White Whitsunday and can be contacted <a href="https://raywhitewhitsunday.com.au" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Whitsunday price performance compared to Mackay

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GUEST OBSERVER
Retail sales disappointed in July coming in flat vs expectations of a 0.3 percent gain. Annual growth slowed to 2.7 percent with the monthly trend estimate tracking a very weak 1.1 percent annualised pace.
There are some caveats to the July number however. In particular, the storetype breakdown showed an unusually large fall in department store sales – down 6.2 percent in the month in seasonally adjusted terms, coming off a decent 4.5 percent gain in June.
That volatility may reflect shifts in the timing of sales which can be exaggerated by seasonal adjustment (we had similar issues in 2013 and 2012 with a strong June followed by a sharp fall in July that mostly reversed in August).
Weather conditions may also have played a part with an abnormally mild July (the 5th warmest on records back to 1961 according to the Bureau of Meteorology) although this did not stop clothing retailers from posting a 0.3 percent gain.
Ex department stores, retail sales were up a much more respectable 0.4 percent mth, 3.1 percent yr.
Looking across other categories: basic food retail bounced back with a 0.7 percent gain following a very weak June (–0.5 percent mth, the second biggest monthly decline in the last six years); household goods disappointed again with a 0.7 percent fall, ‘other’ retail rose 0.2 percent and cafes and restaurants saw a robust 1.2 percent gain.
As noted in previous reports, some of the ‘mixed messages’ from retail at the moment likely reflect widely diverging performances by state with consumers in the growth centres in the south-east boosting discretionary spend but those in mining states cutting back.
For total sales this pattern reversed somewhat in July with sales softer in Vic (–0.6 percent mth) and NSW (–0.2 percent mth) vs modest gains in Qld (0.5 percent mth) SA (0.5 percent mth) and WA (0.3 percent mth).
Note that all sales figures are in dollar value terms so include any price effects from discounting.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian July retail sales flat: Westpac's Matthew Hassan

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A poor understanding of finance maybe costing homebuyers as they fail to spot hidden fees and charges on their home loans accoding to a survey commissioned by financial services provider CUA.
More than 1,000 Australians aged from 25-49 were surveyed in the CUA National Mortgage Survey during July, with half of the survey respondents currently holding a mortgage. 
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The survey revealed that 43 per cent of people misunderstood what was meant by a comparison rate and a further 28 percent admitted they didn’t know what was meant by a comparison rate.
It also found 33 percent of non-mortgage holders did not think they could ever afford to buy a property and 39 percent of respondents feared they would be priced out of the market unless property prices stay the same or decrease.
Andy Rigg, CUA chief operating officer, member services, said property buyers need to be careful that what looks like a very low rate doesn’t actually have lots of nasty hidden fees and charges.
“Comparison rates are useful in helping property owners choose the most suitable rate for existing and new home owners by looking behind the headline interest rate to also factor in fees and charges,” he said.
"It is a concern that fewer than one in three Australians (29 percent) understood what was meant by a home loan “comparison rate”. Lenders are required to disclose the comparison rate so home owners can compare lenders on an even playing field by seeing what the actual cost of their loan will be, including fees, rather than just the annual percentage rate.
"It’s also clear that many home owners are still watching and waiting to see if rates fall to even lower levels, before deciding whether to switch from a variable to fixed-rate loan.”
 
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jonathanchancellor-7SQnKwU6yx

Poor understanding of finance maybe costing homebuyers: CUA 

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Development approval has been received for a $260 million residential development, Oxford Central, in the northern Sydney suburb of Epping for Greaton.
The development, 30 - 42 Oxford Street, the iconic structure will comprise 254 luxurious apartments spread across two 17 storey towers, 292 car spaces and 625 sqm of retail on the ground level. 
Greaton managing director Nicho Teng said the site was earmarked due to its strategic location in the epicentre of the state government’s plans to invest millions in re-developing Epping Town Centre and major transport infrastructure in the suburb. 
“Epping is a highly sought after destination and offers buyers many benefits including its close proximity to NSW’s best primary and high schools, Macquarie Shopping Centre and major transport hubs which connect to the North West Rail Link, North Shore, Macquarie Park, the city’s CBD and Chatswood," he said.
"International architectural practice Marchese Partners has designed stunning spacious interiors and an exterior façade that will command attention on Epping’s skyline.”
