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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

<html><body>
Non-bank lenders share of the total lending market declined markedly in April as mortgage lending remained at record low annual growth. 
In percentage terms banks have almost 92% of the total lending market and non-banks just 8%. 
A year ago banks had less than 90% of the total lending market while 11 years ago (April 2001) they had less than 80% of the total market. 
Total mortgages advanced by both banks and non-banks increased by just 0.4% in April following a 0.4% increase in March leaving the annual pace of growth at 5.3%, according to the latest RBA financial aggregates. 
Annual mortgage growth has been at 5.3% since January, the lowest growth since 1977, according to RBA records. 
Despite this very slow pace of growth banks share of the total lending market increased by $12 billion from $1.708 trillion to $1.72 trillion, while non-banks’ total lending fell by from $155 billion to $152 billion – the fifth successive month (since December) that their total aggregate lending has fallen. 
Banks vs non-banks lending books (figures in $ billions)
 
<table border="0" cellspacing="0" cellpadding="0" width="320"><tbody>
<tr>
<td width="76" nowrap valign="bottom">
Month
</td>
<td width="57" nowrap valign="bottom">
Banks
</td>
<td width="88" nowrap valign="bottom">
Non-banks
</td>
<td width="99" nowrap valign="bottom">
Total lending
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Apr-2011
</td>
<td width="57" nowrap valign="bottom">
1608.0
</td>
<td width="88" nowrap valign="bottom">
163.5
</td>
<td width="99" nowrap valign="bottom">
1771.5
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
May-2011
</td>
<td width="57" nowrap valign="bottom">
1614.9
</td>
<td width="88" nowrap valign="bottom">
164.5
</td>
<td width="99" nowrap valign="bottom">
1779.5
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Jun-2011
</td>
<td width="57" nowrap valign="bottom">
1622.4
</td>
<td width="88" nowrap valign="bottom">
163.6
</td>
<td width="99" nowrap valign="bottom">
1786.1
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Jul-2011
</td>
<td width="57" nowrap valign="bottom">
1625.6
</td>
<td width="88" nowrap valign="bottom">
163.7
</td>
<td width="99" nowrap valign="bottom">
1789.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Aug-2011
</td>
<td width="57" nowrap valign="bottom">
1638.4
</td>
<td width="88" nowrap valign="bottom">
163.0
</td>
<td width="99" nowrap valign="bottom">
1801.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Sep-2011
</td>
<td width="57" nowrap valign="bottom">
1649.8
</td>
<td width="88" nowrap valign="bottom">
161.6
</td>
<td width="99" nowrap valign="bottom">
1811.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Oct-2011
</td>
<td width="57" nowrap valign="bottom">
1658.9
</td>
<td width="88" nowrap valign="bottom">
161.0
</td>
<td width="99" nowrap valign="bottom">
1819.8
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Nov-2011
</td>
<td width="57" nowrap valign="bottom">
1670.4
</td>
<td width="88" nowrap valign="bottom">
162.1
</td>
<td width="99" nowrap valign="bottom">
1832.5
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Dec-2011
</td>
<td width="57" nowrap valign="bottom">
1681.5
</td>
<td width="88" nowrap valign="bottom">
156.4
</td>
<td width="99" nowrap valign="bottom">
1837.9
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Jan-2012
</td>
<td width="57" nowrap valign="bottom">
1685.7
</td>
<td width="88" nowrap valign="bottom">
155.7
</td>
<td width="99" nowrap valign="bottom">
1841.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Feb-2012
</td>
<td width="57" nowrap valign="bottom">
1696.6
</td>
<td width="88" nowrap valign="bottom">
155.1
</td>
<td width="99" nowrap valign="bottom">
1851.7
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Mar-2012
</td>
<td width="57" nowrap valign="bottom">
1707.6
</td>
<td width="88" nowrap valign="bottom">
155.0
</td>
<td width="99" nowrap valign="bottom">
1862.6
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Apr-2012
</td>
<td width="57" nowrap valign="bottom">
1719.8
</td>
<td width="88" nowrap valign="bottom">
151.8
</td>
<td width="99" nowrap valign="bottom">
1871.6
</td>
</tr>
</tbody></table>
 
Over April total owner-occupier mortgage lending totalled $839 billion, up $3 billion from $836 billion in March, while loans for investment property purchases totalled $401 billion compared with $399 billion in March.
 
