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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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I was listening to the radio on my way home on Saturday evening and heard a presenter and a town planner talking about real estate in Melbourne. A caller had asked a question of the two regarding what the “plus” meant when an advertised property was quoted $490,000 plus. The caller was looking at a property in Mitcham, on about 750 square metres, and was thinking about buying it in order to subdivide and develop. 

The town planner talked about due diligence, which was all good and well. He gave advice similar to: Talk to the council to work out whether the area can be developed, and into what. Is it an area that will allow for high density, etc. All very good advice! He did eventually get around to talking about the “plus” as being up to or more than 20%, however he also said he didn’t put too much stock in what the agent said. It was really worth what others will pay. 

There are four main parts to buying property in Victoria: working out what your needs are, searching and identifying possible properties, assessing target properties accurately and finally successfully negotiating the sale. 

Today we will talk about assessment, which is really what the caller was asking the town planner to do without even seeing the property. There are many options when it comes to assessing a property for sale. 

Many people will say to look at the papers or buy information online to get sales results. This is fine if all the sales in the area were auctions. In the state of Victoria, resellers of real estate information cannot identify the private listing past street and suburb. Numbers are not supplied. So, if you know that a property sold in Smith Street for $800,000 and another sold for $400,000 you still do not know what the difference is. 

You can do this if you are diligent. You must physically take note of every sale. If you are looking to buy in “Smith Street” then you need to look at every property that is on the market and when it sells and try to identify the property, then it becomes useful. You need to look at every paper, every website and all the online sellers of information. This will still only give you some idea, as historical sales over the last two years will be difficult to gauge without street numbers. But it can be done. It is extremely time-consuming and tedious. But if you have three to six months to build up a local database then it will be useful. 

The actual sales price is only the first step. You need to visit as many of these properties as possible. You need to segregate your data into properties that have valuable houses on them, properties that have recently renovated houses and properties that have houses with renovation options. 

You then need to look at individual land sizes. Is there a development option? Is there an option to rebuild a new home or renovate the existing home while subdividing the block? Is it a corner block that is easier to renovate? What you are trying to do is calculate whether a property was sold for “land value” or whether there was some additional value in the house. 

When there is some additional value in the house you need to look at how many bedrooms and bathrooms, car accommodation, quality of fixtures and fittings, particularly in the bathroom and kitchen. How big are the individual bedrooms, is there a flow to an open-floor plan, or is it a compartmentalised rabbit warren? 

You need to look at these questions with each individual style of property in mind. If we are looking at a Victorian home, we know that the bedrooms will be of good size, at least three metres by three metres. The ceiling heights will vary from three to four metres, and if there has been little renovation the bathroom will be at the back of the house and the kitchen in the middle because this is how they were added over time. 

A structurally renovated Victorian home should have the bedrooms at the front, followed by bathroom and hopefully ensuite, then the kitchen and an open-plan living zone leading directly on to the outdoor entertainment area. 

However, you would not expect a 1970s “estate-style” home to be set up this way. In fact, the main bedroom is usually near the front, with the others to the rear. A big house might have an L-shaped lounge/dining room with a large central kitchen. Unfortunately, these houses usually have limited rear access unless a further rumpus room has been added and then it would be good to see the outdoor entertainment area run off this. 

Finally, you need to put all this together to try and guesstimate what someone else is likely to pay. 

If you do not know what someone else is likely to pay then you will waste almost a month of your time and effort waiting for the auction, waste money getting pest and or building inspections done, waste money getting the contracts checked by a solicitor and then when auction day comes around and the auctioneer is calling for opening bids and you have a figure in mind, you won’t know whether your figure is in the right ballpark. 

You cannot use the agents estimate to work out what a property is worth. The “plus” does not mean 10% or 20%. When a range is quoted it does not mean the reserve is within these numbers. The selling agent does not need to, and actually cannot give you, any assistance that would be seen to be to the detriment of getting the highest possible sale price for his client – the vendor. Some agents will quote high and try to negotiate from this point; others quote low and will try to push up a potential purchaser. Your best negotiation tool is to have an accurate appraisal of what someone else is likely to pay: i.e., your competition. 

When it comes to purchasing a property there are actually three numbers we need to calculate or guesstimate. What is it worth to us? In other words how much are we happy to pay for this particular property. Secondly, what is it worth to someone else? In other words, what is likely to happen on auction day? And thirdly, and by far the most difficult, what does the vendor want! 

