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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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It’s possibly the world’s priciest one-bedroom penthouse – in Tokyo Japan – with a JPY 1,800,000,000 ($21 million) price tag.
The luxury penthouse, located in the Minami-Azabu district neighbourhood, is listed through Sotheby’s International Realty. It is known as Tokyo's most expensive upscale residential district.
The 440-square-metre apartment comes with Parisian-style terrace and courtyard garden. One of its special features is its entrance corridor, which comes with storage for 200 pairs of shoes.
The vendor purchased the penthouse unit new and then spent 18 months renovating until its 2004 completion.
In the living room is an original art piece by Hiroshi Senju painted on-site. Most of the furniture in the home is custom-designed by Ceccotti Collezioni, along with Italian imported stone and wood used for many of the walls, flooring, and doors.
The Japanese Ryotei-style dining room was designed for dinner parties where the chef can serve the guests directly from the gourmet kitchen.
There’s a full bathroom plus two further baths.
<img src="/images/stories/tokyo2.jpg">
<img src="/images/stories/tokyo3.jpg">
 
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The world’s priciest one-bedroom penthouse - in Tokyo, Japan – with a $21 million price tag 

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Treasurer Wayne Swan has ruled out any changes to negative gearing arrangements for property investment despite the NSW Labor leader John Robertson saying there should be a debate about its effects on the property market.
Robertson is concerned about the potential of negative gearing to push up property prices and make property unaffordable for the next generation of home owners.
"Everyone, I think, is concerned about how their kids are going to buy a house, how they're going to get into it,” said Robertson in an interview on Sky News.
"In many circumstances, these are people who've got two or three investment properties and there's no real appreciation of what negative gearing is doing in terms of putting pressure on housing prices for their kids to get their first foot in the door."
A spokesperson for Swan says the government is committed to the current tax arrangements after ruling out changes to negative gearing in the 2010 Henry Tax Review.
According to ATO figures, about 1.7 million property owners used negative gearing to claim a net rental loss of $6.5 billion for the 2010/2011 financial year.
Robertson’s call for debate on the effects of negative gearing is backed by Cassandra Goldie, chief executive of Australian Council of Social Service, and was also flagged as a potential area of reform in the Homes for All report, the first public policy document released by the Sydney-based McKell Institute.
Goldie says the McKell report highlights that “negative gearing is at the heart of the problem with inflating house prices” while at the same time not increasing the supply of housing.
"We've got a crisis here so let's have a little bit of courage to deal with it,” she told Channel 10’s Meet the Press program.
Negative gearing is considered a cornerstone of property investment, allowing property investors to claim any loss made on an investment property as a tax deduction and thus reduce their tax bill.
The McKell institute’s Housing for All report says that “federal and state governments should favour tax policies which encourage housing supply over demand”.
It goes on to say that “all politicians of all parties recognise that negative gearing and untaxed capital gains add wealth to existing home owners to leverage for second homes and investment properties without any evidence that they increase overall supply significantly; and that increasing effective housing demand in a constrained housing supply results in an increase in house price inflation and in problems of affordability for those seeking to buy”.
“Tax exemptions such as negative gearing have allowed many people to purchase second, third or even more properties.
“In the past, these may have supported the rental market, but in a market where supply is constrained it simply increases the price of housing for everyone,” the report says.
The institute says consideration should be given to “phasing out of negative gearing over the long term in relation to existing properties but perhaps retained for new properties to stimulate supply”.
The report says that those opposed to removing negative gearing argue that such a move will increase rents or lead to less supply.
“There is little evidence for this argument. Our consultations with the banking industry suggest that housing will remain an asset class with or without negative gearing.
“Housing is an investment class which is easily understood, unlike shares or other financial instruments. It has a permanence – ‘bricks and mortar’ – and certainty which many investors like,” says the McKell Institute.
ANZ head of property research Paul Braddick agrees on the need for supply-side reforms but says removing the ability for property investor to negatively gear both existing and new homes would be “very risky”.
Last year ANZ Australia CEO Phil Chronican raised concerns about negative gearing saying governments should investigate whether negative gearing tax breaks are “fostering an unhealthy focus on housing as an investment vehicle, thereby compounding affordability issues”.
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Government not contemplating changes to negative gearing: Wayne Swan