 
 
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lschlesinger-FZcF9M3vE6

Non-banks lose ground as record low mortgage growth continues in April: RBA

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Building approvals for private sector houses fell 11.1% in April to 6,590 on a seasonally adjusted basis, according to the latest ABS figures.
Unit approvals fell 2.3% over April to 3,656 leaving overall dwellings approvals down 8.7% following a rise of 6% in March.
The value of residential building fell 6.7% while non-residential building fell 2.8%, according to the ABS.
The biggest monthly private sector housing fall was recorded in Western Australia, where the number of approvals fell 36.7%, followed by South Australia (-26.4%) and Queensland (-11.6%).
Private sector house approvals rose in New South Wales (2%) but were flat in Victoria.
For the year to April, private sector housing approvals are down 15.9% while unit approvals are down 33.8%
Dwelling approvals decreased in April in Western Australia (-46.7%), South Australia (-27.8%), New South Wales (-15.3%) and Queensland (-2.7%), but increased in Victoria (13.0%) and Tasmania (9.6%) in seasonally adjusted terms.
The value of total building approved fell 5.4% in April in seasonally adjusted terms, and has fallen for three months.
Westpac suggested the April WA result has been heavily impacted by the introduction of new building approval legislation in Western Australia which appeared to have created a hole in approvals presumably due to a lengthier approval process.
"That will be a temporary hole with normal transmission resuming in coming months," it noted. It also suggested the picture across the other states showed volatile moves mostly associated with a lumpy pipeline of apartment projects.
For private sector houses, NSW showed a 1.9% gain building on a similar rise in March; Vic had a flat result; and Qld posted a particularly sharp 11.6%mth drop, unwinding policy-related strength through late last year and early 2012. But notably, all states are recording trend declines in private sector house approvals although NSW and Vic are showing moderating trend declines. "Overall, the April dwelling approvals report is weak but not quite the disaster the headline moves suggest," Westpac said.
The ex-WA results suggest activity is continuing to gradually stabilise but has not settled just yet, it concluded.
The HIA says the "sharp" fall in building approvals in April sends a "very negative signal regarding the wider domestic economy"
“Building approvals have continued to fall over 2012 to date and imply a recessionary level of new residential construction in 2012,” says HIA chief economist, Harley Dale.
“That’s not a positive, upbeat outcome to report, but it is a fact which can’t be ignored or denied,” says Dale.
“The last three months of building approvals confirm HIA’s message that housing starts are heading towards 130,000. That’s a recessionary level of new home building activity with obvious flow-on consequences for Australia’s manufacturing and retail sectors, and employment market.
“Leading indicators over recent quarters have pointed to this poor result and, worryingly, suggest more to come.
“The situation can be turned around, but it requires action and that action needs to occur now. HIA once again calls on Governments to collectively arrest the looming crisis through tax relief and an injection of investment and funding into the new housing sector. Such an injection will also provide vital impetus tothe broader non-resource economy,” says Dale.
Commenting on the April figures, Master Builders Australia (MBA) says they show that last year’s rate cuts have failed to have any impact on residential building approvals in April.
Building approvals are heading south as home buyer confidence weakens," says Peter Jones, chief economist at the MBA.
“The April data pre-dates the May rate cut but with home buyer confidence at such low levels it would appear rates need to fall further in order to arrest the decline in the market.”
“With the immediate challenge to restore confidence and drive a private sector recovery, the building industry is banking on further rate cuts to help boost confidence.”
“To underpin economic activity and jobs, the Government and the Reserve Bank need to boost the more than eighty per cent of the economy caught in the ‘slow lane’," says Jones.
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New home approvals down 11% in April with big drop in WA: ABS

