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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

Joel Robinson

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

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

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

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

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

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

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

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

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

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

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.

But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.

As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.

For apartment residents, that can present a challenge.

If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.

That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.

It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.

As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.

Australia Post's Parcel Lockers provide one solution.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe>

Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.

The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.

For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.

For buyers, it's a reminder that the best apartment features aren't always the most obvious.

A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.

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

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The long-term prognosis for Australian residential real estate is sound. <place>Australia</place>’s population is forecast by the Australian Bureau of Statistics to grow from around 22.4 million in 2011 to 30.9 million in 2031, an increase of 34.6%. This underwrites residential property demand. The deficiency in numbers of dwellings increased from an estimated 22,700 in 2006 to an estimated 124,400 in 2011 according to BIS Shrapnel. This supports price stability. 
A-REITs such as Mirvac, Stockland and Australand have exposure to the residential property sector through residential property development. These A-REITs also have exposure to other asset classes such as office and retail. Recent sentiment towards those A-REITs with significant residential property exposure has been negative. Stockland recently revised down its 2012 financial year earnings estimate as a result of deterioration in the number of lot sales and settlements and adverse weather in NSW disrupting development. This revision was released only six weeks after the group reaffirmed earnings estimates in its first-half results announcement. The result was a 7.3% fall in the share price in the month of March. Compounding this have been tougher lending requirements for both home buyers and property developers. 
A-REIT balance sheets are sound and gearing levels are moderate. The larger diversified groups are able to pre-fund infrastructure works which are important in establishing buyer confidence and aesthetic appeal in a green-fields residential development. Sales volumes are currently more robust in lower value residential property. As a consequence, groups like Stockland are adjusting their planning to accommodate a higher proportion of lower price and smaller lot size residential product. 
Despite the current funding and sentiment challenges, those A-REITs with the capacity to deliver suitable residential product to meet the market will flourish over the medium to longer term.
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markwist-Vaq6S8Xoby

The place for residential property in A-REITs

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About 2.3 million Australians own investment properties. Despite current economic conditions, Australians are continuing to purchase property as a long-term investment. Currently fewer than 1% of Australians are using our pay as you go (PAYG) system, which generates higher cashflow throughout the financial year.
Consider a PAYG variation to increase cashflow now!
An increased cashflow may allow individuals to save on interest costs by paying a current mortgage off faster, save more quickly for an investment property deposit, go on a holiday; there are so many possibilities.
Often overlooked by property investors, the PAYG system is a great way to increase fortnightly cashflow throughout the year. The system gives the option of claiming back tax regularly, rather than in one lump sum at the end of the financial year. A PAYG variation means that the property owner’s employer will reduce the amount of tax withheld to reflect set deductions like depreciation on a rental property. In essence, it is a way of decreasing the amount of tax paid by the investor each pay period.
Submitting the PAYG variation does not replace a normal tax return. A tax return still needs to be filed at the end of the year to calculate the actual amount of tax liability. The PAYG instalments for the year are credited against an investment property owner’s assessment.
There are lots of deductions that the PAYG variation will take into account including interest, rates, management fees, maintenance and depreciation. A quantity surveyor can provide all current and future depreciation values for investment properties in a detailed tax depreciation report. Obtaining the report immediately after the purchase of a property will allow the maximum return from a PAYG variation, as the precise figures will make the instalments accurate.
The flexibility provided to the Investor through a PAYG variation, combined with depreciation deductions identified by a quantity surveyor, can be of great help in managing the fortnightly cash flow of an investment property.
Let’s consider a hypothetical situation:
A typical $400,000 investment property over the first five years would show average annual expenses (or deductions) of $35,000 and an average annual income of $20,000.
The deductions include costs such as interest on a $350,000 mortgage, management fees, maintenance and property depreciation. The total loss (income minus expenses) will result in a deduction for the owner of $15,000. In the 37% marginal rate (a salary between $80,000 and $180,000 per year) the $15,000 deduction could generate a tax return (or credit) of $5,550.
Under a PAYG variation, the investment property owner can adjust his fortnightly pay to anticipate this return, adding $213 to his pay packet each fortnight.
Bradley Beer is a director of <a target="_blank" href="https://www.bmtqs.com.au/">BMT Tax Depreciation.</a>
 
 
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bbeer-RnXpp32fnV

Property investors can use a PAYG system for tax to improve cashflow

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An industrial property at Clayton in Melbourne’s south-east industrial zone has been listed for sale with appeal to owner-occupiers, developers or investors. The property is expected to fetch about $7 million through Savills Notting Hill agent Lynton Williams.
<img src="/images/stories/whiteside.jpg">
“It has a large site of over three hectares, substantial buildings, acres of hardstand, and extensive street frontages providing excellent subdivision and/or redevelopment potential, subject to council approval,” Williams says.
"It is also superbly located within the heart of Clayton with easy access to the M1 Freeway via Blackburn Road and within close proximity of the Princes Highway.’’
Entry into and out of the site was ideal for articulated vehicles. The property comprises an office (881 square metres) and warehouse (7,860 square metres) and hardstand areas. The 3.073-hectare site has frontages to both Whiteside and Fairbank roads.
 