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Approval granted for $260 million residential development in Epping, northern Sydney

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GUEST OBSERVER
New online resources – the Divorce and Separation Financial Checklist and the Asset Stocktake Calculator – developed by ASIC will help people navigate the financial aspects of divorce and separation.
The resources are designed to help Australians manage their finances and make informed financial choices to avoid financial pitfalls during periods of significant change in their life.
The <a href="https://www.moneysmart.gov.au/life-events-and-you/life-events/divorce-and-separation/divorce-and-separation-financial-checklist" target="_blank">divorce and separation financial checklist</a> and <a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/asset-stocktake-calculator" target="_blank">asset stocktake calculator</a> will provide guidance on:
<ul>
<li>making informed financial decisions at the time of a relationship breakdown;</li>
<li>separating finances and getting money on track post separation and divorce and;</li>
<li>commencing the property settlement process by providing a summary of assets and debts.</li>
</ul>
'A relationship breakdown changes many aspects of a person's life, including their finances. This can leave people feeling stressed and overwhelmed and make it difficult to focus on financial decisions', said Mr Peter Kell, ASIC Deputy Chairman.
'The new resources can help sort out money issues and guide people through the financial uncertainty they may be facing when a relationship ends, by providing practical steps to separate finances,' added Mr Kell.
Research undertaken by the Australian Institute of Family Studies has measured the impact of a relationship breakdown on people's finances, which especially affects women. Divorce had a substantial negative effect on the equivalised household incomes of women, with Australian women experiencing a fall in income of 21 per cent compared to their pre-divorce income.<a name="_ftnref1" href="https://www.asic.gov.au/about-asic/media-centre/find-a-media-release/2016-releases/16-285mr-asic-launches-new-divorce-and-separation-resources-to-support-your-financial-decisions/#_ftn1" title=""> </a>
Anne Hollonds, Psychologist and Director of the Institute of Family Studies said, 'When a relationship breaks down, we often don't know how to start sorting out our finances. The new checklist from ASIC's MoneySmart can help you work out what you need to do. You can also use it to support someone you know who's going through a divorce or separation.'
ASIC's promotion of the resources is supported by a video featuring Anne Hollonds who explains how the divorce and separation financial checklist can help navigate finances when a relationship ends.
To view the video, <a href="https://www.youtube.com/watch?v=RyM327PY744" target="_blank">click here</a>.
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Property 101: ASIC's new divorce and separation resources

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GUEST OBSERVER
Australia’s largest listed, carbon intensive companies say management lost focus on carbon matters, abandoned energy projects and didn’t have the commercial imperative to produce long-term strategic action on reducing emissions after the carbon tax was repealed, new research finds.
Our research looked at the comparative views of emitters before and after the repeal of the carbon tax legislation, in interviews with 18 senior managers from nine carbon-intensive listed companies.
Two years have passed since Australia’s carbon tax was repealed. It was introduced by the Labor government and came into effect in 2012.
The carbon pricing scheme asked big emitters to pay for each tonne of emissions above a threshold of 25,000 tonnes, in carbon units, and these were at a fixed charge of: $23 a tonne in 2012, $24.15 a tonne in 2013 and $25.40 a tonne in 2014.
The Swinburne research found the financial pressure exerted by the carbon tax forced companies to take action to manage emissions. As one senior executive observed at the time:
“…the threat is our operating costs will increase, and we won’t be able to pass that cost on through to our customers, and, therefore, our earnings suffer as a result”.
In July 2014, the coalition government repealed the carbon tax by replacing it with the “Direct Action” plan which works primarily by providing funding to companies to incentivise emission reduction activities. The government has spent A$1.7 billion on 143 million tonnes of emissions, at an average cost of A$12 a tonne.
Many of the companies interviewed for our research said Direct Action was not as effective as a carbon tax in driving companies to act urgently and manage emissions. The carbon tax gave companies incentives to act because it increased utilities prices, adding financial burden for some companies, in addition to these companies being liable under the tax.
One manager said:
“The scheme [carbon tax] now obviously having a cost associated with those emissions, it was a case of trying to understand where the costs were and essentially how we capture that information and how we track it.”
The existing National Greenhouse Energy Reporting Act 2007 (which requires high emitters to report emissions) does not provide the same incentives because it’s only a compliance measure with no direct financial burden.
Our research found the carbon tax created not only financial pressure but also a reputation threat for high emitting companies.
