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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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Yes, there is some good news out there.  It isn’t making the headlines, but it is out there nevertheless.
Here are seven positive points to help you make it through your real estate day.
<ol>
<li>The vacancy rate is tight.  In most capitals and major regional markets it remains under 3% and is much lower in Brisbane, Sydney, Perth, Canberra and central Queensland.  Rents growth is starting to accelerate, and we know of numerous examples where more than 30 rental submissions are being received for vacant rental dwellings across Brisbane.</li>
<li>Sales have improved since mid-year, and those vendors who meet the market are selling – and now, often quickly.  It is still a buyer’s market – with the high supply of stock for resale – ensuring that you need to realistically price and market your property well in order to make a sale.  Investors are starting to take their properties off the market and are renting them out again, as they are attracting good rental yields.</li>
<li>Last year’s interest rate drop is having some impact – with the number of owner-occupier loans up 2% in December.  Housing investment loans rose 7.5% in December, after a 2.7% rise in November.  First-home buying activity is currently at a two-year high. Generic prices might be still falling, but there are signs that the housing sector is starting to turn the corner.  The latest housing finance data provides a degree of encouragement.  Home loans have now increased for nine consecutive months, and the investor market is doing the bulk of the heavy lifting.   We have been saying for some time that it is the investors who will get the housing market back on its feet.</li>
<li>Hamilton Harbour – one of the first major Queensland apartment projects to face settlement since the GFC – is settling well.  No, that isn’t strong enough – it is going great guns!  I nearly said gangbusters, but that might be taking it a bit too far. At the time of writing, 89% of the 435 apartments sold since early 2009 have settled, with an overall 95% success rate likely by the end of this month.  <a href="https://www.propertyobserver.com.au/queensland/brisbane-s-rash-of-new-developments-could-have-trouble-getting-financing/2011072050860" target="_blank">We originally wrote about Hamilton Harbour in July last year</a>, stating that it should be on the industry’s “must-watch” list; it was a litmus test for the Brisbane market – a beachhead, if you will.  Sadly, few seem to be watching, and the media are not writing about it. This is big news for Brisbane-town. Other, lesser projects (if you ask me), also appear to be settling well. The average price of a settled apartment in Hamilton Harbour is $526,000, with just over $200 million worth of property settled so far.  Over 220 apartments have been leased in both the towers since late November last year.  The average gross rental yield – based on evidence to date and being rented out for 50 weeks per annum – is 5.3% across the investment stock.  The one-bedroom and one-bedroom with study units are achieving the higher yields.</li>
<li>The Melbourne Institute-Westpac confidence survey shows that late last year, price pessimists in Brisbane dominated (-10%) versus this month’s positive result of 27% (percentage of those expecting a rise minus percentage expecting a fall) – a 180-degree turn in just three months.  The Good Time to Buy a Dwelling Index is up in Queensland and also in Western Australia.  Queensland’s pending state and local elections will hopefully lift confidence higher.</li>
<li>While <a href="https://www.propertyobserver.com.au/economy/be-careful-what-you-wish-for-on-interest-rates-michael-matusik/2011103152145" target="_blank">we don’t need to build as many new homes as we once did</a>, outside of Melbourne, Adelaide, Canberra, Cairns and the Gold Coast, the new housing markets aren’t oversupplied. There is a lot of nonsense written about supply – published often by young’uns who can count (well, sometimes just) but have little understanding about how the new housing market actually works.  At present, for example, there is a lot of commentary (and press) about a pending oversupply of new apartments across inner Brisbane.  Now, whilst there is lots of new mooted apartment development – approved in council – the fact remains that not enough new product is actually being built. Over the last five years for example, 13,000 new dwellings were required to accommodate the population growth, yet – based on the official statistics – just 8,017 new dwellings were approved.  Last year, just 1,902 new dwellings were approved, against an annual average demand for 2,650 new housing starts.  At present there is a serious short-fall.</li>
<li>To finish, everything cycles, including the property market. The Brisbane market, for mine, is at six o’clock on the property clock or at the bottom of its cycle.  Many investors try to pick the bottom of the market.</li>
</ol>
Yet, the direction in which property values travel is only partially dependent on the broader market conditions.  Recent studies show that about 40% of growth (or otherwise) can be explained by trends in the overall market.  The all-important 60% comes down to more individual factors such as location, the style of housing, its design and inclusions, and the income/demographics of the area.
However, a 40% swing in your favour shouldn’t be sneezed at, especially after what the Brisbane market has been through of late.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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michaelmatusik-49YzLvdmNv

