Apartment buyers in New South Wales are set to gain a decade of insurance-backed protection against major building defects, after the NSW Parliament passed the Fair Trading and Building Legislation Amendment Bill 2026.&nbsp;

The Bill establishes decennial defect insurance, known in the market as Latent Defects Insurance (LDI), as an alternative to the existing two-year strata building bond. It cleared the Legislative Council with amendments on Tuesday evening (August 4, 2026), with the Legislative Assembly agreeing to those amendments shortly after.

Under the reform, eligible developers can satisfy their statutory bond obligation by taking out an approved decennial-style policy that gives owners 10 years of cover for major structural defects from completion, claimable directly, without first having to pursue developers or builders through costly legal action.&nbsp;

The change forms the final tranche of amendments arising from the 2021 statutory review of the Strata Schemes Management Act 2015 and related legislation.

Resilience Insurance, which originated the cover in Australia and has delivered it in NSW since 2022, welcomed the passage and credited the NSW Government for delivering it.

“This is protection apartment buyers have needed for a long time, and the credit for delivering it belongs to the NSW Government,”&nbsp;said Corey Nugent, CEO of Resilience Insurance.

“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into. Reform like this is what good, evidence-based regulation looks like.”

Resilience has delivered LDI in NSW since 2022, protecting thousands of apartments, giving the State, and now the country, real-world evidence of how decade-long, no-fault protection works in practice.

The reform also places NSW within a wider national shift.

NSW is the third jurisdiction to put decennial cover into law. The ACT legislated for it in 2024, with the scheme taking effect in late 2025, and Victoria passed its own framework on 17 June. Between them, the three cover the majority of Australia's apartment market.

The reform commences once the legislation is proclaimed, which is expected in the coming weeks. From that point, developers of Class 2 residential apartment buildings can meet their statutory obligation with an approved decennial policy in place of the bond.

Buyers who purchased into projects that took out the cover early are among the first in the country to take keys to apartments carrying decade-long structural protection.

“With the legislation passed, the focus now turns to making it work for buyers,”&nbsp;Nugent said.

“There are already thousands of apartments in NSW covered by this insurance, bought by developers who moved early. The question every buyer should be asking in a display suite is a simple one: does this building come with 10-year defect cover, and who stands behind it?&nbsp;

“We look forward to working with the Government and the Building Commission in coming weeks as the framework moves to implementation, and to sharing what we have learned over the past four years so the protection reaches owners as smoothly and quickly as possible.”

Other states are working through their own reform programs. Western Australia has indicated that decennial cover is within consideration a later stage of its reform sequence, and Queensland has been examining the settings as it looks at the development pipeline ahead of the 2032 Olympics.

Resilience Insurance acknowledges the NSW Government’s continued focus on strengthening consumer protection while supporting housing delivery across the State.

Fast Facts: What the reform means

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Proven at scale:&nbsp;Decennial cover has operated in NSW since 2022, protecting thousand of apartments.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">10 years of cover:&nbsp;Protection for major structural defects runs for a decade from completion, claimable directly and with no legal action required.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">An alternative to the bond:&nbsp;Eligible developers can meet their statutory obligation with an approved decennial-style policy in place of the 2% strata building bond.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Part of a national shift:&nbsp;The ACT has had decennial provisions in force since 2025 and Victoria passed its framework in June. NSW now joins them.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">No-fault, first resort:&nbsp;Owners corporations claim directly from the insurer without first having to establish who is liable for the defect.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost-competitive:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the 2% bond while offering broader, longer protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market position:&nbsp;Resilience originated LDI in Australia and has delivered it in NSW since 2022.</li>
</ul>

Fast Facts: What is Resilience LDI?

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Resilience Latent Defects Insurance (LDI):&nbsp;Covers major structural defects for 10 years from completion.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Consumer-first:&nbsp;Direct claim access, no need for lengthy legal action.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost advantage:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market leader:&nbsp;&nbsp;Resilience Insurance originated LDI in Australia and is the national market leader.</li>
</ul>

Joel Robinson

NSW parliament passes 10-year defect insurance laws for new apartment buyers

Builder-developer <a href="https://www.apartments.com.au/developers/mcnab-developments">McNab</a> has wasted little time reshaping one of South Brisbane's most significant undeveloped apartment sites after acquiring the property earlier this year.&nbsp;

McNab has lodged plans to scrap an existing approval for two 30-storey towers and instead deliver a single 28-storey residential building, preserving part of the site for a future development opportunity.

The proposal, lodged over <a href="https://www.apartments.com.au/new-apartments/64-peel-street-south-brisbane-qld-4101">64 Peel Street and 9 Cordelia Street</a>, is for a residential-led mixed-use development comprising 124 apartments above a landscaped podium, alongside a boundary realignment that preserves part of the land for a future residential project.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="743bf564-3f8f-45fc-b8d3-bbf18f5b628f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20Peel%20st%20podium.png?VersionId=EhCxGrVn_VFH3qTbKnI4WppGwaMnOn0t" />

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a>, the development will deliver 119 two-bedroom and five three-bedroom apartments across 23 residential levels. A five-level podium will accommodate 135 car spaces, while the ground floor will include a 66 sqm commercial tenancy, an activated residential lobby with work-from-home spaces, and a publicly accessible landscaped plaza linking Cordelia and Peel streets.&nbsp;

Communal amenities will span Level 6 and the rooftop, including indoor and outdoor recreation spaces, a swimming pool, barbecue facilities, kitchen and dining areas, lawn space, sauna, steam room and yoga facilities.

The application also proposes a boundary realignment to create a standalone 1,290 sqm development lot while retaining an adjacent parcel for future redevelopment, allowing the balance of the site to contribute additional housing over time.

Hayball said the architecture has been shaped by the site's elevated corner position at the intersection of Peel and Cordelia streets and Brisbane's subtropical climate.

The design incorporates generous landscaped setbacks, a masonry podium wrapped with planting, large north-facing balconies, and a slender tower profile intended to maximise natural light, cross ventilation and long-range views. The rooftop has been conceived as a wellness-focused retreat overlooking Brisbane, with amenities positioned to capture views towards Mount Coot-tha and the CBD.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="c5f99e84-6ad8-4a87-82d1-869685b754d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20tower%20perspective.png?VersionId=Gw0IuJaSAlk.tvGBxInhZOcQAdIB..2b" />

The planning submission positions the proposal as a response to both changing market conditions and Brisbane's Kurilpa Sustainable Growth Precinct planning reforms.

