High-profile apartment defect cases have changed the way many NSW buyers approach purchasing, putting greater scrutiny on building quality, strata records and the parties behind a development before a contract is signed.

The industry buyers are assessing today, however, is also different from the one in which cases such as Opal Tower and Mascot Towers emerged.

NSW has introduced a series of regulatory measures aimed at strengthening oversight of apartment construction, including Building Commission NSW, the Residential Apartment Buildings Act 2020 and the Strata Building Bond and Inspections Scheme. Under the latter, developers are required to lodge a bond, with independent inspections forming part of the process for identifying defects in new strata developments.

Those changes provide another layer of protection, but they haven't removed the importance of buyer due diligence.

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For purchasers considering an apartment, that means looking beyond the residence itself. Building and strata history, strata reports, the track record of the builder and developer, the condition of common property and any known or planned expenditure by the owners corporation can all form part of assessing a building before purchase.

Whether the development is already complete can also materially change what can be assessed.

An off-the-plan purchaser is necessarily buying before the finished product exists. A completed apartment, by comparison, can be walked through before contracts are signed, allowing the purchaser to see the finishes, common areas and broader building as they have actually been delivered rather than relying solely on plans and renders.

It also removes exposure to some of the uncertainties that exist between an off-the-plan purchase and completion, including construction delays, cost pressures and builder insolvency during the delivery period.

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<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a> National Sales Director Ben Hamblett said that greater focus on tangible evidence is increasingly evident among apartment purchasers.

“The biggest shift we're seeing is buyers wanting proof, not promises,” Hamblett said.

“That's exactly why we deal in completed stock - you can inspect the building before you commit - and why we've backed every purchase with a cash bond against special levies.”

At <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> in Parramatta, that emphasis on a completed, inspectable product is already in place.

The 413-apartment, 46-level tower at 12 Phillip Street is being marketed by Projects by Equitifund, allowing prospective purchasers to inspect the residences, common areas and resident facilities before committing.

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The Lennox also introduces another layer to the due-diligence conversation through Strata Surety.

The vendor-funded arrangement provides purchasers with a cash-backed bond held in their own solicitor's trust account from settlement. According to Equitifund, the bond covers any special levy raised during the applicable cover period and is provided at no cost to the purchaser.

Special levies can create an unexpected cost for apartment owners where an owners corporation needs funding beyond its existing strata contributions. Under NSW strata law, a special levy requires approval by owners at a general meeting.

Equitifund Executive Chairman Greg Huxley said Strata Surety was designed to provide something more concrete than reassurance about that potential exposure.

“Buyers have every right to ask hard questions about strata risk - the industry has given them plenty of reasons to,” Huxley said.

“Our answer isn't a reassurance, it's a bond. Strata Surety puts real money behind that confidence, held by the buyer's own solicitor, not by us.”

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For The Lennox, its completed status also means purchasers can assess not only the apartment itself, but a building that has already been occupied and operating for several years.

Completed in 2021, the $300 million development, designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, comprises one, two, three and four-bedroom apartments, with open-plan living areas extending to private balconies. Interiors incorporate engineered timber flooring, stone benchtops and integrated appliances, while many upper-level residences have views across the river and surrounding district.

Its established amenity can similarly be inspected in operation. Resident facilities include the Watermark precinct with a 20-metre pool, outdoor terrace, barbecue areas, gym, fitness studio and conference room, while ground-floor retail addresses the river walk and surrounding public space.

The Lennox is also home to the Southern Hemisphere's first fully robotic residential car park, which has now operated for several years. Its nine-level basement combines three conventional parking levels with six automated levels, accommodating 327 vehicles using technology from German firm Lödige Industries.

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The riverfront address puts The Lennox close to much of central <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a>'s existing infrastructure, including Parramatta Station, Westfield Parramatta, Parramatta Park, and the Church Street dining precinct.

The remaining apartments form part of a limited release secured by Equitifund, following the sale of the majority of residences before and shortly after completion.

The regulatory environment around NSW apartment construction has changed considerably since the defect cases that reshaped public discussion around the sector. For purchasers, however, regulation is only one part of the equation. The ability to investigate a building's history, review its strata position and, where possible, inspect what has actually been delivered remains central to making an informed apartment purchase.

At The Lennox, its completed status provides that opportunity before contracts are signed, while Strata Surety adds a financial backstop against special levies beyond the protections already provided under NSW strata law.

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Joel Robinson

Buying with confidence: What NSW apartment buyers should check beyond the defect headlines

Too often, heritage buildings become the podium for a contemporary tower. At <a href="https://www.apartments.com.au/new-apartments/623-collins-607-623-collins-street-melbourne-vic-3000">623 Collins</a>, <a>Sterling Global</a> challenged its design team to reverse that process.

The brief to <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> was deliberately simple: "Don't design around the heritage. Design from it." It became the philosophy behind a project that draws inspiration not only from two landmark heritage buildings, but from Collins Street itself, a street layered with architectural history and civic significance.

That philosophy has shaped one of <a href="https://www.apartments.com.au/developments/melbourne-vic-3000">Melbourne</a> CBD's most considered residential projects, where the 1924 State Savings Bank and neighbouring Batman's Hill Hotel have become the architectural foundation for 623 Collins rather than remnants preserved beneath a new development.

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Rather than approaching the site as a blank canvas, <a href="https://www.apartments.com.au/developers/sterling-global">Sterling Global</a> saw the existing buildings as the beginning of the story.

"Sites like this rarely become available," the developer said.

"623 Collins wasn't simply an opportunity to develop a prominent CBD site. It was an opportunity to restore and reimagine one of Melbourne's important heritage landmarks while contributing to the continued evolution of Collins Street. For us, the existing buildings weren't constraints. They were the beginning of the story."

Instead of mimicking the ornate heritage architecture, Plus Studio studied the proportions, rhythm and craftsmanship of the original buildings before translating those characteristics into a contemporary 42-storey tower.

[smartcode_project:default project_id=145324 project_image_fid=372748]

"The brief challenged us to create a contemporary landmark that respected Melbourne's architectural history without becoming nostalgic," Plus Studio said.

"Rather than mimicking heritage, we sought to understand its proportions, rhythm and material language before translating those qualities into a distinctly contemporary architectural expression."

The practice says the State Savings Bank and Batman's Hill Hotel became the project's primary source of inspiration, allowing the heritage buildings and contemporary architecture to exist "in conversation rather than contrast." Generous planted terraces further soften the transition between old and new, creating elevated green spaces while reinforcing the dialogue between the restored podium and the contemporary tower.

That dialogue continues throughout the interiors, where Melbourne designer Fiona Lynch developed a material palette inspired by the idea of alchemy, balancing contrasting materials that reference both the Neo-Grec detailing of the original bank and contemporary urban living. The result is a series of spaces that feel timeless rather than trend-driven.