Seven positive signs for Australia’s property markets

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The current 15-basis-point gap between the standard variable interest rate of the major banks will widen in the future, according to Mortgage Choice CEO Michael Russell.
NAB currently has the lowest variable rate of the 7.31% with Westpac the highest at 7.46%.
Russell says the latest round of major bank interest rate increases shows that the major banks are now prepared to move interest rates out of cycle with the RBA and has also signalled to existing and prospective borrowers, that the major banks no longer adopt the same pricing movements.
“While major banks’ standard variable rates have, up until a couple of years ago, been on par each other, borrowers now need to be aware that their standard variable rates are likely to differ going forward,” he tells Property Observer.
“The difference between the standard variable rates for the  big four banks was a significant 14 basis points prior to the latest round of increases and now sits at 15 basis points,” he says.
While Mortgage Choice does not track this data, Russell says the major banks have kept their interest rates on par until the out-of-cycle rate moves by the majors in November 2010.
In November 2010, the Commonwealth Bank announced a 45-point hike after the RBA's Melbourne Cup Day 25-point increase.
Furthermore, he says using a professional mortgage broker has just become even more imperative for existing and prospective borrowers, “to help ensure they obtain the most suitable loan product for their individual needs and requirements”.
{module What do you intend to do given the current interest rate fluctuations?}
{module Have you changed lenders in the last six years?}
 
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lschlesinger-FZcF9M3vE6

More choice likely among big four bank mortgage rates: Mortgage Choice CEO Michael Russell

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Investors returning to the market, not first-home buyers, helped Villa World secure 209 sales across 11 projects during the past six months.
The tally compared with 288 in the previous corresponding period.
First-home buyers constituted about 10% of buyers, with the bulk being upgraders.
<img src="/images/stories/villawood.gif">
Projects in Queensland, including the resource-strong market of Gladstone, notched up a 29% increase in sales success.
But Villa World reported the Victorian market continued to be “very challenging.”
Victorian sales and price growth continued to soften, with Villa World noting over the last six to nine months that Victoria’s previously strong population and migration growth had stalled.
“Consistent price growth over recent years has put pressure on affordability,” the company notes.
Villa World’s Victorian operations will carry forward 161 lots sold worth $29.8 million.
Across all states, an average gross margin of 24.5% per lot was achieved across all its sales, up from 18.8%, with the 2011 first half result affected by the sale of non-core projects.
The group recorded 343 settlements in the six-month period.
The group has total net lots under control of 4,897, including proportional joint-venture ownership.
Villa World indicates the group’s strategy remains unchanged with its focus of developing affordable residential communities, “combined with prudent capital management and maintenance of strong leverage and gearing ratios.”
 
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jchancellor-FAypfDUnLy

Investors and upgraders, not first-home buyers, behind Villa World’s building lot sales in past six months