McNab acquired the site after the previous approval was granted, with the existing scheme no longer reflecting current residential market demands, economic conditions, construction challenges, construction efficiencies or the quality of development outcome now being pursued, the planning report noted.

McNab continues to expand its residential development pipeline across Brisbane and the Gold Coast. The developer recently launched The Tannery in West End, securing more than 60 per cent of apartments before the project's public release. It is also delivering Elements Budds Beach in Surfers Paradise and Lucia Highgate Hill, an eight-apartment boutique development overlooking the Brisbane River.

McNab resets decade-old South Brisbane approval with 124-apartment tower

A steeply sloping Bellevue Hill site is set to accommodate a new mid-rise apartment development, with plans lodged for 20 homes that respond to the site's dramatic topography.

The proposal for the consolidated land at <a href="https://www.apartments.com.au/new-apartments/138a-140-bellevue-road-bellevue-hill-nsw-2023">138A-140 Bellevue Road</a> has been designed by Sydney architecture practice Common Office, which has used the site’s substantial fall to distribute the building’s scale and unlock 20 apartments without presenting the full height to the street.&nbsp;

“The unique design strategy leverages the site’s substantial topographical fall to facilitate increased density, presenting a seven-storey profile to Bellevue Road while rising to 10 storeys at the rear,” Common Office said in its architectural design report.

The apartment mix spans one, two, three- and four-bedroom residences. Four two-bedroom apartments are designated as affordable housing, while the plans also include two adaptable dwellings. The mix is majority three-beds, with the typical three-bed apartment offering around 144 sqm internally, with balconies of around 15 sqm.

The affordable housing component represents 15 per cent of the residential floor area and allows the project to access additional height and floor space under the NSW Government’s in-fill affordable housing provisions. The site also falls within the inner area of the Low and Mid-Rise Housing Policy because it is within 400 metres walking distance of Double Bay Town Centre.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="b1230d0f-3bfa-4a11-abaf-0928c66ef345" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da.png?VersionId=dZeMK3P.OutGjN8ycjsxm8uNsj_QFWQv" />

Common Office has arranged the building around a masonry podium and a lighter upper volume, drawing on two recurring elements of Bellevue Hill’s established architecture: sandstone bases and the vertical proportions of local Inter-war Art Deco apartment buildings.

“The proposal is governed by a holistic design language that reconciles the solid horizontal masonry of the neighbourhood’s podiums with the elegant verticality of its Art Deco heritage,” the architect said.

“The building maintains a consistent rhythmic logic utilising deep recesses and a sophisticated material transition to break down the 10-storey scale into a series of articulated, human-scale volumes.”

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="0147f503-1af1-4d51-97fb-c2f1cba63a9d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20bldg.png?VersionId=GoW7q3NlK67OpnePXhk7zvklrlKb72Qc" />

Large-format sandstone tiles will define the lower levels, establishing a robust base that negotiates the change in elevation from Bellevue Road. Above, red-tinted precast concrete frames, recessed balconies, anodised aluminium screens and expanded metal details will create a more vertically expressed façade. Integrated planter beds will introduce greenery across balcony edges and recessed sections of the building.

The elongated northern façade has been divided into three recessed vertical masses to reduce its perceived length. Triangular window elements and metal privacy screens reference the geometry of nearby Art Deco buildings while controlling overlooking toward surrounding homes. The southern elevation will incorporate further privacy screening, landscaped edges and deep balconies to maintain light and ventilation.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="e8679cf1-18bc-4447-8a0f-0052b94ab83c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da%20rooftop.png?VersionId=5SQqQqRFf76rvE2p1TbxJSweMN70AIbc" />

Private and communal landscaping is distributed throughout the development. A landscaped garden apartment is positioned within the lower portion of the site, while a communal terrace on Level 5 will include a central timber deck, barbecue facilities, resident planting plots and areas for outdoor dining and informal gatherings.

Common Office described the terrace as an elevated sanctuary designed to capture district views and sunlight. Its planting strategy incorporates endemic species associated with the Eastern Suburbs Banksia Scrub, extending the landscape vertically through the building and providing habitat for local flora and fauna.

A second communal outdoor area is proposed at roof level, with built-in seating, paved gathering areas and perimeter planting.

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction. Positive Investment Enterprise is delivering the 16-apartment Kew Palm House on Birriga Road, while Chanine Developments is also under construction at Florian, a 36-apartment project on Banksia Road.

&nbsp;

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction.

First Look: Apartment development pitched for Bellevue Hill, Double Bay fringe

South Brisbane's apartment pipeline continues to build momentum, with <a href="https://www.apartments.com.au/developers/trk-property-group">TRK Property Group</a> lodging plans for a 161-apartment tower on Montague Road as developers accelerate investment across the Kurilpa Sustainable Growth Precinct.

The proposal for 176–186 Montague Road would replace an existing office building with a 20-storey residential tower designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, adding to a growing pipeline of high-density projects reshaping one of Brisbane's fastest-evolving inner-city precincts.

The project has been conceived as a "living building", featuring a flowing tower form, extensive vertical landscaping, and generous communal spaces that respond to the evolving Kurilpa Sustainable Growth Precinct.

TRK Property Group Development Director Matt Kan said the project reflected the confidence developers have in South Brisbane's long-term future.

"South Brisbane is entering an incredibly exciting period, and we see Montague Road sitting right at the heart of that evolution," Kan said.

"With the former Visy site directly opposite us and significant investment planned throughout the broader Kurilpa precinct, there is a real sense of momentum around this part of the city and what it will become over the coming years.

"For TRK, this is an opportunity to be part of that next chapter and deliver a project that responds to where the precinct is heading, while contributing to the continued evolution of Brisbane's river edge."

