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]

Joel Robinson

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

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.

Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.

While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" />

Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.

Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.

The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" />

The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.

In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.

Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.

According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.

Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.

The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a>

&nbsp;

Alfred Street the latest North Sydney pocket to be transformed by residential development

Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

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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A South Sydney residential development site has been sold for a bullish $7,188,000.
The 4,843-square-metre site  at 78-82 Bay Street, Botany was offered with a two-year leaseback to the University of NSW. The university bought it in two purchases, paying $1,225,000 in 1992 for a 3,439-square-metre portion and then the remainder from Botany Glass for $1.25 million in 1997.
“This was an ideal South Sydney development site positioned in a quiet residential location close to all necessary amenities,” its Colliers International Sydney selling agent Guillaume Volz suggests.
“With a continued shortage of sites available this was an ideal opportunity to secure a quality property with time to add value and profit,” conjunctional Colliers International South Sydney agent Michael Crombie adds.
It came with a proposed zoning R3 medium-density residential with a proposed 22-metre height limit and a proposed floor space ratio up to 1.5:1.
Auctioneer Damien Cooley from Cooley Auctions opened the bidding at $4.1 million.
 
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UNSW pockets $7 million for South Sydney apartment development site

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There was daylight between first and second place on RP Data's list of the top sales of the week, with the late arts patron <a href="https://www.propertyobserver.com.au/residential/ann-lewis-romantic-rose-bay-villa-fetches-about-%2415-million-after-auction-title-tattle/2011102752108" target="_blank">Ann Lewis’ house claiming the top spot at $15 million</a>. The second-place sale, 6 Penshurst Avenue, Neutral Bay, last sold for $1.3 million in 2005 but had been on the market since early 2009, when it was listed for $3,575,000. Its price expectations were reduced to around $3.39 million last month. It sold for $3,275,000 through Raine &amp; Horne Neutral Bay agent Stewart Robertson. A property from the ACT appeared in 10th spot on RP Data’s list.
1. 8 Bayview Hill Road, Rose Bay, NSW, six-bedroom, four-bathroom house, sold at auction on October 27 by Ken Jacobs of Christie's International Real Estate in conjunction with McGrath Estate Agents for $15 million




2. 6 Penshurst Avenue, Neutral Bay, NSW, five-bedroom, five-bathroom house, sold on October 28 by Raine &amp; Horne Neutral Bay for $3,275,000



3. 34 Chatsworth Road, Prahran, VIC, four-bedroom, three-bathroom house, sold at auction on October 25 by Marshall White Real Estate Armadale for $3,137,500



4. 18 Willowie Road, Castle Cove, NSW, four-bedroom, three-bathroom house, sold at auction on October 29 by Belle Property Mosman for $2.99 million



5. 132 Hargrave Street, Paddington, NSW, four-bedroom, three-bathroom house, sold on October 26 by McGrath Estate Agents for $2.9 million



6. 77 Grey Street, East Melbourne, VIC, two-bedroom, two-bathroom house, sold at auction on October 29 by Caine Real Estate for $2,832,500



7. 12 Rosemeadow Drive, Cabarita, NSW, four-bedroom, three-bathroom unit, sold at auction on October 29 by McGrath Estate Agents for $2.55 million



8. 26 Holt Avenue, Mosmand, NSW, four-bedroom, three-bathroom house, sold at auction on October 29 by Raine &amp; Horne Neutral Bay for $2,457,000



9. 70B Iris Street, Frenchs Forest, NSW, four-bedroom, two-bathroom house, sold on October 25 by Century 21 Robert Campbell for $2.45 million



10. 18 Wells  Gardens, Griffith, ACT, five-bedroom, four-bathroom house, sold at auction on October 26 by Luton Properties Manuka for $2,375,000.
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Daylight between first and second-place sale of the week: RP Data