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Most of the people reading this column will be either employees of small and large businesses, or owners of these companies.
Yesterday I gave a one-hour speech to a seminar of 500 small business owners. As you might imagine, my presentation was chock-a-block full of economic analysis. If you want to have a look at some of the charts, you can view them <a target="_blank" href="https://christopherjoye.blogspot.com.au/">here</a>.
Today I want to highlight two – rather unrelated – things I canvassed at the seminar. The first touched on the distribution of housing debt among those owners that have a mortgage. The second was about the key lessons I have learned starting disruptive businesses.
Based on the latest available data, the RBA estimates that the total value of all Australian household debt to their assets is just 19.4%. So the absolute “debt-to-assets ratio” in the household sector looks pretty low. A company with this level of leverage would not be regarded as risky.
What about the level of gearing within the housing market? The RBA’s analysis puts this figure at about 30%. That is, there is circa $1.2 trillion worth of mortgage debt held against $4.1 trillion worth of private housing. Again, this looks good: it is around half the equivalent ratio in the United States.
But Chris, I hear you say, what about the level of indebtedness for those, and only those, with a mortgage? And how does this change according to age and income?
The RBA has kindly obliged and supplied this data as well. The first chart below tells us for home owners with a mortgage (i.e., excluding those who have paid off all their debt), gearing rises to a peak of 63% for those aged 25 to 34 and then declines steadily to a nadir of just 9% for those aged 65 to 74. Importantly, the median level of gearing across all home owners with mortgage debt is just 44%.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/may311.gif"><img src="/images/stories/2012/05/may311thumb.gif"></a>
The second chart teaches us that the level of leverage in the housing market rises as a function of income. As you move rightwards along the x-axis you are migrating up the household income bands. The median home owner in the bottom 20% of income earners only has a debt-to-assets ratio equal to 22%. This then peaks at more than 45% for those owners in the top 40% of earners.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/may312.gif"><img src="/images/stories/2012/05/may312thumb.gif"></a>
The second thing I shared with yesterday’s seminar (which I gave alongside Yellow Brick Road’s Mark Bouris) were the insights I had gathered through my own experience starting businesses. Hopefully there will be some practical take-aways here for those of you who are in the midst of building a new business, and those who are considering whether to make the leap.
 
 
<hr class="system-pagebreak">
 
The first observation was that simple business models are often the best. Put another way, you need to “risk-adjust” the returns you expect to get from investing in a new company. Reinventing the wheel is great if you want to become the next Mark Zuckerberg. But for every winner there are many more losers. Unfortunately, we only see the “survivors”, which creates a downward bias in our perception of the execution difficulty. It is harder than you think!
Creating new products that have never been conceived of before can bequeath tremendous rewards, as Apple’s journey has demonstrated. At the same time, there is only one Apple, and innumerable skeletons that have been left in her corporate wake.
My own view is that innovation can be incredibly gratifying. But it is also bloody hard work. So when you start a new business, consider whether you want to grab the low-hanging fruit and execute a safe strategy, or whether you have the financial resources to weather the long, hard road to building a truly “disruptive” enterprise that is going to reshape the world in which we live.
A second learning was that “corporate structure” counts. It sounds boring, but most new businesses take quite a while to get to cashflow breakeven. You will, therefore, be accumulating tax losses along the way. Your ability to harness these losses in future years will be impacted by both the corporate structure you choose at inception, and how this changes over time.
Your corporate structure will also affect your ability to capitalise on the attractive research and development subsidies the government offers through the tax system. These can be invaluable financial oxygen for new businesses engaged in genuinely inventive activities.
A third insight was that almost all “personal partnerships” fail. If you do a study of the history of personal partnerships you will see that they have an astonishingly high attrition rate. Corporate partnerships, on the other hand, are different. A company has a much better ability to transcend personalities and the idiosyncrasies of individual relationships. While corporate partnerships can also be taxing, they are, in my experience, easier to manage. And they can be more lucrative over the long run.
When entering into partnerships, you need to always assume the worst. You should have comprehensive shareholders or partnership agreements drafted by specialist lawyers that deal with every possible adverse scenario. This is no easy task: a decent shareholders agreement can be more than 50 pages in length. But it will save you trouble down the track.
A fourth learning has been that intellectual property (IP) is a highly undervalued asset. Vigilantly protecting your IP through trademarks and patents can be an exceptionally important source of competitive advantage and commercial leverage. Again, you need sound counsel. Here I would avoid lawyers and start with an experienced patent attorney, which are usually cheap.
My penultimate observation was that human ingenuity can usually overcome even the most intractable problems. I cannot count the number of times I used to say to myself “we’re cactus”, only to sit in a room with a bright bunch of guys and come up with durable solutions. There are intelligent and executable answers to almost all commercial issues. Yet most people are intrinsically problem-oriented and find the search for solutions innately challenging. My message: be positive and condition yourself to always focusing on identifying answers.
My final lesson was not to let mediocrity pollute a high-performance personality. We all have different endowments of commitment, skill, patience, empathy and intuition. When I started out I used to torture myself about personal conflicts. Over time I have learned to, first, maniacally divorce my emotions and sense of self from all commercial decision-making, and, second, to recognise that most people are uncomfortable with this approach.
If you look at anyone who has accomplished something significant in private enterprise — and I don't mean migrating inexorably up a major bank hierarchy — you will find that they have had to overcome countless personal conflicts in the process. They say the softest thing about Frank Lowy is his teeth.
The key to the best decision-making is surprisingly tautological: you need to select the best option irrespective of what the consensus view may be. When making any decision, you will inevitably have to conflict with some section of the participants involved in the process. Few decisions make everybody happy. Those that do are almost always sub-optimal. And many of the best decisions will upset the majority.
To my mind, progress is about breaking down the barriers erected by institutional inertia. And when you smash down walls, you often break noses. Don't be afraid to do so.
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