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Cashed-up downsizers in the pricey Melbourne suburb of Brighton have shown strong interest in luxury apartments, with 25% of Cbus Property’s Warleigh development sold within a week of its launch at the end of February. About 35% of the units have sold so far. Cbus Property acquired the 9,015-square-metre property at 30-44 Warleigh Grove, Brighton in December 2010. The disused North Brighton Croquet Club site was offloaded by the New Zealand-based retirement living company LifeCare Residences, which acquired control from ASX-listed fund manager Abacus two years earlier.
The development aims to emulate the indoor-outdoor feel of its freestanding neighbours, with half of the site’s 9,000-square-metre block given over to open outdoor space.
“Growing up only a couple of hundred metres from Warleigh Grove, I have a close connection with the site, and a design sensitive to the neighbourhood character of surrounding street scape was a key criteria to the design brief,” says Cbus Property development manager Andrew Potter.
<img src="/images/stories/warleigh1.jpg">
“It’s paramount as a designer to produce spaces that are not only aesthetically pleasing, but usable and functional,” says Jack Merlo of Jack Merlo Design.
“The outdoor areas allocated to many of the homes are almost as large as the apartments themselves. Generous timber decks and the use of bluestone and natural stone materials give a warm palette and provide a complementary connection between inside and out,” he says.
<img src="/images/stories/warleigh2.jpg">
“The private courtyards and terraces have been oriented to look over the communal lawn area to increase the sense of space for residents.”
The Warleigh will comprise a mixture of 108 townhouses and apartments across three sections: Luxe, Domaine and The Residences.
Domaine is the largest, with 62 one-, two- and three-bedroom apartments. Prices will range from $490,000 to $1.7 million, and they range in size from 57 square metres to 130 square metres, excluding terraces.
<img src="/images/stories/warleigh3.jpg">
Luxe will comprise 39 two- and three-bedroom apartments, which will range in size from $970,000 to $1.7 million and from 87 square metres to 147 square metres, excluding terraces.
The most exclusive section is The Residences, which will be made up of seven three-bedroom townhouses priced from $1.9 million to $2.2 million. They will range from 180 square metres to 220 square metres and will include their own double garages and separate addresses.
The development is a 10-minute drive to Brighton Beach and a one-minute walk from North Brighton train station.
<img src="/images/stories/warleigh4.jpg">
The project was designed by SJB Architects and aims to blend in with the older homes in Brighton.
<img src="/images/stories/warleigh5.jpg">
“We have captured the stately home character that you see throughout Brighton and adapted it to this development,” says SJP Architects director Charles Justin. “The architecture has very strong geometric forms and contrasting finishes to the facades such as metallic bronze, copper cladding and charcoal render, as well as natural materials including timber, brickwork and stone.”
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Cashed-up downsizers show strong interest in Brighton development The Warleigh

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In the financial services industry we talk at length about asset allocation, spreading risk and the risk-return curve.
But when Australians talk about saving for their retirements it’s the basic idea of the diversified portfolio which is most important.
I was thinking about this recently after I put out a Twitter asking where followers would put $10,000 for a year if I gave them the money.
Two-thirds of the responses would put their $10k into shares, property or cash but not a single person told me that they’d split the $10k and invest it in different asset classes.
None of the almost 70 people who responded to me said: “I’d put $4000 into shares and $3000 into a property trust and $3000 into a fixed interest account.”
The fund management and financial advisory industries have spent the past 20 years emphasising the benefits of a diversified portfolio and spreading your risk, and at the base of a diversified portfolio is asset allocation.
Allocating investments by class means devoting parts of your capital to Aussie shares, part to global shares, part to cash, part to property and part to bonds.
Then you match the ratios of your allocation with what is known as your life stage.
If you’re 20 your allocation will be heavier to Aussie and global equities, because the amount of time you’re invested will cancel out the volatility cycles and you’ll get higher returns.
When you’re a retiree or a near-retiree you shift the weighting of your allocation to be heavier in cash and fixed interest because while they’re lower in returns they’re high in stability.
While these dramatic shifts in asset allocation have become par for the course I’ve been rethinking it lately.
Allocating assets by investment class has an extreme look to it. The two main risks that retirement savers face are market risk and inflation risk.
You expose yourself to market risk because you chase higher returns and that means you’ve invested in volatile equities.
Inflation risk occurs because you’re chasing low risk, which means investing in cash that hovers very close to the inflation rate.
Secondly, we are encouraged to skew our retirement investments to market risk or inflation risk, by the default options at our superannuation fund managers.
If you tick default for most of your accumulation phase you’ll be invested 60-70% in equities and when you identify that you’re about to retire most default funds switch you to reliance on cash investments.
That is a pendulum and it might not be as successful as we imagine.
How do we stop the pendulum?
The asset class called bonds – halfway between the risk/return of equities and cash – is a better long-term performer than Aussie equities, with very little volatility.
I believe the issue of asset allocation will be revisited in this post-GFC market and we’ll come to see it as a chance to properly balance a portfolio from the outset rather than change the risk profile to match life stages.
Keep an eye on bonds – they’ll be a part of that change.
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Where would you invest $10,000?