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Migrants and the over-50 are set to become favoured home lending customers of ANZ.
In its 2011 annual results presentation ANZ says it is looking to form deeper relationship with five customer segments namely: “affluent, migrant, young money, over-50s and ANZ staff”.
Migrants and over 50s appear to be a particular focus of the bank, with <stockticker>ANZ</stockticker> committing to providing more specialist migrant teams and more bankers to focus on retirees.
First-home owners are notably absent from its list of desired customers.
The annual results revealed that first-home owners comprised just 9% of the bank’s $170 billion mortgage portfolio and only 8% of new lending in the 2011 financial year.
Owner-occupier mortgages make up just under two-thirds (64%) of its mortgage book.
NSW and the ACT (27%) and Victoria (28%) account for more than half of its mortgage portfolio, with just under one in five borrowers coming from Queensland.
The bank revealed a 12% rise in underlying profit for the 2011 to $5.6 billion.
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ANZ to focus on migrant and over-50 home loan customers

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Sydney architect Domenic Alvaro’s strikingly small Surry Hills house, which looks like a slimline prefab concrete umbrella stand, has been awarded the World House of the Year at the prestigious 2011 World Architectural Festival award ceremony in Barcelona.
The house – known as Small House – was credited not only for its exceptional architectural and interiors features, but also for presenting a solution to the long-standing issue of urban sprawl.
<img src="/images/stories/smallhouse1.jpg">
It was conceived after buying three car spaces on a corner in Surry Hills and building a five-storey house above it. It comes with a floor space of 220 square metres on its tiny 42-square-metre plot.
Inspired by architects in Tokyo who work with incredible small spaces, the house is built from prefabricated concrete that can be moulded offsite and assembled onsite in four days.
The block had cost $230,000 in 2008.
The award-winning property, owned by architect Domenic Alvaro and his partner, Sue Bassett, was featured in the first series of Grand Designs Australia after its 2010 completion by the builder Nicholas Bettar, from Baseline Constructions.
<img src="/images/stories/smallhouse2.jpg">
“I am incredibly thrilled to have been presented with this prestigious award,” Alvaro, the principal at Woods Bagot Sydney studio, says. Woods Bagot’s commercial projects have included the Qantas Club Lounge in Sydney.
“Sydney’s urban landscape needs an injection of innovation as the city looks to more efficient use of urban areas to accommodate population growth.
“Small House was designed not only to be my own home, but also to test a development model for downtown urban living as an alternative to the ubiquitous luxury apartment,” Alvaro notes.
“Small House investigates a new typology in the current urban living space, whilst still reflecting a contemporary lifestyle full of diversity and creativity.”
<img src="/images/stories/smallhouse3.jpg">
Wedged between an old terrace and an industrial building, the house was built upwards rather than outwards, given the site was so small it can fit into the double garage of a typical sprawling suburban home.
“The philosophy of small house proposes to build upwards rather than outwards, by assigning multiple uses to single spaces, with flexibility for change in the future,” Alvaro adds.
Like many traditional homes, the kitchen is the social hub of the house, central to the other living zones.
With entries from internationally renowned practices to small local architects across the globe, Alvaro’s entry competed against 18 short-listed projects, WAF program director Paul Finch noted.
<img src="/images/stories/smallhouse4.jpg">
Woods Bagot is a global studio with more than 800 staff working across North America, Europe, Asia, Australia and the Middle East.
Small House is a multi-award winning project, having won Residential Architecture (Houses) and Small Project Architecture at the NSW Australian Institute of Architects Awards; and New House under 200 square metres and the Outdoor category (in collaboration with 360°Landscape Architects) at the annual HOUSES Awards.
<img src="/images/stories/smallhouse5.jpg">
Despite the tiny size of the parcel of land, the house has three bedrooms, two bathrooms, living, kitchen and dining areas.
Costing about $650,000, the house is zoned vertically:
Ground floor: utility/ store/bicycle/parking
First floor: sleeping/bathing, storage
Second floor: living (with optional additional zone)
Third floor: food prep/eating/entertainment, topped by a working roof garden terrace, all connected via a series of stairs.
Roof: a “working” roof garden terrace (the circulation space enables a small study on the roof space, and the panel sliding doors open to enable the roof to become the fifth room of the house – albeit an outdoor room – and herb and flower garden with over-scaled fig tree, thus creating a canopy effect.
Photographs (except first photograph) by Trevor Mein
 
 
 
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Domenic Alvaro’s smallest house in Surry Hills rises to win international prize