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The project will deliver 316 residences across four collections, Heirloom, Signature, Reserve and the Penthouse Collection, with each responding differently to its position within the building, from the restored heritage podium through to the upper levels of the tower. The Heirloom Residences retain defining heritage elements including original heritage windows, generous proportions and high ceilings, while the tower introduces contemporary homes with expansive layouts and elevated views.

Amenities have likewise been designed to support long-term city living rather than short-stay convenience. Residents will have access to concierge services, wellness facilities including a pool, cold plunge, sauna, steam room and gym, alongside private lounges, entertaining spaces and dedicated resident clubs.

Sterling Global says that approach is resonating with buyers seeking permanence rather than novelty.

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According to the sales team, purchasers are looking for enduring architecture, generous floorplans, heritage character and long-term value, with many commenting that 623 Collins "doesn't feel like another apartment development" because of the way the architecture has been curated around the site's history.

Situated on the prominent corner of Collins and Spencer streets, the project occupies one of Melbourne's most recognisable gateway sites, marking the western entrance to the city's best-known street. For Sterling Global, it also reflects a broader shift in city-making.

"Rather than maximising development yield, the project embraces adaptive reuse as a design philosophy, allowing heritage to inform architecture, interiors and the overall resident experience," the developer said.

"The result is a building that feels uniquely connected to Melbourne."

[smartcode_project_cta:default project_id=145324]

How Sterling Global designed 623 Collins from Melbourne's history

Avant Townhomes is adding to Ivanhoe’s family-sized housing options with <a href="https://www.apartments.com.au/new-townhouses/three-82-ivanhoe-382-upper-heidelberg-road-ivanhoe-vic-3079">Three 82</a>, a collection of just 16 four-bedroom townhomes on Upper Heidelberg Road.

The <a href="https://www.apartments.com.au/developers/intrapac-property">Intrapac Property</a> townhome division has taken a contemporary approach to the traditional family home, pairing larger floorplans with the lower-maintenance format of a townhouse.

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Designed by <a href="https://www.apartments.com.au/architects/arcadia-studio">Arcadia</a>, with landscaping by Landsite, the homes feature generous open-plan living and dining areas that connect directly to outdoor spaces, with layouts also designed to maximise natural light and privacy.

Natural stone is used throughout the interiors, including in kitchens that pair stone surfaces with bespoke cabinetry, considered storage and SMEG appliances.

The four-bedroom layouts include built-in wardrobes and a main bedroom with its own ensuite, while family bathrooms service the additional bedrooms. Each home also includes a lock-up double garage and intercom entry.

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Energy efficiency has been incorporated into the design through solar panels, double glazing and reverse-cycle heating and cooling, with the homes targeting 7-star energy ratings.

Rather than incorporating extensive communal facilities, Three 82 has been conceived around private residential amenity, with the 16-home scale keeping the focus on individual homes and their own indoor and outdoor spaces.

The development is located at 382 Upper Heidelberg Road, around one kilometre from Ivanhoe Village's cafés and retail and a short drive from Eaglemont Station and Ivanhoe Station.

[smartcode_project:default project_id=152069 project_image_fid=374393]

Several of Ivanhoe's established schools are also nearby, including Ivanhoe Girls' Grammar and Ivanhoe Grammar School. The address also provides access to the suburb's parklands and the wider Yarra River corridor.

<a href="https://www.apartments.com.au/project-marketer/nelson-alexander">Nelson Alexander</a> has been appointed to handle sales.

Construction is underway and progressing well, with Three 82 currently tracking toward completion in Q2 2027.

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Three 82 brings boutique four-bedroom townhome collection to Ivanhoe

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/graya">Graya</a> has secured a prime Newstead site from fellow developer Fraser, subsequently lodging plans for The Silo, a major mixed-use residential project in Newstead designed around a new public laneway linking the James Street precinct with the wider Gasworks and Newstead neighbourhood.

Proposed for the corner of Chester and Morse streets, the <a href="https://www.apartments.com.au/architects/bureauproberts">Bureau^Proberts</a>-designed project places its strongest emphasis at ground level, where retail, landscaping and a new cobblestone pedestrian connection would open the site to the surrounding neighbourhood. The design team describes The Silo as “more than a residential building”, positioning the development as an extension of Newstead’s public realm rather than a standalone apartment tower.

“A new cobblestone laneway and landscaped connection between James Street and Gasworks unlock a missing pedestrian link, improving walkability and stitching together two of Brisbane’s significant urban destinations,” Bureau Proberts said in its Urban Design Report.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="0ea1b06a-75f5-40a5-b2c5-33c97bc86052" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/silo%20bldg.png?VersionId=KmjsAtNePu57_B31EM_DJ5T6KPJHtcmo" />

The Silo is planned as a mixed-use development incorporating apartments alongside a bar and centre activities including food and drink outlets, indoor sport and recreation, office and retail uses.

Architecturally, Bureau Proberts has conceived the building as a collection of vertically expressed, stepping forms rather than a single uniform tower. The composition rises from an articulated podium before being broken by a triple-height landscaped recreation level, with the upper section becoming more compact before terminating in a landscaped rooftop garden.

The project's name and architectural language draw directly from Newstead's industrial history. Patterned off-form concrete is proposed as the principal façade material, complemented by slender metal rod balustrades and extensive planting. The cylindrical and vertically ribbed elements give the building its silo-like expression, while curved balconies and planted edges introduce a softer subtropical layer.

“The Silo reinterprets its robust forms, scale and materiality through a contemporary subtropical architectural expression, creating a building that acknowledges its industrial legacy, while responding to the way the precinct is occupied today,” Bureau^Proberts said.

The recreation level is one of the defining breaks in the tower. Plans include a lap pool, mature subtropical planting and shared resident facilities within an elevated communal garden. Landscaping continues through the podium and onto the rooftop, where a further garden forms what the architects describe as a “subtropical crown” to the building.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="f8451036-35a4-49a9-8d88-2ef4438eba3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Silo%20Lane.png?VersionId=h8N31_rYmCEqoNrpt4kbYVQhJGZn60LH" />

At street level, the development has been designed to establish a more permeable block. Retail and hospitality tenancies address the public realm, while landscaped pedestrian spaces lead into the new laneway connection. Renders in the design report show the proposed “Silo Lane” as a substantial opening through the podium, framed by cylindrical concrete forms with cascading planting above.

The Silo continues Graya's move into larger apartment developments after building its reputation across high-end residential projects in Brisbane and the Gold Coast.

Graya buys Frasers Newstead site, plans The Silo between James Street and Gasworks precincts

<a href="https://www.apartments.com.au/developers/wickton">Wickton</a>’s completed Linacre Rise development in Hampton is giving Bayside downsizers the opportunity to move into a spacious apartment near the beach, with the developer covering stamp duty for a limited time.

The 27-residence development has been designed for buyers who want to simplify their living arrangements without giving up the space, warmth and quality associated with a long-term family home. Most apartments have already been secured by Bayside locals, leaving a select collection of two and three-bedroom residences and penthouses available.