Once we have these numbers we can then begin to set up a buying strategy. We will talk about different buying strategies at another time. You can get an accurate assessment of a property from an experienced and licensed buyers’ advocate or a valuer. You need to engage them and pay them in order to guarantee they are working for you. 
Ian James is director of <a target="_blank" title="JPP" href="https://www.jpp.com.au">JPP Buyer Advocates</a> – the largest dedicated buyer advocacy in Melbourne. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiate more than $100 million worth of property each year for clients.
 
 
 
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ijames-Mpno6qpjHC

How to properly assess property values

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Borrowers may have to wait several months for another rate cut, says the Commonwealth Bank.
CBA chief economist Michael Blythe expects that the RBA may cut rates again in May, as “the risks lie with an earlier move”.
Blythe says the RBA’s Statement on Monetary Policy made it was clear that “risks in <place>Europe</place> are still skewed to the downside” and that there “differences between domestic sectors”
“So if ‘demand conditions weaken materially’ there is ‘scope’ for easier monetary policy,” he says.
“Financial markets will continue to price in further rate cuts and the debate between economic commentators will lean in that direction as well.
“The terminal cash rate will depend mainly on how the European story evolves.  While that story is evolving the need for lower rates will be debated at every RBA meeting.  But a trigger is required.
“There are plenty of potential flashpoints.  Significant quantities of Italian, Spanish, Portuguese and Greek debt are due to mature over the February?April period.  Negotiations over Greek debt and a second bailout package need to be finalised soon.
“These events are risks and not part of baseline forecasts.  As a result, we have pushed back the timing of the next move to May, when we have a 4% cash rate pencilled in.  The risks lie with an earlier move,” he says.
HSBC chief economist Paul Bloxham says the bank still expects further cuts from the RBA “given the global downside risks” with a cut forecast in March and one more in the second quarter of the year.
Bloxham says Friday’s Statement on Monetary Policy will help “elucidate” the RBA's thinking on today's decision.
Today’s statement, Bloxham says, “suggested that while the risks in Europe remain 'skewed to the downside' the 'acute financial pressures on banks in <place>Europe</place> were alleviated considerably late in 2011 by the actions of policymakers'”.
“Overall, they suggested that 'should demand conditions weaken materially, the inflation outlook would provide scope for easier monetary policy.' Clearly, they will be watching the global risks very carefully,” he says.
Westpac chief economist Bill Evans expects a 0.5 percentage point cut in the cash rate over the course of the first half of this year despite today’s decision. 
“While the case set out by the bank does not provide strong encouragement to expect a cut in March,  we believe that over the course of the next month the case will be sufficiently strong to justify another cut. Indeed it is our view that the case has already been established,” Evans says.
 
 
 
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lschlesinger-FZcF9M3vE6

RBA may not cut rates until May: Commonwealth Bank

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The decision by the RBA to leave rates on hold today will have a “benign” effect on the property market, according to Monique Sasson Wakelin, managing director of Wakelin Property Advisory. 
Her response is in strong contrast to the<a target="_blank" href="https://www.propertyobserver.com.au/economy/residential-building-to-suffer-from-rba-s-decision-to-leave-rates-unchanged-industry-bodies/2012020753282"> gloomy reaction from others in the property and mortgage industries</a>. 
Wakelin says the decision to keep rates unchanged sends a “positive message about the health of the Australian economy”. 
“The RBA is satisfied that the economy is robust by world standards and not requiring additional stimulation. The evidence of this is low and stable unemployment, inflation sitting comfortably within its desired range of 2% to 3% and the economy growing close to trend. 
“It is also clear that the RBA does not wish to stimulate a disproportionate increase in house prices, demand and finance that could ultimately lead to undesirable inflationary pressure and a yo-yo effect on prices and demand in the property sector,” she says.
 In keeping rates on hold at 4.25% Sasson Wakelin says the RBA has been “prudent in balancing up international and domestic conditions”.
“With a stable domestic economy and conditions abroad that are at least not getting worse, the RBA has adopted a wait and see approach.” 
“This stance provides the Reserve Bank more firepower to cut rates further should the eurozone debt crisis deteriorate or the nascent <country-region><place>US</place></country-region> recovery peter out over 2012. 
“On balance, we welcome the decision and believe the short- and medium-term impact of the announcement are benign,” she says.
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Effect of rate hold will be ‘benign’: Monique Sasson Wakelin