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The Peninsula residential development site at Monterey Keys on the northern Gold Coast has been listed for receivership sale.
The current listing is 32,994 square metres of waterfront land in a gated community, which potentially consists of up to 62 individual titled lots.
CBRE Gold Coast managing director Mark Witheriff said the sale campaign is expected to generate interest from domestic house and land developers.
“The sale could provide an opportunity for the incoming owner to either sell down the individual waterfront lots or develop a themed waterfront community on the remaining land and super lot,” Witheriff says.
The Peninsula is located on the natural waterway of Saltwater Creek, offering views to Hope Island Resort from its Helensvale location.
Offers close on December 1.
Stefan Dopking and Quentin J. Olde of Taylor Woodings were appointed as receivers and managers of Kabale, the site’s owner, in June 2011.
The Monterey Keys residential estate was launched in 1992, initially comprising 1,100 lots on a 182-hectare riverfront site on the northern Gold Coast.
The site was purchased in a vacant state in 1998 for $12 million by Kabale Holdings, a company associated with the Dalley family, with a view to the development of an integrated residential resort.
It was a canal housing project with an estimated $300 million completion value.
In 1989 when Kabale went through a period of reconstruction the estate lay dormant, with sales beginning in late 1992 averaging 10 to 15 blocks a month for the first two years. The dry lots were fetching around $70,000 and the wet lost $130,000.
Most recently the developer was selling wet blocks from $495,000, which were re-priced over recent times down to $395,000.
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Last plot of Gold Coast's Monterey Keys up for receivership sale

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The number of first-home buyer market entering the market is up 40% compared with a year ago, with NSW leading the charge, according to mortgage broker AFG. 
The AFG Mortgage Index for October shows that first-home buyers comprised 16.4% of all loans processed by AFG brokers – a 40% increase for this buyer category compared with October 2010, when they comprised 11.8% of the mortgage market. 
The number of first-home buyers who took out loans in October was the greatest number entering the market since September 2009 –when the full First Home Owner Boost Scheme, introduced to support the housing market following the GFC – came to an end. 
First-home buyers were particularly active in NSW, where they represented 21.1% of home loans in October. This buyer segment was also well-represented in Queensland (17.9%) and Western Australia (17.3%). 
The decision by the NSW state government to end first-home buyer stamp duty exemptions and concessions for the purchase of established on January 1, 2012 has most likely contributed to the pick-up in numbers as first-home buyers look to beat the deadline. 
From January 1 the NSW government’s <a href="https://www.osr.nsw.gov.au/benefits/first_home/faqs/fhplus1/">First Home Plus scheme</a>, which provides stamp duty exemptions on homes valued up to $500,000 and concessions on duty for homes valued between $500,000 and $600,000, will come to an end to be replaced by the <a href="https://www.osr.nsw.gov.au/benefits/first_home/faqs/new_home/">First Home - New Home Scheme</a>, which provides stamp duty exemptions and concessions for new homes or vacant land intended to be used as the site for a new home.
The November interest rate cut is expected to encourage more first-time home buyers over the coming months, with Real Estate Institute of Australia acting president Pamela Bennett calling it particurlarly good news for this sector of the market.
RateCity CEO Damian Smith says for first-home buyers who haven’t yet entered the market, “lower rates will turn the clock back to 2010 and have an appreciable impact on affordability”. 
BIS Shrapnel chief economist Frank Gelber expects first-home buyers to return to the market in growing numbers following the rate cut and to drive the market over the next year.
Percentage of borrowers fixing their home loans
<img style="border-style: initial; border-color: initial;" src="/images/stories/afgnovember3.gif">
Source: AFG
In line with mortgage broking franchise <a href="/news">Mortgage Choice</a> recording sales of fixed-rate mortgages at a three and half year high in October, AFG also recorded a big jump in fixed-rate mortgages, with sales of the products rising from 16.6% of all loans arranged in September to 20.4% in October, the highest proportion since March 2008.
In July 2011, fixed-rate mortgages comprised only 7.9% of home loans arranged by AFG brokers.
Mark Hewitt, general manager of sales and operations at AFG says: “Buyers are reaping the benefits of one of the most competitive mortgage markets we’ve seen in years. Discounted fixed rate loans appealed to all buyer types, but especially first home buyers and those looking to refinance. 
“We have been slightly surprised with the popularity of fixed rates given it has been generally predicted variable rates would decrease and we would now expect the proportion of fixed rate loans to fall, following the cut in variable rates announced this week,” Hewitt says. 
The October index also showed a growing desire among borrowers to use lenders outside the major banks and Hewitt is hopeful the rate cut will drive further support for a recovery of the second tier lending market. 
Non-majors have seized more market share than at any time over the past 12 months, comprising 21.1% of all home loans. 
Their products are of particular appeal to first-home buyers, where almost 30% of the market is held by non-majors, as well as buyers looking to refinance, where non-majors account for a 21.2% market share.
The percentage of investment loans fell slightly to 35.6% compared with 37.7% in October with investors especially active in NSW (39.2%) and Vic (38.9%) with lower levels of activity in QLD (32.9%), WA (32.2%) and SA (29.8%). 
AFG brokers account for one in 10 mortgages arranged in Australia.
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NSW leads revival of first-home buyer market - and the fix is on: AFG