 
 
 
 
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jchancellor-FAypfDUnLy

Clayton industrial property seeking $7 million buyer

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Developer Ecove has sold 111 of the 270 apartments of stage two of its Australia Towers development at Olympic Park less than two weeks after the stage launched on April 21.
<img src="/images/stories/at211.jpg">
Most buyers have purchased the larger two-, three- and four-bedroom units, and Colliers International residential project marketing general manager David Chittenden says most are owner-occupier upgraders from Sydney's inner west and the Hills District.
“What these sales have shown is that not everybody is an investor on a downsizer,” Chittenden says.
<img src="/images/stories/at21.jpg">
Stage one of the development (pictured below), which is now complete, has sold 209 of the 216 apartments.
<img src="/images/stories/at27.jpg">
Stage one launched in early 2010, and construction finished a few weeks ago. Almost 80% of stage one sold within the first few weeks of the 2010 launch.
<img src="/images/stories/at23.jpg">
<a target="_blank" href="https://www.propertyobserver.com.au/developments/olympic-park-australia-towers-launches-stage-two-after-stage-one-sells-fast-out-of-the-starting-blocks/2012040354146">The second stage, called ATII, will be 25 storeys</a> and is the second of three planned stages. It will have 95 one-bedroom apartments ranging from $450,000 to $595,000 and from 54 to 71 square metres internally, 132 two-bedroom apartments with between 77 square metres and 122 square metres of internal space and priced between $585,000 and $1,085,000, 26 three-bedroom apartments of between 103 and 159 square metres each ranging from $900,000 and $1,565,000 and 14 four-bedroom units, which will range from between $995,000 and $1.76 million and between 141 and 181 square metres internally. Every apartment will have at least one car space.
<img src="/images/stories/at24.jpg">
“Lifestyle is the major reason ATII has been so popular," Chittenden says.
"Many people want to take advantage of the sporting and entertainment facilities on their doorstep, the 430 hectares of parklands, the 35 kilometres of bike tracks, and the 32 restaurants, cafes, bars, and speciality retailers.”
<img src="/images/stories/at28.jpg">
Olympic Park is a new 640-hectare Sydney suburb about 15 kilometres west of Sydney CBD and became an official suburb in 2009. The locality was part of the suburb of Homebush Bay and was redeveloped for the 2000 Sydney Olympics. More than 5,000 events are held at Blaxland Riverside Park in the suburb every year, and about 500 permanent residents now live there. There are more than 130 businesses in the suburb.
Architectural firm Bates Smart has taken a cue from the nearby stadium precinct for the design of ATII.
<img src="/images/stories/at25.jpg">
“We’ve given the building ‘gills’ so that it can breathe,” says Bates Smart director Philip Vivian. “Vertical slots on the northern and southern sides of the facade encourage natural airflow through the apartments and the communal spaces.
“The design maximises light into each apartment, and horizontal sun-shading bands circling the building in varying depths provide added protection to the north.”
<img src="/images/stories/at26.jpg">
Colliers estimates that one-bedroom units will rent for between $500 and $575 per week and that two-bedroom units will command rents of between $600 and $800 per week. For the pricier, larger apartments, Colliers estimates that the three-bedroom units will rent for between $700 and $1,000 per week, and that tenants will pay between $1,000 and $1,500 per week for the four-bedroom units.
<img src="/images/stories/at213.jpg">
Construction is expected to start on ATII in mid-2012 and finish in early 2014.
<img src="/images/stories/at29.jpg">
 
 
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cknowlton-QnEa6ntUYP

About 40% of Olympic Park's ATII tower sold soon after marketing starting gun sounds

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There were 774 sales in Perth for the week ended May 2, compared with 608 for the same week last year, according to the Real Estate Institute of Western Australia. Last year Easter fell on April 24, so the comparable week last year was the week after the Easter/Anzac Day long weekend.
<img src="/images/stories/reiwamay2.gif">
 
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Perth sales up 27% on same week last year: REIWA