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Since the average Australian family’s debt-to-income ratio has risen from 55% in the early 1990s to around 150% today, they’ve become vastly more sensitive to changes in interest rates. Combine that with the fact that most Australian borrowers are on fully adjustable-rate loans that usually price off the RBA’s target rate, and you start to realise that Australia’s central bank is facing significant, and perhaps uniquely acute, community resistance to higher rates. (Never mind that numerically speaking there are actually more savers than borrowers.)

This situation is exacerbated by the highly telescoped nature of Australian economic growth. The newly-appointed and self-described “dove” on the RBA board, Heather Ridout, highlighted this on radio during week: around 80% of the Aussie economy is expanding at an insipid 1% pace while the remaining 20% races along at a spectacular 15% rate. Framed differently, four out of five Australian businesses want rate cuts while one-fifth don’t really care. It’s like the awesome-foursome have one guy rowing at top speed while the remaining three have been given lead oars.
And then we have the government of the day in periodic conflict with Australia’s embattled central bank. For decades the convention was that the independent members of the RBA’s board set staff pay. While the RBA is part-regulator of, and explicit lender of last resort to, the entire banking system, and many of its alumni have held high office in the private sector, top staff are still paid only a fraction of what they could earn elsewhere.
Possibly because of well-documented clashes between the RBA and the government during the GFC (over the 2008 rate hikes and the deposit guarantees), and the subsequent spectre of an overly hawkish RBA eager to raise rates during 2010-2011, Treasurer Wayne Swan broke with his predecessors’ convention and took away the RBA board’s pay-setting powers. At the same time, he promised that future governors would not receive Glenn Stevens’s ‘out-of-step’ $1 million pay packet (ignoring the fact that the average top=10 major bank executive gets about four to five times as much).
Some believe that a parallel assault on the RBA’s independence and credibility was the replacement of the two main “hawks”, or inflation-fighters, on the bank’s board—Professor Warwick McKibbin and Donald McGauchie—with a manufacturing industry lobbyist, Heather Ridout, who says she prioritises growth over inflation, and a former Labor economic advisor, John Edwards. The appointment of Edwards broke the multi-decade tradition of having at least one politically-independent academic expert sitting on the bank’s board.
Professor McKibbin’s regular criticisms of the government’s general policy initiatives doubtless helped convince them that the political costs of elevating academics to the RBA board outweighed the clear governance benefits.
Indeed, it would not be a complete surprise to see Julia Gillard’s recently departed staffer and noted RBA critic, Stephen Koukoulas, one day join Edwards (or replace him), assuming Labor still have the power to make this change.
Koukoulas notably characterised this month’s RBA decision as “candy-arsed”, and has been vociferous in his condemnation of the RBA for not cutting in February.
In light of the dynamics described, it should be no surprise that the community has been baying for cuts. The Australian and The Australian Financial Review collectively published four opinion pieces immediately before this week’s RBA meeting calling on the bank to ease its policy position.
News Limited’s Terry McCrann also chimed in declaring that the odds of an April cut were better than 50%, and, more remarkably, that if the RBA governor recommended another pause, which he did, the doves on the board would roll him. In doing so, McCrann acknowledged for the first time that there had been occasional battles on the RBA board when the numerically-dominant doves had knocked-back staff recommendations to hike rates, which is something I argued occurred in 2011.
Following the RBA’s decision to wait for the first quarter inflation data, we have been overwhelmed with columnists from The Australian and The AFR confidently calling a cut in May, and lambasting the bank for misjudging the pulse of growth.
Of course, much of this is predicated on one unusually low GDP print in the fourth quarter of last year. People seem to forget that these numbers can be revised by stunning margins. For example, in the first quarter of 2011 the ABS told us that the economy had contracted by a horrific -1.2% as a consequence of the east coast floods. The latest estimate is a radically more benign -0.3%. It is not inconceivable that the fourth quarter GDP will revise up to signal healthier growth at the end of last year.