Higher-income households with mortgages have the highest level of debt: Christopher Joye

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Melbourne’s poorest-quality office stock may become sought after by investors following a new report showing D-grade offices have the lowest vacancy rate of all office types in the city.
The vacancy rate for “inferior quality” D-grade office stock in the city stands at just 2.2%, less than half the vacancy rate of premium-grade stock (5.9%) and well below the 3.5% vacancy rate for high quality A-grade stock, according to the latest City of Melbourne Property Watch report.
Based on current total D-grade office stock of only 121,000 square metres, this equates to around 2,700 square metres of available space to rent.
The least attractive office grade from an investment point of view appears to be C-grade, “average” office stock, which has a vacancy rate of 10% and more than 574,000 square metres of total space.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/melboffice.gif"><img src="/images/stories/2012/05/melbofficethumb.gif"></a>
No new D-grade space has been added to the pool in the 12 months to January 2012, while there was 3,300 square metres of C-grade office space added to the market over this period.
Demand for D-grade office space indicates that businesses still want to be based in the city, but cannot afford the rents charged for better-quality office space, the Property Council of Australia Hunter regional director Andrew Fletcher said when reporting on a similar phenomenon in Newcastle.
The tightest office market in the Melbourne CBD is Docklands, which has a vacancy rate of just 0.8%.
C-grade and D-grade offices have “poor air quality, poor lighting, low-grade amenities and have no minimum standards for building, floor space or environmental ratings” reported the Canberra Times in January.
The report says there is 623,000 square metres of premium-grade space, 1.8 million square metres of A-grade space and 931,000 square metres of B-grade space.
Yields for premium-grade office space range from 6.75% to 7.25%; they range from 7.25% to 8% for A-grade and 8.5% to 9.5% for B-grade.
Yields on the sought after St Kilda Road office market range: 8.75% to 9.25% for A-grade and 9% to 10% for B-grade. 
The report does not provide yields for C-grade and D-grade stock.
The Melbourne CBD office market (incorporating Docklands) is the second largest in the country and currently comprises 4.1 million square metres of office space.
Only 41,201 square metres of new supply was introduced to the market over the 12 months to January 2012, well below the annual 10-year average of approximately 135,000 square metres.
Report author Amanda Walker says the Melbourne CBD office market has the second lowest vacancy rate of mainland capital cities and has recently enjoyed moderate growth in rents and capital values.
“The market is currently considered balanced that is demand driven, rather than supply led.
“Offshore demand for Melbourne CBD office investments appears to be strengthening, highlighting the market’s resilience and appeal as a global investment destination,” she says. 
“In a period of global economic uncertainty, the outlook for the Melbourne CBD office market remains positive. Continued stability and anticipated rental growth is likely to continue to be a key attraction for offshore investors.
“Limited forecast growth in white collar employment over the next 12 months, together with a lack of new supply in the first half of 2012 is likely to keep vacancies at similar levels before new stock and backfill supply comes online,” she says.
 
