<p>One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.</p>

<p>Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.</p>

<p>The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.</p>

<p><img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" /></p>

<p>Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.</p>

<p>Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.</p>

<p>The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.</p>

<p>Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.</p>

<p>The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.</p>

<p>That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.</p>

<p>The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.</p>

<p>"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.</p>

<p><img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" /></p>

<p>Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.</p>

<p>The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.</p>

<p>The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.</p>

<p>According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.</p>

<p>The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.</p>

<p>A significant component of the proposal is the revitalisation of Blue Street Plaza.</p>

<p>The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.</p>

<p>Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.</p>

<p>Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.</p>

<p>Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.</p>

<p>Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.</p>

<p>The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.</p>

<p>Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.</p>

<p>&nbsp;</p>

<p>FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.</p>

<p>Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.</p>

<p>Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.</p>


Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

<p>Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.</p>

<p>The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.</p>

<p>The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.</p>

<p>The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.</p>

<p><img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" /></p>

<p>The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;</p>

<p>PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.</p>

<p>The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.</p>

<p>Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.</p>

<p>"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.</p>

<p>Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.</p>

<p>A major focus of the design has been the public domain.</p>

<p>The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.</p>

<p>The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.</p>

<p data-end="239" data-start="66">Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.</p>

<p data-end="442" data-start="241">Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.</p>

<p data-end="661" data-start="444">Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.</p>

<p data-end="909" data-start="663">Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a></em></p>

<p data-end="1339" data-start="1019">Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.</p>

<p data-end="1339" data-start="1019">[smartcode_project:default project_id=30959 project_image_fid=292863]</p>

<p data-end="1398" data-start="1341">It has since quietly assembled its next wave of projects.</p>

<p data-end="1805" data-start="1400">Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.</p>

<p data-end="1805" data-start="1400">[smartcode_project:default project_id=152095 project_image_fid=373685]</p>

<p data-end="1991" data-start="1807">The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.</p>

<p data-end="2303" data-is-last-node="" data-is-only-node="" data-start="1993">Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a></em></p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a></em><br />
&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

<p data-end="492" data-start="327">Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.</p>

<p data-end="843" data-start="497">At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.</p>

<p data-end="1109" data-start="848">The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.</p>

<p data-end="1109" data-start="848">[smartcode_project:default project_id=152022 project_image_fid=375528]</p>

<p>Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.</p>

<p>The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.</p>

<p>"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375531]</p>

<p>The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.</p>

<p>The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375524]</p>

<p>Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.</p>

<p>Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375530]</p>

<p>The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.</p>

<p>The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.</p>

<p>The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.</p>

<p>"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.</p>

<p>"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."</p>

<p>Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.</p>

<p>[smartcode_project_cta:default project_id=152022]</p>


Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

<p>Not all apartment amenities are immediately visible.</p>

<p>Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.</p>

<p>Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.</p>

<p>Online shopping has been one of the biggest drivers of that shift.</p>

<p>Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.</p>

<p>For apartment residents, however, receiving those deliveries isn't always straightforward.</p>

<p>Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.</p>

<p>Australia Post's Parcel Locker network is one response to that shift.</p>

<p><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/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe></p>

<p>Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.</p>

<p>The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.</p>

<p>That growing presence reflects a broader change in how apartment buildings are being planned.</p>

<p>Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.</p>

<p>It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.</p>

<p>For buyers comparing apartments, these everyday details are becoming part of the decision-making process.</p>

<p>Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.</p>


Parcel delivery is joining the apartment amenity checklist

<p data-end="471" data-start="164">Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.</p>

<p data-end="777" data-start="473">The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.</p>

<p data-end="976" data-start="779">Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.</p>

<p data-end="1119" data-start="978"><a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.</p>

<p data-end="1399" data-start="1121">"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.</p>

<p data-end="1399" data-start="1121">"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."</p>

<p data-end="1605" data-start="1401">The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.</p>

<p data-end="1852" data-start="1607">The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.</p>

<p data-end="1852" data-start="1607"><img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" /></p>

<p data-end="2031" data-start="1854">Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.</p>

<p data-end="2299" data-start="2033">"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.</p>

<p data-end="2588" data-start="2301">Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.</p>

<p data-end="4143" data-start="3991">Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.</p>

<p data-end="593" data-start="417">Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.</p>

<p data-end="789" data-start="598">New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.</p>

<p data-end="1053" data-start="794">IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.</p>

<p data-end="4143" data-start="3991"><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a></em></p>

<p data-end="4143" data-start="3991"><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a></em></p>


First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

<p>Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.</p>

<p>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;</p>

<h2>What is the Help to Buy Scheme?</h2>

<p>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.</p>

<p>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).</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

<p>To qualify for the Help to Buy Scheme, applicants must meet the following conditions:</p>

<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>

<p>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.</p>

<p>The scheme is expected to commence in NSW in late 2025, as part of a national rollout.</p>


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

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.</p>

<h2>New South Wales First Home Owner Grant</h2>

<p><strong data-end="252" data-start="225">First Home Owner Grant:</strong> 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.</p>