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="590fe1ad-f892-4446-a679-80e33a16d029" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20tower%20facade.png?VersionId=uOJStrcKpyHFcPE1w6_9SMAFzVMCcZll" />

The scheme includes a mix of one, two, three and four-bedroom apartments, incorporating multi-purpose rooms in selected residences to provide additional flexibility for home offices or expanded living areas. The proposed mix comprises 15 one-bedroom, 13 one-bedroom plus MPR, 73 two-bedroom, 26 two-bedroom plus MPR, 30 three-bedroom, and four four-bedroom apartments.

Rather than adopting a conventional rectilinear tower, COX Architecture has developed a sculpted form inspired by the movement of the Brisbane River.

"The proposal has been designed by COX Architecture as a 'living building' that responds to the site's riverine setting, floodplain history and evolving urban context within the Kurilpa Sustainable Growth Precinct," the planning report states.

"The architectural form draws from the fluid nature of the Brisbane River, with a curved and undulating tower form that creates a varied architectural edge and avoids a conventional rectilinear tower expression."

The podium has also been designed as an architectural feature rather than a conventional parking structure, with cascading planting, screening and natural-toned materials softening its appearance. Resident parking is elevated above ground level to address the site's flood constraints, while habitable apartments sit above flood planning levels. Upper-level communal facilities are designed to accommodate shelter-in-place arrangements during major flood events.

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="01fa15d0-90df-46c7-9555-7941fc45373c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20podium.png?VersionId=mHyua.w1pHGBt9qEdWzrlsv.leztUCwO" />

Communal amenity is a major focus of the proposal. Around 1,815 sqm of shared resident space is proposed across the ground floor, level 19 and the rooftop, including co-working areas, indoor and outdoor recreation spaces, wellness facilities, dining and gathering areas, lawn spaces, a rooftop pool and spa, and extensive landscaping. At street level, a landscaped forecourt and approximately 345 sqm of publicly accessible open space along Montague Road are intended to improve the pedestrian experience while activating the building's frontage.

The development will provide 163 car spaces, including 152 resident bays and 11 visitor spaces, together with 144 bicycle spaces incorporating resident storage, visitor parking, bicycle maintenance facilities and e-mobility charging infrastructure.

The site sits within one of Brisbane's fastest-changing inner-city precincts, less than two kilometres from the CBD and within easy reach of South Bank, West End, the Queensland Cultural Centre and extensive public transport connections. The Kurilpa Sustainable Growth Precinct planning framework is encouraging higher-density residential development to help meet Brisbane's housing supply targets while supporting walkable, transit-oriented neighbourhoods.

TRK Property joins South Brisbane apartment surge with Montague Road tower plans

Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

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?

When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.

But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.

As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.

For apartment residents, that can present a challenge.

If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.

That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.

It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.

As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.

Australia Post's Parcel Lockers provide one solution.

<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/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe>

Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.

The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.

For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.

For buyers, it's a reminder that the best apartment features aren't always the most obvious.

A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.

The apartment feature many buyers don't think about, until their first missed delivery

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The debate is over; the big Donald has had the final say – if you cannot sell your property, don’t fire your real estate agent, fire him or her up!
This comes from Donald Trump (he used to sack agents who couldn’t sell his “beautiful” buildings) in his address to the Australasian Real Estate Agents conference on the Gold Coast earlier this week.
Now he pays 7% to 8% commissions and he believes this works a treat.
I don’t disagree, and on several occasions, when it came to selling my own home, paid a financial incentive to get a higher price.  Not every agent took the money, instead donating the balance to charity.
According to IBISWorld, 5,000 people lost their jobs in the real estate industry in Australia over the last five years.  Revenue in the industry has dropped by close to 10% since 2007.
As we wrote a few weeks back it is defying gravity to expect real estate agents to work on a 2.5% commission structure.
Virtually no other business on the planet works off such low sales margins.
Good advice DT, but really, “beautiful”?
According to ABARES, there are 94 major mineral and energy advanced developments taking place across Australia.  These total $173.5 billion and importantly, they are advanced – meaning approved, with most underway.
<ul>
<li>A breakdown of these projects is as follows:</li>
<li>35 energy projects – $116 billion total</li>
<li>35 mineral projects – $33.6 billion total</li>
<li>20 infrastructure projects – $19 billion total</li>
<li>4 mineral/energy processing projects – $5 billion total</li>
</ul>
Most are in Western Australia, with 39 projects totalling $109 billion, followed by Queensland with 28 projects for a combined $49 billion and New South Wales with $8.2 billion.
<a href="https://www.propertyobserver.com.au/developments/we-must-get-residential-development-back-on-the-front-page-michael-matusik/2012052954891">Again, as discussed last week,</a> this isn’t a flash in the pan or fly-by-night operation, but major long-term developments.  These projects amount to some serious economic grunt and provide strong pillars of support.
I read something recently in the Economist to the effect that men are selfish layabouts.  Really?  I can only imagine the resounding guffaws from the fairer sex: “Tell us something we don’t already know,” they are yelling.
But you see – and I just love this bit – there’s apparently a reason for it.
An American study has found that …. wait for it … the amount of housework a man does depends on how much he dislikes it.  The more a male likes a task, the more of it he will do and vice-versa.
Not exactly revolutionary stuff; but it does give me incentive to confess a dirty little secret.  I do the clothes washing at my house – each weekend, dutifully sorting the whites from the darks.  It’s therapeutic, and well, everyone in the family agrees I’m just better at it.
But back to the study, the flip side of this finding is that the amount of housework that women do has nothing to do with how much they might like or dislike a task.  Women just get on with the job and do what has to be done.
Good-on-ya, girls!  We really didn’t need a study to tell us.  Where would we be without you?
And for all those males suffering from SLS (selfish layabout syndrome), you may now take solace from the fact that your condition is officially verified.  You are not alone.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition. Michael has launched a new initiative, called<a target="_blank" href="https://www.matusik.com.au/"> Think Matusik</a>. Think Matusik brings together expert opinion and select property opportunities.
Michael will present a free webinar on tips on buying your first property as an investment on Tuesday, June 5 at 12.30pm.
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Why paying your estate agent a higher commission can get you better results

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The average gross rental yield for houses across Australia was 4.3% for a median price of $470,000, according to RP Data-Rismark Daily home value index. Brisbane, Canberra, Darwin and Hobart were all above the national average. In April, the gross rental yield for houses was 4.2%. 
<img src="/images/stories/2012/06/3point7percent.gif">
The gross rental yield for houses in Melbourne, which has a median house value of $534,450, according to RP Data-Rismark.
 