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So the RBA held interest rates steady at its February meeting, which is what I expected, characterising economic growth as “close to trend” and inflation “close to target”. I had previously argued that holding in February was a no-brainer from a pure policy-setting perspective.
However, the RBA operates in a world of complex practical constraints, the biggest of which is that the RBA’s board is, unusually, dominated by six private sector individuals with a natural bias towards lower rates, and the Treasury Secretary, who ultimately represents the government of the day and is typically regarded as being “dovish”.
We know as a matter of empirical record that former treasury secretary Ken Henry had battles with RBA board members Warwick McKibbin and Glenn Stevens during the GFC trying to push the target cash rate much lower than the RBA hawks wanted (its nadir was 3%).
Accounting for these real-world limitations on the RBA given its board complexion, I stated that I slightly favoured the RBA leaving rates unchanged.
But, rest assured, this was a massive surprise for both the financial markets and most economists. The markets were pricing in an 80%-plus probability of a cut only a few days ago, and it had gone as high as 100%. Only three of 27 economists surveyed by Bloomberg picked today’s decision, which is a telling statistic.
Some, like former prime ministerial advisor Stephen Koukoulas, felt there was a near-certain probability of a 25-basis-point cut, and a real possibility that the RBA cut by twice as much.
And then we have News Ltd’s Terry McCrann, who in four separate articles in the last two weeks stated that the RBA was “almost certain” to cut its cash rate today. I speculated publicly that McCrann was being “worded up” by either a private sector board member or politicians seeking to maximise pressure on the bank to comply. 
When McCrann predicts a result with a very high degree of confidence, the financial markets ordinarily fall in behind him. The bank has stated that it does not normally like “shocking” the markets (and expectations more broadly), and will sometimes rationalise its own moves by referencing the fact that the policy change was being anticipated in the markets.
With the recent pick-up in growth in the world’s largest economy, the rebound in the US labour market (where the unemployment rate fell from over 9% to 8.3% today), a very benign soft landing in Australia’s two major trading partners, China and India, and an only so-so domestic inflation report that left underlying consumer price pressure at 2.6% over the last year, sitting on the sidelines and waiting for more information made a great deal of sense.
Indeed, there has been some more positive tinges to the domestic data flows. For example, the ANZ job ads index surged 6% on Monday to a level that UBS analysis suggests should cause unemployment to remain static around its currently very low 5.2% rate (see chart).
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyefeb71.gif"><img src="/images/stories/joyefeb71thumb.gif"></a>
We have also seen more positive housing data, with national dwelling prices grinding out a slight seasonally adjusted rise over the months of November and December (taken together).
A more worrying development for the RBA has been partial information implying a return of inflationary pressures. The monthly TD Securities-Melbourne Institute benchmark has recorded a strong increase in its core measures of Australian inflation on a three-month annualised basis, as the chart below shows.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyefeb72.gif"><img src="/images/stories/joyefeb72thumb.gif"></a>
One interesting question is what the major banks now do. The RBA’s cash rate affects all forms of bank funding, one way or another. It directly affects the circa 60% of funding that is sourced from short-term retail deposits. It indirectly impacts the 30% of funding that is originated from the wholesale markets locally and overseas (via its influence on the yield curve). So the question is: do the banks unilaterally raise rates on the back of claims of higher funding costs? I don’t think so. Maybe ANZ nudges its rates up a tiny amount, just to make a statement.
The fact is, however, that funding costs and financial stresses more generally have plummeted in recent weeks. When CBA issued its $3.5 billion, AAA-rated covered bond in January, it paid a price of 1.75% over the swap rate. Today that same covered bond is trading 36 basis points lower at just 1.39% over the benchmark rate.
The broadest possible measure of Australian financial stresses, which is the “credit default swap index” produced by ITraxx, has declined strikingly from over 220 points in November last year to about 140 points today (see chart).
Click to enlarge
<img src="/images/stories/joyefeb73thumb.gif">
It would be a brave bank to undertake independent margin expansion in the face of this evidence.
Christopher Joye is a leading financial economist and a director of Rismark International and Yellow Brick Road Funds Management. The above article is not investment advice.
 
