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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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Half of the apartments in the Pyrmont development Harbour Mill, on the former Edwin Davey &amp; Sons Flour Mill are at the junction of Allen and Jones streets, have sold off the plan when they launched this past weekend.
<img src="/images/stories/2012/05/harbourmill10.jpg">
About 65% of the 136 units in the Ceerose development are priced under $600,000, and owner-occupiers and investors who buy these offerings before July 1 this year will be entirely exempted from stamp duty under the NSW government's home builders’ bonus.
<img src="/images/stories/2012/05/harbourmill2.jpg">
CBRE, which is marketing the project, says about 60% of the 70 units sold so far have sold to investors.
<img src="/images/stories/2012/05/harbourmill1.jpg">
The two interlocked buildings in Harbour Mill will comprise 32 studio apartments ranging in size between 40 and 69 square metres, with prices starting from $395,000. The 51 one-bedroom apartments will range from 55 to 75 square metres and start from $495,000. There will be 45 two-bedroom apartments, ranging from 80 to 98 square metres, and they will not qualify for the stamp duty exemption, as they start from $725,000. The eight largest apartments, of three bedrooms each, will range from 100 square metres to 122 square metres and will come with extensive roof terraces. They begin at $1 million.
<img src="/images/stories/2012/05/harbourmill4.jpg">
The site began its life as a jam factory and in the early 1900s was converted into the Edwin Davey &amp; Sons Flour Mill, which closed in 1996. Most of the buildings have been demolished since the mill’s closure, but the façade has endured and is incorporated into Grimshaw Architects’ Harbour Mill design.
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<img src="/images/stories/2012/05/harbourmill5.jpg">
Ceerose bought the 3,100-square-metre site last year from developer Mike Boulos, who had intended to build a seven-storey mixed-use development on the site, but the plans never came to fruition. Boulos had bought the site in 1996 for $3.38 million.
<img src="/images/stories/2012/05/harbourmill12.jpg">
The development application for Harbour Mill is currently before Sydney City Council, with approval expected in mid-June. The council was involved in Ceerose’s contest to find an appropriate design for the site and is understood to be very supportive of the Harbour Mill plans.
<img src="/images/stories/2012/05/harbourmill6.jpg">
Ceerose founder Edward Doueihi wanted to preserve as much as possible of the existing building, as he has a strong attachment to the flour mill. His father ran a bakery on nearby Cowper Street, and as a child Doueihi often visited the Edwin Davey &amp; Sons mill to buy supplies.
<img src="/images/stories/2012/05/harbourmill7.jpg">
“I’ve been emotionally attached to the mill since my childhood,” says Doueihi. “Unfortunately most of it has been torn down. Now that I own the site I’m going to build something that reflects the mill’s proud history and my fond memories.”
<img src="/images/stories/2012/05/harbourmill8.jpg">
Doueihi plans to display photos of storyboards of the site’s history in Harbour Mill.
One of the buildings in Harbour Mill will be four storeys and include the heritage façade, and the second 10-storey building is designed to “step up and over it”.
<img src="/images/stories/2012/05/harbourmill9.jpg">
“The design respects the heritage of the mill and the place it has played in the history of Sydney, whilst acknowledging and fitting in with the modern trend coming through in the Pyrmont-Ultimo area,” says Andrew Cortese of Grimshaw Architects. “The old and new aspects of the building blend and work together, delivering an unique building.”
<img src="/images/stories/2012/05/harbourmill3.jpg">
 
The building will include a communal atrium with ventilation from the outside instead of air-conditioning, a café on the ground floor and a communal gym.
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Edwin Davey Flour Mill rises again as Harbour Mill as investors rush to secure stamp duty-exempted units

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CommSec chief economist Craig James has called for the federal government to hold a home building summit.
“The Reserve Bank has certainly expressed more concern about the lack of home building in recent months, however it can only do so much in stimulating activity.
“Ultimately federal and state governments need to sit down with developers, industry bodies and finance providers to work out the fundamental constraints on new home building.
“A home building summit would certainly be a positive leadership initiative from the federal government,” James suggests.
His comments came after a slight lift in April new home sales.
But James noted the nearing end of Victoria’s $13,000 first-home bonus helped national new home sales mount a partial recovery in April.
The HIA - JELD-WEN new home sales report, based on a survey of Australia’s 100 largest builders, showed a 6.9% rise in total seasonally adjusted new home sales in April, with new detached house sales increasing the most in Victoria, up by 17.2%, ahead of the removal of the first-home bonus.
The increase in Victorian home sales was the first gain in five months, James notes.
"However it is clear that home building is weak, certainly well below averages over the past five years.
“In part Aussies lack confidence to build,” he adds.
"Others are opting for shared accommodation, whether it be Gen Y renting apartments together or staying home with their parents. Or it may be that senior Australians are opting to live with their children and grandchildren.
"Certainly home occupancy has been rising over the past two years – something that hasn’t happened in over a century," James says.
 