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Do you get a fair return on your savings? And what returns do the major banks earn over and above the interest rate they pay you on your cash? Indeed, why do the banks “cap” the returns on your savings accounts at all? These are all interesting questions that I will use to prime today’s column.
We have become so conditioned to being subject to a fixed cap on our savings rates — either via a term deposit or through variable rates that adjust in line with the RBA’s target cash rate — that the notion of not having an interest rate cap seems positively odd.
But imagine if a bank turned around to you and said, “Instead of fixing your 12-month term deposit rate at, say, 5%, we are going to target giving you a 5% return, and if we can earn more on our lending and investing activities, we will pay you more. In this way, when the bank does well, you do well”.
Today the banks are implicitly saying the opposite: namely, “We will pay you 5% per annum fixed, and everything we earn above that we are keeping 100% for ourselves and our shareholders”.
To get to the bottom of this you need to first understand your relationship with the banks. When you put your money on deposit you are actually lending to them. In fact, legally and economically, you are a senior-ranking “creditor”. You are in the same position as the bank is when it lends money to you to buy a home. It is funny how nobody thinks of savings like this!
Yet on almost all your “at-call “or “transactional” savings accounts, you get little if any return (i.e., the banks usually pay zero interest rates). However, the longer you are willing to commit to lend to, or finance, the banks, the higher the interest rate they will normally offer you. Now this makes sense. The price of money ordinarily rises with the term of the loan.
What then do the banks actually do with your money? At its most basic level, they take the cash you lent them, which, formally, is a “liability” the bank must repay you, and use that money to make new loans to small businesses, corporations, and households. Roughly 60% of your money will be invested in residential and investment property loans. The remaining 40% will be lent to businesses, from SMEs to large companies.
The bank then generates two forms of return over and above the (much lower) interest rate it pays you. First, it charges businesses and households substantially higher rates than those which you earn on your savings accounts.
According to RBA data, the average “discounted” home loan rate following Tuesday’s cut should be around 6.8% per annum. In comparison, the average bank pays a 0% interest rate on your transaction account. If we take the average “bonus” savings account, the typical bank is paying you about 5.2%.
In this case, therefore, the spread between the interest rate the bank earns on its home loans and the interest rate it pays you on your cash is about 1.6% per annum.
Remember, however, that 40% of your money is being lent to businesses. Again using RBA data adjusted for Tuesday’s cut, the average small business pays a 9.7% per annum interest rate on its bank loans. If the small business offers up a home as security for the loan, the interest rate will be just under 9%.
So when it comes to small business lending, the interest rate the banks earn (or “spread”) beyond that which they pay you in your “bonus” savings account are between 3.6% and 4.5% per annum.
What about the rates the banks charge on personal loans and credit cards? According to the RBA, the average personal loan rate is around 15% per annum, while the average “discounted” credit card rate is 13.2%.
Once again, the banks are earning substantial interest rates beyond what they pay on your savings. In fact, multiples more in the case of personal loans and credit cards, even after accounting for loan losses.
All told, the RBA estimates that the average net interest rate the major banks generate beyond the interest they pay on their funding is about 2.4% per annum.
Regional banks earn a materially lower 1.6% per annum spread, or “net interest margin”. Why do they do worse? They pay higher rates to the people that fund them. So why do they have to pay more than the majors? Because their “credit ratings” are lower. This means their perceived risk is higher.
(As an aside, I have previously argued that the risk of catastrophic loss in a simple, “narrow” bank like a “regional” is less than that associated with a much more complex conglomerate like the majors, which are stretched across Australian and foreign operations, and all manner of other activities, including funds management, and proprietary trading.)
The average 2.4% interest rate the majors generate above their cost of funds is then boosted significantly further by “non-interest income”, which mainly refers to “fees”.
 