 
 
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chrisjoye-JYhJsTrNRC

RBA's decision to leave rates on hold the right call: Christopher Joye

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The Reserve Bank has come under heavy fire from the building industry and mortgage brokers for not cutting rates for third successive time at its February meeting today.
The two peak residential construction bodies, Master Builders Australia (MBA) and the Housing Industry Association (HIA), expressed disappointment at the decision and warned of its impact on the building industry and home-buying appetites. 
“Master Builders was disappointed that rates were not cut given the current poor conditions in the building industry,” says Wilhelm Harnisch, chief executive of MBA, following the decision. 
“Monetary policy needs to be more supportive to underpin activity in a building industry clearly stuck in the slow lane of the economy.” 
He pointed to the MBA’s December quarter national survey, which showed the building sector was struggling having lost the “cushioning effect of government stimulus programs”. 
“Sales and forward orders have fallen away dramatically as cautious clients, overseas events and difficulties accessing finance work against any upturn,” says Harnisch. 
“Lower interest rates are needed to restore confidence in the building industry and drive a private sector recovery in the housing and commercial building markets.” 
Harnisch says the building industry “was banking on a further rate cut to help boost confidence to stabilise an increasingly uncertain market”. 
“The Reserve Bank needs to reconsider its strategy and cut rates further to assist in driving a sustainable recovery in the building industry.” 
The HIA described the RBA’s decision as a missed opportunity to “bolster business and household confidence”. 
“A rate cut today would have been appropriate for current economic conditions, but sadly that decision was not taken,” says HIA chief economist Dr Harley Dale. 
“The global and domestic economic outlook remains clouded, within which new housing activity in <country-region><place>Australia</place></country-region> faces the risk of revisiting GFC lows.” 
Dale notes the widespread expectation for a cut and an increasingly aggressive debate regarding what <country-region><place>Australia</place></country-region>’s banks would and should do with a cut prior to the announcement. 
“Against this backdrop, leaving rates unchanged has the potential to weigh down on confidence and non-resource economic activity,” he says. 
“Borrowers seeking relief from the uncertain economic climate and cost of living increases will be disappointed the Reserve Bank of <country-region><place>Australia</place></country-region> has resisted the chance to lower official interest rates,” says mortgage broker Loan Market, part of the Ray White Group. 
Loan Market spokesman Paul Smith says most consumers had been expecting the RBA to reduce the cash rate again after cuts in November and December last year. 
Smith says a recent Loan Market consumer survey found the majority of respondents had been anticipating more reductions to the cash rate. 
He says the RBA likely held off reducing rates due to considerable mixed economic signals in the market <a target="_blank" href="https://www.propertyobserver.com.au/economy/inflation-data-should-encourage-rba-to-cut-rates-again-in-february/2012012953143">such as a mid-range target inflation rate of 2.4%</a>. 
“We thought the RBA could have applied a 50 basis points cut this month but they have taken a more cautious approach and still have plenty of room to move,” he says. 
“While the fundamentals of the Australian economy remain quite strong and consumer sentiment has been improving, sections of the economy can only benefit from the stimulus provided by lower interest rates.” 
Mortgage broker network 1300 Home Loan slammed the RBA’s decision and called it a “serious mistake”. 
According to managing director John Kolenda, there were so many downside risks in the economy that what was needed was a series of rate cuts, not for the RBA to sit on its hands with a hold decision. 
“With the banks’ costs of funding rising all the time and most sectors of the economy remaining weak, we need to see some real relief passed on to home owners,” he said. 
“This hold decision is a missed opportunity which the RBA will live to regret if the situation in <place>Europe</place> continues to deteriorate while consumer confidence here remains as weak as we have seen in recent months.”
 
 
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Residential building to suffer from RBA's decision to leave rates unchanged: housing industry bodies