<hr>
<img src="/images/stories/2012/06/4point3percent.gif">
The gross rental yield for houses in Adelaide, which has a median house value of $385,000, according to RP Data-Rismark.
<hr>
<img src="/images/stories/2012/06/4point4percent.gif">
The gross rental yield for houses in Sydney, with a median house value of $628,450, according to RP Data-Rismark.
<hr>
<img src="/images/stories/2012/06/4point4percent.gif">
The gross rental yield for houses in Perth, which has a median house value of $470,000, according to RP Data-Rismark.
<hr>
<img src="/images/stories/2012/06/4point7percent.gif">
The gross rental yield for houses in Brisbane, which has a median house value of $434,050, according to RP Data-Rismark.
 
<hr>
 
<img src="/images/stories/2012/06/4point8percent.gif">
The gross rental yield for houses in Canberra, which has a median house value of $519,000, according to RP Data-Rismark.
 
<hr>
 
 
<img src="/images/stories/2012/06/5point3percent.gif">
The rental yield for houses in Hobart, which has a median house value of $360,000, according to RP Data-Rismark.
 
<hr>
<img src="/images/stories/2012/06/6percent.gif">
The rental yield for houses in Darwin, which has a median house value of $510,000, according to RP Data-Rismark.
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Capital city house yields by the numbers: A state-by-state analysis: RP Data-Rismark

<html><body>Australian Property Monitors (APM) has released a list of results from 295 auctions in Sydney for the weekend of June 2. The clearance rate was 54.9%. <a href="https://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf" target="_blank"> Click here</a> for the auction results, and click on each street address to see the property's marketing.</body></html>

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APM's 295 Sydney auction results show 54.9% clearance rate

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The Reserve Bank board meets next on June 5. We expect that the board will decide to further reduce the overnight cash rate from 3.75% to 3.5%.
We now expect that the low point in this easing cycle will be 2.75% rather than 3.25%, which had previously been our expectation. We expect further cuts in July and August to be followed by a final cut in the fourth quarter.
We do not favour the 50bp cut scenario in June. The decision to cut by 50bps in May was mainly driven by direct concerns around the domestic economy. To us, there appeared to be an element of catch up with the bank holding steady in February–April when the domestic case for a cut was strong. The decision will be built around the impact that the deterioration in global confidence will have on the Australian economy. Since the board meeting in May, US 10-year bond rates are down from 1.9% to 1.6% and the Australian equivalent is down from 3.6% to 2.9%. However, there are a number of key risk events over the next few weeks (Greek elections on June 17, for example) which will be critical for global confidence. We expect a more orderly approach to addressing these issues and thus a more “considered” 25bps move. However, nobody can be particularly confident in gauging the bank's meeting-by-meeting strategy for dealing with these issues.
This is a change in our previous forecast position. We had been expecting that the board would decide to hold rates steady in June, with two further moves expected in both July and August of 25bps each. We now expect that the low point in this easing cycle will be 2.75% rather than 3.25.
These two extra cuts are based on our assessment that the global environment – read Europe – has deteriorated even further since we revised down our call for the low point from 3.75% to 3.25%. In turn, this deterioration is expected to have a more severe impact on confidence in Australia than had earlier been expected.
The stance of policy is currently only mildly expansionary despite the official cash rate being at 3.75%, its lowest level outside the global financial crisis.
We gauge that it is only mildly expansionary because the stance of policy should be assessed in the context of private sector interest rates. With the gap between the Standard Variable Mortgage Rate (SVMR) and the official cash rate now being 140bps wider than in 2007, we assess that the neutral rate has fallen from 5.5% in 2007 to 4.1%. That puts the official cash rate only 0.45% below neutral today – certainly only mildly accommodative.
Another way of assessing this stance is to compare the SVMR with its long-term average. The long-term average SVMR is 7.5%, so the current SVMR, at 7.05%, is also only 0.45% below the average.
A move to 2.75% in the official cash rate is likely to see the rate somewhere between 100bps and 145bps below neutral, depending on the movement in private sector rates in response to the fall in the official cash rate. If there was a full 100bp reduction in private rates then the official cash rate would bottom out 145bps below neutral.
If the reduction in private rates was along the lines of the reduction following the rate cut in May then the official cash rate would bottom out 115bps below neutral. The same logic would mean a SVMR of between 6.05% and 6.5%.
In the three previous easing cycles the official cash rate has bottomed out at 150bps (2008/09); 125bps (2001) and 50bps (1996-97) below neutral.
In those periods the SVMR bottomed out at 5.8% (2009); 6.05% (2001); and 6.7% (1997).
The contrast with 2009 is important. Despite the cash rate falling below its GFC trough, we expect the SVMR will bottom out well above the 2009 level.
In the more recent two periods above, the final rate cut in the cycle coincided with an increase in the unemployment rate of one to two percentage points over the preceding year: 6% to 7% in 2001 and 4% to 5.9% in 2008-09. In 1996-97 the increase in the unemployment rate was only around 0.5ppts, as this was a mid-cycle slowdown rather than a fully- fledged slowdown.
The contrast with those earlier periods the implied stance of policy should also take into account the level of the Australian dollar. In 1997 the AUD/USD was around 68 cents; in 2001 around 50 cents and in 2009 around 70 cents. Clearly the AUD was providing a much more complementary stimulatory support for the economy than in current circumstances where, despite recent weakness, it is still around 98 cents.
 