When the carbon tax was repealed, the focus on carbon emissions in these companies shifted. In some cases this showed up in the form of changes to staff hiring, away from environmental or technical specialists and towards legal staff. One manager explained it as:
“Even though we may not have the technical background in some respects, I think there’s a lot of interest in the legal profession into climate issues, you know, the social issues.”
This shift in focus was partly due to a lack of top management attention to the issue and partly because the financial justification for having dedicated personnel to tackle emissions decreased.
Some companies postponed or abandoned energy management projects after the repeal of the carbon tax. For example, one manager observed that his company had postponed A$1.5 billion worth of long term renewable investment projects due to the carbon tax repeal and the political uncertainty around the Renewable Energy Target.
Another factor is the lower use of techniques such as provision of incentives and setting targets for emissions management compared with the period of the carbon tax. One manager stated his company was no longer investing in target setting as there was no financial return for doing so.
Almost all interviewees in our research agreed that the carbon tax had been an effective mechanism when it was in place. Certain companies have a clear expectation a carbon price will re-emerge. They are proactively monitoring this issue. One manager described it as:
“We shadow in a carbon price across our portfolio of assets, determine what the potential impact is for [company name] and how we would manage that. We’ve continued to invest in carbon reduction…The business now looks at it as a cost-of-doing business opportunity."
Overall, the research provided mixed evidence about achieving Australia’s commitment, made at the Paris climate change summit, to reduce emissions to 26-28% on 2005 levels by 2030. Some companies are acting as though the carbon tax never left us, while for others carbon emission management is no longer a strategic issue.
The financial pressure exerted from the carbon tax was a strong motivation for all sample companies to take urgent action on emissions management. So the challenge for the current government is whether Australia’s current policy incentives for corporate constraint of carbon are strong enough to deliver.
Jayanthi Kumarasiri is lecturer in Accounting, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/jayanthi-kumarasiri-292785" target="_blank">here</a>.
Christine Jubb is professor of Accounting, Associate Director Centre for Transformative Innovation, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/christine-jubb-296433" target="_blank">here</a>.
Keith Houghton is emeritus professor Australian National University, and holds a part-time position at, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/keith-houghton-296537" target="_blank">here</a>.
All are authors for The Conversation.
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Direct Action not as motivating as carbon tax say some of Australia’s biggest emitters

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A second Palm Beach house designed by the internationally acclaimed architect Peter Muller has quietly hit the market. 
It is the redundant weekender of the fashion industry veteran Peter Weiss and his wife Doris.
They have listed their hillside pavilion style architectural gem following their recent purchase on the Pittwater waterfront, a Walter Barda-designed designed home. It seems Peter and Doris have always wanted a sandy west facing weekender on the peninsula so they spent $10 million plus for the home which was built for another rag trader Gordon Smith and his wife, Julianne.
Peter Robinson, of LJ Hooker Palm Beach, has been asked to sell the redundant Bynya Road 1960s Muller designed home that they bought in 2010 for $3.5 million.
It has been owned by a who's who - especially in the 1990s - including ad man John Nankervis and then wife Amanda who bought it from another adman Michael Magnus in 1995 for $500,000. The model agent Peter Chadwick, spotted as dapper as ever at the mid-week launch of the Aladdin musical, paid $680,000 to buy it in 1997 selling it in 2002 at $1.9 million.
The other Muller currently for sale is just two doors away. It is the 1954 family home of the Muller family who owned it for a decade.
The hilltop bushland home, with views towards Pittwater, has just had a two year refurbishment. It has been listed by the Martin family who bought it for $1.8 million in 2013 from the real estate agent Peter Thane who had paid $265,000 in 1986.
It is being marketed by the Modern House agency as 'the seminal mid-century family home of one of Australia's most influential architects."
Muller was an architect in private practice from 1952 until retiring aged 80 in 2007.
This article was first published in the Sunday Telegraph.