Two-bedroom apartments are priced from $1.275 million, three-bedroom residences from $2.25 million and penthouses from $3.375 million, with the completed homes available to inspect and move into now.

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<a href="https://www.apartments.com.au/buildings/linacre-rise-hampton-8-10-linacre-road-hampton-vic-3188">Linacre Rise</a> occupies an elevated position on one of <a href="https://www.apartments.com.au/developments/hampton-vic-3188">Hampton</a>’s quiet, tree-lined streets, around 250 metres from the bay and 500 metres from Hampton’s village centre. Its setting gives residents access to the beach, local cafés, shops and Hampton Train Station while retaining the feel of an established residential neighbourhood.

Architecture and interiors by <a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a> draw on the warmth and permanence of traditional brickwork, with the building integrated into terraced landscaping by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>. Ground-floor apartments are elevated above the street and include private garden courtyards, while several upper-level residences have generous balconies and outlooks toward the bay.

Inside, the residences favour natural materials and generous proportions. Herringbone-pattern European oak flooring, natural stone benchtops, premium joinery and Swiss V-ZUG appliances are among the key inclusions, while integrated storage has been incorporated across kitchens, bathrooms, studies and living areas.

The kitchens have been planned as practical spaces for both everyday use and entertaining, with substantial island benches, detailed cabinetry and adjoining dining and living zones. Full-height wardrobes, plush bedroom carpeting and carefully considered lighting reinforce the residential character Wickton sought to retain for buyers moving from larger homes.

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A Linacre Rise purchaser said the completed apartment had delivered the space, outlook and construction quality they had been seeking.

“The unit is very light, has views to die for over the bay, all construction materials and fittings are premium quality, we have secure parking for three cars, EV charging at very competitive rates, the neighbours are friendly and there is just a lovely ambiance about the place,” the purchaser said.

Environmental features include solar panels, shared electric vehicle charging stations, rainwater harvesting for toilet flushing and landscape irrigation, double-glazed windows and water-efficient fixtures and appliances.

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The development was built by Balmain &amp; Co, with Wickton managing the broader development process through its in-house team.

For downsizers, the project’s completed status removes much of the uncertainty associated with buying off the plan. Purchasers can inspect the finished apartments, understand their outlook and proportions, and move in without waiting for construction to conclude.

The remaining selection includes north-oriented balconies, corner configurations and penthouses with elevated bay views. The developer-paid stamp duty initiative is available for a limited time, with potential savings of up to $200,000 depending on the residence purchased.

[smartcode_project_cta:default project_id=95289]

Limited-time stamp duty offer at completed Linacre Rise apartments in Hampton

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 most Australians, buying an apartment is one of the biggest financial decisions they'll ever make

The location, floorplan and price are often the first considerations, but in recent years another question has become increasingly important: who is actually delivering the project?

A series of high-profile builder collapses, construction delays and defect concerns have fundamentally changed how many Victorians approach buying off the plan. The collapse of Porter Davis in 2023, which reportedly left around 1,700 homes unfinished, became one of the most visible examples of the risks that can emerge when a construction company fails. <a href="https://www.equifax.com.au/sites/default/files/lpassets/pdf/Final-Business-Market-Pulse-June-Sector-Deep-Dive-Report-2.pdf">Similar challenges across the broader construction sector</a> have left buyers asking more questions before signing a contract.

As Victoria continues encouraging higher-density housing to address supply shortages, transparency is becoming just as important as location or price.

One tool increasingly entering the conversation is the <a href="https://icirt.com/">Independent Construction Industry Rating Tool (iCIRT)</a>, an independent assessment framework designed to help buyers better understand the developer or builder behind a project. Originally developed by Equifax in consultation with government and industry as part of NSW's Construct NSW reforms, the system has since expanded nationally.

<h2 data-end="1519" data-section-id="7nmx3" data-start="1492">What is an iCIRT rating?</h2>

Most Australians are familiar with independent ratings in everyday life.

We compare ANCAP safety ratings before buying a car. We look at Health Star Ratings in supermarkets. Banks rely on credit assessments when lending money.

Until recently, however, there has been very little independent information available to help apartment buyers assess the business responsible for delivering a residential project.

That gap is what iCIRT was designed to address.

Builders, developers and other construction professionals with an iCIRT rating have demonstrated high-trust characteristics through an independent, evidence-based assessment across six criteria: Character, Capability, Conduct, Capacity, Capital and Counterparties. This involves a rigorous review of financial health, past project track record, and ethical conduct. Crucially, an iCIRT rating could help provide property buyers with confidence that they are working with a professional who has demonstrated the capability, capacity, and willingness to return and rectify issues.

Importantly, iCIRT is not a recommendation to purchase a particular property, nor is it a traditional credit rating. It is an independent assessment framework designed to provide objective information about a construction business using a <a href="https://icirt.com/sites/default/files/2025-08/iCIRT-Methodology-Issue1-May-2021.pdf">published methodology</a>.

The system has been widely adopted in New South Wales, where more than one-third of medium and large residential builders and developers now hold an iCIRT rating, representing over two-thirds of the state's residential building market by value as of 2025/26.

<h2 data-end="3126" data-section-id="h6ohtj" data-start="3084">Why buyers are doing more due diligence</h2>

For many buyers, particularly those purchasing off the plan, the biggest risk isn't whether they'll like the kitchen finishes.

It's whether the project will be delivered on time, to the expected quality, and by a company capable of completing the development.

<a href="https://icirt.com/sites/default/files/2026-07/iCIRT%202025%20Consumer%20Survey%20Report%20v05.pdf">Consumer research commissioned by iCIRT</a> found more than half of respondents believed current protections do not adequately safeguard buyers from builder insolvencies or defective projects. Other research found 88 per cent of prospective buyers would seek independent ratings or due diligence before purchasing, while 90 per cent said trust in construction professionals is essential.

That doesn't mean buyers should rely on a single rating alone.

Independent legal advice, understanding the contract, and seeking financial advice all remain important parts of the due diligence process.

However, an independent assessment can provide another source of information alongside those traditional checks.

<h2 data-end="4138" data-section-id="pquzxc" data-start="4094">Trust is becoming a competitive advantage</h2>

The conversation isn't only changing for buyers.

Developers are also recognising that trust has become an increasingly important part of the sales process.

Five years ago, purchasers typically asked about floorplans, finishes and settlement dates.

Today, sales teams are increasingly being asked about the developer's experience, financial stability, previous projects and construction partners.

For companies with strong governance and established delivery records, an independent iCIRT rating provides another way to demonstrate those credentials before buyers even visit a display suite.

According to Equifax, the assessment can also help businesses drive sales and <a href="https://icirt.com/resources-for-business/icirt-rating-helps-scion-secure-high-value-projects">secure high-value projects</a>, as well as identify operational improvements and <a href="https://icirt.com/resources-for-business/mirvac-reinforces-brand-trust-and-quality-independent-icirt-rating">attract top talent</a>.