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Income from a property investment is generated through the receipt of growing rent secured by a lease contract. The variability of income is low. Earnings in Australian real estate investment trusts from additional sources, including property development and funds management, dilute this stability. 
Property income exposure within an A-REIT portfolio can be enhanced by selecting those A-REITs that reflect these characteristics of property. Up until the onset of the GFC, the use of gearing increased reflecting the relatively low cost and ready availability of debt. This exacerbated the steep rise and subsequent decline in market capitalisation of A-REITs. 
In the four years leading up to December 2007, average A-REIT price performance of 9.1%  per annum reflected using increased leverage, acquiring overseas properties and higher valuations on fund management businesses. In the four years to December 2011, the average price fell by 22.5% per annum. By contrast, the average annual income return for the four years to December 2007 was 6.6% per annum compared with 7.1% per annum for the subsequent four years to December 2011. 
Not only was there a stark contrast in performance, volatility increased significantly as market prices and sentiment deteriorated. The magnifying impact of excessive gearing was evident in performance between the two periods. Volatility of return increased from 11.6% per year in the four years to December 2007 to 33.1% per year in the four years to December 2011. Annual volatility of income returns decreased from 3.5% per year to 2.6% per year between the same two periods. 
The income generated by property is relatively stable. The introduction of alternative sources of income including development profit, transaction and fund management fees shifted the characteristics of an A-REIT investment away from property fundamentals and increase volatility of returns. By focusing on contracted rental income, the business risks and associated volatility of return of the investment can be reduced. Imprudent gearing will magnify volatility of earnings and returns.
Mark Wist is senior asset consultant at <a target="_blank" title="Atchison Consultants" href="https://www.atchison.com.au/">Atchison Consultants</a>.
 
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markwist-Vaq6S8Xoby

Income in A-REITs is the essential attribute of property investment

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The combined property-finance-business sector was the only industry to record an improvement in both profitability and confidence over January, according to the NAB monthly business survey.

On the back of a small overall rise in both business conditions (up two points) and business confidence (up one point) in January, profitability rose “marginally” in the finance-property-business sector as well as in the recreation and personal services industry.

The proportion of businesses not requiring finance increased from 64% to 67% in January, the highest figure since the survey was first asked.
<img src="/images/stories/nabfeb15.gif">
Source: NAB
Confidence also strengthened in the property-finance-business sector, with the industry index rising four points to +3 on this measure.

In line with <a href="https://www.propertyobserver.com.au/residential/queensland-building-approvals-up-25%24-but-national-approvals-fall-abs/2012020253231" target="_blank">historically weak building approvals</a> and a challenging economic environment, sentiment in the construction sector deteriorated over January.

NAB recorded a nine-point drop in construction industry confidence (alongside a similar fall in the wholesale sector), while there was a heavy 30-point fall in construction sector profitability.

The construction industry found itself on the wrong side of most measures in the survey, including forward orders and capital expenditure.

Construction is also the second most under-used industry in the economy alongside retail, operating at 79.8%, ahead of manufacturing (76.1%). Capacity utilisation is highest in mining (87.1%), according to the survey.

 Summing up the January index, NAB said there were “heavy falls in conditions in wholesale, transport and utilities, and construction, broadly offset by improvements in mining, manufacturing and recreation &amp; personal services”.

On a state-by-state basis, business conditions deteriorated sharply in SA and Tasmania, but strengthened modestly in Victoria and Queensland.





 
 
 
 
 
 
 
 
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Property sector profitability and confidence improves, but construction falls further: NAB

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If our economists are armed with all the research available in today’s information age, why can’t they agree on where are our property markets are heading? 
In fact a better question would be, why do so many get it wrong? 
The simple answer is that market movements are far from an exact science. 
It’s more than just fundamentals that move markets. 
The fundamentals – like population growth, supply and demand, employment levels, interest rates, affordability and inflationary pressures – are easy to monitor. 
However, one overriding factor that the experts have difficulty quantifying is investor sentiment. 
In a recent report, AMP chief economist Dr Shane Oliver explains that people often suffer lapses of logic when investing and many of their investment decisions are driven by emotion. 
For example, we tend to extrapolate the present into the future. When things are booming we think the good times will never end, and when the market mood is glum, we have difficulty seeing the light at the end of the tunnel. 
Think about it – when the media reports falling property prices or an impending housing crash, many investors become scared and sit on the sidelines, believing the end of property is nigh and things will never improve, when in reality much of the risk has been removed from the market. 
Conversely, when property markets are booming and stories of investors seemingly making large gains overnight abound, people want to jump on the bandwagon and cash in – often at a time when the market is near its peak.
 