As UBS’s Matt Johnson argues, the growth data tends to revise towards the unemployment rate, which at its current 5.2% level seems to paint a more positive picture.
Those that want lower rates overlook a few other key points.  Namely that:
<ul>
<li>The RBA cut twice only months ago, a move most assess takes 1-2 years to have its full effect; </li>
<li>The currency is now 5% below its level at the beginning of March, and, if it keeps falling, will become a source of inflation rather than deflation; </li>
<li>Australia has high “services” (as opposed to “goods”) and non-tradeables (as opposed to “tradeables”) inflation, with tradeables and goods inflation having been depressed only by the appreciation in the currency; </li>
<li>The unemployment rate remains just a touch above the Treasury’s estimate of its ‘full-employment’ level, and has been bobbing around this mark for a year; </li>
<li>Mortgage rates are actually at or below their long-term averages; </li>
<li>Core inflation is still smack-bang in the middle of the RBA’s target band (not below it), and that this is partly a result of the RBA’s historic rate settings; </li>
<li>We have a carbon tax being implemented this year that many experts think will be more inflationary than the government and RBA forecasts imply; </li>
<li>Productivity looks low and threatens to boost inflation above the RBA’s target band unless it improves; </li>
<li>The two largest economies in the world, the US and China, are currently growing around their trend pace; </li>
<li>The global environment is materially better than the RBA had banked on back in December; and </li>
<li>Central banks around the world have printed over US$8 trillion of new money to underwrite government deficits and bail-out private banks, which history suggests, can be inflationary.</li>
</ul>
I think one under-appreciated problem for the RBA is that it is discovering just how hard it is to raise rates beyond their neutral level following the regime-change in the economy’s interest rate elasticity during the 1990s and 2000s. After more than 20 years of relatively low inflation (care of China flooding global product markets with cheap goods), there are entire generations of Australians who cannot remember what it was like to have high inflation and double digit rates. And these people vote. In 2011 the RBA executive learnt that it no longer controlled its own board, as Ian MacFarlane had done during his easier and more stable reign. Following the governance revolution implemented by a much more open-minded Glenn Stevens, the RBA has unwittingly empowered the vested interests that dominate its board.
With six private sector representatives and a politically-appointed treasury secretary, the RBA has arguably the most inflation-friendly monetary policy committee of any central bank in the developed world. It also just happens to have one of the highest inflation targets in the world, and, just coincidentally, has failed to meet this target during Glenn Stevens’ term (core inflation has average 3.2% per annum since the December quarter of 2006).
Given the decision-making constraints the RBA faces, and the fact that it believes it has one main policy goal (price stability), which is spun into a “dual mandate” in the long-run (by arguing that if it keeps inflation low it will help maximize employment growth), logic would suggest that it should cautiously, and only when persuaded with reliable empirical evidence, lower the price of money to stimulatory levels. To be clear, this is because normalising it again, and pushing rates into restrictive territory, is a vastly more difficult undertaking.
Years ago I argued that given the RBA’s questionable inflation-fighting track-record since Stevens’ term began, and the abovementioned limitations, it should potentially have an asymmetric response function: all things being equal, the RBA should prefer to slightly undershoot rather than slightly overshoot its inflation target. In practice, the opposite has proven to be the case.
Don’t get me wrong: if year-on-year core inflation prints near the bottom of the RBA’s target band in a few weeks time, and the labour market deteriorates further, this central bank will be almost certainly cutting rates in May.
While the lay fans in the stands may not embrace the decision-making fortitude I advocate here, RBA officials can draw strength from the fact that history tends to be a more impartial judge.
Christopher Joye is a leading financial economist and a director of <a href="https://www.ybr.com.au/savings/index.cfm">Yellow Brick Road Funds Management</a> and Rismark. The above article is not investment advice.
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The RBA has unwittingly empowered the vested interests that dominate its board

Regional Victorian towns dominate list of mainland hotspots under $300,000, but Melbourne off the menu