<hr class="system-pagebreak">
 
That’s the easy part. The much more complex aspect of the business of banking is that these enterprises take the cash (or “equity”) they get from their shareholders and use it to make loans to businesses and home owners that are worth multiples of that equity. That is, they are highly “leveraged”.
More specifically, they borrow for the relatively short term from people like you and me, and from institutional investors (roughly 50% of their money comes from mums and dads, 40% from institutions and 10% from shareholders), and then lend that money out for up to 30 years as home loans.
This begs the question: what happens if I want my money back? If, for example, I have put $100 in my savings account, and the bank has used that money to offer 30-year home loans, how can the bank possibly repay me my money?
The short answer is it can’t. The business of banking is based on what is known in the jargon as an “asset-liability mismatch". Every once in a while mums and dads decide they don't trust the bank anymore, and rush to withdraw their cash en masse. At the same time, the institutional investors that lend the banks the other 40% of their funding for terms ordinarily less than five years may also refuse to roll over these loans.
Under the law, if you do not have a reasonable expectation of meeting your current liabilities (e.g., repaying your depositors), you are, by definition, trading insolvent. So if there were ever a “run” on a retail bank, with large volumes of depositors asking for their money back, the bank would be legally insolvent in the absence of some other support from taxpayers.
In order to address this flaw at the heart of banking, which every few decades tends to lead to banking crises (in the 1890s around 90% of all private banks in Australia failed), governments have developed a number of safeguards.
The first protection was to create a taxpayer bank that was explicitly established to lend to the banks, and thus supply them with so-called “liquidity”, during crises. This is known as the Reserve Bank of Australia, and a self-described part of its mandate is to serve as a “lender of last resort” to the banking system.
A second, more recent, protection was to supply a minimum taxpayer guarantee of retail deposits. That is, if the bank fails, the government will guarantee that a minimum dollar sum will be repaid to you.
A third protection used during the global financial crisis (for the first time) was to have Australian taxpayers guarantee the banks’ institutional debts. That is, the government told the banks’ institutional lenders that if the banks ever defaulted on these loans, taxpayers would step in and pick up the tab.
If you think through this carefully, you start wondering about what is a fair distribution of returns between banks and their creditors (i.e., you and me). You ask yourself the question, "With all this taxpayer support, should I be expecting more bang for my buck on my savings?"
We have learnt today that ignoring all the fees banks produce on their products, they are able, on average, to generate net interest rates of around 2.4% per annum beyond what they pay their funders: viz., savers and their institutional lenders.
In thinking about the question of fairness, I will leave you with one chart. It was recently published by the Reserve Bank of Australia, and it shows the major banks’ “returns on equity”. In the last half-year, these annualised at close to a 20% rate. 
Regional banks manage to attract shareholders with much lower, early-teen, returns on equity. We need more give, and less take.
<img src="/images/stories/nov3.gif">
Christopher Joye is a leading financial economist. The above article is not investment advice.
 
 
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More give, less take from banks