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Every day that the big four banks delay passing on the Reserve Bank’s latest interest rate cut represents a deprivation of $12 million from home owners’ pockets, according to The Australia Institute.
NAB and the Commonwealth Bank have announced their response to the RBA lowering the cash rate by 0.5 percentage points yesterday. <a href="https://www.propertyobserver.com.au/overseas/nab-first-of-big-four-banks-to-cut-rates-with-032-percentage-point-cut/2012050254522" target="_blank">NAB will cut its rates by 0.32 percentage points.</a> The <a target="_blank" href="/news">Commonwealth Bank will cut its rates by 0.4 percentage points.</a>
The Australia Institute derived the $12 million figure from the $1.1 trillion in total housing loans held by the big four.
It then calculated the difference 50 basis points makes in the banks' combined revenue for one day.
The institute assumed only 80% of the mortgage market was in standard variable rates, senior research fellow David Richardson told Fairfax Media.
“The big four banks have more than an 80% market share. If they are not prepared to pass on interest rate cuts in full then perhaps it’s time to start discussing a banks super profits tax again,” Richardson said.
“The banks are engaging in a phoney debate about the cost of borrowing,’’ he concluded.
In order for the domestic economy to fully benefit, the Federal Treasurer, the housing industry lobby and consumer groups have called on the banks to pass along the full rate cut.
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Banks’ delay in passing on interest rate cut costing customers $12 million per day: Australia Institute 

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Angry that ANZ can record an interim profit of $2.97 billion while refusing to pass on the RBA’s rate cut? Annoyed that banks continue to exploit the lack of competition to belt consumers and business with higher interest rates and fees?
The problem is, we’re all hypocrites. The complaints have considerable justification, but most of us are silent, greedy accomplices in what the banks are doing.
At some stage in the financial cycle, most Australians benefit from strong, profitable banks, either as depositors or shareholders. And by swallowing some of the RBA rate cuts, the banks are merely trying to do the right thing by their owners. And who are the bank shareholders, and who are the biggest group of bank shareholders? Why, ordinary Australians via their superannuation funds (retail, industry, self-managed).
The banks underpin much of our super funds’ investment in shares. Even industry super funds, which typically have a wider spread of alternative and property investments, will have 5-6% of their entire holdings in the big four banks. Their big dividends are much loved by fund managers, investors, advisers and shareholders. They are rivers of gold which this year will be around $18 billion.
We also want to have it both ways on rates. If you want a full pass-through of rate cuts by the RBA, then you have to be prepared to accept lower profits and deposit rates. But they in turn mean the banks lift their borrowings in wholesale markets here and offshore, increasing their costs and exposing themselves to greater risks in the event of another financial crisis. Go to Spain, France, the UK or Ireland to find out what weak, financially crippled banks do for confidence, the economy and consumers. Consumers, business and others in those countries have real justifications to moan and groan about their banks.
There’s a problem though for all the banks (and for retirees and others with bank deposits), in that after yesterday’s rate cut, nearly all the term deposits on issue are now half a per cent or so too expensive, but that expense won’t improve for months for the banks until the deposits expire and get rolled over at lower rates. Just how much lower will be the problem. So the banks face more pressure on their margins, possibly until the end of 2012, especially if there’s another rate cut from the RBA. As the RBA has found, while the cost of funds has fallen, the fall in bank deposit rates has been much smaller, as intense competition for deposits forces the banks to keep offer rates (especially teaser rates) higher than they would have expected.
In fact it’s not the cost of wholesale funding here or offshore that’s the problem for the banks who want to maintain their profits, it’s the intense competition for local deposits. That in turn makes every depositor part of the problem for the banks. While Australians moan and groan about the behaviour of the banks (in many cases with justification), they blithely demand higher rates of interest on their bank deposits (especially term deposits), which in turn pushes up bank funding costs, which in turn has caused them to keep some of the rate cuts from the RBA (and add a bit more). Bank depositors are part of the bank’s funding cost pressures, but we won’t admit it.
Don’t expect any sympathy at the RBA for the banks. It’s of the view the banks have contributed to their problems, and hurt the wider economy by keeping part of the last couple of rate cuts (and a bit more) thereby damaging consumer sentiment. This is what RBA chief Glenn Stevens said in <a href="https://www.rba.gov.au/media-releases/2012/mr-12-10">yesterday’s statement about the banks</a>:
<blockquote>
“As a result of changes to monetary policy late last year, interest rates for borrowers have been close to their medium-term averages over recent months, albeit tending to increase a little as lenders passed on the higher costs of funding their books. Credit growth remains modest overall …
“In considering the appropriate size of adjustment to the cash rate at today’s meeting, the Board judged it desirable that financial conditions now be easier than those which had prevailed in December. A reduction of 50 basis points in the cash rate was, in this instance, therefore judged to be necessary in order to deliver the appropriate level of borrowing rates.”
</blockquote>
That is, the RBA knows the banks won’t pass on the full cut so it went for a larger cut. It’s as much a bit of bank bashing (shorn of the rhetoric from Wayne Swan and other critics) as we have seen from the central bank for some time. And if we get another rate cut next month or in July, then that will be aimed at bashing bank lending rates even lower to a level where they are seen by the RBA as stimulative for the economy, not constricting. The first bank to pass on the next rate cut full will be a sign that the RBA has succeeded in bring the banks back into line.
A few other points need to be made. The rate cut (and those to come) won’t help retailing. There’s too much capacity and the structural change underway is now unstoppable and will see more outlets close, employment fall and perhaps one or two big chains crunched badly. The RBA knows, via the latest household expenditure survey, that just over half of all mortgage holders are repaying their mortgages at a rate above the minimum needed. In other words, they are building up their equity. There is no reason to believe that they won’t change this after the 0.50% cut yesterday. It just increases their level of saving.
This article originally appeared on <a href="https://www.crikey.com.au/" target="_blank">Crikey</a>.
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Why we’re all complicit in the banks’ interest rate gouging