<h2 data-end="4962" data-section-id="1j54ng5" data-start="4912">Beyond buyers: lenders are paying attention too</h2>

The influence of independent construction ratings is also extending beyond consumers.

According to Stamford Capital's Real Estate Debt Capital Markets Survey, an increasing number of lenders now incorporate iCIRT ratings into their due diligence processes when assessing residential development finance applications.

The survey found lender adoption has continued to rise, with many respondents saying independent assessments provide additional insight into governance, counterparties and delivery capability beyond traditional financial analysis. Some lenders also reported declining funding applications where businesses had poor or no ratings.

As construction costs remain elevated and access to development finance becomes more selective, demonstrating credibility is becoming increasingly valuable.

<h2 data-end="5801" data-section-id="1qazuxs" data-start="5772">What it means for Victoria</h2>

Victoria's apartment market is entering a new phase.

The state is seeking to accelerate higher-density housing while simultaneously introducing reforms aimed at improving confidence in residential construction.

For buyers, that means there are more tools available than ever before to research the businesses behind a project.

For developers, it signals that transparency is becoming another point of differentiation in an increasingly competitive market.

Buyers are asking more questions than ever before and increasingly expecting independent information, not just marketing material, before making one of the biggest financial commitments of their lives.

Find out how to get iCIRT rated <a href="https://www.icirt.com/sites/default/files/2025-08/iCIRT-Infographic-Assessment-Process-Final.pdf">here</a>.

<hr data-end="6469" data-start="6466" />
The information contained in this article is general in nature and does not constitute personal, financial, legal or tax advice. It does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it and, where appropriate, seek independent professional advice.

This article contains links to third-party websites. These links are provided for convenience only. Equifax Australia does not control and is not responsible for the content, accuracy or privacy practices of external sites.

Copyright © 2026 Equifax Australia Information Services and Solutions Pty Ltd. All rights reserved.

Buying off-the-plan in Melbourne? How independent iCIRT ratings are set to change Victorian property

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There are lots of loud voices advocating big cities as the best places for investors to target, as I wrote in my Property Observer column in September.
Indeed, they say, the big cities are the only places to invest. Some even suggest you’re crazy to buy anywhere else. 
These people have one thing in common: they have businesses that benefit if you follow their advice. This is the loudest noise in real estate – the voice of vested interests. 
Apart from the ethical issues of seeking to benefit from giving tainted advice, it’s foolish to have such hardline attitudes. 
Nothing is that black and white in real estate. Situations are always evolving, and the best opportunities at a given point in time can be found in myriad places: a regional city, a seaside town with an important export port, an outer suburb boosted by new transport infrastructure, an inner-city area with an evolving university-hospital precinct.
But, generally speaking, I have no doubt that many of the best opportunities for long-term capital growth with solid yields are found outside the big cities. 
Regional Australia is the most under-rated option for investors. Investor surveys that asked people where they expect to find the best capital growth always rank the regions last, behind popular choices like inner-city suburbs and sea change icons. 
It emphasises how misinformed the average punter is and how little homework they do. These choices contradict all the research evidence. I suspect “research” for most investors consists of absorbing media sound bytes – which means they have their heads crammed with negativity and misinformation. 
To put things in simplistic terms, this is what the research shows: outer suburbs outperform the inner-city, hill change out-does sea change, and the city v. country clash is usually won by country. 
There are plenty of exceptions you could find, but those are the general rules of thumb that emerge from research. 
To compare city and country, let’s look at New South Wales. Sydney property professionals tend to gag at any suggestion of going west of Parramatta to buy real estate. If it’s not the beaches, the inner city or the north shore, you’re a nutter. 
This is despite the miserable capital growth performance of Sydney over the past decade. There are very few suburbs anywhere in Sydney that have managed a long-term average even as low as 6% a year. There are none with double-digit averages. 
Among the so-called “better” areas that have delivered only 3% or 4% a year to property owners are Manly, Balmain, Palm Beach, Vaucluse, Gordon, French’s Forest, Sutherland … it’s a very long list. 
Doing only marginally better, with averages around 5% a year, are places like North Sydney, Leichhardt, Bondi, Randwick and Cronulla. At growth rates like these, you’d be better off leaving your money in the bank. 
Regional NSW, however, is full of cities and towns with double-digit growth rates for the past 10 years. Among them are Muswellbrook, Singleton, Lismore, Casino, Branxton, Greta, Gunnedah and Glen Innes. 
A second-tier list of places with growth rates around 9% to 9.5% includes Goulburn, Wagga Wagga and Murwillumbah, all of them out-performing any Sydney suburb you care to nominate. 
One of the best has been humble Broken Hill, which has averaged 13% per year over the past decade. 
Melbourne overall has been a better performer than Sydney, but the same city v. country pattern applies. If you want a double-digit growth rate long-term, you have to head bush. 
Consider the suburbs of Melbourne’s inner south-east, much beloved by property professionals and local media who see auction activity there as the barometer of all things real estate. Toorak, the standard bearer for everyone who loves pretentious property, has a Sydney-esque growth average of 4.9%. 
Others, like Armadale, Brighton and St Kilda, are a little better, averaging in the 5% to 6% range. 
Some, including Balwyn, Canterbury and Malvern, has touched the intoxicating heights of 8%. 
Compare that to workaday Gippsland towns like Traralgon, Churchill, Maffra and Sale, which have averaged 11-12% over the past 10 years. 
Portland, down in the far south-west, has been chugging along unnoticed (except by city people who love to fish) with a growth average of 10% a year. 
Scattered around the regional areas of Victoria are plenty with double-digit averages: Woodend, Kyneton, Camperdown and Barwon Heads among them. 
I’ve heard it said that regional areas are risky because their economies are based on a single major industry like agriculture or mining. 
For many regional cities, this is untrue. There’s nothing one-dimensional about Orange, Tamworth and Dubbo in NSW, or Ballarat, Bendigo and Warrnambool in Victoria. Their great strength is the diversity of their economic base, along with their affordability.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" rel="nofollow" target="_blank">hotspotting.com.au</a> and can be <a href="https://www.twitter.com/hotspotting" rel="nofollow" target="_blank">followed on Twitter</a>.
For Terry's updated outlook sign up for the free webinar on Thursday, December 6 at 12.30pm on <a target="_blank" href="/news">Regions versus capital cities - where to invest in 2013?</a> 
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terryryder-YECXbqmri2

The best opportunities for property investors will be outside major cities in 2013