 
 
 
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Melbourne’s poorest-quality office stock has tightest vacancy rate: City of Melbourne report

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Property development giant Lend Lease has put pressure on Federal Treasurer Wayne Swan to reconsider his federal budget decision to double the withholding tax.
The tax is charged on the distribution paid to foreign investors who buy into managed funds and is set to increase from 7.5% to 15% from July 1.
The withholding tax was as high as 30% under the Howard government, but was cut to just 7.5% by Kevin Rudd in July 2010.
Lend Lease chief executive Steve McCann has called the tax change “sudden, surprising and unhelpful” and says that the largest real estate and infrastructure projects cannot be funded by even the largest super funds.
“Real estate and infrastructure is heavily reliant on offshore institutional capital, especially in the post-GFC era,” he said in an email reported by the Australian Financial Review.
McCann warns that an increase in the tax will cause foreign investors to recalculate their return on investment and reconsider investing in Australia.
The end result will be that Australia’s ability to compete with other countries for offshore capital will suffer, with a flow-on effect for jobs, McCann says.
Lend Lease has $10 billion worth of construction projects on its books, including the massive Barangaroo development.
In its defence, the government claims the new tax rate is a better balance of the needs of Australia to remain an attractive destination for foreign investors while ensuring a fair return.
Treasury is estimating a tax return of $260 million over four year generated from the withholding tax.
Earlier this week, the Property Council of Australia (PCA) failed to convince the federal government to reverse its decision.
PCA chief executive Peter Verwer was in Canberra yesterday attending the Residential Markets Summit hosted by the National Housing Supply Council following a meeting with Wayne Swan.
A spokesperson for the industry body says Verwer would not be commenting any further than the PCA’s post-budget statement.
Verwer was supported by Financial Services Council head John Brodgen, representing the interests of retail and wholesale fund managers and superannuation funds.
On May 8 following the budget statement, the PCA issued a statement calling the withholding tax increase “another extraordinary misstep” by the Gillard government.
“The Rudd government scored a global coup in slashing the withholding tax to 7.5%, [and] the world responded by sending us more of their money to manage,” said the PCA at the time.
Verwer called the move “desperate and cack-handed” and said it would send “an appalling signal to international investors” daring them to try and invest somewhere else.
“This measure shreds Australia’s ambition to become the leading funds management hub for the Asia-Pacific region, and is another example of this government’s inability to sell a good news message and stick to a clear course.”
 
 
 
 
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Lend Lease slams 15% withholding tax as Property Council fails to convince Wayne Swan to scrap it

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Who says Twitter is just fluff? Well, I did before Max Keiser and Stacy Herbert persuaded me to sign up. I’ve since realised that it’s rather like a modern version of the old-fashioned news wire services for the public. Choose who to follow, and they’ll keep you updated on things that interest you. If that happens to be Kylie’s waistline or Kurt’s fidelity, that’s your problem, not Twitter’s. One tweet that I received told me something that didn’t seem right from my own data: that CPI-deflated US house prices were now within reach of their long-term average (i.e. 1890 till now). From my figures – which I had cobbled together from Robert Shiller’s first edition “Irrational Exuberance” data supplemented by the S&amp;P Case-Shiller Index, adjusted for inflation – prices had fallen a lot, but still had a long way to go. So I went back to Robert Shiller’s home page, checked his updated data, and sure enough real US house prices were now “only” 15% over their long-term average. Though this certainly doesn’t mean that house price falls in the US are almost over – having overshot by so much, there is every prospect of them going well below the long term average before they stop falling, especially given the unprecedented mortgage debt from which households are still deleveraging. But it means the day that real US house prices stop falling is closer than I thought before Twitter alerted me to this problem with my data. The chart below shows the difference between my old series and the new one – which is taken without modification from Robert Shiller’s data page. Figure 1: Shiller USA Real House Price Data