 
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Federal government needs to convene home building summit: CommSec's Craig James

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 The City of Melbourne, Southbank and Docklands will continue to be the epicentre of high-density urban renewal projects in Melbourne until 2014, according to a new report compiled for the Property Council of Australia by consultants Charter Keck Kramer (CKC). 
However beyond 2014, CKC anticipates that there will be an increased provision of medium-density projects, “particularly across the established middle region, as well as continuing supply of smaller apartment projects”. 
The apartment push into the suburbs is already occurring in established middle-region suburbs like Dandenong, 30 kilometres from the CBD, where 43% of construction activity is currently for apartment projects. 
Apartment projects account for more than a third (34%) of construction activity in Box Hill, 28% of activity in Footscray and 22% of activity in Sandringham. 
CKC says it can be confidently predicted that residential urban renewal supply will slow considerably after 2014, “given the heavy influence of apartments within the urban renewal concept”. 
“The evident slowing in the established housing market since 2010, and the more pronounced reduction in off-the-plan apartment sales activity at the same time will translate through to lower future completion levels,” says CKC.
The report anticipates that 421 major residential urban renewal projects (including several multiple stage developments) will be completed between 2012 and 2014. 
Click to enlarge
<a href="/images/stories/ckcmay29.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/ckcmay29thumb.gif"></a>
The projects are expected to deliver 34,440 dwellings, with 82% of these being apartments, with the higher concentration of supply in larger projects of more than 100 dwellings. 
Over this period, about 42% of new apartment buildings will have more than 10 levels, compared with 31% in the construction period from 2005 to 2011. 
High-rise apartments will remain concentrated within the established inner-city municipalities. 
The report notes that pattern of major residential urban renewal concentrated in the City of Melbourne (including parts of the St Kilda Road precinct), Southbank and will continue to prevail. 
However, it notes that though the City of Melbourne will account for a lesser concentration (29%) of overall activity than it has over the recent past. 
Stonnington and Yarra local government areas account for the greatest increases in relative supply between the recent past and forthcoming periods. Their shares of overall metropolitan activity will increase by 3 percentage points to 9% each. 
The CKC report ranks the City of Melbourne as the top urban renewal LGA from 2005 to 2011 (6,651 apartments) followed by Southbank (2,718 apartments); Docklands (1, 956 apartments, 2026 total dwellings); South Yarra (1,352 apartments) and Port Melbourne (1,070 apartments, 1,183 total dwellings). 
In total CKC identified 607 individual major urban renewal projects (including several multiple stage developments) that have been completed between 2005 and 2011, containing 39,355 new dwellings.
The report, Making the Numbers Stack Up, was released in response to Victorian government projections that over the 40 years to 2051, Victoria’s population will increase by 3.2 million to 8.7 million. 
Over the same period, Melbourne’s population is expected to grow to 6.5 million, while regional Victoria is projected to grow to 2.3 million. 
The report concludes that there is currently “strong alignment between policy and market preferences for supply into locations offering high amenity and transport connectivity”. 
“Metropolitan policy should reinforce this nexus and seek to minimise constraints to new development where such preconditions exist so as to optimise supply opportunities and maximise community benefits associated with urban renewal. 
“Locations that currently do not exhibit the necessary preconditions to support higher density outcomes must undergo a period of progressive step changes in market conditions and density before apartments can be supported. 
“Not every centre, nor every suburb, can be expected to accommodate higher-density urban renewal but those suburbs which have the necessary preconditions (transport, amenity and supportive house price structures) should be expected to provide opportunities for appropriate urban renewal to occur,” says the PCA.
Photograph courtesy of <a href="https://www.flickr.com/" target="_blank">Flickr</a>.
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Melbourne urban renewal to slow and spread to the suburbs from 2014: Charter Keck Cramer

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What are your two biggest challenges when saving? Arguably capital preservation and generating long-term, “after inflation” returns in the order of 3% to 5% per annum. What is inflation? Simply, the periodic increase in the cost of the goods and services that you buy. If inflation rises faster than your income (and/or your investment returns), your purchasing power is not keeping pace with your cost of living. Are your living expenses different to the official inflation rate calculated by the national statistician? You bet, which makes evaluating your actual purchasing power more complicated. 
In my first chart below I have compared the official inflation rate with four “cost of living indices” published by the Australian Bureau of Statistics. These indices cover, respectively, “employees”, “aged pensioners”, “other government benefit recipients”, and “self-funded retirees”. The black dotted line is the inflation rate.
Click to enlarge
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As you can see, our cost of living has generally appreciated more rapidly than the headline inflation numbers (observe how three of the four cost of living indices are above the black dotted line). While the inflation rate since 1998, which is when the cost of living measures start, has averaged about 3% per annum, employees, pensioners and other welfare beneficiaries have seen their living expenses accrete by between 3.3% and 3.4% per annum. Over time, this wedge compounds up into significant differences. Only self-funded retirees have had their living costs track inflation. It is worthwhile adding here that the 3% annual inflation rate recorded over the 1998 to 2012 period is hardly comforting (underlying inflation estimates are similar): in particular, it is way above what most OECD nations regard as acceptable. 
The key thing to take away from this analysis is that you need to punch out consistent returns of 3-4% per annum from your savings just to keep pace with the rise in the price of the goods and services you need to buy to survive. 
The bad news is that doing so in the current environment, which is characterised by global “deleveraging” (i.e., higher savings and, where possible, reduced indebtedness) is bloody hard. Central banks around the world have cut interest rates to near-zero, which means that in the UK, North America, and Europe savers are going backwards on their cash accounts once they account for inflation. 
In Australia the situation is only a little better. In my next chart I have illustrated both the “average” bank deposit rate, which is the red line that refers to the right-hand-side axis, and the return you get on the average bank deposit after paying living expenses (the yellow bars that relate to the left-hand-side axis). Here I’ve assumed that you are an “employee”, as defined by the ABS.
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<a title="Click to enlarge" rel="shadowbox" href="/images/stories/may292.gif"><img src="/images/stories/may292thumb.gif"></a>
As you can see from the yellow bars, the “real” return you get on the average bank deposit has been very low since the start of 2011. While you can currently get a 1% annual return above the cost of living, this is being driven by the decline in inflation recorded in the second half of last year and the first quarter of 2012. That reduction was in turn an artefact of the sharp appreciation in the Aussie dollar, which is now being reversed. The likelihood of higher cost of living rates in future quarters (compared to the recent past) combined with declining returns on bank deposits means that real interest rates are likely to once again converge towards zero, and possibly turn negative. 
More on page 2
 