<hr class="system-pagebreak">
The labour market comparison argues that current market pricing is somewhat excessive. Market pricing implies that rates will eventually fall by 140bps (just above 2.25%) which implies a range 125bps to 175bps range below neutral.
Because market expectations are still significantly more aggressive than even this revised view, we still expect fixed rates to increase should our forecasts prove correct. For example, with markets giving a significant probability to a 50bp cut this week we would expect fixed rates to increase modestly if we are correct and "only" a 25bp move is delivered.
Market pricing is reflecting extreme uncertainty, and it is distorted by hedging activity by offshore investors who are not taking a pure position on Australian monetary policy, and it is therefore highly volatile. The uncertainty emanates from:
<ul>
<li>The European outlook, highlighted by the risk of Greece withdrawing from the Euro and excessive instability in the Spanish banking/sovereign nexus.</li>
<li>The state of the Chinese economy and prospects for counter cyclical policies to be a) enacted and b) to gain traction.</li>
<li>Prospects for the US economy where the recovery seems to be losing momentum</li>
<li>The impact on private sector rates in Australia of official rate cuts and the spillover to confidence.</li>
<li>The state of the labour market in Australia following the surprise fall in the unemployment rate from 5.2% to 4.9%.</li>
<li>Prospects for the interest rate sensitive parts of the Australian economy – housing and consumer expenditure and the investment and employment decisions of those firms that service those sectors.</li>
</ul>
Our forecasts are based around a general outlook that while Greece is unlikely to leave the euro the European "scene" will be marked by rolling crises and bailout packages against a back drop of protracted recession in the region. That would avoid the "worst case" scenario that might be partly priced in by the market but would ensure an ongoing drag on confidence, both consumer and business, in this country.
Recent news from Europe has reinforced our concerns for the region, particularly for Greece and Spain. For Greece, the June 17 election looms as a crucial event. The most recent polls point to far-left party Syriza being in the ascendency; if this poll proves correct, then a tense stand-off between the new government and the Troika is almost assured. The eventual outcome is highly uncertain although our base case leaves Greece in the euro.
Spain’s financial ill-health has also rapidly come back to the fore over the past month, primarily due to the need to fully nationalise banking conglomerate Bankia, formed in 2010 through the union of seven stressed regional banks. The €19 billion price tag for the nationalisation is troublesome given the Spanish sovereign’s urgent need for austerity and difficulty in accessing cost-effective capital. However, the reported €180 billion of bad loans (industry estimates) for the system as a whole, combined with the enfeebled financial position of Spain’s regional governments, make a positive outcome increasingly improbable. The need for a support package for Spain would be a serious test for the financial and political capital of the region. Our concerns about the impact of these issues on confidence in Australia have increased in recent weeks.
Recent information out of China has been in accord with our long-held views that the cyclical downturn of the first half of this year will be progressively relieved by policy accommodation. That will see a recovery underway later this year, which will get 2013 started on the front foot. Our forecast for 2012 remains at 7.8% and our 2013 forecast remains 8.7%. A weaker than expected export profile, driven by European problems, would lower near-term growth, but would strengthen the policy response in the second half, which would help the 2013 numbers. We note that the RBA's approach to the Chinese slowdown has been to attribute it to policy choices which can be reversed if needs be. Thus we might expect that the board will have been heartened by the recent move towards growth support in China. That adds up to a position whereby China is a neutral for the policy outlook detailed here.
The US economy is likely to lose further momentum through the Northern spring and into summer. Deteriorating job and domestic demand growth are expected to result in another round of quantitative easing. Further weakness in equity and/or house prices would give further justification for action. As evidenced from the April FOMC meeting minutes, so too would a deterioration in Europe and/or concerns over the potential impact on activity of the 2013 ‘fiscal cliff ’.
Overall, we continue to expect global growth of "only" 2.8% in 2012, compared with official estimates of 3.5%. We expect that recent developments in Europe will prompt a downward revision to official estimates moving towards our own view.
While off shore issues are likely to dominate the board's explanation behind its decision to cut rates this week there is also a domestic case for lower rates. We were surprised by the insipid 0.8% increase in the Westpac Melbourne Institute index of consumer sentiment in May, despite a 35bp cut in mortgage rates – the biggest cut since February 2009. We are wary of the recent fall in the unemployment rate noting the unusual circumstances of a rise in jobs and a fall in the labour force. We note that Treasury is forecasting the unemployment rate to reach 5.5% by mid-2013, with, presumably, a higher rate earlier in the year. We also point to the Westpac Melbourne Institute index of unemployment expectations which has "job insecurity" on a par with 2001. While the headline unemployment rate looks solid the underlying story around the labour market is perplexing.
In the year to April total employment has lifted by 87.3k jobs. However, 71.7k were part-time jobs and 57.3k were female. So the employment growth this year has been concentrated in part-time and/or females jobs. It is also worthwhile noting that to date, WA is still the centre of growth for employment having added 35.7k to its workforce this year.
 