 
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Peter Muller designed Palm Beach home listed by Peter Weiss

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<div class="column">We consider the reasons why the RBA may consider implementing Quantitative Easing (QE).</div>
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<div class="column">There would need to be a sharp downturn in economic activity which is not in our forecasts.</div>
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<div class="column">Some QE options are more likely than others, based on other central bank experiences and the nature of Australia’s financial system. Negative interest rates look unlikely.</div>
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<div class="column">We believe that the RBA sees the Effective Lower Bound (ELB) for the cash rate to be around 1.0%.</div>
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<div class="column">We do not believe that the Zero Lower Bond (ZLB) will happen here.</div>
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<div class="column">A lower Australian dollar (AUD), say below USD0.70, is preferred because it will obviate the need for QE.</div>
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Overview 
The RBA cash rate is currently at a record lows and, in our view, set to go slightly lower. Our forecast is for a 25 basis point rate cut in November, bringing the RBA cash rate to a new record low of 1.25% after the September quarter inflation update. But conventional monetary policy is reaching its limits here. While real GDP growth is close to decade averages, inflation and wages are still trending lower. So a cash rate of 1.0% is a clear possibility. But that could be the low point, or the ELB, before unconventional monetary policies (UMPs), like QE, are introduced here. 
Why are rates being cut to such low levels? Essentially it is because inflation is very low. However, low interest rate are not lifting activity where it is most required. Namely, in non-resources business investment. Ever lower cash rates are required because economic growth rates can be significantly higher than they currently are in order to return inflation to the target range of 2-3%. 
The “neutral cash rate” – the one where full employment co-exists with mild inflation - is clearly moving lower since the Global Financial Crisis (GFC). It has not stabilised. This is a global phenomenon and in the US the Fed currently believes the real neutral Fed funds rate has declined to zero.1 
However, one of the costs of low interest rates is overstimulation of the housing market, necessitating APRA’s macro-prudential new controls over lending to home buyers and developers. We suspect there may be another tweak of the controls if the risks around the housing sector are not abating sufficiently quickly. Housing credit growth is moderating but offshore capital flows into local residential and commercial property remain relatively strong. State government tax hikes on foreign investors’ residential investment are a recent development. Higher property taxes usually slow investment activity. 
UMPs, like QE, have been used effectively since the GFC, to stimulate activity and overcome the lack of liquidity in parts of the financial system. Research from other central banks indicates that it has been effective in lowering longer term interest rates and flattening interest rate curves.2 But that the costs may rise if QE remains in place for an extended period. 
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Of course, Australia’s monetary policy arrangements are not the only factor influencing domestic activity and the level of the Australian Dollar (AUD). They are not done in complete isolation in a world of open capital flows and floating currencies. 
If the US Fed proceeds to lift interest rates later this year, then the effect should be to lift the USD and lower the AUD. A lower AUD, say near USD0.70, would provide a boost to the Australian economy through stronger export growth. It also shifts price relativities in goods and services markets to favour local producers. 
While indicating that the possibility is “very remote”, RBA Assistant Governor Chris Kent, recently discussed the RBA’s studies on UMPs in an interview with Bloomberg. Kent flagged that unconventional policies would not be used on a pre-emptive basis. But rather only after symptoms of economic stress had materialised that warranted policy action. 
Governor Glenn Stevens has also stressed that the RBA’s current inflation targeting framework is flexible enough for inflation to undershoot the target for a reasonable period of time. These comments cover the current situation where there is above-potential economic growth and reasonable growth in the labour market, but low inflation. It also appears to indicate that the RBA is reluctant to use UMPs. There would need to be greater downside risks to economic activity and, as part of that, upside risks to the national unemployment rate.  
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Possible UMP options 
RBA Assistant Governor Christopher Kent, in a recent interview, stated that a combination of UMPs used concurrently may be more effective than a single one. So we could expect more than one unconventional policy tool to be employed in Australia should the need arise. 
Most Likely Options 
We consider the most likely QE options for the RBA to be as follows. The list is not exhaustive, but they appear realistic. 
1. Explicit forward guidance from the RBA that provides a high degree of certainty that the cash rate will stay low for a long time. Credible forward guidance in publications and speeches lowers interest rates along the interest rate term structure. This in turn supports financial asset prices and would apply some downward pressure to the currency. Markets and investors would benefit from regular updates on the RBA’s reasons for maintaining expansionary monetary policy settings. 
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Large scale domestic bond market asset purchase programs. Asset purchases raise the price of assets being purchased, and lower their yields. Lower yields on these assets in turn encourage investors to purchase other types of assets, pushing up their prices and generating positive wealth effects. Preferred assets for purchase are likely to be Federal and State government debt. 
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However a reduction in the long term yields from corporate and 600 government bond asset purchase may not have a significant impact on household or business borrowing costs in Australia. As interest rates go lower the transmission of monetary policy to bank lending rates may become less effective. 