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What about those “special rates” you can get with the banks? In my third chart I have repeated the analysis above using the RBA’s “special” bank rate series. After living costs, real special deposit rates are currently a little higher at circa 2% per annum. But they were much lower in 2011 and the risk is, as I just noted, that they fall towards zero again.
Click to enlarge
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So if we can only earn at best 1-2% per annum above living costs via the banks, what other options do we have? Today I want to have a think about equities and property.
As you probably know, the share market has been horrifically volatile in recent times, and has delivered negative total returns – before subtracting cost of living increases – over the last one to two years. 
Nevertheless, equities do have an important role to play in any long-term savings plan. The emphasis here is on “long term”, because even the most diversified equities portfolio can have its value halved in the short term. 
What should our return expectations for equities be? It’s a hard question to answer. Let’s start off by thinking about what we mean by “equities”. A well-diversified equities portfolio simply gives you an ownership stake in a large chunk of corporate Australia. Of course, there are also many private companies and small businesses that are not listed on the ASX, and which you will not, therefore, have exposure to. 
The “enterprise value” of any company is the sum of its debt (i.e., loans from the bank and bonds it issues) and equity (i.e., the amount you invest to own part of it). If economic growth, or GDP, is defined as the market value of all economic output, it is hard to imagine how the enterprise value of corporate Australia can grow much faster than nominal GDP.
Trend “real” economic growth is thought to be around 3% to 3.25% per annum. Long-term inflation averages about 3% per annum. So a long-term nominal economic growth forecast might be circa 6% per annum. Should your expected total return for Aussie shares be the same? No, because if companies are funded using debt and equity, the equity returns should be higher than the sum of the debt plus equity (or the company’s total enterprise value). 
Over the last 30 years, Aussie shares have given total returns of about 11-12% per annum, which has been significantly higher than economic growth. But remember that these high returns come with high risk (i.e., the probability of loss). Think 40-50% falls in the value of Aussie shares in 1987 and 2008.
What about residential property? There is much overlooked nuance associated with investing in housing. Let’s repeat the first principles approach I used for shares. 
It is hard to see how the overall value of housing can increase more quickly than household purchasing power, all things being equal. So a good benchmark for capital gains is probably disposable household incomes. For a bunch of reasons, these will probably grow at about 4% to 5% per annum over the next decade. But this does not sound especially exciting; i.e., house price growth a tad above inflation. 
Then, of course, we have rental income in the same way we get dividends from shares. The current gross yield on Australian capital city apartments is about 5% per annum (and rising). So your total gross expected return from investment property might be 9% per annum over the next decade.
Despite the baloney about housing being a tax-advantaged asset-class, the taxes and transaction costs associated with buying and selling housing in Australia are heinously expensive: the IMF figures about 12% round-trip. Amortised over your average seven- or eight-year holding period this is going to knock 1.5% per annum off your total returns. So maybe you get, on average, 7.5% per annum net, over the cycle. Not a bad real return assuming inflation runs at 3%. 
Now here is the rub. Your actual “equity” returns are usually much higher than this. Like most companies, homes are funded by debt and equity. The average initial gearing on a home is about 80%, while the average gearing on an existing Aussie home with debt outstanding is about 45%. (Think about it: when you buy a $500,000 home with a $100,000 deposit you are geared 80%.) 
There are three attractive things about housing leverage: first, you can get much higher leverage than almost any other asset-class (i.e., the bank will lend you up to 95%); second, residential home loans are the cheapest form of debt you will find (cf. small business loans, corporate loans, or personal loans); and, third, the term of the debt – up to 30 years – is longer than the gearing available to other investments.
A final wrinkle with residential real estate is that the risk of investing in an individual home is far greater than most people realise. In fact, Rismark estimates that the volatility of a single family home is akin to the volatility of the share market. 
Accordingly, the best possible residential property investment would be a product that allows you to invest in a portfolio of thousands of individual homes to give you the diversification you need to reduce risk. A nationally diversified residential property index has very low volatility of about 5% to 6% per annum (compared with the 15% to 20% per annum of the ASX All Ordinaries Accumulation Index). Leveraging up against this would be safe: gearing against an individual home is a far more hazardous exercise.
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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With a low cash rate, equities and property are important for any long-term savings plan: Christopher Joye