<hr class="system-pagebreak">
 
Now this is a far from a spectacular number (just 21k per month) and the fall in the unemployment rate has been driven by the fall in participation rate. If the participation rate had held constant since September last year, the unemployment rate would have peaked at 5.75% in Feb 2012 and even in April, following a run of better jobs numbers, the unemployment rate would still be 5.5%. Overall we are not inclined to alter our forecast that the unemployment rate will exceed 5.5% by year's end.
Recent data prints are also uninspiring. Retail sales for April (down 0.2%); spending on renovations and additions (down 4.7% in the March quarter) and residential building (down 1.9%) and dwelling approvals (weak even abstracting for the WA element) have all been weak despite the rate cuts in November and December. While investment plans in mining from the Capex survey for 2012-13 remain strong we estimate that both manufacturing and services investment are expected to decline in 2012-13.
On house prices, the RP Data series (apparently favoured by the RBA, and also our favourite measure) estimates that house prices have continued to fall in 2012, despite the rate cuts, being down by 0.8% in to April, with high frequency prints showing that prices fell further in May.
We expect there will also be adequate scope from inflation to further lower rates. With growth pressures mainly in the mining sector where the "escape" valve of imports can be used to contain inflation pressures and with those industries being affected by the high AUD and the deleveraging of the household sector needing to raise productivity, the inflation outlook is particularly encouraging. We expect another respectable productivity and unit labour costs outcome in the March quarter national accounts, due the day after the RBA meets in June. In its May statement on monetary policy the RBA forecast that inflation will remain near the bottom of the 2–3% band over the next year.
We have always expected rates to bottom out in the second half of 2012, with rates on hold for most of 2013.
That was not the case in 2009 when rates got to a more stimulatory level than we expect this time and fiscal policy both domestically and offshore was providing a huge complementary boost. In particular, the government's boost to housing with the First Home Owners Grant was very important.
However, as we progress through 2013, the interest rate debate will shift from anticipating additional rate cuts to the timing of the next RBA tightening cycle. On this, we make two key points.
The rate outlook for 2013 will differ from that during late 2009. On the earlier occasion, the view was that rates needed to be normalised, that borrowing rates needed to be returned to around average levels, in an orderly fashion. We assess that the stance of policy needs to remain on the expansionary side throughout next year. Notably, the global economy will remain fragile and vulnerable to shocks, even if the headline growth numbers return to around trend, as we anticipate. Domestically, the consumer is in a deleveraging phase, which means the housing sector needs more supportive settings. Moreover, the Australian economy is in a transition phase, with the relatively high dollar driving significant structural change. The tightening of monetary conditions associated with the high dollar needs to be taken into consideration.
Equally, it would be inappropriate for the Australian economy, which is on the right side of the shift in global growth to the Asian region, to leave interest rates around historic lows for a prolonged period. As the significant confidence drag from Europe begins to fade, but not disappear (markets become more comfortable with the likely adjustment process in Europe), rates will need to move off their lows. We envisage that the RBA will need to begin raising the cash rate during the second half of 2013. This would have the cash rate at 3% on our forecasts by year's end.
Outlook for the Australian dollar
The AUD has recently reached our base September quarter forecast of 98 cents. At present there are a number of downward pressures operating on the currency – rate differentials, commodity prices, the shift back into trade deficit, weak risk appetite globally, diminished FX reserve accumulation in emerging markets – that will not dissipate in the short term. Therefore we feel that there is more to come in this depreciation phase. We now see a 96 cents rate by end September, with the strong likelihood that it goes lower than that rate in the meantime. In the short-term, we expect the USD index to show considerable strength, the yen's safe haven status to shine through as Japanese investors exhibit strong home bias in a low yield world, while the euro will understandably find few adherents. Asian currencies will also remain under pressure for the moment.
We do however retain the view that AUD/USD will be back above parity by year's end, in line with a pullback in the USD index. That call is largely predicated on an expected series of stimulus policies in Europe; China; and the US that will gain traction, particularly through the December quarter,. The combined effects of the more accommodative global policy environment will reverse the negative dynamics current swirling around the AUD (and other growth assets, like Asian currencies and commodity prices). We see the currency reaching $1.02 by the end of the year and moving even higher in early 2013, before levelling out at mid-year in the $1.05–$1.06 area.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator.</a>
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Interest rates to fall to a low point of 2.75% by the end of this year: Westpac’s Bill Evans

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Does the disappearance of one timber building make a sound if people aren't around to hear it?
No one will ever know because all cameras were pointed towards the recent launch of Lend Lease's new Forté development as Grocon's Delta plans were quietly put on hold.
Lend Lease have started construction on the world's tallest timber residential building in Docklands.
Grocon had announced plans in March last year to build the world's tallest timber residential building on the former Carlton United Brewery site in Melbourne.
<img src="/images/stories/2012/05/delta3.jpg">
The 10-storey Delta was due to take the title from London's nine-storey Stadthaus, but Lend Lease will now beat Grocon to it.
<a href="https://www.propertyobserver.com.au/developments/lend-leases-docklands-project-forte-will-be-worlds-tallest-residential-timber-building/2012052554840/Page-2">Lend Lease's Forté will rise 32 metres from the ground to be the world's tallest</a>, and Melbourne's first timber residential tower.
Construction is due to be finished in October.
<img src="/images/stories/2012/05/delta2.jpg"> After Grocon's March announcement not much more was heard.
In September last year, Grocon's national design manager and general manager of the CUB site, David Waldren, gave a talk at the Building Australia's Future conference suggesting plans were going ahead.
But Property Observer spoke to Grocon spokesperson Jane Wilson, who confirmed industry whispers that the plans for the building were on hold.
<img src="/images/stories/2012/05/delta4.jpg"> 
"The situation with Delta is pretty much that it's on hold at the moment," Wilson says.
"It's still a concept at the moment, but we do hope to build it next year.
"We certainly do want a timber residential building, and we hope it will go ahead.
"Lend Lease is obviously going to be ahead of us."
<img src="/images/stories/delta.jpg">
Grocon will for now focus on the Swanston Square development on the same site.
"We have been selling apartments in Swanston Square development, which is part of the CUB site.
"We're due to start construction there soon," Wilson says.
Grocon need not worry too much as if any of three mooted plans around the world go to plan, Lend Lease will have the title taken away from them soon enough.
{module Would you buy an apartment in a timber building?}
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Timber! Grocon’s wooden Melbourne building Delta on hold as Lend Lease’s Forté to grow quickly