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During the past four days days the latest monthly data on credit growth in Australia from the RBA and the latest quarterly house prices data and monthly building approvals data from the ABS have ll been released. Together, these confirm trends that I’ve identified on numerous occasions between the acceleration of mortgage debt and the change in house prices.
Building approvals plunged 13.9% in September, while housing credit increased by 0.5% over September (see the <a target="_blank" href="https://www.rba.gov.au/statistics/frequency/fin-agg/2011/fin-agg-0911">RBA release</a> for details), but this involved a further deceleration of mortgage debt, as figure 1 shows.
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Figure 1: Change and Acceleration of Mortgage Debt in Australia
<div style="text-align: center; font-family: Arial, sans-serif; color: #3d66ab; font-size: 12px; width: 380px;"><img src="/images/stories/keen1.gif"> </div>
 As I explained in <a target="_blank" href="https://www.debtdeflation.com/blogs/2011/09/04/%E2%80%9Ca-much-more-nebulous-conception%E2%80%9D/">A Much More Nebulous Conception</a>, there is a complex causal link between the acceleration of mortgage debt and the change in house prices. In a nutshell, the two sources of monetary demand are income and the change in debt; these then finance the purchases of both newly produced goods and services, and the turnover of existing assets. There is thus a causal link flowing from change in debt to the level of asset prices, and consequently a link between the acceleration of debt and the change in asset prices.
That relationship is evident in the pattern of change in Australian house prices over the last two decades. The most recent figures – that prices fell 1.2% over the June to September 2011 quarter, and 2.2% from September 2010 to September 2011 (see the <a target="_blank" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6416.0Main+Features1Sep%202011?OpenDocument">ABS Release</a> for details) – confirm that mortgage debt acceleration, and not “population pressure” etc., is the key determinant of house prices.
Figure 2: The Mortgage Acceleration and House Prices Change Relationship (R^2 = 0.54)
<img src="/images/stories/keen2.gif"> 
Of course, one can’t forget the role of government intervention in sustaining an asset bubble either, and here the Australian government has a peerless record – whether the conservatives (Liberal Party) or progressives (Labor Party) have been in power. Whenever the economy was facing a recession, its favourite tool of macroeconomic policy has not been fiscal stimulus, but stimulating the housing sector via the 'First Home Owners Scheme'.
It was first introduced by the Hawke Labor government in 1983, in response to the recession that had swept the previous Liberal government from power; it was reintroduced by the Hawke government after the share market crash of 1987, given fears then of a serious recession; the Howard Liberal government brought it back as a "temporary" measure to counter the impact of the GST in 2000 (and it has never been removed!), and then doubled it in 2001 to counter an imminent recession; and finally Rudd doubled (and for new homes, tripled) the grant as a counter-measure to the Global Financial Crisis in late 2008.
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Though restarting the housing bubble wasn’t the express intent of government policy, its 'collateral damage' included spikes in house prices as well (see figure 3). The turnaround from an 8% per annum rate of fall in real house prices to a 15% rate of increase was merely the latest (but not the greatest) such instance of government manipulation of house prices that has given Australia the most expensive housing in the Western world.
Figure 3: The First Home Vendors Scheme and House Prices
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 So will they try again? I’m sure they will be sorely tempted should yesterday's unemployment data reveal a rise in unemployment – against the conventional expectation that Australian unemployment should be falling. But I doubt that they will, for two reasons.
 
Firstly the “collateral damage” of such a policy – a further boost to our house prices – would be political suicide today. Though house price inflation was initially very popular – and it remains popular with those who are highly levered into house prices today – it would evoke huge opposition from the many who are now locked out of home ownership. The entry costs into home ownership in Australia are now prohibitive – even after the fall from its peak level, houses are still more expensive in real terms than they were before the Rudd government’s spin of the house price boost bottle.
Figure 4: Real House Prices are still above the pre-FHVB peak
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Buying a first home therefore involves taking out a mortgage that consumes a prohibitive share of the average wage – when First Home Buyers can be expected to be earning below average wages.
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 Secondly, the policy has only worked because it has gone in concert with the banking sector’s willingness to lever the grant with additional mortgage debt. The very success of this process is now the best reason why it won’t be tried again – or why, if it is tried, it might not work as it has in the past. Australian mortgage debt is now substantially higher than American (when compared to GDP), and though banks may still be willing to lend, willing borrowers are much harder to find. Our mortgage debt is once again falling when compared to GDP, and I doubt that anything the government can do can make it rise yet again from its already unprecedented peak.
Figure 5: Australian mortgage debt grew more rapidly than US, and now exceeds it
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The one trick that Australia does have up its sleeve for re-inflating the house price bubble is interest rate policy. Since the vast majority of Australian mortgages are floating rate, a cut to official interest rates rapidly translates into falling mortgage payments for borrowers (see figure 6). If rates fell substantially, this could encourage Australians to take on yet more mortgage debt, and thus re-ignite the Australian housing bubble.
Figure 6
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 Even this is, I think, unlikely – again, because the past success of this “asset price inflation as macroeconomic policy” game has made it unlikely that the same play will work again. Australian private debt levels have risen from the historically low level of 25% of GDP in the period from 1945-1965 to an unprecedented peak of almost 160 percent in early 2008. Government policy – especially the First Home Vendors Boost – merely temporarily delayed the deleveraging process from Peak Debt.
Figure 7: Private debt ratio now falling from unprecedented level
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 Since deleveraging results in falling asset prices as well as rising unemployment, it is unlikely that even substantially lowering interest rates will encourage Australians back into debt once more. Australia’s apparently stellar economic performance over the last two decades, which was primarily driven by accelerating private debt, may soon drop back to the pack now that the inevitable deleveraging can no longer be delayed.
Figure 8: Credit Accelerator drives change in unemployment (R^2 = -0.65)
<img src="/images/stories/keen91.gif">
 Steve Keen is Associate Professor of Economics and Finance at the University of Western Sydney and author of   <a href="https://debunkingeconomics.com/" target="_blank">Debunking Economics</a>  and the blog <a href="https://www.debtdeflation.com/blogs/" class="=article" target="_blank" style="text-decoration: none; color: #287bce; margin-top: 3px; margin-right: 0px; margin-bottom: 3px; margin-left: 0px; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: transparent; line-height: 14px; padding: 0px;">Debtwatch</a>.
This article originally appeared on <a href="https://www.businessspectator.com.au" title="Business Spectator" target="_blank">Business Spectator</a>. 
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stevekeen-hGRrVP8sYD