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In many parts of Victoria there is a shortage of rental homes and the only way the shortage will be fixed is if more individuals invest, i.e. buy housing for the sole purpose of providing it as rental accommodation.
The problem is that those who choose to do that face higher rates of stamp duty.
When the previous state government reduced stamp duty in 2007 it left the old higher rates in place for investors.
As a result, those who buy a house for the purpose of increasing the number of available rental homes pay a higher rate of stamp duty than they would if they were going to live in it.
The higher rate of stamp duty is in addition to the land tax, for which they are liable on an annual basis. It is not equitable to charge an investor land tax on the basis that the property in question is not their principal place of residence then charge extra stamp duty as well.
An investment home purchased for $400,000 is liable for $2,700 more in stamp duty than if it were purchased to live in. That is the equivalent of nearly five years’ worth of land tax.
Charging higher duty for investment properties can have two effects: firstly, it can act as a disincentive to individuals purchasing and providing rental accommodation; secondly, it can increase the cost of the accommodation to renters.
In the coming state budget the government should consider equalising stamp duty for all non-first home buyers.
Enzo Raimondo is CEO of the <a href="https://www.reiv.com.au/" target="_blank">Real Estate Institute of Victoria</a>.
 
 
 
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Victorian government should give investors a fairer go and eliminate higher stamp duty rates for investors

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Once we’ve located a suitable development site and if there’s an existing house on the land, we order a pest and building inspection. Management of the renovation is part of the development process.  But to what degree do you renovate, and when is it considered overcapitalising?  In these regional areas, we are not looking to massively upgrade a house but to add cost-effective value and maximise rental returns.
It’s crucial that we receive the pest and building report before our client exchanges on the property, so we always make our offers “subject to a pest and building report”.
When the report arrives, it’s usually around 30 pages long and for first-time readers, can completely shock and turn them off a property. The report contains a lot of information that the inspector needs to explain and also to include in order to “cover” himself.  It’s his job to point out all the things wrong with the house, but then it’s our job to sift through the data and explain to our clients what we believe to be acceptable or common in houses in this particular area and of this particular age.
Property Bloom has renovated many houses, and we have picked up some common problems that may sound a bit scary but can be quite cost-effectively solved.  Most of the houses that fall into the right price range – so that the numbers stack up to develop – would be over 50 years old.
And these properties do have defects, depending on the age and the general maintenance they’ve experienced, however the property usually still represent good value.
I thought it would be interesting to translate some comments we often find in the building report that can raise alarm bells. In our experience these ‘defects’ are actually are not too hard to fix by using cost effective renovation strategies.
Defect: Various downpipes discharge rainwater to ground and require connecting to stormwater pipes or storage tanks.
Solution: A plumber can cost-effectively connect down pipes to the stormwater for approximately $800.
Defect: The external painting and finishes reflect an inadequate maintenance program and will require extensive preparation, detailing and painting to ensure long-term qualities.
Solution: Most houses can be washed down and may not require painting.  If they do, we can usually have it painted for $2,500.
Defect: Roof mortars require repointing randomly to ensure further long-term waterproofing qualities.
Solution: Pointing is a substance that is used on the roof capping tiles. A quote from a roofer can be quickly obtained, however if the roof is not leaking then it may not be required urgently.
Defect: Internal painting is in poor condition and requires professional upgrading.
Solution: One person’s “poor condition” is another person’s “OK”.  We like to wash down internal walls and ceilings with sugar soap and they usually come up like new. What is acceptable for a tenant may be different to your own standards.  We can internally paint a house for around $2,000 and a new coat of paint does wonders to a house, so it’s worth considering.
Defect: Asbestos linings were possibly present in some areas.
Solution: Asbestos materials remain serviceable and are considered safe as long as asbestos is not tampered with.
Defect: There is sagging to the ceilings.
Solution: Sagging ceiling are easily identified by the ceiling areas being wavy and not level and can be repaired by a handyman securing ceilings to partitions.
Defect: There are variations in the floor structure and some bounce.
Solution: Over time piers do sink or timber floor joists can deflect or bend.  Piers can be packed to stop some of the bounce and variation. To re-pier an entire house is usually not necessary, but we always ensure the ant caps are on piers.  Bent joists can be replaced if required.
Defect: Some damage due to wood decay fungi.
Solution: Wood decay fungus is commonly known as wood rot.  The type of fungi encountered by pest controllers usually resides in poorly ventilated subfloors, below wet areas of the home, exterior timbers and in areas that retain waters in the soils. The durability and type of timbers are factors along with the temperature and environment. Removal of the moisture sources usually alleviates the problem.  Have a carpenter inspect and replace any rotted boards or timbers. Most old homes will have some degree of wood rot.
So don’t be put off when reading through reports, if you have any doubts or don’t understand the information, discuss it with your building inspector, as often a conversation can explain things in more simple terms.
If your strategy is to create high-yielding property then be careful not to overcapitalise when you are renovating.  We base our renovation assessments on what’s required to bring a house up to the market standard and to make the house safe and clean.  Right now we are finding properties where just a few thousand dollars needs to be spent to increase the rent substantially due to the high demand in these town.   Once you’ve completed your house renovation and then go on to add a new dwelling, granny flat or even a duplex, the yield can be dramatically increased and equity can also be created.
Jo Chivers is director of <a title="Property Bloom" target="_blank" href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.
 