Other emotional traps include becoming overconfident, wishful thinking and ignoring information that conflicts with your current views. In other words many investors create their own “reality”. 
Can you see how this type of activity, influenced by investor psychology, drives booms and busts? How the dominant investor mentality of the time helps drive the property cycle? 
Simply, when investors put on the brakes, housing values tend to stagnate or fall due to lack of demand. And when they jump back into the market, demand rises and up go prices. 
Obviously one or two misguided investors won’t be able to influence property prices, but investor sentiment is contagious. 
People tend to want to do what others are doing – they follow the crowd because going against popular opinion is seen as risky. What if you make a mistake? What if the others are right and you are wrong? 
Oliver says this “collective behaviour” is magnified by several things, including; 
<ul>
<li>
Mass communication enabling the behaviour to become infectious. Now more than ever we are bombarded with messages from the media influencing how we think and feel about things. When we hear that real estate is doomed, all but a handful of sophisticated investors get scared out of the game. And when the media tells us housing markets are booming everyone wants a piece of the action.</li>
<li>
Pressure to conform If your friends or family are doing it, it must be right. Right? Human nature makes us reluctant to do the opposite of what our peers are doing. </li>
<li>
A major precipitating event can give rise to a general belief that motivates investor behaviour. The global financial crisis scared waves of investors out of the markets. On the other hand, the resource boom enticed thousands of investors into west coast housing markets to cash in. </li>
<li>
A general belief that grows and spreads When the belief that property values can only go up spreads through an uneducated new generation of investors they enter the market pushing prices up even further, perpetuating the belief and helping make it a reality. Similarly when the crowd believes the market is going to crash, they steer clear, this gets reported in the media and the negative sentiment feeds on itself. </li>
</ul>
Oliver observes that these “lapses in logic” by individual investors and the magnification of such lapses by crowd psychology feeds property cycles and goes a long way in explaining why we see boom and slumps at different points in time. 
When investor sentiment is positive, the crowd jumps in feet first, pushes up demand and places upward pressure on prices – causing boom conditions. Conversely, when sentiment is negative, the crowd backs off and frequently sells out of the game due to concerns that they’re about to lose everything – causing market slumps. 
What can an investor learn from this? 
<ol start="1">
<li>Our property markets are not only driven by fundamentals, but also by the often irrational and erratic behaviour of an unstable crowd of other investors.</li>
<li>Booms never last forever, neither do busts. Don’t be surprised when they come around, and don’t overreact. According to Oliver, this will help you avoid being sucked into booms and spat out during busts.</li>
<li>Treat your property investments like a business and stick to a proven strategy to take the emotions out of your investment decisions.</li>
<li>Recognise that property is a long-term play and set up financial buffers to help you ride the property cycles. </li>
</ol>
Invest counter cyclically.
Warren Buffet once said: “We attempt to be fearful when others are greedy and to be greedy only when others are fearful.” 
This is also the investment strategy of many successful property investors. 
I’ve always been an advocate of counter-cyclical investing. I’m often sceptical of conventional wisdom – not because the crowd is always wrong, but because the crowd is always late. 
Sure, it takes some courage to do the opposite of what everyone else is doing, but the results of your contrary behaviour will ultimately speak for themselves.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
 
 
 
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Why economists’ property predictions are so often wrong 