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Some signs of improvement in global economic conditions, particularly in the US and Europe, expectations of the Australian economy to grow at trend and some signs of a stabilising housing market are some of the reasons the RBA has given for leaving the cash rate on hold today at 4.25%.
The full Monetary Policy Statement by RBA governor Glenn Stevens: 
“Information becoming available since the December meeting confirms that economic conditions in <place>Europe</place> were weakening late last year, with risks still skewed to the downside. Reflecting this, most forecasters have lowered their forecasts for world GDP growth this year to a below trend pace. That said, recent data from the <country-region><place>United States</place></country-region> suggest a continuing moderate expansion after a soft patch in mid 2011. Growth in <country-region><place>China</place></country-region> has moderated as was intended, but on most indicators remained quite robust through the second half of last year. Conditions around other parts of <place>Asia</place> have softened. Commodity prices declined for some months to be noticeably off their peaks, but over the past couple of months have risen somewhat and remain at quite high levels. 
“The acute financial pressures on banks in <place>Europe</place> were alleviated considerably late in 2011 by the actions of policymakers. Much remains to be done to put European sovereigns and banks on a sound footing, but some progress has been made. Financial market sentiment, though remaining skittish, has generally improved since early December. Share markets have risen and term funding markets have reopened, including for Australian banks, albeit at increased cost compared with the situation prevailing in mid 2011. 
“Information on the Australian economy continues to suggest growth close to trend, with differences between sectors. Labour market conditions softened during 2011 and the unemployment rate increased slightly in mid year, though it has been steady over recent months. CPI inflation has declined as expected, as the large rises in food prices resulting from the floods a year ago have been unwinding. Year-ended CPI inflation will fall further over the next quarter or two. In underlying terms, inflation is around 2½%. Over the coming one to two years, and abstracting from the effects of the carbon price, the Bank expects inflation to be in the 2% to 3% range. 
“Credit growth remains modest, though there has been a slight increase in demand for credit by businesses. Housing prices showed some sign of stabilising at the end of 2011, after having declined for most of the year. The exchange rate has risen further, even though the terms of trade have started to decline. This is largely a reflection of a decline in the euro against all currencies. Nonetheless, the Australian dollar in trade-weighted terms is somewhat higher than the bank had previously assumed. 
“At today's meeting, the board noted that interest rates for borrowers have declined to be close to their medium-term average, as a result of the actions at the board's previous two meetings. With growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy was appropriate for the moment. Should demand conditions weaken materially, the inflation outlook would provide scope for easier monetary policy. The board will continue to monitor information on economic and financial conditions and adjust the cash rate as necessary to foster sustainable growth and low inflation.”
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Better global outlook, steady local economic growth and stabilising housing market help keep rates on hold: RBA  

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The Reserve Bank has surprised and disappointed home loan borrowers by leaving the cash rate unchanged at 4.25%.
The Australian Dollar reacted immediately rising to above $1.08 having opened at under $1.07. It has fallen back slightly since then trading around $1.078.
A 0.25% rate cut would have reduced mortgage repayments by around $50 per month for those with a $300,000 mortgage, though lenders were not expected to pass on the full rate cut.
NAB currently has the lowest standard variable rate mortgage at 7.22%.
ANZ offers a standard variable rate of 7.30% followed by CBA (7.31%) and Westpac (7.36%).
ANZ will make an independent announcement about interest rates on Friday.
The three-day wait for ANZ mortgage holders in February and March is due to the quirks of the calendar month (the RBA meets on the first Tuesday of each calendar month to make its interest rate call) – ANZ borrowers will have to wait 10 days from April onwards.
Bendigo and Adelaide Bank has also indicated that it plans to follow ANZ and move out of step with the RBA, with chief executive Mike Hirst reiterating the point that the official cash rate no longer strongly correlates with banks’ cost of funds.
Prior to the RBA announcement the major banks indicated they were unlikely to pass on the full rate cut putting out statements about increased funding costs. 
The decision to leave rates on hold comes as the mining sector booms but others like residential construction and retail continue to struggle. 
According to the Australian Industry Group Australian Performance of Construction Index, construction activity contracting for the 20th consecutive month in January led by a slowdown in the building of apartments and commercial buildings. 
A rate cut was expected to deliver a boost to housing construction, where the pace of decline eased following the November and December rate cuts. Engineering construction with its strong ties to the resources boom remained the best performing construction sector. 
Retail sales declined 0.1% in December according to ABS figures, below consensus with Westpac expecting 0.2% gain over December.
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RBA leaves rates on hold and dollar rises

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<city><place>Sydney</place></city> registered the biggest monthly decline in property listings in January, with peak summer stock levels falling 15.9% from 34,000 to 29,000, according the latest figures compiled by SQM Research. 
All cities experienced the typically expected monthly drop in sales stock, with <city><place>Adelaide</place></city> experiencing the most marginal decline, falling by 0.3% month-on-month. 
Nationally property listings fell by 4.3% to just below 369,000, with SQM managing director Louis Christopher telling Property Observer the market volumes have most likely peaked. 
For the year to January listing are up 13.5% led by a 33.3% increase in <city><place>Melbourne</place></city> listings.
Christopher says seasonality is the biggest factor in the January decrease, though the drop was bigger than expected.
<img src="/images/stories/sqmfeb7.gif">
Source: SQM Research
“It does convince one that stock levels have peaked,” Christopher says.
“At the start of 2009, buyers quickly took out the low-hanging fruit – the same thing is happening now,” he says.
Christopher says February data will be crucial.
“If there is no pick-up in listings or a just a marginal increase, then it will indicate that something cyclical is happening.
“Then it will be clear to us there is something else is going on in the market, such as listings being absorbed by an increase in buyer activity,” he says.
Christopher says <city><place>Sydney</place></city> vendors are mos likely withdrawing their listings and preparing fresh marketing campaigns ahead of the February pick-up.
Christopher says not much should be read into the 8.3% month-on-month drop in <city><place>Melbourne</place></city> listings given how much they are up year-on-year.
According to SQM, <city><place>Hobart</place></city> recorded the largest yearly increase, climbing 40.9% since the corresponding period of the previous year (January 2011) and coming to a total of 4,558. 
<city><place>Darwin</place></city> recorded the largest yearly decrease, falling by 11.7% since the corresponding period of the previous year (January 2011) and coming to a total of 1,331. 
 