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A display home can be a very attractive option when it comes to property investment. They’re normally built to a high standard, impeccably maintained and have guaranteed rent for a set period. Coupled with this, there’s often a high yield and always fantastic tax depreciation deductions.
Purchasing a display home is a little different from your average investment property. The builder or developer will sell the property with a lease-back option, where they retain the property as a tenant for normally around one to two years. These lease-back contracts often contain extension options where the sales agreement enables the builder to extend the term of the lease beyond the initial period.
A display home is likely to be in the most desirable part of the development and will often have extensive landscaping and quality finishes. After all, the job of a display home is to entice people into the development and showcase upgrades to the standard packages available.
The tax depreciation deductions available are significant with high quality display homes. As an example, consider the depreciation deductions on a display home with a total build cost of $190,000 (excluding soft landscaping). The property includes plant and equipment items such as coo tops, blinds, carpet, hot water systems, ovens, packaged air-conditioning and more. A property with a construction cost of $190,000 could expect around $30,000 in total plant and equipment items. In the case study scenario I ran, the value was exactly $27,867. So this gives us the following figures:
<ul>
<li>Division 40 Assets (plant and equipment items) - $27,867</li>
<li>Division 43 Component (capital allowance) - $162,133 </li>
</ul>
The division 43 component will return 2.5% of the opening value each year, which equals $4,053 per year.
The division 40 assets will depreciate at different rates, from 100% for assets under $301 in value, to 13.33% in this example. The total division 40 depreciation in the first year came to $5,423 under the diminishing method.
This gives us a total tax depreciation deduction in the first year of $9,476.
Out of interest, the second year, which won’t include any of the assets written off at 100%, came to $8,573.
This example gives you an idea of the potential deductions on a fairly standard display home. You can certainly find display homes with construction costs double the value of the case study.
Depreciation however, is just one part of the picture. Even more important is the yield. This is yet another attractive feature of a display home. There are major builders currently advertising yields as high as 7.5% to 8%.
Now I did say there were going to be cons. The normal rules of doing your research and checking the contract apply, however there are some things to consider that are specific to display homes. One such consideration is outgoings. Quite often the term of the lease does not include a provision for the tenant to pay the outgoings. These include electricity and water for example, and can add up significantly over time. It’s important to be clear about the contract and understand what you’re responsible for.
Another consideration is the purchase price itself. The display home might have some great upgrades, but what effects will that have on the market value of the property when it comes time to sell? Display homes may also be situated where there is no precedent for that quality of home, say in regional areas. So it can quite often be difficult to know what the capital growth prospects are, and what the current market value is. A local estate agent can be a valuable resource.
Lastly, let’s look at conversion costs. Display homes can be configured differently to the way a normal tenant would require. For example, many display homes won’t include a hot water system as there is no need for it to sit idle for two years not being used. You can also find display homes with the garage converted into an office. In this situation the roller door may be replaced with a sliding door. They may also have security fencing encroaching onto the driveway. Are there conversion or rectification costs required before a tenant moves in, and who pays?
These are all questions that require investigation when purchasing a display home as an investment.
With that being said, a well-researched display home can be a hassle-free, high-yielding investment with great depreciation deductions and no property management fee.
Mike Mortlock is a director of <a href="https://www.mcgqs.com.au/">MCG Quantity Surveyors</a> specialising in tax depreciation deductions for property investors.
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The pros and cons of investing in a display home

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The last of the four terrace offerings on the current series of The Block 2012 has commenced its marketing.
The <a target="_blank" href="https://www.realestate.com.au/property-house-vic-south+melbourne-110681105">407 Dorcas Street</a> terrace  in South Melbourne (pictured below) is listed through RT Edgar agents Kent Morgan and Gerald Betts.
{yoogallery src=[images/stories/2012/05/june1block]}
It’s marketed as a four-bedroom terrace, whereas the other three terraces are being marketed as three bedrooms apiece. Dan and Dani have put the extra bedroom on the ground floor of their corner terrace.
“Inspired ideas by Dan and Dani, who responded best to the demands of the contest, add a designer edge to a totally transformed tri-level floor plan,” Morgan suggests.
Dan and Dani have turned the indoor rooftop space into a study, plus terracing as have the couple Sophie and Dale when renovating <a target="_blank" href="https://www.propertyobserver.com.au/renovating/sophie-and-dales-dorcas-street-terrace-challenges-brad-and-laras-for-title-of-the-best-on-the-block/2012052454828">401 Dorcas Street</a> at the other end of the block.
The properties at <a target="_blank" href="https://www.propertyobserver.com.au/renovating/hockingstuart-very-quick-out-of-the-block-with-channel-9-reality-show-south-melbourne-marketing/2012052254782">403 </a>and <a target="_blank" href="https://www.propertyobserver.com.au/renovating/buxton-bangs-on-about-having-the-best-in-the-block-s-dorcas-street-south-melbourne-offering/2012052254796">405 Dorcas Street </a>– renovated by Mike and Andrew, and Brad and Lara respectively – have top floor laundry and rooftop bars instead, plus terracing.

Like the other three terraces, inspection for buyers is by private inspection with no photography permitted during inspections given there are still room reveals to occur on the reality television show.
Public open for inspections will be held on Saturday 16th June and Sunday, June 17 between 10.00am and 3.00pm.
401 Dorcas Street
 
<img src="/images/stories/2012/05/401floorplan.gif">
 
<img src="/images/stories/2012/05/line.gif">
403 Dorcas Street
 
<img src="/images/stories/2012/05/403floorplan.jpg">
<img src="/images/stories/2012/05/line.gif">
405 Dorcas Street
<img src="/images/stories/2012/05/405floorplan.jpg">
407 Dorcas Street
<img src="/images/stories/2012/05/407floorplan.jpg">
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Rootop study v bar, four bedrooms v three: Dorcas Street Block floorplans indicate the auction battlelines  

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Based on RP Data-Rismark’s house price data released today it appears that most of the weakness in dwelling values has been confined to the luxury sector.
Whereas homes located in the 20% of most expensive suburbs across the nation are down in value by 3% between January and April (red line in chart below), those located in the middle 60% of suburbs have not budged in value (-0.1%). And there was actually a recent improvement in dwelling values in the cheapest 20% of suburbs over the last few months (refer to the blue line below).
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/june13.gif"><img src="/images/stories/2012/05/june13thumb.gif"></a>
This analysis is based on RP Data-Rismark’s “stratified” hedonic index calculated on a monthly as opposed to daily basis. As a consequence, the latest cut of the results runs through to end April in contrast to the more timely “daily” data that stretch through to the end of May.
The sustained correction in luxury property values is consistent with the thesis I have outlined here before of a fundamental downward adjustment in valuations in this specific sector due to the contraction of the once-lucrative financial services industry.
The disconnect between the luxury and mass markets is even clearer as we go back further in time. In the chart above the three markets are indexed to 100 as at the start of 2011. The cumulative dwelling value declines for the cheapest 20% of suburbs since January 2011 is only 1.8%. Similarly, the middle 60% of suburbs have declined by a relatively benign -2.9%. Yet in the 20% most expensive suburbs, the total loss has been 2.3 times higher at a stonking -6.8%.
Christopher Joye is a leading financial economist and a director of <a href="https://www.ybr.com.au/savings/index.cfm" target="_blank">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
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chrisjoye-JYhJsTrNRC