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Credit Union Australia (CUA) has today confirmed it will not be increasing any of its variable-rate mortgages. 
ME Bank has also left its variable interest rates unchanged following the RBA announcement. The bank’s standard variable rate remains at 6.74%. ME Bank is wholly owned by industry super funds.
CUA, one of Australia biggest customer-owned lenders, will leave its standard variable rate unchanged at 6.72%, more than 50 basis points lower than the lowest rate of the big four, NAB, which has increased its standard variable rate to 7.31%. 
CUA and ME Bank have taken what Yellow Brick Road chairman Mark Bouris has referred to as the “opening” created for smaller lenders by the major banks slugging customers with interest rate increases outside of the official rate cycle.
Chris Whitehead, chief executive of the CUA, says the company remains committed to offering customers the best deal possible and points out that since April 2010, CUA’s standard variable rate has consistently been at least 0.5% cheaper than the average of the big fours’ equivalent products. 
“While CUA is certainly not immune to the funding pressures facing the big banks, our ability to focus entirely on our customers, rather than on dividends to shareholders, allows us more flexibility to make rate decisions that are in their best interests,” he says.
Another mutual lender, the Jerry Seinfeld-fronted Greater Building Society, did not follow the CUA, raising its variable rates by 0.1% and pushing up its standard variable mortgage to 6.9%. 
Despite this increase, the Greater is still offering a standard variable rate 0.56% lower than Westpac, which has the highest variable rate of the big four at 7.46%. 
“On current rates, a customer with a 30-year, $300,000 standard variable home loan is still $1,464 a year better off than a Westpac standard variable home loan customer. The Greater customer will save $43,920 over the life of the loan,” says Greater chief executive Don Magin. 
The Greater variable rate increase is effective from tomorrow for new loans and for existing customers from February 22. 
6.72%
The standard variable bank rate that CUA is currently charging its customers.
6.90%
The standard variable bank rate that the Greater Building Society will charge new customers from February 15 after raising rates by 0.1%. The rate rise for existing customers kicks in on February 22
6.94%
The standard variable bank rate that Heritage Bank is currently charging its customers.
7.20%
The standard variable bank rate that BankWest is currently charging its customers.
7.22%
The standard variable bank rate that ING Direct is currently charging its customers
7.24%
The standard variable bank rate that HSBC is currently charging its customers.
7.30%
The standard variable bank rate that Bank of Melbourne/St.George is currently charging its customers.
7.31%
The standard variable rate that NAB will charge its customers from February 20 after lifting rates by 0.09%.
7.33%
The standard variable bank rate that Suncorp is currently charging its customers.
7.36%
The new standard variable bank rate ANZ will charge its customers from February 17 after lifting rates by 0.06%.
7.36%
The standard variable bank rate Bank of Queensland will charge its customers until at least the next RBA meeting on March 6, the bank has pledged.
7.41%
The new standard variable bank rate the Commonwealth Bank will charge its customers from February 20 after lifting rates by 0.1%.
7.45%
The new standard variable bank rate Bendigo and Adelaide Bank will charge its customers from February 21 after lifting rates by 0.15%.
7.46%
The new standard variable bank rate Westpac will charge its customers from February 20 after lifting rates by 0.1%. 
*All rates as announced on February 14.
 
{module What do you intend to do given the current interest rate fluctuations?}
{module Have you changed lenders in the last six years?}
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CUA and ME Bank leave variable rates unchanged: a guide to new mortgage rates as the dust settles 

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There’s a distinct feeling of déjà vu in the air, with non-bank lending pioneers Mark Bouris and John Symond both launching campaigns urging borrowers to consider alternatives to the major banks following the interest rate increases of the last few days.
On Sunday night Aussie kicked off its new advertising campaign fronted for the first time in five years by chairman and founder John Symond.
In the new campaign, which runs with the tagline “It’s smart to ask”, Symond urges consumers and borrowers to question and challenge their current financial providers, specifically banks, in an effort to review and choose a financial product or service.