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The nearing end of Victoria’s $13,000 first home bonus has helped national new home sales mount a partial recovery in April following a very weak end to the first quarter of 2012, the Housing Industry Association has reported.
The HIA - JELD-WEN new home sales report, based on a survey of Australia’s 100 largest builders, showed a 6.9% rise in total seasonally adjusted new home sales in April.
Detached house sales rose by 6.4%, while multi-unit sales were up by 10.3%.
New detached house sales increased by 17.2% in Victoria, ahead of the removal of the first-home bonus, the HIA noted.
Detached house sales also increased in Western Australia by 9.8% and New South Wales by 1.8%.
However, detached house sales fell by 5.9% in South Australia and by 5.5% in Queensland.
The increase in Victorian home sales was the first gain in five months, the CommSec chief economist, Craig James noted.
"The good news is that Victorian house sales soared.
"The bad news is that the upcoming expiry of the First Home Bonus probably had a lot to do with it.
"And unfortunately in economics it can get like that – on the one hand this, on the other hand that.
"However it is clear that home building is weak, certainly well below averages over the past five years," Craig James said.
It was in part that Australians lacked confidence to build, he added.
"Others are opting for shared accommodation, whether it be Gen Y renting apartments together or staying home with their parents. Or it may be that senior Australians are opting to live with their children and grandchildren.
"Certainly home occupancy has been rising over the past two years – something that hasn’t happened in over a century," Craig James said.
 
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HIA chief economist Dr Harley Dale says the April lift in new home sales of both detached houses and multi-is was an “imperative result”.
"Even with this latest improvement, the aggregate volume of both new home sales and local government building approvals imply that in the absence of a rapid and sustained recovery, national new home building is heading to a recessionary level in 2012.
“That’s an unfortunate fact which everybody needs to face and which requires further interest rate cuts and immediate government action,” Dale says.
“We keep hearing that Australia is one of the world’s strongest economies in aggregate.
“That’s a redundant concept if people on the ground aren’t feeling and experiencing that, and they haven’t been for quite some time,” he says.
"Further interest rate cuts are required, and the Reserve Bank should just get on with the job on June 5.
“However, rate cuts are not a panacea and the key to a housing recovery lies with governments at all levels.
“Job losses are mounting and governments need to collectively act to revitalise new home building through reducing the sector’s excessive tax burden and through an immediate injection of investment and funding,” the HIA press release says.
 
 
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New home sales partial recovery in April buoyed by Victorian first-home bonus deadline: HIA

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Borrowers will have to wait until July at the earliest for the next rate cut, according to the latest Bloomberg poll of economists.
Just four out of the 19 economists surveyed by Bloomberg expect the RBA to cut rates again when it meets on June 5.
Analysts say the Reserve Bank might wait for fresh inflation data before making its next decision, but will also be keep a close watch on global events, particularly in Europe and in China, <a target="_blank" href="https://www.propertyobserver.com.au/news/rba-worried-about-china-industrial-slowdown-glenn-stevens/2012052854866">as mentioned by RBA governor Glenn Stevens yesterday</a>.
If the RBA relies on the official ABS data, it will have to wait until August 7 to make its next interest rate decision, as June quarterly CPI data will only be released on July 25.
Westpac chief economist Bill Evans expects at least a 50-basis-point cut between now and August, but says Westpac is reserving its right to review its forecast on the RBA's decision at its June 5 meeting “until next week, when more information will be available around the global situation”. 
“We were also disappointed at the poor response of Consumer Sentiment in May and the continued deterioration in respondents' already weak confidence about job prospects. That prompted us to subtly moderate our view from 50bps in June/August to 'at least' 50bps. 
“With the RBA's concerns around Europe and the assessment that policy is only mildly stimulatory the case for an immediate rate response is respectable. In fact a case to front-load the cut to offset any further confidence damage from Europe is also respectable,” says Evans.
The Reserve Bank might be swayed to move earlier by fresh data from other sectors, which will come out of over the next few days. 
Tomorrow retail trade figures for April will be released giving an indication of consumer sentiment, while on Thursday building approvals data for April will give the RBA a sense of whether residential construction may pick up in the months ahead.
The RBA will also be able to reflect on a weaker housing market when the RP Data-Rismark May Home Value index is released on Friday.
RP Data national research director Tim Lawless says the housing market over May has remained “fairly soft, suggesting the recent interest rate cuts and strong labour force results are yet to have a positive influence on housing market conditions”.
“Over the month to date, the daily RP Data-Rismark Home Value Indices have fallen lower for each of the major capital cities apart from Adelaide,” he says.
Retail sales figures are forecast to rise by just 0.2% in April after an unexpected 0.9% increase in March.
The RBA will also take note of the disappoint result in the May Westpac Melbourne Institute Index with consumer sentiment rising just 0.8% despite the 0.5-percentage-point rate cut.
 