Luxury sector driving current fall in house prices: Christopher Joye

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The daily RP Data-Rismark dwelling value index released today tells some interesting stories. The charts enclosed herein all work off the “daily” (as opposed to monthly) data and give us unprecedented insights into the “intra-month” movements in house prices that we’ve never seen before.
My first chart simply portrays the daily changes in the eight capital city “all dwellings” index. We can see that Aussie home values declined by about 1% in January followed by a full recovery over February, March and part of April, as I’d previously discussed here.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/june11.gif"><img src="/images/stories/2012/05/june11thumb.gif"></a>
On the 15th of April – coincidentally at the same time ANZ announced an out-of-cycle, 15-basis-point hike in home loan rates – overall dwelling values commenced a steady slide again to the point where we are actually down about 2% over the year-to-date.
This begs the question as to whether there are any specific markets or seasonal factors driving the overall effect.
It is true that the months of May, June and July are seasonally very weak to the tune of about 0.3% per month or nearly 1% cumulatively. However, the May seasonal factor is only about 0.3%, and would not change the directionally downward pulse in values that we have recorded since mid April.
A big explanation for the national weakness since mid April has been a strikingly sharp fall in Melbourne dwelling values, which you can see illustrated as the red line in the next chart below.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/june12.gif"><img src="/images/stories/2012/05/june12thumb.gif"></a>
As at the end of May, Melbourne dwelling prices are off about 5% this year. But most of this decline has materialised since the middle of April. Specifically, home values in Melbourne have declined by 4.2% since the 15th of April.
In contrast, the Sydney housing market, which is denoted by the black line, has rebounded nearly 1% since the second week of May. In seasonally-adjusted terms, this would be an even stronger outcome. Likewise, we can see some recent stabilisation in raw Brisbane dwelling values, which are illustrated by the orange line in the chart above.
Looking through these intra-month movements, which I would reiterate we have never been privy to before, I am relatively sanguine about the outlook. With an incredibly weak supply-side and supportive monetary policy, sentiment should improve as the year passes (barring global economic disasters). We’ve already seen this in the auction clearance rate data, which has tended to be better in 2012 than what we observed in 2011.
The double RBA rate cut in May resulted in an average 37 basis point reduction in lending rates. While there is little doubt that there have been some net valuation adjustments as bidders revise down their expectations of future capital gains, these are being offset by substantially improved rental returns and a much lower cost of debt.
In the owner-occupier market, where rents are not as explicit a part of the investment equation (they are “imputed”), this total return argument may take longer to grip.
But the bottom line is that today you can get 5.83% variable rates and sub-6% three-year fixed rates. Fixed rates may come down even further given the record slump in long-term Australian interest rates. Naturally any additional easing of monetary policy will only improve bidders’ purchasing power.
Christopher Joye is a leading financial economist and a director of <a target="_blank" href="https://www.ybr.com.au/savings/index.cfm">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
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Sydney house prices start to rebound as Melbourne falls: Christopher Joye

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Melbourne’s property market remained weak in May, with dwelling values falling 2.7% to a median of $490,000, the biggest monthly fall of all eight capital cities, according to the RP Data-Rismark May Home Value Index.
Melbourne dwelling values are now down 8.4% for the year to May, with houses down 8.8% to $534,000 and units down 5.4% to $440,000 – making it the worst-performing mainland capital city market.
Only Hobart is worse, with a 8.9% fall over the past 12 months.
The Victorian capital led a 1.4% fall in capital city values.
Perth dwelling prices fell 1.7% over April to a median of $460,000 while Sydney dwelling prices were down 1.2% to a median of $555,000.
Brisbane dwelling prices were more resilient down just 0.3% over May to a median of $415,000.
The latest drop brings the cumulative national decline to 2.2% over the first five months of 2012, with overall dwelling values down 5.3% over the past 12 months. 
Much of the weakness is confined to the detached housing market rather than apartments with RP Data research director Tim Lawless pointing out that unit values have been much more resilient to value falls compared to houses. 
Over the past 12 months capital city house prices have fallen 5.8% to $470,000, with units down a more modest 1.5% to $430,000.
“It is clear that the market is becoming increasingly price point driven. Unit values across the combined capitals increased in May and they are up by 1.3% over the first five months of the year. 
“Based on median prices, unit prices are generally around 15% to 20% lower than house prices. Investment yields also tend to be higher and units are often located more strategically compared with their detached counterparts,” says Lawless. 
The slide in May indicates that the housing market has not responded to the interest rate cuts in November and December, notes RP Data-Rismark.
According to Rismark managing director Ben Skilbeck, the housing market is being buffeted by a drop in consumer confidence, with the Westpac Melbourne Institute Index of Consumer Sentiment 6.3% below its long-term average despite an overall “positive economic picture”. 
“Concurrently, new mortgage finance commitments aren’t moving a great deal suggesting we are yet to see heightened buyer activity return to the market,” he says. 
Another hurdle for the property market is the large number of properties currently being advertised for sale, with RP Data estimating there were around 308,500 homes advertised for sale across Australia during May, almost 9% more than at this time last year. 
Regional dwelling values were more resilient, falling 0.2% over April to be down 1.4% year-on-year with a median price of $320,000.
Adelaide was the best-performing capital city over the quarter, with dwelling prices up 1% over the three months to May 31, 2012 to $370,000.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/rpjune1.gif"><img src="/images/stories/2012/05/rpjune1thumb.gif"></a>
Brisbane values are down 6% year-on-year, Perth values are down 3.9% and Sydney values are down 3.6% since April last year.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/rpjune12.gif"><img src="/images/stories/2012/05/rpjune12rhumb.gif"></a>
Rismark managing director Ben Skilbeck says one positive to take away from the soft housing market is that housing affordability is showing a marked improvement. 
“The combination of interest rate reductions, declining home values and disposable income growth has significantly improved affordability. 
“Since dwelling values peaked in November 2010, they are down by 7.6%, the RBA cash rate has fallen from 4.75% to 3.75% and disposable income per household has increased by over 5%,” he says.
Darwin is offering investors the highest gross rental yields of all capital cities - 6% for houses and 5.9% for units with Melbourne offering the lowest rental yields on houses (3.7%) and sharing the lowest rental yield on units with Adelaide of 4.5%
“Rental yields are higher now compared to a year ago across every capital city. In some cities where rents have increased meaningfully such as Darwin and Perth, gross rental yields have improved by 50 basis points or more,” Lawless says.
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