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Looking at other countries with very low or negative policy rates shows that deposit rates have not declined to the same extent as central bank policy rates. This has limited the extent to which banks can reduce their lending rates without reducing their margins and profitability.
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Excluding banks and financials, the Australian corporate bond market is relatively small. This means lower yields for these securities would have 
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a limited impact on overall business borrowing costs, especially if interest rates are already low. 
Asset purchases are likely to have implications for the value of the Australian dollar. Foreigners hold a significant share of government bonds outstanding. The Australian dollar will be sold if foreigners reduce their holdings of these assets in response to lower yields and redirect their money back offshore. Offering a Bank of England type Term Funding Scheme where the RBA lends significant amounts to the commercial banks at the prevailing cash rate to ease commercial banks’ cost of funding. This enables the banks to pass on the full extent of any interest rate cuts.
Financing government infrastructure spending via purchase of Federal and State Government bonds of varying maturities. It could be done in tandem with the current Federal Government asset recycling program. It involves State Governments receiving a 15% premium from the Federal Government for an asset sale that is then used to finance infrastructure that is intended for future sale.
Fortunately, Infrastructure Australia has a list of projects, across the States, which would produce the most effective medium and longer term economic and social outcomes. We have recently published research on the shortfall in public infrastructure investment in Australia.
Unlikely policy options 
We consider the following options to be less likely in Australia:
Negative interest rates (NIR). Assistant Governor Kent has said that NIR would pose problems for the banking system and put the money market fund industry at risk. Governor Stevens has also said that the likelihood of negative rates in Australia is “low” and that it could damage bank earnings. This in turn could lead to higher lending rates and lower credit supply, which is the opposite effect to what was intended.
NIR are initially applied between the central bank and commercial banks at a wholesale level. But in Germany, some banks are now applying them to retail depositors.
It may also pose potential risks for funding Australia’s current account deficit. We make the observation that so far, no country with a current account deficit has implemented negative rates.
The purchases of foreign assets over and above normal reserves management. Kent has said that purchases of foreign assets would be seen internationally as overt exchange rate targeting. RBA Governor Stevens has previously been criticised for trying to “talk down” the valuation of the Australia dollar. G20 member countries, which includes Australia, agreed not to target their exchange rates for competitive purposes.
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Conclusions 
We have canvassed what we see as the most likely options should QE policies be introduced. However we emphasise that it would take a significant downshift in economic growth and a rise in the unemployment rate for the RBA to consider UMP. We see the most likely options as forward guidance and bond market asset purchases. Ideally, a concerted effort to lift activity via publicly-funded infrastructure programs in transport, ports, airports and education would augment it. The aims are to stimulate activity, drive the economy towards full employment and keep inflation within the target band without financial instability. It’s a learning curve at a new, extraordinarily low level of global interest rates. 
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 Michael Workman is senior economist, <a href="https://www.commbank.com.au/corporate/research?ei=mv_research" target="_blank">Commonwealth Bank</a>.
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Desperation or just the next step? QE in Australia: Michael Workman

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GUEST OBSERVER
Each ‘earnings season’ or ‘profit-reporting season’ CommSec tracks all the earnings results of ASX 200 companies to obtain a comprehensive picture of the aggregate health of Corporate Australia.  
Despite some high profile exceptions, companies have generally reported solid results. All but 16 of the 139 companies produced a profit for the year to June. That is, almost 90 per cent of companies made money. Excluding BHP Billiton, aggregate profits lifted by almost 7 per cent.  
Gold, Real Estate Investment Trusts (REITs) and Health Care were some of the strongest sectors in 2015/16 together with companies linked to, or dependent on, home building.  
A record 92 per cent of full-year reporting companies elected to pay a dividend.
The Profit Reporting Season 
There is no doubt that the past year has been challenging for many companies. But that isn’t anything new. Australian companies have been living with the new realities of ‘disruption’, increased competition and low inflation for a few years now. The important point is that Australian companies continue to respond positively to the challenges. Almost 140 of Australia’s biggest companies reported full year results, and all but 16 have recorded a profit. Strip out BHP Billiton and aggregate profits are up by around 7 per cent compared with a year earlier. 
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In typical sporting parlance, it was a year of two halves. In the second half of 2015, unemployment fell, retail spending rose and the Aussie dollar eased  all serving to boost bottom-line profits. But over 2016, the dollar drifted up, the job market stalled and retail spending flattened. You can blame “Brexit” or the long election campaign, but operating conditions for companies became tougher.  