 
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Reserve Bank may put rate cut cycle on hold in June: Economists

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Canadian coffee chain Esquires Coffee House is expanding into Australia following an entry to the New Zealand market, spearheaded by a high-tech store concept. 
Founded in 1993 in Vancouver, Esquires has established a presence in North America, the United Kingdom, Ireland, Dubai, Abu Dhabi, Saudi Arabia, China, Fiji and even New Zealand. 
In New Zealand, there are 47 Esquires stores. 
Now the franchise has turned its attention to Australia, confirming it will open its first flagship store in Sydney next week. The store will be located in the affluent suburb of Mosman. 
The company-owned store will be the model for future Australian outlets, with additional stores planned for not only NSW but also Queensland and South Australia. 
Esquires is part of the Retail Food Group family, which is also the local licensee of Donut King, Brumby’s Bakeries, Michel’s Patisserie, bb’s café and, most recently, Pizza Capers. 
RFG’s brand manager Khim Puseman admits it is “a little bit unusual” Esquires entered the New Zealand market prior to the Australian market.
 “It’s a brand that’s been out there for a little while... A couple of guys in New Zealand actually bought the rights to the New Zealand market, but it is a little bit unusual,” Puseman says. 
Puseman is quick to point out the store in Mosman is not the first Esquires store in Australia – there’s another store in Tweed – but it is the first concept store. 
“The Mosman store is the first concept store in that it embodies the new brand position of Esquires Coffee House,” Puseman says. 
In addition to a self-serve kiosk and free WiFi, each new store will be equipped with iPads for customers to use. 
“We’re really trying to embody more of a high technology standpoint. We’ll be launching online ordering, mobile orders, and we have self-serve kiosks,” Puseman says. 
“We are leaning towards targeting a younger age group but really anyone who has an appreciation for technology.” 
According to Puseman, a love of technology is also important among the chain’s franchisees, which are currently being sought out. Of course, franchisees also need to care about coffee. 
“It’s a high-tech brand but it’s also a coffee brand. We’re looking for franchisees or people who have a great passion for coffee,” she says. 
“They need to be focused on the utmost quality of the coffee and the service of the coffee.” 
“We want them to be able to speak to the target market, and align themselves with the brand in terms of the high-tech offering. Essentially, they need to be enthusiastic.” 
Puseman isn’t concerned the popularity of the brand will be compromised because it is foreign. 
“The whole range has been adapted to be best targeted to Australia. We haven’t just brought in an international brand, plopped it in an Australian suburb and hope it does well,” she says. 
“All our products have been custom picked and chosen because of local palates and local taste… For example, we’ve added more cold beverages because it gets a bit warmer [in Australia].” 
Meanwhile, Queensland-based coffee franchise Zarraffa’s Coffee has announced its plans to expand into NSW. Zarraffa’s currently has 52 stores. 
A drive-through site in the suburb of Fairfield will be the company’s flagship location in NSW, as part of a plan to open at least 11 new franchises this year throughout Queensland and NSW. 
Zarraffa’s chief executive Kenton Campbell told Franchising the company is moving away from traditional shopping centre locations to more suburban retail sites. 
“Developing a successful drive-through store model has been critical to these plans,” Campbell said. 
“Our primary focus is on building the financial health of all our stores, and delivering value and support to our franchisees.” 
“Expansion has always been executed in a financially responsible way, and 2012 is the right time for this move.” 
The news comes less than two weeks after a franchisee couple was <a href="https://www.propertyobserver.com.au/https://www.startupsmart.com.au/franchising/billy-baxters-franchisees-win-%241.22-million-in-damages/201205156300">awarded $1.22 million in damages</a> after a successful appeal against franchisor Billy Baxter’s. 
Billy Baxter’s is a chain of licensed coffee houses, cafés and restaurants. 
Ross and Sue Pollard operated a Billy Baxter’s greenfield site in the Adelaide suburb of Glenelg, but did not achieve the turnover anticipated by the franchisor’s representative, Phillip Mauviel. 
A Victorian Supreme Court of Appeal decision found there were no reasonable grounds for Mauviel to make the representations regarding turnover, resulting in a $1.22 million payout.
This article originally appeared on <a href="https://www.startupsmart.com.au/" target="_blank">StartupSmart</a>.
 
 
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Canadian coffee chain Esquires looks to Australia following NZ success

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Investors who borrow through their self-managed super funds to acquire property continue to breach the rules and risk being reported to the Tax Office, warns Heather Gray, a partner at law firm DLA Piper.
Her warning comes as the ATO revealed in its third-quarter update (to March 31) that it had prosecuted of more than 1,500 people for tax and superannuation offences, sending “a clear warning to tax cheats that they can expect to be caught”. 
Properties acquired by a SMSF <a target="_blank" href="https://www.propertyobserver.com.au/finance/clarity-for-smsf-property-investors-as-ato-defines-single-acquirable-asset/2012052454820">using limited-recourse borrowing rules</a> have to be acquired via a separate trustee with a custodian holding the legal title.
“Clients still get this wrong all the time,” said Gray at the Institute of Chartered Accountants in Australia’s Business Forum 2012.
“They will ring you (their financial advisor) on a Monday morning all excited saying they have found a great property over the weekend for their super fund.
“They will tell you they have signed a contract and want to sit down to discuss how they will structure the investment in their fund,” says Gray.
But, she says, invariably the custodian has not signed the contract.
“In fact the client has not even thought about the custodian; it’s not even a twinkle in their eye as yet.”
“And they have paid the deposit, who knows from where – probably from some random banking account,” Gray says – not from the fund.
Such basic mistakes can result in investors breaching SMSF borrowing rules and being reported to the ATO.
“It is the super fund buying the property and the super fund that must provide the money,” explains Gray.
Furthermore it is the custodian, which holds the legal title, and it must be the one that signs the contract of sale.
Tax Commissioner Michael D'Ascenzo says the March quarter ATO prosecution figures show that there are “significant risks and consequences for people who do not properly fulfil their legal and civic responsibilities in relation to tax and superannuation”.
"The year-to-date results to 31 March reveal that the ATO successfully prosecuted 1,106 individuals and 400 companies for tax and superannuation offences," he says.
“We have a range of measures in place to ensure we detect and deal with those who evade their obligations. This includes information sharing and working with other government agencies, and also with overseas counterparts.
"The ATO pursues tax cheats to the full extent of the law to ensure honest taxpayers have their interests looked after. Australians don't want to face an unfair burden when dishonest people avoid their tax obligations, and they expect the ATO to provide a level playing field,” says D’Ascenzo.
Last week the ATO finalising guidelines for what constitutes a single acquirable asset under limited recourse borrowing rules and clarifying what <a target="_blank" href="https://www.propertyobserver.com.au/renovating/ato-ruling-specifies-allowable-repairs-and-renovations-for-smsf-property-investors/2012052454821">renovations and repairs are allowed to be carried out on properties</a> acquired through super.
 