Australia's housing bubble will burst eventually, with debt the main cause

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By the reaction in the media, yesterday's rate cut by the Reserve Bank is the greatest thing since, well, the last rate cut 31 months ago. It's going to boost <a href="https://www.smh.com.au/business/retail-likes-rate-cut-20111101-1mtvg">retail</a>, <a href="https://smh.domain.com.au/boost-for-home-owners-as-banks-pass-on-rate-cut-20111101-1mtzj">housing</a> and even <a href="https://www.news.com.au/money/interest-rates/christmas-cheer-over-latest-rates-cut/story-e6frfmn0-1226183081358">Christmas</a>. Truly a miracle.
Yet all this reaction, and that on TV and radio yesterday and this morning, completely misses several important points.
The first is that the rate cut will cause the banks to cut their deposit rates, meaning savers will have less income, especially those who depend on fixed income from bank term deposits, such as pensioners and superannuants.
Secondly, the cut will, if it sparks a halt to the current slide in housing prices across all capital cities (they fell 1.2% in the September quarter, according to the Australian Bureau of Statistics and 2.2% in the 12 months to the same quarter), then house prices will start rising, thereby ending the small improvement in housing affordability we are currently witnessing.
But more importantly, the group of people who will get relief from the lower cost of their housing and other loans is much smaller than you thought.
If only our pundits in the Fairfax and News Limited press, plus the ABC, had read the Reserve Bank's Financial Stability reports, such as the <a href="https://www.rba.gov.au/publications/fsr/2011/sep/pdf/house-bus-bal-sheet.pdf">second one for 2011</a> released in late September they would have found something to their interest, and changed their reporting yesterday and today.
Put simply, many Australians are deleveraging and saving more. The higher savings are well known, but not too many of our pundits have bothered to think about how that is being achieved; it is not just a case of saving more money in their accounts ($12 billion extra in September)
Australian mortgagees are repaying more than the minimum on their housing loans, and credit card holders are also repaying their credit card loans faster than they have to. As the RBA explained in the September Stability Review:
"Contributing to the slower pace of debt accumulation, some households are saving more by choosing to pay down their debt more quickly than required.
"Net repayments on credit cards have picked up in recent months. Many housing loan borrowers have continued to make substantial excess principal repayments, even as higher interest rates have raised required interest -- and thus total -- repayments.
"The average excess repayment is currently equivalent to around three-quarters of the scheduled total (principal plus interest) repayment. Consistent with this tendency to pay debt ahead of schedule, surveys have shown that a high share of households consider repaying debt to be the wisest place for savings.
"Households that make excess repayments on their home loans generally build up buffers that they can draw down in the future if required. This should be regarded as a positive development for the resilience of the sector. These shifts in saving and borrowing behaviour have in part been enabled by a favourable labour market and solid income growth.
"Growth in gross income therefore outpaced the impact of higher interest payments, such that growth in real disposable income per household (after interest payments) also strengthened, to 3.3 per cent over the year to the June quarter, up from 2.3 per cent over the year to the December 2010 quarter.
"This increases the resilience of households to shocks, relative to countries where it is less common to do so. As well as providing a cushion against changes in borrowers’ financial circumstances, excess repayments increase the distance between the remaining loan balance and a property value that could be lower in the future, making negative equity positions less likely."
These trends are also ignored by the same writers when they warble on about the rising level of mortgage stress. Mortgage stress has always been with us, no matter the state of interest rates; some people who have lost jobs, seen pay cut or are starting out on the home buying treadmill feel it more than others.
But how can mortgage stress be a problem when a large proportion of people with mortgages are paying off those mortgages faster than they can? In other words, they are paying back more than the minimum, which is always recommended by advisers because it builds up buffers and reduces the principal faster than it would normally be reduced.
The fact that Australians with mortgages are repaying their loans faster is also ignored by the doom and gloomers who predict a nasty fall in property prices and a re-run of what we have seen overseas. They include Professor Steve Keen.
And finally, the most desperate piece of marketing came from Fairfax property website Domain, which sent <a href="https://view.email.domain.com.au/?j=fe6815757367057d7610&amp;m=fecb15717d62067f&amp;ls=fde511727c6000787d137970&amp;l=fe9c157177600c7c77&amp;s=fe281c7574640379771177&amp;jb=ffcf14&amp;ju=fe2715797c61017b741672&amp;r=0">this email</a> to registered users yesterday afternoon:
<a target="_blank" href="https://view.email.domain.com.au/?j=fe6815757367057d7610&amp;m=fecb15717d62067f&amp;ls=fde511727c6000787d137970&amp;l=fe9c157177600c7c77&amp;s=fe281c7574640379771177&amp;jb=ffcf14&amp;ju=fe2715797c61017b741672&amp;r=0"><img src="/images/stories/dyernov3.jpg"></a>
"This fall in rates will be greatly appreciated by households as it will put an extra $60 into their pockets each month," said Domain property expert Carolyn Boyd. Talk about desperation.
The reality is that most mortgage holders will simply leave their payments unchanged and effectively repay their loan by an extra $60 a month or whatever the saving is on their mortgage.
This article originally appeared on <a target="_blank" href="https://www.crikey.com.au/">Crikey</a>.
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cknowlton-QnEa6ntUYP