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Ask anyone nowadays what the property market is doing and they will do doubt refer to the median as a justification of how the market is performing. Unfortunately focusing on the median is like trying to watch a game of footy at the MCG from the Eureka Tower Skydeck. You can see it’s a game of footy but you really have no idea what is going on.
The median is only a guide at best because although it provides a general reflection of the market it tells us very little about what is really happening at ground level.
When we look at the median the numbers can be skewed and manipulated in so many ways.  Let's take a look at the median of two suburbs in Melbourne’s west - Point Cook and Newport.
Point Cook’s median grew from $345,000 in 2006 to $450,000 in 2011. Although the annual compound growth rate was not staggering it was still a respectable 5.46%. But here is the rub.
In 2006 Point Cook had 4195 freestanding houses and in just 5 years that number more than doubled to over 9000. Point Cook has experienced an explosion in construction in recent years but building a new home does not come cheap.  This is because Australia is experiencing a skills shortage driven by an exodus of many workers to the mining states in addition to many young people not wanting to get their hands dirty and avoiding manual work.
The demand for new housing combined with the shortage of supply of people who can build them is resulting in a dramatic increase in the cost of construction of new homes. The result is when we see a lot of new home construction in one area the growth in the median is driven by capital improvements to the land not the appreciation of the land itself.
Newport on the other hand lies around 15klms closer to the CBD and while the median value of houses is significantly higher at $673,000 the annual compound growth over the last 5 years has been an impressive 9.84%.
The story in Newport is strikingly different to that of Point Cook. In 2006 the suburb had a total of 3430 freestanding houses but by 2011, according to the census data, this number had actually fallen back to 3120. Newport has a shortage of land and the decrease in freestanding houses is most likely because the only way to meet demand is to knock down some houses and replace them with units or town houses.
While there is no doubt some houses in Newport have been renovated in recent years in the main capital growth has been a result of land appreciation as apposed to capital improvements.
The property at <a href="https://www.realestate.com.au/property-house-vic-newport-110576633" target="_blank">25 Charlotte Street, Newport, </a>is typical of a house in Newport that has experienced a good level of capital growth. This property was purchased in Jan 2006 for $317,000 and sold a couple of months ago for $500,000. The property had no renovations done during this time.
As a result of these two different drivers we need to interpret the growth in median in Point Cook and Newport in different ways. Growth that is driven by capital improvements will deflate slowly as the improvements slowly depreciate over time. However because land is a finite product when the median is driven by land appreciation it will be in a much stronger position to hold its ground into the future.
 
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/" target="_blank">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
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marmstrong-sd3emVLPPb

Don't rely on the median dwelling price as a measure of the market

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NAB has announced that it will pass on 20 out of the 25 basis points cut from the cash rate by the RBA yesterday.
The bank's standard variable home loan rate will fall from 6.58% to 6.38% per annum on December 10 - the lowest of the major banks with the Commonwealth Bank (6.6%) and Westpac (6.71%) yet to make an announcement on rates and ANZ (6.6%) making its independent decision on Friday, December 14.
NABs head of personal banking, Lisa Gray said the rate cut delivers on its pledge to offer the lowest standard variable home loan rate of the major banks for 2012 - however the bank did not say whether it would continue with this pledge in 2013.
The bank has offered the lowest standard variable home loan rate of the major banks for 41 months.
"Throughout the year, we have consistently acted to deliver on our pledge to our customers to offer the lowest standard variable rate throughout 2012," she said.
NAB must be fairly confident that neither the Commonwealth Bank nor ANZ will pass on 23 basis points or more.
Were they to do so, the Commonwealth Bank and/or ANZ's standard variable rate would reduce to 6.37% meaning they would have a lower standard variable offering than NAB - a public relations disaster.
Gray said NAB's decisions on interest rates were not taken lightly and the bank sought to strike the right balance between the cost of funding and offering competitive rates to customers.
Update, the <a target="_blank" href="/news">Commonwealth Bank</a> has announced it will pass on 20 basis points to borrowers, reducing its standard variable rate to 6.40% from December 10. 
 
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lschlesinger-FZcF9M3vE6

Rate watch: NAB moves first among big four passing on 20 basis points 

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Few Australian housing policies are more <a target="_blank" href="https://www.prosper.org.au/wp-content/uploads/2012/09/Philip_Soos_Written_Off_Negative_Gearing.pdf">contentious than negative gearing</a>. Despite the publicity it has received and its popularity with government and property investors, little analysis of negative gearing can be found within easy reach, with much of it accessible only in academic journals. Only an occasional fragment is found in the mainstream media.
Australia’s policy on negative gearing is considered a sacred cow by investors and politicians, with <a target="_blank" href="https://news.domain.com.au/domain/home-investor-centre/blogs/domain-investor-centre-blog/what-housing-policy-20120621-20pcl">Prime Minister Julia Gillard</a>, <a target="_blank" href="https://www.theaustralian.com.au/national-affairs/treasury/wayne-swan-stands-by-negative-gearing/story-fn59nsif-1226321644363">Treasurer Wayne Swan</a> and <a target="_blank" href="https://www.couriermail.com.au/news/breaking-news/housing-crisis-negative-gearing-will-stay/story-e6freono-1226462610490">Federal Housing and Homelessness Minister Brendan O'Connor</a> ruling out changes to this policy. The reason for this obstinacy is that negative gearing allows a property investor to deduct losses against the investor’s personal income of the investor at their marginal tax rate (MTR), a tax minimisation strategy adopted by 1,110,922 taxpayers who vote. Property is run at a net loss when interest payments and property-related expenses like <a target="_blank" href="https://www.ato.gov.au/content/downloads/IND00270214N17290611.pdf">repairs and maintenance</a> exceed rental income.
The strong Australian economy has not experienced a recession since the early 1990s. This along with reduced personal tax burdens, real rising incomes, extensive property <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=hsaf_ctte/report/report.pdf">subsidies</a> and <a target="_blank" href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=hsaf_ctte/report/report.pdf">tax breaks</a>, and rapid increases in property values, delivered an economic environment conducive to negative gearing. From 1996 to 2010, housing prices surged by 130%, adjusted for inflation and quality.
The present <a target="_blank" href="https://housingstressed.org.au/wp-content/uploads/2011/09/Australias_Broken_Housing_System.pdf">housing and rental affordability crisis</a> is placing tremendous <a target="_blank" href="https://housingstressed.org.au/wp-content/uploads/2011/10/Housing-costs-through-the-roof-Final-Report.pdf">financial stress</a> on many Australians as <a target="_blank" href="https://www.rba.gov.au/speeches/2008/images/sp-so-270308-graph1.gif">housing and rental prices have outpaced wages</a>, and provided the spark for the public to question the validity of subsidising investors, whether they choose to gamble on making a return by selling property at a higher price or eventually becoming cash flow positive when rents rise to exceed outgoings.
Despite the fact that negative gearing has existed for a long time, much assertion but surprisingly little evidence has been made to justify this policy across all classes of investment, whether it be shares, business, or property investment. The supporters of negative gearing provide negligible evidence to show that is it a sound policy.
Deductibility and tax minimisation under negative gearing
It is common sense that both businesses and investors should be allowed to deduct the costs directly incurred in making an income, but labour is unable to do so. A salaried employee incurs substantial costs in the course of earning a wage (for instance, accommodation, travelling to and from the workplace, and childcare) but government policy bars deduction of these costs against wages.
There is a double standard in operation here. From a distributional or equity perspective, this policy is biased towards the <a target="_blank" href="https://taxreview.treasury.gov.au/content/downloads/report/Architecture_of_Australias_Tax_and_Transfer_System_Revised.pdf">wealthy</a>, as business and investment capital <a target="_blank" href="https://www.melbourneinstitute.com/downloads/working_paper_series/wp2004n12.pdf">ownership</a> is concentrated into this class, which relies proportionately less upon wages.
The disparity between wage earners and investors is exacerbated when negative gearing is considered. The net income loss from an investment property reduces the investor’s personal tax liability, even though that loss was generated elsewhere. Earning a wage and earning income from an investment are two separate activities and should be treated as such. Business commentator Alan Kohler <a target="_blank" href="https://www.propertyobserver.com.au/https://www.smh.com.au/articles/2004/06/28/1088392603764">accurately summarised</a> the inconsistency between investment and employment:
Five years ago treasurer Peter Costello told Australians: “Work for a living and we’ll tax you at close to 50 cents in the dollar; speculate and we'll only take 25 cents. Not only that but, as a special deal – while stocks last – we’ll pay half your speculating costs.”
To sum up this line of reasoning, investors are unduly advantaged by the present taxation arrangements relative to labor. Investment capital is overwhelmingly concentrated in the wealthiest households, who deduct investments costs against income generated, have the highest personal incomes and thus MTRs, can deduct investment losses against their personal tax liability (negative gearing), can carry forward losses and lower their effective MTRs.
Clearly, the tax system is biased towards the rich in terms of cost deduction and tax liability minimisation. Some of this bias can be reduced by maintaining consistency: labour should be allowed to deduct costs against wages but disallow negative gearing for investors.
 