 
 
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SMSF investors still making basic mistakes on property purchases as ATO cracks down on super ‘cheats’

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It is soon evident in this discussion with guest Joe David, special counsel in the property and infrastructure group from national law firm Corrs Chambers Westgarth Sydney office, that in his well-exercised view, two key factors underpin the legal foundations of our property market: Torrens title (together with consumer protection legislation) and the quality of contracts.
Firstly 1858 marks the introduction of the ground-breaking Torrens title system of title registration (initially in South Australia), and today its “reputation” continues to build the security of our major residential projects.
According to Joe David, as a result of laws introduced on January 27th, 1858 by Sir Robert Torrens (see notes below), Australia’s internationally regarded property laws and land title system were soon to be the key foundation of the local real estate market.
And that is still so today, and as we will see spreading way beyond the borders of South Australia. However it is Joe’s view “it is the developer’s reputation and the fact that our property industry has kept pace with the expectations of today’s buyers that together so well service the needs of our present-day market.”
With over 35 years’ experience acting for major developers, Joe David talks about some very clear cut and valuable in-sights across the project marketing sector.
<img src="/images/stories/joedavid.jpg" width="350" style="float: left; margin: 5px;">
Joe is very well qualified to give up his time to take part in this series of posts. Heading up the developer sales group at Corrs, Joe has his focus on what he terms “the money end of the project”. From my point of view that’s a few very simple words that mean a great deal. After all it requires little conjecture to imagine circumstances where as Joe puts it, “if a contract is not watertight when it comes to settlement a developers investment could be at an unacceptable level of risk”.
The progression of quality contracts is one that Joe returned to frequently during our conversation. Throughout his 35 years, Joe has worked with many of Australia’s major developers including Mirvac, a group he labels “as trail blazers”, in particular for the way that it has been at the forefront in selling off-the-plan projects for more than two decades.
A great deal of his experience comes from being involved with a raft of major projects including Quay Grand, Newington (part of Sydney’s Olympic precinct), Jackson’s Landing and Walsh Bay.
“Many of the projects I have been involved with have included a wide range of title structures not only typical freehold and strata title, but also complex community title and leasehold projects and in some projects a mix of titles. Layer upon layer.
“These structures directly reflect in how contracts are drafted. They also imitate I think, the more complex nature of today’s urban environments and so this helps explain why in part contracts have had to become big and complex.”
It is against such a track record easy to understand why Joe David’s faith and understanding of property law in the project marketing arena allows us to observe some valuable and interesting insights.
In the sales and marketing of large developments, they can ‘suffer’ from being very complex for buyers to comprehend, and this is understandable and Joe is correct to highlight that the creation of any large community needs to be well documented as far as possible from the outset.
World-beating property law
Few would argue with his starting point – “It is good property law, the Torrens title system, that ensures title security, title that is guaranteed by a process of registration so that every buyer can have absolute confidence in the title of the property they buy.
“Our title system is paramount and we owe a great deal to Sir Robert Torrens. ‘Title by registration’ and how the title relies upon certified boundaries and registered plans, not only assures title but the exact description of the property is also clear, the registered lot and plan details.”
And with some major projects attracting offshore buyers there are clear benefits flowing from Australia’s title and contract security.
“With projects that are taken offshore Australia’s title system is proven to be popular with overseas buyers. Even where fraud occurs, there is a statutory system of compensation available. When you buy from the registered proprietor of real estate title with very few exceptions is guaranteed by the state.”
When I reflect upon Joe’s remarks, I suspect we should not always take the ‘advantage’ for granted. While fraud is very rare under our system, I feel that we should be re-assured that title does help to underpin major developments taken off-shore. Furthermore, our contracts enhance access to finance and the entire sales and marketing path runs efficiently.
More on pages 2, 3 and 4
 