<img src="/images/stories/2012/05/keenmay313.gif">
The revision has intriguing consequences for the Australian market. My Australian data comes from cobbling together Nigel Stapledon’s PhD research into long term real house prices from the late 1800s to the ABS data which began in 1986 – and it too is hardly data of the standard that the physical sciences expect. But that said, the Australian house price bubble appears even more extreme: three times the long-term average, versus “only” twice the long-term average when Alan Greenspan told Congress that there was no bubble in US house prices. And of course, the dominant view in Australia is that there is no house price bubble here. Yeah, right. Figure 2: Long term real house prices
<img src="/images/stories/2012/05/keenmay311.gif">
Even when you consider just the very brief time series that the ABS has assembled, Australia’s bubble dwarfs the American one. Real house prices peaked at 2.6 times the level of 1986, whereas the US market peaked at 1.7 times the 1986 level.
Figure 3: Real House Price Indices from 1986-Now
<img width="470" src="/images/stories/2012/05/keenmay312.gif">
 
<hr class="system-pagebreak">
 
Though US house prices have now returned to their 1986 level, mortgage debt has not. All the froth pumped into the market by 30 years of rising mortgage debt has now gone, but the level of mortgage debt is far higher.
Figure 4: Mortgage debt levels
<img width="470" src="/images/stories/2012/05/keenmay314.gif">
This is why house prices could fall a lot further in the US – even though they’re now a relative hair’s breadth from the long term average. As I’ve argued regularly here, the real driver of change in asset prices is the acceleration of debt. I won’t go into the details here – I’m rushing to get this post up before I am on a panel today at the Australian Property Council’s annual gabfest – but I’ll let the next two charts speak for themselves. 
Figure 5: Correlation of mortgage acceleration and house price changes, US
<img width="470" src="/images/stories/2012/05/keenmay315.gif">
Figure 6: Correlation of mortgage acceleration and house price changes, Australia
<img width="470" src="/images/stories/2012/05/keenmay316.gif">
Finally, the chart I published some weeks back comparing house price falls from the peaks in the US, Japan and Australia used the old data, and made Australia’s rate of decline from its June 2010 peak appear comparable to the slow pace of Japanese decline. This revised data indicates that our rate of price fall is more comparable to the US pattern.
Figure 7: House price falls from peak – the early years
<img src="/images/stories/2012/05/keenmay318.gif">
How far could Australian house prices go down? Given what has happened to US and Japanese prices, the simplest answer is “a lot more than most of the people in the audience here seem to expect”.
Figure 8: House price falls from peak – the middle years
<img src="/images/stories/2012/05/keenmay317.gif">
Figure 9: House price falls from peak–the long term
<img src="/images/stories/2012/05/keenmay319.gif">
Steve Keen is a professor of economics and finance at the University of Western Sydney and author of Debunking Economics and the blog <a href="https://www.debtdeflation.com/" target="_blank">Debtwatch</a>.
This article originally appeared on <a target="_blank" href="https://www.businessspectator.com.au/">Business Spectator</a>.
 
 
 
 
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As the Australian housing bubble bursts, prices could fall a lot further than people expect: Steve Keen