<hr class="system-pagebreak">
 
Increasing the rental stock and lowering rents
This is the <a target="_blank" href="https://media.hia.com.au/enews/industryupdate/iss3/media/Negative_Gearing_Feb11.pdf">primary argument in favour of negative gearing</a>, that it provides an incentive to investors to purchase property for rent, thus increasing the supply of rental properties as a proportion of the total housing stock. As the reasoning goes, negative gearing holds rental prices down, benefitting tenants.
The evidence shows otherwise: <a target="_blank" href="https://www.macrobusiness.com.au/2011/04/negative-gearing-on-the-nose/">92% of residential property investment</a> is for the purchase of existing dwellings rather than those newly constructed, meaning that former owner-occupiers and tenants have to purchase or rent elsewhere, respectively, thus resulting in little to no net increase in the supply of rental dwellings.
In the long term, it makes little sense for the supply of rental properties to increase compared to the total residential stock unless there is a profound upward swing in housing prices, with investors spurred into the market on expectations of making a substantial profit through realising capital gains upon sale. Accordingly, there is little incentive when <a target="_blank" href="https://debtdeflation.com/blogs/wp-content/uploads/2010/09/KeenCLSAReportHandOfGov.pdf">long-term data</a> from Australia and other countries shows that housing prices track inflation, despite numerous and ongoing booms and busts.
Negative gearing is also <a target="_blank" href="https://www.propertyobserver.com.au/https://www.austlii.edu.au/au/journals/DeakinLRev/2002/17">badly targeted</a> as high-income professionals and millionaires also allegedly receive lower rents along with those who do need it. If policymakers are concerned about rental affordability, there are other options to pursue. The obvious candidate is the Centrelink <a target="_blank" href="https://www.humanservices.gov.au/customer/services/centrelink/rent-assistance">Commonwealth Rent Assistance</a> (CRA) scheme, a subsidy provided to low-income tenants.
The effects of quarantining negative gearing in the 1980s
The <a target="_blank" href="https://www.theage.com.au/business/a-negative-impression-20110501-1e30g">favourite scare story</a> promulgated by the housing lobby is that when the Hawke/Keating government quarantined negative gearing during 1985-87, it caused rental prices to surge, quickly leading to its reinstatement. Fortunately, not only did the evidence refute this <a target="_blank" href="https://www.theage.com.au/business/time-to-change-the-unfair-rules-for-negative-gearing-20110424-1dsu6">urban myth</a>, it showed that negative gearing can be safely quarantined, if not abolished.
Rents rose in Perth and Sydney only, remained steady in Melbourne and Canberra, and fell in Brisbane, Adelaide, Hobart and Darwin. If the lobby was correct, quarantining should’ve adversely affected all capital city rental markets equally, not just two out of eight (even when factoring in a lagged response). There were <a target="_blank" href="https://www.asb.unsw.edu.au/research/publications/ejournaloftaxresearch/Documents/paper4_v3n1.pdf">confounding factors at work</a>: rising interest rates, introduction of capital gains tax and a stock market bubble.
Oddly enough, while the lobby claims that quarantining will increase rents, the inverse is not considered: rents have escalated from 2006 onwards while negative gearing was in effect. Perhaps they could claim that rents would’ve been higher otherwise, but this is an ad infinitum argument, that is, negative gearing is not generous enough, so by increasing the scope of tax deductibility, it can serve to further constrain rents.
How much does negative gearing cost?
ATO data provides an estimate of the cost of negative gearing: in 1993-94 it was $850 million, fluctuating around the $1 billion mark over the next several years. As investors piled into the market, the cost rapidly escalated to a peak of $3.8 billion in 2007-08 before falling to $2.9 billion in 2009-10. Over the last 17 years, negative gearing has cost taxpayers an inflation-adjusted $33.5 billion (2012 dollars).
What to do?
Policy outcomes can be enhanced by quarantining negative gearing deductions to the purchase of newly constructed properties but not for established properties. It would be even better to remove it, as it makes little sense to subsidise property investors, regardless of the reasons for investment when there are <a target="_blank" href="https://housingstressed.org.au/2012/08/30/aah-releases-a-4-point-plan-to-fix-our-housing-crisis/">better policies</a> for helping low-income tenants.
Also, the negative gearing debate presupposes the existence of income taxation, which has no justification when <a target="_blank" href="https://www.prosper.org.au/wp-content/uploads/2007/11/dwyer-tax-resources.pdf">evidence suggests that substantial amounts of tax revenue</a> can be raised from far more efficient bases. Income tax is one of <a target="_blank" href="https://www.taxreview.treasury.gov.au/content/html/Publications/papers/report/image/section_2-2.gif">125</a> <a target="_blank" href="https://taxreview.treasury.gov.au/content/html/commissioned_work/downloads/KPMG_Econtech_Efficiency%20of%20Taxes_Final_Report.pdf">burdensome taxes</a> that productive individuals and business bear the brunt of.
According to the property lobby, it’s <a target="_blank" href="https://www.smh.com.au/business/negative-gearing-is-safe-from-tax-review-treasurer-hints-20100326-r34t">too dangerous to reform negative gearing</a>, let alone abolish it. Fortunately, there’s no requirement for anyone to believe the lobby, given the weight of evidence against their assertions and the fact that they have enough conflicts of interest to fill a book.
Philip Soos is a researcher at the School of International and Political Studies at <a target="_blank" href="https://www.deakin.edu.au/">Deakin University.</a>
 