<p><strong data-end="413" data-start="389">Stamp Duty Benefits:</strong> Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.</p>

<h2>Victoria South Wales First Home Owner Grant</h2>

<p><strong>First Home Owner Grant:</strong> Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.</p>

<p><strong>Stamp Duty Benefits</strong>: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.</p>

<h2>Queensland First Home Owner Grant</h2>

<p><strong data-end="920" data-start="893">First Home Owner Grant:</strong> 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.</p>

<p><strong data-end="1162" data-start="1135">Stamp Duty Concessions:</strong> Provides additional concessions for properties valued up to $800,000.</p>

<h2>Western Australia First Home Owner Grant</h2>

<p>&nbsp;</p>

<p><strong>First Home Owner Grant:</strong> 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.</p>

<p><strong>Stamp Duty Concessions:</strong> Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.</p>

<h2>Australian Capital Territory First Home Owner Grant</h2>

<p><strong data-end="1617" data-start="1590">First Home Owner Grant:</strong> Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.</p>

<h2>South Australia First Home Owner Grant</h2>

<p><strong>First Home Owner Grant:</strong> 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.</p>

<p><strong>Stamp Duty Relief:</strong> Available for new homes and vacant land purchases.</p>

<h2>Tasmania First Home Owner Grant</h2>

<p><strong>First Home Owner Grant</strong>: Offers a $10,000 grant for new homes and off the plan purchases.</p>

<p><strong>Stamp Duty Exemption</strong>: 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.</p>

<h2>Northern Territory First Home Owner Grant</h2>

<p><strong>First Home Owner Grant:</strong> The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.</p>

<p><strong>Stamp Duty Exemption</strong>: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).</p>

<p><em>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.</em></p>


Every First Home Owner Grant for new property by state

<p>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.</p>

<p>Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.</p>

<p>Some systems assess individual building components, while others provide an overall rating for the entire structure.</p>

<p>A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.</p>

<p>NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.</p>

<p>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.</p>

<h2>What is NatHERS?</h2>

<p>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;</p>

<p>NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;</p>

<p>NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.</p>

<p>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.</p>

<h2>How NatHERS Ratings Work</h2>

<p>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.</p>

<p>The tools can model complex effects of building mass, insulation, window size, and other elements.</p>

<p>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.</p>

<p>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;</p>

<p>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.</p>

<p>Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.</p>

<h2>Benefits of Higher NatHERS Ratings</h2>

<p><strong>Energy Efficiency:</strong> 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.</p>

<p><strong>Cost Savings:</strong> 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.</p>

<p><strong>Environmental Impact:</strong> 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.</p>

<p><strong>Improved Comfort: </strong>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.</p>

<p><strong>Market Value and Desirability:</strong> 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.</p>

<p><strong>Compliance with Building Codes:</strong> 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.</p>


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?

<p>Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.</p>

<p>Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.</p>

<p>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.</p>

<h3>Convenience and accessibility</h3>

<p>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.</p>

<p>[smartcode_project:default project_id=114215 project_image_fid=204874]</p>

<p>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.</p>

<h3>Vibrant lifestyle and community</h3>

<p>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.</p>

<p>[smartcode_project:default project_id=107714 project_image_fid=214122]</p>

<p>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.</p>

<h3>Potential for higher rental yields and property value appreciation</h3>

<p>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.</p>

<p>[smartcode_project:default project_id=139989 project_image_fid=212887]</p>

<p>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.</p>

<h3>Enhanced security and maintenance</h3>

<p>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.</p>

<p>[smartcode_project:default project_id=108019 project_image_fid=212658]</p>

<p>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.</p>

<h3>Live-work-play balance</h3>

<p>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.</p>

<p>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.</p>


alisonwarters@gmail.com

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

<p style="line-height: 1.38;">When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.</p>

<p style="line-height: 1.38;">Often the largest outlay, after the deposit which goes to the bank, is stamp duty.</p>

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

<p>Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.</p>

<p>It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.</p>

<p style="line-height: 1.38;"><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></p>

<h2>Who pays Stamp Duty?</h2>

<p>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.</p>

<h2>How much does Stamp Duty cost?</h2>

<p>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.</p>

<p>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!</p>

<p>Overall, the stamp duty you need to pay will depend on:</p>

<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>

<p style="line-height:1.38">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.</p>