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Victorian property investors looking for opportunities under $500,000 should look at apartments in the inner-Melbourne suburb of St Kilda East and also cast their nets as far as Geelong, Bendigo and Ballarat, according to analysis by Herron Todd White (HTW) valuers in the latest Westpac Property Report.
<img src="/images/stories/2012/05/vicregionalmap.jpg">
“Throughout Victoria and Melbourne there are abundant opportunities for buyers in the under-$500,000 price range, and in this sought-after end of the market prospects for future capital growth look good virtually across the board,” HTW chief executive Brendan Hulcombe.
HTW says St Kilda East is very appealing to investors on a tight budget and would provide change on $500,000, with apartments trading at a median unit price of $465,000 and yields ranging from 4% to 4.5%.
According to HTW, affordability – particularly in the apartment market, is encouraging investor interest in St Kilda East, which is just six kilometres from the Melbourne CBD.
Other factors keeping rental demand high are good transport connections via trams servicing the main shopping hubs like Chapel Street and Acland Street and the cosmopolitan feel of Carlisle Street, as well as a predominantly young local population “creating a compelling urban lifestyle that should underpin future capital growth”.
There are currently a spate of new developments being marketed off the plan to investors, including the Hotham Street Apartments, due for completion in 2013, which will offer 18 dwellings with basement car parking with prices starting from around $380,000.
Geelong
Geelong also offers opportunities under $500,000, with the key drawcards of this market being a manageable commute into Melbourne and more affordable prices.
“Employment opportunities are strengthening in Geelong, and a population shift away from Melbourne towards the urban growth boundary has seen Geelong’s population continue to increase.
“Geelong is viewed as an investment hotspot and a good all-round performer for 2012. Rental yields range from 4.5% to 5% and median house prices rose by 5.7% last year giving investors a healthy overall return,” says HTW.
Geelong has a median house price of $530,000, with apartments ranging from around $290,000 to $390,000. Vacancy rates are also low at 2.3%.
Bendigo 
HTW notes that the Bendigo residential market has stabilised over the last quarter with demand remaining buoyant alongside reasonable sales turnover providing good opportunities for investors to take advantage of the city’s current rental shortage.
Bendigo yields are generally between 5.5% and 7%, with a current median house price of $277,500 and $227,500 for apartments, meaning investors could quite possibly by one of each and still stick to their budget of $500,000.
“Latrobe University plays a key role underpinning demand for rental accommodation in Bendigo, and yields are higher than for other nearby regional centres like Echuca and Shepparton. Proposed investment in the city’s health infrastructure by the state government will continue to promote Bendigo as a major regional growth centre,” notes HTW.
HTW valuers say a land shortage is emerging in Bendigo and price growth in residential house lots has become quite noticeable in recent months.
“As a guide, some new developments such as the Evergreen Links Estate in Eaglehawk have experienced price rises of 25% over the past year. This shortage points to good prospects for further capital growth in the future,” says HTW.
Ballarat 
A growing population and a very low vacancy rate at around 1% make Ballarat a good option for investors.
“Ballarat property prices have remained stable and affordable with median prices of $285,000 and $223,750 for houses and apartments respectively,” says HTW.
“Investors are experiencing yields ranging from 4.75% to 5.5%, and the vacancy rate is very low at around 1%,” says HTW.
Ballarat’s current population of around 96,000 people is forecast to rise to 130,000 by 2030 due to regional employment opportunities.
According to HTW, the desirability of Ballarat is further enhanced by its mix of period houses and modern homes, with the one hour commute to Melbourne attracting buyers priced out of the metropolitan market.
“The Ballarat West Growth Area and the Alfredton West Precinct Plan have resulted in significant rezoning of land, and this will lead to the development of new major activity centres along the lines of Lucas – Ballarat’s newest suburb, which is expected to release up to 2,300 new land plots over the next 12 to 14 years,” says HTW.
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Regional centres Geelong, Ballarat and Bendigo offer best sub-$500,000 property investment opportunities in Victoria: HTW

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So what do you do if you’ve found a home, it’s for private sale, and you want to make an offer? How you kick the ball into play, to use the vernacular, can be even more important than the actual amount – especially at the highest level. Too often buyers’ first efforts are way out of bounds and the game is over on the first move.
Slamming a deadline on a low-ball price, for instance, not only has limited chance of acceptance, but can also offend – making a future, more realistic offer harder to get over the line. On the other hand a careless high-ball comment can make it almost impossible to offer sensibly afterwards.
Before you step over the negotiation white line please understand that the first thing you say and how you say it often becomes the foundation around which negotiations are built.
If those foundations are faulty, your dreams may come crashing down on a home you could have bought had you done your homework, executed a plan well and shown some respect.
I know it can be hard to accept, but sellers and their agents have feelings, too.
Mal James is principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
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Be cautious when making your first offer on a property, or negotiations could end before they begin

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There’s good news for first-time investors and buyers, with banks now considering casual and secondary incomes when assessing mortgage applications, according mortgage advisors Smartline.
The mortgage broking franchise says the banks are now looking favourably at a variety of income types when considering home loan applications, having tightened their lending rules in the fallout from the GFC.
“While overtime, bonuses and second jobs used to be regularly accepted by lenders, unfortunately this changed when the GFC hit,” says Smartline managing director Chris Acret.
“Those with casual or contract employment or who were self-employed also found it much more difficult to secure home financing as banks becoming very risk adverse.
“Thankfully, lenders are increasingly ‘normalising’ their lending criteria and while we haven’t yet returned to pre-GFC levels, it’s moving in the right direction,” he says.
The move will be welcomed by those investors and buyers who are self-employed or on contract or casual employment.
According to Smartline, some lenders will now also consider the income of a person working in a temporary, casual or contract position after three months, particularly if the applicant works in certain roles, such as an accountant, teacher, nurse or engineer.
This is because banks have “sensibly” revised their view on income types in light of changing work practices.
“The full-time position that was guaranteed for life is slowly becoming less and less relevant as both employers and employees look for greater flexibility in the workplace and in their lives,” says Acret.
However, he warns that different lenders could have quite different criteria when it came to assessing income types.
Find out why buying an investment property as your first purchase could be the easiest and cheapest way to get your foot on the property ladder by signing up for next week’s free Property Observer webinar with Michael Matusik: Tips for buying your first property as an investment. The webinar takes place on Tuesday, June 5 at 12.30pm.
 