 
 
 
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How to read between the lines of a pest and building report: Jo Chivers

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Five years on, the US economy remains sluggish after the bursting of a house price bubble. More recently, the focus has been on China, the world’s second largest economy, and whether it too might be overwhelmed by a similar event. Reports of <a href="https://www.time.com/time/magazine/article/0,9171,2096345,00" target="_blank">“ghost cities”</a> and some property developers <a href="https://www.bbc.co.uk/news/world-asia-16009050" target="_blank">facing</a> bankruptcy have become commonplace. Some commentators have <a href="https://www.foreignaffairs.com/articles/136963/patrick-chovanec/chinas-real-estate-bubble-may-have-just-popped?page=show" target="_blank">asserted</a> that the bubble may have already “popped”. The stakes are high. The IMF <a href="https://www.imf.org/external/pubs/ft/wp/2011/wp11208.pdf" target="_blank">notes</a> that since 2007, China has contributed more – much more in fact – to world growth than any other country, and this is projected to remain the case into the foreseeable future. Given that China’s construction sector is a significant source of demand for our natural resources, Australia has more to lose than most if the economy there sours. Before commenting on the Chinese case, it is worth briefly reviewing the chain of causality in the US. From 1997, house prices in the US began to<a href="https://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----" target="_blank"> appreciate</a>. During the 2000s, the market became increasingly infected by debt-funded speculators betting on continued capital gains. In the process, banks lent money to borrowers of marginal credit worthiness requiring little or no collateral. When prices stalled and then went into sharp reverse in 2006, the banks were left holding the bag, ultimately requiring a bail out by taxpayers. Banks (and firms and households) then spent the next few years seeking to rebuild their balance sheets, as opposed to extending new loans, and this process continues today. The above story breaks down at several points when it comes to China. What is true is that house prices in China have increased rapidly during the 2000s. That, however, is about where the similarities end. Firstly, while recent<a href="https://www.ft.com/intl/cms/s/0/c0f12d0e-70e6-11e1-a7f1-00144feab49a#axzz1qMiy3UmD" target="_blank"> headlines</a> have reported that house prices in China have <a href="https://www.propertyobserver.com.au/https://www.guardian.co.uk/business/feedarticle/10149902" target="_blank">fallen </a>for a fifth straight month, what we have actually seen is a levelling off in prices. According to official data, prices nationwide remain steady compared with a year ago and remain marginally up since 2010. Unofficial <a href="https://blogs.wsj.com/overheard/2012/03/20/what-is-chinas-house-price-reality/" target="_blank">data </a>points to stronger price growth since 2010. Examples of more significant price declines in certain cities can be found, as they can in particular developments in a given city. But to tell a macroeconomic story based on these is to miss the forest for the trees. To put the above numbers in perspective, last year house prices <a href="https://www.smh.com.au/business/property/record-slump-in-house-prices-in-2011-20120201-1qsid" target="_blank">fell </a>more in Australia than they did in China. Secondly, there is<a href="https://online.wsj.com/article/BT-CO-20120325-705551" target="_blank"> little evidence</a> that any deterioration in the housing market has infected the banking system. Given that nation-wide house prices have not in fact declined, this is perhaps not surprising. There are other reasons as well. One is simply that Chinese are much more likely to fund home purchases from savings, often calling upon the assistance of family members in the process. In part this reflects cultural differences, but also strict down payment requirements imposed on borrowers by banks. Thirdly, it should not be forgotten that the key institutions in China’s banking system remain more or less government-owned. This changes the rules of the game considerably. Standard risk management variables, such as the capital adequacy ratio – which, incidentally, is extremely high amongst Chinese banks – and the non-performing loan ratio, are only of marginal relevance because the integrity of the biggest banks is guaranteed by the government. China’s central government is willing and able to act on that guarantee. The level of public debt outstanding is modest and even when contingent liabilities are taken into account, such as debt racked upon by local governments, the prospect of China falling victim to a European style public debt crisis is remote. Another example is that amid a deteriorating macroeconomic environment in which privately owned banks might elect to slow credit growth, the Chinese government can instruct banks to do the opposite, as was seen in 2009. This remains within the capability of the banks given the extremely high reserve requirements they maintain. Fourthly, in addition to continuing government ownership, there is also the fact that the banking system remains heavily regulated. For example, by fixing interest rates, the government can act to boost the margins and profits of the banks. This may be a negative from an efficiency perspective, but nonetheless can act to promote the stability of the system. Property prices in China may well be inflated. Price to income ratios, particularly in the major cities, suggest that they are. However, for high prices to constitute a bubble, they must be able to burst. In the case of China, it is not clear that they have, nor where a trigger might come from. More likely is that we are set to see a period of no or low price growth, rather than sharp declines. Of course, even stagnant house prices have implications for China’s overall rate of growth and therefore the demand for Australian natural resources. But as China’s premier, Wen Jiabao, recently <a href="https://news.xinhuanet.com/english/china/2012-03/14/c_131466703.htm" target="_blank">noted</a>, the days of average annual growth rates in excess of 10% are over. The sooner that we in Australia accept and adjust to this new reality, the better.