Assessing all the profit results of the major listed companies provides great insights into the health of Corporate Australia and thus the health of the economy. We are less interested in whether companies met or exceeded analyst forecasts. That says more about company guidance, the forecasting abilities of analysts and the number  of analysts providing forecasts for company earnings (in many cases just one broker ‘covers’ a stock).
The good news is that companies are making money; cash levels remain high; and companies remain super-keen to pay dividends to shareholders.  
Overall, though it is clear that Aussie companies have had to work hard in lifting revenues, they continue to achieve success in restraining costs. Low wage growth and weaker input costs such as energy assisted companies in boosting bottom-line profits. Aggregate cash levels haven’t budged much from the last reporting period in December. But as noted, companies are enthusiastic as they have ever been in paying out dividends.  
And while it has been hard work to lift revenues, Treasury Wine Estates (TWE) has shown what can be done with a re-assessment of strategy. TWE now employs a high margin strategy and it was successful in lifting revenues 19 per cent in the last financial year.  
And on the costs side, Fortescue Metals (FMG) has shown the benefits of its focus on cutting iron ore cash costs, slashing expenses by 31 per cent over 2015/16. Fortescue noted that C1 costs had been cut by 43 per cent over the financial year. And Qantas also trimmed costs by 1.4 per cent while lifting revenues by 2.4 per cent, boosting bottom-line profits. Underlying fuel costs fell by 17 per cent in 2015/16 with underlying non-fuel expenses down by 5 per cent.  
BlueScope Steel was another stand-out, continuing its amazing recovery, with profits more than doubling on the back of strategic decisions and improving industry fundamentals.  
It is wrong to say that resources companies had a poor 2015/16. Gold producers as a group actually reported a 4.4 per cent lift in profits. Demand for gold has remained firm while the gold price in Australian dollar terms flirted with record highs on a number of occasions in 2015/16. Earnings weakness was concentrated in the Diversified Metals &amp; Mining sector.  
Arguably the best performing sector in 2015/16 was Real Estate Investment Trusts – REITs or property trusts. The fundamental assets such as shops, industrial premises and offices have remained in firm demand with investors increasingly on the look-out for higher yields.  
Other solid-performing industry sectors include Health Care, Packaged Food, Broadcasting, Asset Management and Casinos &amp; Gaming. Companies linked to, or dependent on, home building and purchase also did well.  
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The Details: Full-year earnings
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CommSec has analysed all results from ASX 200 companies. Traditionally brokers or analysts focus on smaller subsets of results. And some merely focus on just whether companies have met or fallen short of “market expectations”.
Overall, 139 companies from the S&amp;P/ASX 200 reported profits for the year to June. Including all companies, profits fell 16.8 per cent over the year to $30.4 billion. But a significant distortion is imparted into the results from BHP Billiton. The mining heavyweight swung from a profit of US$1,910 million to a loss of US$6,385 million. To include BHP Billiton in the aggregate results would present an incorrect picture of the earnings season.  
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<img src="/images/2016/09/02/Screen%20Shot%202016-09-02%20at%208.37.04%20AM.png" alt="">
Some of the key results:
Excluding BHP Billiton, aggregate profits rose by 6.8 per cent to $36.8 billion.  
Average earnings per share rose by 1.4 per cent (ex BHP Billion, up 3.9 per cent).  
Aggregate sales were up by 3.2 per cent over the year; aggregate costs/expenses were also up 3.2 per cent.  
All but 16 companies recorded a profit for the year to June: that is, 88.5 per cent of companies recorded a profit.  
63.3 per cent of companies increased profit over the year; above the long-term average near 60 per cent.  
Aggregate cash holdings rose by 0.7 per cent to $74.2 billion.  
Adding in the 28 companies reporting half-year earnings, cash levels were up by 2.5 per cent on end  December levels.  
Aggregate dividends rose by 6.0 per cent over the year.  
 92.1 per cent of companies (128 of 139 companies) paid a dividend.  
Of companies paying a dividend, 65.6 per cent lifted dividends; 16.4 per cent maintained dividends; and 18.0 per cent of companies cut dividends.  
The Details: Half-year earnings results  
CommSec has tracked 28 companies from the ASX200 that reported earnings for the half-year to June. All but three reported a profit. That is, 89.3 per cent of companies reported a profit.  
The gap between profit and loss was closer: 57.1 per cent reported a profit.  