 
 
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Banks considering alternative income sources when assessing mortgage applications: Smartline

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There can often be some misunderstanding around a fixed-price contract.  If you don’t know a builder, then there can also be a little mistrust as you look over the tender. Am I being overcharged?  Is everything included?  Will there be many variations?

Today I opened an email that made me smile and really feel grateful for such a wonderful builder we are working with on our development projects.

The email came from the office of my builder. It related to a three-villa project under construction. It had two variations attached to it; one for the site preparation and the other for slab piering.  I’d been overseeing the works with the site manager so I was expecting the variations but weren’t sure on the exact cost they’d come in at.

“Variations are changes to the original contracted work, which involve either an addition or reduction in the scope or value of work,” so the <a href="https://consumer.masterbuilders.asn.au/the-building-process/contracts-and-variations/variations">Master Builders Assoc describes</a>.

So you’ll always find some items marked as provisional in your builder’s contract, because you can’t always plan the entire “scope or value of work” required when developing.

In this builder’s contract this clause was clearly included:  “Provisional sum is the estimate cost of labour and materials; it includes an amount for the builder’s margin. If the cost is more than the allowance, the difference including builder’s margin will be added to the contract price. “

Back to our three-villa project variations.  The first one covering the site preparation was for tree removal.  The builder’s tender covered vegetation clearing but from the time Property Bloom located the site, ran our analysis, designed the project, lodged the development approval and construction certificate and the client had her construction loan finalised and we could start to build, the vegetation had grown to a rather large tree.  We did get a quote from a tree lopper to clear it, but we decided that it would be cheaper for the builder’s excavator to push it over and clear it as part of the site preparation. So we did expect a little increase to this provisional cost but wouldn’t know until the excavator submitted his invoice to the builder. It ended up being a little over $1,000 for this work.

The other variation was for under slab piering.  Once work was completed, we knew that we hadn’t needed to use the entire provisional allowance in the builder’s tender.  When on site with the concreter, I could see that the depths he was drilling to were not as deep as expected and so there were less lineal meters of piering required.  For this work our client was receiving a credit as the provisional allowance was over-estimated.

I needed to let my client know that there had been some variation to the build cost.  After all, she had signed a fixed-price contract a few weeks earlier, but I had made a point to explain the items marked provisional in her contract.  Usually provisional items are:

<ul>
<li>Disposal of stormwater – even with an engineer’s plan, this may vary during construction</li>
	<li>Retaining walls – the square meters of retaining often can’t be totally confirmed until the site is cut</li>
	<li>Piering to under the slab – dependant on how deep they may need to drill to hit solid support</li>
	<li>Site preparation – excavation – cut and fill.  There can be more fill required to bring in or take away</li>
</ul>
The conversation I had with my client was easy. She was coming out in front with the credit on the piering more than covering the variation on the site clearing.  This is the kind of outcome we strive for, but it doesn’t always work that way.

In property developing or home building, there can often be a degree of disappointment once under construction as issues arise.  Mostly this comes down to the developer or home owner’s expectation that the costs won’t change.

The more developments or home builds you manage, the more issues you become aware of. But if you can go into it knowing there is a degree of risk that you must take, then you won’t be disappointed if an issue does come up.

No one can really know what will happen once you start work, but as project managers, it’s our job to manage the issues in the most effective way so that we minimise costs and the valuable time in may take to sort out the issue.  And when it goes the other way and a credit is issued, then that’s a wonderful feeling.

<h2>Recently listed properties:</h2>

[smartcode_project:default project_id=3490]

[smartcode_project:default project_id=3783]

[smartcode_project:default project_id=3565]
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