<hr class="system-pagebreak">
Contracts – the size of a telephone book
Joe rightly points out that the marketing of a project that is not yet built presents some hurdles for the developer and buyer. The buyer is looking at the product we are selling that may frequently be on a site where no work at all has yet to be undertaken.
Then under most circumstances the developer will be looking at a commitment of tens of millions of dollars or even much more, naturally while this is a backdrop we are all familiar with it is one that requires a secure and detailed contract. The contract needs to work to meet the needs of everyone involved in each transaction. I think it is also important to remember that some projects can involve hundreds of individual contracts, and this can create extraordinary pressures.
For example in talking to Joe, a major release or launch can bring any number of buyers together, in a limited time, in a competitive sales path, where contracts must run smoothly and result in secure transactions. These pressures need to be addressed early and not surface during the launch day itself.
“Over a number of years contacts have become more complex and this is in response to varied circumstances, like those outlined while many will relate to the title structure of the project.
“This has also resulted in more detailed vendor disclosure – more community rules, management statements, complex strata titles that will have building rules to ensure that as far as possible the strata scheme runs well when the building is complete.”
Joe points to the fact that there can also be a mix of residential, retail and commercial users all within the one project.
“These sometimes very large mixed use developments, all give rise to varied rights and obligations and these need to be fully documented with clear boundaries, and rights between the different parties. After all nobody wants any sort of dispute aggravated by a poor set of management rules.”
However in Joe’s experience it is the reputation of the developer that is central and even the most complex documentation and contract cannot make up for a solid foundation underpinned by a AAA track record.
Over the last few years the developer’s reputation has become more important and even more so now that finance is a complex challenge for many developers.
“There is always the need to achieve ever-more pre-sales levels to gain finance, as banks and other sources of finance are now ever-more anxious that pre-sales contracts are secure.
“Financiers are looking very closely to ensure that results in ‘qualified pre-sales’ so that when the project is complete, as I have said earlier, the buyers will be required to settle. So that the sales will be there and secure at the end of what can be a long lead-time. When the building is complete and the buyer gets what they paid for, so does the developer and the contract has the central role of underpinning this.
“There could be circumstances where a weak or badly drafted contract could see buyers, look for ways not to settle and succeed because of some flaw in the contract.
“It’s I am sure obvious that if you have huge financial exposure at the end of a 2 or 3 year construction period with a lot of cash going out, the contract and the buyers need to be rock-solid.”
However in a complex market, the importance of secure contracts also extends beyond the document itself and the one-off relationship between the Vendor and Purchaser.
There are other factors that Joe cites including for example one person or entity buying several apartments, and there are limits on the ratio of overseas buyers to local buyers, because both these examples might increase risk, and today financiers are very risk sensitive.
“And so returning to the core of what we have been discussing I return again to highlight that at every level the quality of our contracts, financial requirements and security of title help to underpin activity, even in the most complex project.”
More on pages 3 and 4
 
<hr class="system-pagebreak">
 
A fair balance
All contracts involve two parties and so a contact to buy into an off-the-plan project does however clearly need to work for all involved – the developer, the financer and of course the buyer must all have rights and safe guards.
“Because there are risks on behalf of the developer and there are expectations for the buyer, there are rights for all sides and again I have to come back to the importance of reputation, it’s so very important, and a solid brand for a major developer is bankable.”
Clearly the purchaser is making a commitment to a property they cannot see, to a property that they might not have title to for many years and it’s purchase will usually affect their future. Every buyer will also have to make a financial commitment.
Joe, like all of us, is aware that many projects being taken to market are large and complex thus creating a complex task for the project team.
“Until the project is finished the developer will not earn any income, they will not recover any of their costs and nor will they realise any profit. In fact until the project is sold and sales are settled the developers costs and liabilities, are almost open-ended, in a way it’s a like a vacuum.”
The contracts used in this environment, need to be fair and any rights that a buyer might have to cancel or not complete the purchase need to be for substantial departures. And while a definition of substantial can be hard to define unfair contract terms are now covered by legislation. There are some core areas to consider like any size variations of individual apartments, the quality and extent of finishes and the contract sunset clause.
“From a consumer’s perspective there has been some general heightened awareness of contract terms. The spot light given to ‘unfair’ contract terms associated with some industries, like telecoms and gyms has helped make consumers more sensitive.”
Again here we can see the importance of a developer’s reputation so that buyers can have the confidence in the delivery of quality products.
Some of the key issues that may be high on any list of concerns among buyers are according to Joe already addressed because of the more advanced planning criteria when projects go to market, as they have had to meet substantial council planning and other conditions such as heritage.
“Size variation is a major area of concern, and just what is an acceptable variation before any sort of compensation is due or a right to cancel is engaged. However a well-drafted contract will address this and also how any price adjustment is to be made.”
Is a variation of 3% satisfactory or is 5%? When this happens it is important that good will prevail, as the developer’s reputation will come into play.
“Contracts have I think kept pace with the growth of medium density living, and despite the fact that contracts are more complex, I do think that buyers do understand the limitations of what is involved.”
In general it is a remarkable stable environment
Pre-sales are very important, for apartments and also for house and land products. State and federal laws work to safeguard all contracts.
However according to Joe David the last 30 years has seen the experience of the project marketing field gain in quality and lessons have been taken to heart leading to a very stable market.
In addition to size variations in contracts, as we have discussed the sunset clause is in Joe’s experience also important.
In marketing a project there needs to be the assurance and security that it will complete on time, and in Joe’s view where there are circumstances when any increased lead time is needed this needs to be clearly addressed.
More on page 4
 