Cash levels fell 24.3 per cent from June 2015 to June 2016 to $24.8 billion.  
92.9 per cent of companies (26 of 28 companies) paid a dividend.  
Of companies paying a dividend, 53.8 per cent lifted dividends; 19.2 per cent maintained dividends; and 27 per cent cut dividends.  What are the implications for interest rates and investors?  
The Aussie sharemarket is slightly overvalued at present with a price-earnings ratio sitting closer to 17, above the longer-term average of 15.7. But the latest earnings results represent a tick for the sharemarket. And with the economy in decent shape, share prices have scope to track profits higher – particularly in light of the super-low interest rate environment.  
We see no need to change our long-held forecasts. We currently expect the All Ordinaries to be between 5,500- 5,700 points by end-2016 (ASX 200 probably 100 points lower) with the index lifting to 5,700-5,900 by mid-2017.  
As always, the focus of investors should be on total returns from shares, not just share prices. Global factors (that is, the US election and US interest rate hikes) may act to constrain domestic share prices in the short-term, but fundamentally Aussie companies are in good shape, making money and choosing to pay dividends. Indeed most  of the major listed companies have decided to lift or maintain dividends. The current dividend yield is around 4.2 per cent.
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<div class="column">Total returns on the Australian sharemarket – as measured by the All Ordinaries Accumulation index (XAOAI, dividends plus share price changes) – hit record highs on August 24 at 51,934 points. Currently total returns on Australian shares are up 7.4 per cent on a year ago. We expect total returns over the next 12 months to record annual growth of between 7-12 per cent. Companies have been cagey about providing guidance for the next six months. And that is understandable. Most are being challenged by the low inflation/low interest rate environment and looking at options for growth. And these options differ. Gold companies are looking to invest and expand. Industrial companies such as SEEK are looking at “aggressive” reinvestment in the business and potential acquisitions. Domino’s Pizza is looking to push the envelope further by focusing on completing deliveries in 10 minutes.
In other words, many see the best form of defence being attack. And that makes sense. Fewer companies can exercise price leadership, and competition is now very much global for many industries. The key for companies is to find a point of difference from competitors and one that customers truly value. The low inflation/low interest rate environment looks to be around for some time to come. 
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>. Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Corporate Australia rewards shareholders: CommSec's Craig James and Savanth Sebastian

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A fair number of Australians are losing their sleep, literally, as they go through the emotional journey of looking for that dream first home, says a recent survey.
More than 70 percent of Australian first home buyers become emotionally invested during their house hunting, says the research commissioned by St.George Bank.
The survey of 1,000 first home buyers reveals that more than 50 percent of respondents said their sleep hours suffered while 25 percent found themselves losing focus at work.
Ross Miller, general manager for St.George Retail Banking, said the research highlighted how much emotion is involved when it comes to purchasing a property.
“Buying your first home is a major milestone and a huge financial investment so it’s no surprise to see almost three quarters of respondents became emotionally invested in the process." 
A good number also reported that they missed out on catching up with friends (45.9 percent), visiting family (34.3 percent) and doing house work (33.4 percent) due to the time it took to search for and purchase a first home.
“In this current competitive market, where a majority (63.5 percent) of first home buyers missed out on purchasing a property because they were outpriced, the pressure can be significant.”
Miller offers some tips to manage the first home buying process:
• Set a budget – it might be tempting to overbid when you find a property you love. Avoid spending more than you want to by having a price range in mind;  
• Take care of your wellbeing – purchasing a first home may take its toll; it can be helpful to take a break and spend time with family and friends;  
• Seek out experts who can help – the St.George Bank team can support you with knowledge about the market and advice on the right products for your needs.
 “With record low interest rates, now is a fantastic time to take your first step on the property ladder. Come and speak to your local St.George banker to ensure you make the best decision for your financial future,” added Ross.
Summary of key findings
• 71.8 percent become emotionally invested when buying a property  
• 54.8 percent found that their sleep patterns suffered during the house hunting period  
• 25.3 percent found that their productivity at work suffered during the house hunting period  
• 22.1 percent found that their relationship with their partner suffered during the house  hunting period  
• 45.9 percent missed out on catching up with friends during the house hunting period  
• 34.3 percent missed out on visiting family during the house hunting period  
• 33.4 percent missed out on doing house work and chores during the house hunting period  
• 49.3 percent missed out on purchasing a property 
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