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 Negative gearing has worsened the housing crisis and cost taxpayers billions of dollars: Philip Soos

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The Reserve Bank’s decision to cut the cash rate to 3% appears to have been taken – perhaps belatedly – to stimulate the non-mining sectors of the economy as well as provide a greater buffer against further global economic weaknesses.
Many will argue that it has come too late and that the RBA should have made adjustments earlier for struggling sectors like manufacturing, retail and tourism.
It also suggests some inconsistency in thinking (as pointed out rather harshly by<a href="https://www.businessspectator.com.au/bs.nsf/Article/RBA-Reserve-Bank-interest-rate-cut-inflation-pd20121204-2N6WD?OpenDocument&amp;utm_source=exact&amp;utm_medium=email&amp;utm_content=143786&amp;utm_campaign=pm&amp;modapt=commentary" target="_blank"> </a><a href="https://www.businessspectator.com.au/bs.nsf/Article/RBA-Reserve-Bank-interest-rate-cut-inflation-pd20121204-2N6WD?OpenDocument&amp;utm_source=exact&amp;utm_medium=email&amp;utm_content=143786&amp;utm_campaign=pm&amp;modapt=commentary" target="_blank">Business Spectator's Adam Carr</a>) when looking back at concluding remarks in the November statement with the RBA content to adopt a wait and see approach as to the impact of earlier rate cuts.
“Further effects of actions already taken to ease monetary policy can be expected over time. The board will continue to monitor those effects, together with information about the various other factors affecting the outlook for growth and inflation,” said Glenn Stevens in his November statement.
The December statement says growth has been “running close to trend over the past year” and that inflation is “consistent with the medium-term target”, so on those two fronts the need for a rate cut cannot be argued.
The conclusion which can then be drawn is that concerns about the world economy and the need for stimulus of the non-mining sectors of the economy have finally become uppermost in the mind of the RBA.
Certainly, the housing market is not worrying the RBA as much as it has previously, with Stevens noting in his December statement that there are “indications of a prospective improvement in dwelling investment, with dwelling prices moving a little higher, rental yields increasing and building approvals having turned up”.
And access to capital for big business and banks is also not a problem in the minds of the RBA board members.
“Capital markets remain open to corporations and well-rated banks, and Australian banks have had no difficulty accessing funding, including on an unsecured basis. Borrowing conditions for large corporations are similarly attractive and share prices have risen since mid-year," said Stevens.
Indeed, such statements could have been taken to justify a rate hold.
But clearly the two-speed economy is a serious concern.
“Available information suggests that the near-term outlook for non-residential building investment, and investment generally outside the resources sector, remains relatively subdued. Public spending is forecast to be constrained,” said Stevens in his December statement.
Adding to this, the RBA is also concerned about the forecast slowdown in the mining investment boom and that other sectors of the economy will need to grow to keep the economy on track.
“In Australia, most indicators available for this meeting suggest that growth has been running close to trend over the past year, led by very large increases in capital spending in the resources sector, while some other sectors have experienced weaker conditions.
“Looking ahead, recent data confirm that the peak in resource investment is approaching. As it does, there will be more scope for some other areas of demand to strengthen,” said Stevens.
The RBA also highlights a gloomier global outlook with global growth “forecast to be a little below average for a time”, with risks to the outlook “still seen to be on the downside”.
Given the focus on the mining investment slowdown (expected to peak in 2014) and a desire to stimulate the non-mining sectors, further rate cuts should be expected in 2013, perhaps earlier rather than later.
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Rate cut aims to stimulate non-mining sectors of the economy

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Australia's fifth biggest mortgage lender, ING Direct has thrown down the gauntlet to the major banks by passing on today's RBA cash rate cut in full.
ING Direct will lower the interest rate on its variable mortgages by 0.25 percentage points, effective Monday December 24.
The online bank's most popular home loan the Mortgage Simplifier will reduce to 5.72% p.a.
“Our funding position has eased recently allowing us to pass on 25 basis points, however, the threat of elevated funding costs has not passed completely, " says ING Direct CFO Glenn Baker.
ING Direct has a $38 billion home loan book.
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Online ING Direct quick to move with full rate cut passed on to borrowers

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Reserve Bank rate cuts no longer have any meaningful impact on housing market activity, according to Laing+Simmons general manager Leanne Pilkington, following today’s 25 basis point cash rate cut.
Swimming against the tide of industry commentary forecasting a housing market bounce in 2013, Pilkington says that while borrowers may get a final reprieve for the year from the rate cut, the Reserve Bank "no longer has the relevance or power to stimulate housing market activity as the banks are either not passing on the cuts, or passing on only a fraction of them".
“The net result is that interest rate cuts at the Reserve Bank level are not having an impact. The subdued levels of transactional activity, despite the official cash rate being at historical lows, not only emphasises the caution among buyers but also the lack of stock on the market,” said Pilkington.
“The end result of the lack of consumer confidence – and trust – in the banks is that more people are staying put, fewer first home buyers are taking the first step to ownership, and those in need of an upgrade are hesitant to make a move in the current climate.”
Laing+Simmons recorded a 30% jump in open for inspections in October over September as well as a rise in the number of auction attendees and market appraisals following the October 3 rate cut, but the rally was short lived with November numbers back on par with September.
Pilkington said spring contributed to the usual spike in activity, with the market unable to maintain the upward momentum.
She said the government needed to investigate “new avenues to stimulate activity, as cash rate adjustments are no longer cutting it and said there was a need for to incentivise the developer side of the equation “because caution is dictating the buyer side at present”.
She also called for a “reconsideration of stamp duty” calling it “the single most restrictive tax inhibiting transactional activity, one which effectively quashes a potential deposit for many buyers”.
Other market commentators said the rate cuts would have an impact.
“Two interest rate cuts this quarter (October and now December) improve the prospects of a tangible recovery emerging in 2013 for both new home building and renovations activity,” said HIA chief economist, Dr Harley Dale.
 "Lower interest rates make a vital contribution to improving conditions for the residential construction industry, but government action is the key.”
Residential developer Sekisui House, currently building the $2 billion Central Park mixed-use project in inner Sydney in partnership with Frasers Property Group and The Hermitage residential community in Sydney’s South West said the 0.25% cut would boost the property market in the coming months
“In our market, we’ve noticed a trend in higher sale volumes corresponding to previous rate cuts throughout 2012, which we believe is also buoyed by the significant State Government commitment to infrastructure in Sydney’s South West,” said Craig D’Costa, Sekisui House senior development manager at The Hermitage.
Matt Daly, general manager of residential builder Hotondo Homes, welcomed the rate cut and said it would bring the dream of building and owning your own home “a little more reachable”.
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RBA rate cut won’t stimulate housing market pick-up: Leanne Pilkington