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There are several providers of statistics on Australian house prices, but only one that doesn’t have a vested interest in the direction house prices actually move in: the <a target="_blank" href="https://abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6416.0Main+Features1Mar%202012?OpenDocument">Australian Bureau of Statistics</a>. So despite the criticisms of this series – that it’s based on detached dwellings only, based on median sales data, too infrequent, not adjusted for “hedonic” differences between houses, etc, it’s the only one I trust.
Chris Vedelago wrote a very nice piece about how confusing the various commercial house price statistics are: "The Real Estate Institute of Victoria said the city’s median house price rose 0.9% in the March quarter. Except that, according to RP Data-Rismark, it fell 1%.Australian Property Monitors, which is owned by Fairfax, believes prices rose 1.6% in the three-month period. Residex, on the other hand, estimates values fell 1.9%… (“Confused about the market? We all are“, The Age,April 29) I’m happy to ignore these numbers – and even more so the spin doctoring that goes with them. The ABS numbers are in, and they show a 1.1% national fall over the March quarter. Sydney house prices fell 1.8% according to the ABS, whereas Australian Property Monitor alleged they rose 1.4% – the latter being the basis for Andrew Wilson’s latest piece “<a target="_blank" href="https://smh.domain.com.au/real-estate-news/confidence-rises-as-prices-bounce-back-20120427-1xokf">Confidence rises as prices bounce back</a>” (The Sydney Morning Herald, April 28). Yeah, right. Australian house prices have now fallen 6.1% from their peak, and have been falling for 21 months, which is the longest downturn in nominal prices ever recorded by the ABS – the previous longest being the 12 months from the beginning of the GFC (which was terminated by my favourite government policy of all time, the First Home Vendors Boost). Figure 1: Nominal house prices have fallen 6.1% since June 2010
<img src="/images/stories/keenmay21.gif">
I’m sure the usual spruikers will come out with why this is now the bottom, and it’s a good time to buy, and there wasn’t an Australian house price bubble, and the shortage will drive up prices, and…  So let’s put the current data in the context of the bursting of acknowledged overseas house price bubbles. Firstly the inflation adjusted data: in real terms, house prices have now fallen 10% from their June 2010 peak, and are back to a level they first reached in late 2007. Figure 2: Real house prices have fallen 10% since June 2010
<img src="/images/stories/keenmay22.gif">
Now let’s compare the Australian experience to date with the Japanese and US experiences – where no one, not even <a target="_blank" href="https://www.federalreserve.gov/boarddocs/testimony/2005/200506092/default.htm">Alan Greenspan</a>, denies that there was a housing bubble.  The Japanese bubble peaked in June 1991; the US bubble peaked in May 2006; and Australian house prices peaked in June 2010. Figure 3 shows the three declines from the peak, and while the Australian experience so far is clearly better than the US’s, it’s only a whisker better than the Japanese experience to the same date after the peak. Figure 3: Comparing Japanese, US and Australian house prices from their peaks
<img src="/images/stories/keenmay23.gif">
Anyone who takes comfort from that should also consider the longer-term perspective – see figure 4. Figure 4: The long-term picture for Japan and the USA
<img src="/images/stories/keenmay24.gif">
The motive force behind Australia’s bubble was the same as in the US and Japan: accelerating debt drove rising house prices during the boom. Now in both those countries, decelerating debt is driving house prices down. The same pattern applies in Australia – see figure 5. Figure 5: Mortgage acceleration drives change in house prices
<img src="/images/stories/keenmay25.gif">
Don’t take heart from the uptick in acceleration at the end of the series there: for that to be sustained into the future, ultimately Australian mortgage debt would need to start rising (compared to GDP). But mortgage debt grew more rapidly here and reached a higher peak than in the US (see figure 6); the odds that it will rise again are slim. Figure 6: Australian mortgage debt exceeded the US’s
<img src="/images/stories/keenmay26.gif">
And even though the actual level of mortgage debt is still rising, it’s doing so at the slowest rate ever recorded by the RBA (see figure 7). Figure 7: Annual growth in mortgage debt (with series break in 1991)
<img src="/images/stories/keenmay27.gif">
The odds are that the rate of decline will accelerate in the next year – since as Leith van Onselen pointed out <a target="_blank" href="https://www.macrobusiness.com.au/2012/04/tax-stats-unmask-negative-gearing/">yesterday</a>, many baby boomers are relying on rising house prices to secure their retirements. Now that house prices are falling, and have been doing so for almost two years, many of these boomers – 74% of whom earn less than $80,000 a year, with the average investor losing over $9000 a year on these “investments” – could decide to get out rather than continue to absorb losses. The unwinding of their leveraged positions could push mortgage growth below zero, and of course accelerate the house price fall. Steve Keen is a professor of economics and finance at the University of Western Sydney and author of Debunking Economics and the blog <a target="_blank" href="https://www.debtdeflation.com/">Debtwatch</a>.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator</a>.
 