The great mortgage stress myth: We're paying off our homes faster

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The expected improvement in consumer and business confidence on the back of the November 2 rate cut will have positive flow-on effects for the struggling retail property sector as well as provide to stability to office and industrial leasing markets, according to CBRE regional director of global research and consulting Kevin Stanley.
Stanley says there are already some “early signs of confidence returning to the household sector, which may have developed in anticipation of a rate cut and will only be further reinforced now the decision has actually been made”.
“For commercial real estate, a rise in retail spending will ultimately lead to higher turnover in retail outlets and shopping centres, which in turn will support growth in rents,” he says.
“It will also improve the viability of those retailers who’ve been feeling the effects of lower revenues and this in turn should reduce vacancy risk across the retail sector.  It may also ignite interest in leasing some of the vacancy which has emerged in the last couple of years.”
Stanley also expects the 25-basis-points cut to stabilise business sentiment toward reducing costs further, such as reducing area leased or the workforce.
“This is likely to lead to more stability in the office and industrial leasing markets, where business confidence is critical to decision making concerning occupancy.
“While the interest rate cut has flowed through to household mortgages, the cost of debt for commercial loans may not necessarily drop to the same extent, given banking exposure and attitudes toward risk in the commercial sector.
“It is interesting to note, though, that the long term cost of debt is now about 4.4% (the 10-year bond rate), which means the spread to commercial property yields is at its widest for almost 20 years – that’s compelling evidence of the current attractiveness of commercial property pricing.  It adds support to the notion there’s now plenty of room for prime commercial real estate yields to compress some.”
Overall, he says the small cut will be a “real positive for real estate”.
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