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Sydney leads national decline in stock on market in January: SQM

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The Commonwealth Bank is planning to sell the State Savings Bank of NSW building at <street><address>48 Martin Place</address></street>.
Along with the adjoining property at <street><address>9-19 Elizabeth Street</address></street>, it comes with reported expectations of achieving $150 million given its offered with development approval for the moderization of the offering. 
The building at 48 <street><address>Martin Place</address></street> is an iconic <city><place>Sydney</place></city> building and is on the National Heritage list. The bank will take a long lease back. 
<img src="/images/stories/martinplace1.jpg">
It has a distinctive terracotta and pink granite Beaux-Arts façade. It was originally built as the headquarters of the Government Savings Bank of NSW, which opened in 1928. 
The interior features large scagliola columns, extensive use of marble, and a plaster and pressed-metal ceiling. The building's square trading hall was originally one of the largest in the world. Its stately vault is housed in the basement. There had been a recent refurbishment by Tanner Architects within the bank headquarters. 
<img src="/images/stories/martinplace2.jpg">
In 2010 the CBA engaged project managers TSA Management to study the ongoing feasibility of its holding as part of the bank’s overall accommodation planning program.
The CBA’s nearby “money box” building, at <street><address>120 Pitt Street/5 Martin Place</address></street> partially changed hands last year when the industry superannuation fund Cbus bought a half share for $42.3 million from the bank's Commonwealth Property Office Fund. 
The site, on which the former Commonwealth Bank's famous tin money boxes were modelled, is to be redeveloped, which CPA and Cbus will jointly finance. The estimated cost is more than $405 million. 
At the end of the project, nine floors will have been added to the side of the heritage building, which runs down <street><address>Martin Place</address></street> and around the corner in <street><address>Pitt Street</address></street>. 
The sale was part of the Commonwealth Bank's decision to consolidate its <city>Sydney</city> city-based staff into the new properties at <place><placename>Darling</placename><placetype>Harbour</placetype></place>, known as <street><address>Commonwealth Bank Place</address></street>.
The Australian Financial Review forecast the 48 Martin Place holding with its adjoining office space might fetch $150 million.
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jchancellor-FAypfDUnLy

Comonwealth Bank to sell heritage-listed State Savings Bank of NSW building 

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AMP Capital plans to reopen to investors the $760 million Wholesale Australian Property Fund, one of the many property and mortgage funds that have remained frozen following the GFC.
The fund manager took over as responsible entity of the retail property fund in November last year from previous manager AXA Australia.
AXA Australia froze the fund in November 2008.
AMP Capital has agreed to a planned asset sales program to increase liquidity in the fund.
Its most valuable asset is the Casula Mall Shopping Centre in the outer south west of <city><place>Sydney</place></city>, valued at $112 million, and the Bond Store One parking garage in The Rocks, valued at $72 million.
AMP Capital head of property funds management Chris Judd says the fund has delivered an average return of 9.25% over 27 years.
“We are excited we are in a position to re-open the fund,” he says.
“Property fundamentals remain steady and as we have seen before, direct property as an asset class performs well during uncertain economic times.”
“The fund will retain a strong income focus and low risk orientation. It will continue to invest in quality direct property assets and, as always diversification remains a key component.”
“We expect the fund will continue as an open ended fund with the aim of delivering reliable income and long term capital growth to investors,” he says.
The fund has a portfolio of 17 retail, commercial and industrial properties in Australian and <country-region><place>New Zealand</place></country-region>.
The fund delivered shareholders a total return of 7.5% for the year to October 2011.
 
 
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