 
 
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ABS figures show Australia's housing price bubble is bursting: Steve Keen

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The Bank of Queensland was the only lender to react yesterday to the Reserve Bank's rate cut decision.
It has announced it is cutting its standard variable rate by 35 of the 50 basis points in the cash rate reduction.
BOQ chief executive Stuart Grimshaw says continued economic uncertainty had influenced BOQ’s decision to hold back 15 basis points.
“Increased competition in retail term deposits continues to put upward pressure on the bank’s cost of funds,” he says.
“When making decisions on rates we consider the needs of our customers and those of our shareholders.
“It is a difficult balancing act, but we believe passing on a 35 basis point cut is the responsible course of action this month,” he says.
BOQ will cut its standard variable rate by 35 basis points as of 11 May 2012, bringing its standard variable rate home loan to 7.11%.
The bank also lifted mortgage rates by 10 basis points following the March bank decision by the RBA to leave the cash rate on hold, having been the first significant lender to pass on the full 25 basis points cut announced by the RBA in December.
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Bank of Queensland first to show its hand with 0.35% cut

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Queensland’s plague of natural disasters has been blamed for the sunshine state’s struggling rental market.
Residential vacancy rates there are mostly below 3%, which is the excepted figure for a balanced market in terms of supply and demand, according to figures released by the Real Estate Institute of Queensland (REIQ).
REIQ chief executive officer Anton Kardash says the contraction is a result of slowing house sales and disaster recovery.
“Until recently we had many potential first-home buyers and investors sitting on the sidelines while our market and economy recovered from the natural disasters last year, which has put pressure on our rental market,” he says.
Brisbane’s vacancy rate fell to 1.7% from 2.3% in December last year. The inner city was at 1.4% in March this year, down from 1.9% in December 2011.
Queensland’s major regional markets are in worse shape, with the amount of available homes to rent in regional Rockhampton at just 1%. In March last year the vacancy rate there was 1.8%, and that dipped to 0.9 % in December, reflecting rental trauma for tenants.
The resources boom town of Gladstone has a vacancy rate of just 1.4%, and a luxury four-bedroom, two-bathroom house near town will give tenants little change from $1,000 a week.
In far north Queensland the Cairns rental market is also undersupplied, with tight vacancy rate of 2.5%, showing a fall of 0.7% in 12 months. Bundaberg has shown some improvement, with vacancy rates increasing to 3.3% from 2.5% in the year to March 2012.
Queensland’s two major tourist hotspots have comparatively languishing residential rental vacancy rates.
On Noosa’s coast, residential vacancy rates have jumped from 4% in March 2011 to 4.8% this year while on the Gold Coast rates have increased from 3.6% last year to 3.9% in March 2012.
 
 
 
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