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<h3 id="mr-title">Statement by Glenn Stevens, governor: monetary policy decision:</h3>
"At its meeting today, the board decided to reduce the cash rate by 25 basis points to 3%, effective 5 December 2012," writes Stevens.
"Global growth is forecast to be a little below average for a time. Risks to the outlook are still seen to be on the downside, largely as a result of the situation in Europe, though the uncertainty over the course of US fiscal policy is also weighing on sentiment at present. Recent data suggest that the US economy is recording moderate growth and that growth in China has stabilised. Around Asia generally, growth has been dampened by the more moderate Chinese expansion and the weakness in Europe.
"Key commodity prices for Australia remain significantly lower than earlier in the year, though trends have been more mixed over the past few months. The terms of trade have declined by about 15% since the peak, to a level that is still historically high.
"Sentiment in financial markets remains better than it was in mid year, in response to signs of progress in addressing Europe's financial problems, though Europe is likely to remain a source of instability for some time. Long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Capital markets remain open to corporations and well-rated banks, and Australian banks have had no difficulty accessing funding, including on an unsecured basis. Borrowing conditions for large corporations are similarly attractive and share prices have risen since mid year.
"In Australia, most indicators available for this meeting suggest that growth has been running close to trend over the past year, led by very large increases in capital spending in the resources sector, while some other sectors have experienced weaker conditions. Looking ahead, recent data confirm that the peak in resource investment is approaching. As it does, there will be more scope for some other areas of demand to strengthen," Stevens writes.
"Private consumption spending is expected to grow, but a return to the very strong growth of some years ago is unlikely. Available information suggests that the near-term outlook for non-residential building investment, and investment generally outside the resources sector, remains relatively subdued. Public spending is forecast to be constrained. On the other hand, there are indications of a prospective improvement in dwelling investment, with dwelling prices moving a little higher, rental yields increasing and building approvals having turned up.
"Inflation is consistent with the medium-term target, with underlying measures at around 2½%. The introduction of the carbon price affected consumer prices in the September quarter, and there could be some further small effects over the next couple of quarters. Partly as a result of that, headline CPI inflation will rise above 3% briefly. Looking further ahead, with the labour market softening somewhat and unemployment edging higher, conditions are working to contain pressure on labour costs. A continuation of moderate wage outcomes and improved productivity performance will be needed to keep inflation low, since the effects on prices of the earlier exchange rate appreciation are now waning. The bank's assessment remains that inflation will be consistent with the target over the next one to two years.
"Over the past year, monetary policy has become more accommodative. There are signs of easier conditions starting to have some of the expected effects, though the exchange rate remains higher than might have been expected, given the observed decline in export prices and the weaker global outlook. While the full effects of earlier measures are yet to be observed, theboard judged at today's meeting that a further easing in the stance of monetary policy was appropriate now. This will help to foster sustainable growth in demand and inflation outcomes consistent with the target over time," says the statement.
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Just a little housing improvement detected so rate cut given: RBA governor's statement for December cash rate meeting

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The number of dwellings approved for construction fell 7.6% in October in seasonally adjusted terms, after rising for the past two months, according to the ABS.
The monthly fall was far greater than 1.6% drop forecast by economist polled by Bloomberg and follows an upwardly revised 9.5% rise in September (from unrevised 7.8%) and 23% rise in August.
Dwelling approvals are a forward indicators of future construction activity.
The biggest fall in dwelling approvals occurred in Victoria (-14.2%), followed by Queensland (-7%) and South Australia (-0.1%). Building approvals increased in Tasmania (11%), New South Wales (3.2%) and Western Australia (0.1%).
In the key detaching private sector housing market, approvals fell 1.5% in October while approvals in the more volatile units market fell 18%
Private sector house approvals rose in New South Wales (5.5%) but fell in South Australia (-7.9%), Victoria (-4.5%), Queensland (-2.4%) and Western Australia (-1.3%).
Westpac says private sector house approvals were the "main source of disappointment although the segment continues to follow a strong double-digit uptrend despite the 1.5% fall in October", with Queensland and Victoria both showing more "pronounced weakness across private sector houses than elsewhere".
"Private sector house approvals are showing a vigorous uptrend in WA and steady gains in NSW," says Westpac.
The bank says the main driver of the 18% fall in unit approvals were dwellings in 'high-rise' buildings with 'low to mid-rise' continuing to show a strong uptrend.
The value of total building approved fell 6.7% in October, in seasonally adjusted terms, after rising for two months.
The value of residential building fell 12.9%, while non-residential building rose 6.7%.
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Dwelling approvals fall by greater than expected 7.6% in October: ABS

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Stockland’s 2013 full-year earnings are likely to fall 15% unless there is an “unlikely” improvement in the “challenging” Victorian residential market, the residential developer has told investors.
In its latest market update, Stockland said there had been no improvement in the Victorian residential market since the company’s AGM in October.
“Unless the Victorian market improves soon, which seem unlikely, underlying earnings per security (EPS) for the 2013 financial year will be at the lower end of our previously guided range of 10% to 15% below the 2012 financial year. EPS decline will be even greater in the first half, primarily due to a large skew to the second half in the Residential business,” said Stockland.
In his October AGM address, outgoing managing director Matthew Quinn said Stockland’s residential business faced a “high degree of uncertainty given current buyer caution” though with some signs of improvement in Perth and a bolstering in NSW and Queensland through first-home buyer stimulus targeted at the new housing market
“The reality, though, is that conditions are very tough in Victoria where the company’s most profitable projects are located,” Quinn said.
The lower earnings expectations follows the release of a Melbourne update from The National Land Survey Program, which found that <a href="https://www.propertyobserver.com.au/land/one-in-three-melbourne-residential-lots-being-returned-to-developers-by-building-firms-report/2012112958179?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=newsplus">nearly a third of residential lots</a> released by big land estate developers on Melbourne's fringes are being returned by mid-sized home building companies, which can't find smaller home builders and or end-use home buyers.
The poor outlook will be one of the challenges faced by incoming Stockland boss Mark Steinert, who will replace Matthew Quinn as chief executive from January 14.
At today's market update briefing, Stockland residential boss Mark Hunter acknowledged recent interest rate cuts and the reintroduction of first-home buyers’ grants in NSW and Queensland, but said market uncertainty and a lack of consumer confidence were continuing to present challenging market conditions, which were particularly apparent in the Victorian residential market.
“Although the challenging market is impacting our performance in the 2013 financial year, we have made good progress in diversifying our residential portfolio and we are meeting the market with more affordable products. We have demonstrated our continued focus on larger, master-planned communities, which present better economies of scale and greater potential to deliver stronger returns over time.
“In the second half of 2014 and 2015 financial years we will bring more projects to market that meet these core criteria and this will drive stronger returns. We will also finish a number of projects in 2013 and 2014 financial years that don’t meet these criteria and are currently impacting our performance.”
Stockland will provide its next update to investors at its half-year results in February.
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