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 James Laurenceson is currently a Senior Lecturer in Economics at The University of Queensland. He has previously also held appointments at Shimonoseki City University in Japan and Shandong University in China. This article originally appeared on<a href="https://theconversation.edu.au/" target="_blank">The Conversation</a>. 
 
 
 
 
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Haunted by a Chinese property bubble

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There’s an air of growing panic among Australia’s business people. Company directors are calling for a budget deficit, retailers feel like they are peering over a cliff and everybody’s worried sick about the carbon tax and the high currency.
Metcash’s Andrew Reitzer reported yesterday that he is seeing “unprecedented and prolonged challenging operating conditions”. The IGA supermarkets are battling deflation of 0.9%, with specials making up more than half of all shopping baskets and as a result Metcash is laying off 478 people.
Meanwhile the Reserve Bank and Treasury are insouciant. RBA Governor Glenn Stevens merely said yesterday that “considerable structural change is occurring”, while putting off a rate cut. Treasury is working with the government to produce one of the toughest budgets in the nation’s history.
I can’t remember a time when the policymakers and the real world diverged as much as they do now.
It’s entirely possible that business people are in a funk unnecessarily and that the bureaucrats in Canberra and Martin Place have a better idea of what’s going on, but I doubt it. The truth is that both the RBA and Treasury have been getting it wrong, and both are being forced to adjust their economic forecasts downwards.
At yesterday’s RBA meeting, according to Governor Glenn Stevens: “the board judged the pace of output growth to be somewhat lower than earlier estimated”, but they stubbornly put off a rate cut anyway.
Last year’s federal budget forecast real GDP growth this financial year of 4%, which now looks absurdly optimistic. For calendar 2011, growth was half that figure and there is no reason to think it will be much different for the financial year – perhaps a little more than 2%.
So why do the government economists have their heads in the clouds, apart from the fact that it’s normal?
It’s partly because one person’s 'structural change' is another’s nightmare, and partly because it suits them: Treasury needs to produce a $40 billion fiscal turnaround to assist the treasurer’s political agenda and the RBA is still focused on inflation.
Business people, meanwhile, are seeing weak domestic demand because of consumer deleveraging, weak export demand because of the currency appreciation, and rising costs because of the labour laws and higher energy prices, both present and future.
To a large extent, the yawning gap between the economists and business people reflects the difference between 'gross' and 'marginal' – that is, the RBA is watching aggregate national inflation numbers while business people are watching their margins get hammered, and Treasury is watching national output, including the mining investment boom, while on the east coast, businesses are watching their all-important marginal sales collapse.
Business is a marginal game, while economics is gross.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator</a>
 
 
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