<hr class="system-pagebreak">
 
Quality marketing information
While not a direct part of any contract, marketing information also plays a role in this topic.
Almost any project marketing sales path now involves the increased use of highly developed artists impressions, computer generated images and extensive display suites.
“In my view these items need to have a good level of accurate and reliable information and the reputable developers and their marketing agents are very experienced in doing this.
I would also absolutely encourage that items like inclusions are covered in detail. I am an advocate of adding more and not less meat – there will always be questions from buyers, – but it is important to ensure equivalent quality is provided and that descriptions and marketing material always avoids any sort of vagueness or uncertainty.
Floor plans and finishes schedules are also key elements, they need to be easy to understand, they need to have focus on the purchaser, and they are key elements in the contract that are always looked at.”
My view is that the marketing suite and core materials that Joe highlights like plans and finishes schedules are the face of the development, they in-turn underpin the developers reputation and so should never be approached in any sort of half-baked manner.
Comparison with auctions
And as we start to wind up this discussion with Joe, I was keen to get his view on a comparison of project contracts and the given popularity of auctions.
“We all appreciate that auction contracts are used for a completed product, they are so popular as the sale is binding ‘at the fall of the hammer’ – the sale is made and the property is sold. The auction aims to flush out the most willing buyers beforehand and can also deliver a much higher than anticipated price.
And while the two areas are very different, vendor disclosure also extends to auction contracts.”
Improvements
Thanks to Sir Robert Torrens and an excellent track record of contract development and professional marketing we look in good shape. In fact we have even exported our land title expertise to many international destinations including the Middle East and Singapore, still there are areas of improvement.
“I think reputation can never be under-valued. I do not think we will ever see a 2-page sales contract. However I think it is track-record, reliability, resources and trust that, alongside quality marketing that will continue to encourage improvements in this area.”
The industry sends out the call via marketing for consumers to come and see our projects and we invite buyers to make the purchase.
“We then need sound contracts to ensure clients receive their money in the end, and buyers receive a quality end property. All underwritten by trust and reputation.”
 
Note: A little bit af background
Sir Robert Richard Torrens (1814-1884), public servant, politician and land titles law reformer, was born in Cork, Ireland, son of Colonel Robert Torrens. On December 12, 1840 along with his wife he arrived in South Australia.
Years after arriving in South Australia local titles were in an unsatisfactory state and, as he put it, land was no longer “the luxury of the few”, therefore “thorough land reform … [was] essentially the people’s question”.
He stood for Adelaide in the House of Assembly elections of 1857 and, almost entirely because of his espousal of land titles reform, topped the poll. He was Treasurer from October 24, 1856 to August 21, 1857, he published a further draft of his proposed bill on April 14 and 15 and introduced it as a private member’s bill in yet a third form on June 4. He was premier from September 1 to 30, but no action was taken on the bill until November 11, 1857, when the second reading was carried. Despite very strong opposition, mainly from the legal profession, it passed through both Houses and was assented to on January 27, 1858.
Peter Chittenden is managing director for residential of <a target="_blank" href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx">Colliers International</a>
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Torrens title and contracts underpin the legal foundations of our property markets

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Amid all the recent doom and gloom, major global banks are quietly alerting their clients to prepare for a share market surge, if Greece exits the eurozone.
That's because they believe world authorities will be flooding international markets with massive liquidity.
And given the G8 Communique from Camp David, this may well occur anyway — just to keep Greece within the fold.
Last week, Ken Henry (former treasury secretary) predicted Australia could provide global appeal to investors:
“It's quite possible on this occasion Australia will be seen as offering something of a safe haven for global capital movements.”
And this is already being evidenced by strong demand for Australian bonds — where the yields for 10-year bonds fell to a new post-war low of less than 3.2%, during last week.
But there's some hesitancy.
There still seems to be a general confusion within the economy. And unfortunately, when people are confused, they tend to do nothing. Therein lies the current dilemma for Australia.
Even though our fundamentals are in vastly better shape than 80% of the rest of the world, most consumers are "feeling less wealthy" than they were several years ago.
This is mainly due to house prices having fallen and remained stagnant, as well as the volatility within the share market. Plus there are number of structural changes working their way through the economy.
But overall, employment levels are holding up, and in some areas, business investment is expected to increase by more than 20% this year.
Furthermore, imports should grow by 12% and the terms of trade are expected to improve by about 10% over the coming 12 months. Even Japan has notched up a 4.1% growth for the first quarter, and the US housing market looks as though it may have bottomed.
The latest OECD forecast has Australia growing at 3.1% in 2012 and reaching 3.7% during next year.
Still, pundits are a fearing a slowdown in China, but you really need to keep this in perspective:
<ul>
<li>China's growth has fallen from 9% to 8.1% — which is still remarkably high;</li>
<li>Its economic growth is driven by domestic investment, not exports to Europe; and</li>
<li>Resource-heavy investment into new roads, bridges, airports, officers and apartment blocks is still growing by over 20% per annum.</li>
</ul>
This is what will continue to underpin China's demand for Australian resources.
Bottom line: Taken together, all of this is clearly creating havoc for the forecasters. However, it certainly doesn't justify the level of caution being shown by commercial property investors at present.
Right now, if you do your homework in finding a modern property with a solid tenant on a four- to six-year lease,  you'll be able to snare a well-priced commercial property investment, offering you excellent growth over the next five years.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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