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<script type="text/javascript">brightcove.createExperiences();</script>The new ad kicks off with Symond asking: “Is your current home loan the right one for you today? It’s smart to ask, the fact is things are more competitive today, you can save thousands but you need to make the right choice.”
He then goes on to say: “You could ask your bank, but would they tell you if a competitor had a better product? We will.”
Yellow Brick Road’s Mark Bouris, who famously competed with John Symond when he built up non-bank lender Wizard in the late 1990s and early 2000s (until selling it to GE Money for $500 million in 2005), has also gone on the offensive against the major banks.
Speaking on Eddie Maguire’s Triple M breakfast radio show today, Bouris said the banks had given smaller lenders like Yellow Brick Road and others “such an opening”.
“If this was AFL or rugby league I would be kicking goals or scoring tries,” he said, perhaps harping back to the days when Wizard sponsored both the NSW State of Origin side and Collingwood Football Club.
“The bottom line is my interest rate is 6.83% and the banks’ is 7.36% and that over 25 or 30 years you could save $40,000.
“If that’s not the most compelling reason to shop around and look for a better deal, I don’t know what is.
“There are small banks, there are credit unions, there are non-bank lenders like my business, Yellow Brick Road, offering better deals then the big four banks,” he said.
Bouris says the problem is that all anyone ever talks about is the big four banks.
“We are all doing them a big favour by talking about the big four… There are other places to go to.”
Bouris says it’s no harder to get a loan from a credit union, building society or non-bank lender than it is from a major bank if you qualify for it.
Bouris admitted that funding costs for new lending had risen but said this game was about averaging and smoothing out your costs, not just passing them on to your customers.
<a target="_blank" href="https://www.propertyobserver.com.au/finance/our-banks-are-too-big-to-fail-too-few-to-be-competitive-mark-bouris-and-christopher-joye/2012020853307">Along with Yellow Brick Road director Christopher Joye</a>, Mark Bouris has taken his campaign against the major banks online and in the print media, warning that the financial system is more at risk by being reliant on four $50 billion banks. Bouris and Joye suggest Australia would be better off with 10 banks worth $20 billion, “each small enough to fail without causing widespread damage”.
Competition between Bouris and Symond for mortgage customers reached its zenith in about 2003 when Aussie was writing about $600 million a month in new mortgages and Wizard had a mortgage book worth about $6.5 billion and about 300 franchise offices.
Aussie Home Loans acquired the Wizard franchise network from GE Money in 2008 during the height of the GFC for an undisclosed sum believed to be a fraction of what GE spent on buying it from Bouris in 2005.
Just before Aussie acquired Wizard, the Commonwealth Bank acquired a third of Aussie for about $70 million.
In 2002 Aussie changed its business model from a non-bank lender offering Macquarie Bank-backed loans through its PUMA program to that of a mortgage broker offering a range of loans from different lenders including the major banks.
In 1995 Symond was the face of Aussie Home Loans, kicking off its famous “We’ll Save You” ad campaign with the question: “You work hard for your money, so why give it to the banks?”
“I want you to ring your bank and demand a better deal… If they won’t come to the party, ring us.”
Yellow Brick Road remains a non-bank lender and receives its wholesale funding from Gateway Credit Union.
 
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Mortgage wars Groundhog Day: Mark Bouris and John Symond turn back the clock as they take on the banks

Mosman heads top 100 list, with Kew, Paddington and Castle Hill climbing the ranks and Hope Island and Vaucluse tumbling 

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Despite growing demand from investors for distressed listed Australian commercial properties, supply is set to easily exceed demand during the first quarter of 2012, according to research by the Royal Institute of Chartered Surveyors.
The report shows levels of distressed commercial properties on the market increased from quarter three to quarter four, the RICS Global Distressed Property Monitor found.
Globally, demand for distressed commercial properties increased as more distressed commercial properties entered the market.
The levels of increasing demand are unprecedented, according to the report, with 80% of the countries surveyed reporting increased investor interest.
“Indeed, in most cases the pace of rising demand picked up at a faster pace than previously seen,” writes RICS economist Matthew Edmond
“The rise in the number of countries reporting rising investor appetite for distressed assets may be viewed as an indication that prices in the market place are getting closer to offering value.”
Scandinavia, UAE, Italy, France and Japan led the push for increasing demand from investors, and only three counties surveyed reported decreasing demand.
Countries at the centre of the eurozone debt crisis are expected to have the fastest rising levels of distressed commercial property entering the market, with the Republic of Ireland, Portugal, Spain and Italy topping the list.
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“Given the ongoing and intensifying problems in Europe, it is little surprise that respondents in many of these countries are more pessimistic,” writes Edmond.
“The continuing debt crisis in the area is clearly adversely affecting sentiment, as property professionals in France and Germany also anticipate further rises in distressed selling.”
Ireland and southern European nations also top the list of countries where supply outstrips demand.
An expected fall in supply was reported by seven counties, two more than in the previous quarter, but the majority of respondents in Europe still expect supply to exceed demand.
 
 
 
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