Ellen Walker

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

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<p class="Body1">Earlier this week I was sitting amid 30-degree heat in South-east Queensland, noting that some parts of Australia had 40 degrees and others had 20, while speaking by phone to a Tasmanian friend who had just lit a fire amid wintry conditions.</p>
<p>Imagine our reaction if a TV weather presenter took an average of weather conditions around the nation and announced that “the temperature in Australia today was 25 degrees”.</p>
<p>Clearly that would be ludicrous. But every day in media, economists and other commentators take that kind of position on residential real estate. They reduce this very large and diverse nation to a single market to be described by a single figure: “Australia house prices rose 8 percent in the past 12 months.”</p>
<p>From that one figure which so inaccurately describes Australian residential property, they will extrapolate myriad conclusions: there’s a national property boom, prices are too high, there’s a real estate bubble in Australia, the nation is vulnerable and young people are being left behind.</p>
<p>The big-name ratings agencies like Moody’s and Standard and Poor’s take it a big stride further. They will access narrow data from a single source, often based on a single month’s alleged price movements, and use that to justify a press statement warning about “Australian house prices” getting out of hand.</p>
<p>Moody’s recently dashed off a media release warning that “resurgent housing prices” in Australia were eroding affordability, because “housing prices had risen 2.7 percent across Australia” in September. But prices hadn’t increased across Australia – the average for the capital cities had risen that much, according to one source, whose figures were contradicted by several other sources – not forgetting the notoriously erratic nature of month-to-month changes which are ignored by credible researchers. </p>
<p>The lack of expertise and sophistication evident in these statements is quite startling, given the lofty reputations of the big brand-name entities making them. It really is very flimsy analysis and shallow behaviour, based not on a desire to inform but on a need to generate publicity. </p>
<p>I had a call earlier this week from an ACT-based journalist wanting to discuss the market in Canberra which, he said, was going crazy “like everywhere else in Australia”. We’re entitled to expect people paid to write about real estate to have better knowledge than that. Everywhere is not going crazy in real estate and certainly Canberra is not (annual house price growth averages around 4 percent, according to three major research entities).</p>
<p>But that’s a common assessment I hear from all kinds of people daily. Many Australians really do believe what they read and hear: that there’s a national property boom, that prices are through the roof everywhere and no one can afford to buy.</p>
<p>I fear for consumers making big financial decisions based on such skinny knowledge, while wading through a sea of misinformation.</p>
<p>The different scenarios being played out in the thousands of markets around the country include a small number of strongly rising ones, a far greater number of mediocre ones, some with prices going backwards and a few where the local market has crashed.</p>
<p>Economists clearly believe there’s a national boom because interest rates are at record lows and that, in their minds, means real estate <span style="text-decoration: underline;">should</span> be rising everywhere. And therefore it is.</p>
<p>But it isn’t. And that reality would suggest to an inquiring mind that the level of interest rates perhaps is not the over-riding factor.</p>
<p>In my view, the most significant factors are the underlying local economic conditions and the level of spending on infrastructure.</p>
<p>It is not coincidence that the No.1 ranked economy is NSW and that the city with the biggest infrastructure spend, by a wide margin, is Sydney. That’s been the case for the past three years, a time during which most markets across metropolitan Sydney have had strong price growth.</p>
<p>The No.2 ranked economy is Victoria, helped by strong population growth, and the infrastructure spend is reasonable, though well below Sydney’s. Not coincidentally, Melbourne has been the second strongest city market on price growth, though at levels well below the genuine boom levels of 2001-02-03.</p>
<p>The economies impacting Brisbane, Adelaide, Canberra and Hobart have largely been mediocre and infrastructure spending has been relatively weak in recent years. That’s reflected in the absence of price growth to match Sydney’s.</p>
<p>It is, again, not coincidence that the recent rise of prospects for Hobart real estate has happened alongside an improving state economy and sharply rising spending on infrastructure in Tasmania. </p>
<p>Adelaide, too, is showing signs of an improving market, supported by solid economic and real estate indicators and significantly rising spending on infrastructure.</p>
<p>Meanwhile, Western Australia now ranks in CommSec’s <em>State of the States</em> report as the worst economy in the land and Perth has the weakest of the city real estate markets. The Northern Territory is also faltering and Darwin’s property market is in a similar condition to Perth’s. Prices in both cities have been going backwards for three years and record low interest rates have not helped them.</p>
<p>Beyond the capital cities, there are multiple different scenarios in the many thousands of different markets.</p>
<p>Some, including regional centres close to Sydney, have had periods of solid price growth. Others, like both the Gold and Sunshine Coasts in Queensland, have had elevated activity without yet delivering major price escalation </p>
<p>Most regional markets, however, have been walking rather than running – and several, notably those impacted by the resources sector, have experienced significant decline.</p>
<p>We’re a massive nation and the real estate conditions are as diverse as the range of temperatures you’ll see on a weather map on the evening television news.</p>
<p><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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terryryder-YECXbqmri2

Most regional markets walking rather than running

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<p>Tasmania is a fine example of the adage that it’s easy to get a bad reputation but very hard to lose it. </p>
<p>The days of Tasmania being the basket case economy of Australia are gone, as are the days when investors steered clear of Hobart as a place offering no growth.</p>
<p>I’ve been advocating the merits of investing in Hobart for the past 18 months or so, based on the marked improvement in the state economy and the status of Hobart as the capital city with the lowest prices, tightest vacancies and highest rental yields.</p>
<p>Hotspotting’s regular research into sales activity has noted the rise in sales volumes in Hobart (and also in Launceston and Devonport) this year.</p>
<p>I’ve felt a bit like a voice in the wilderness, given that Hobart and Tasmania is a pretty hard sell. It’s very hard to shift entrenched attitudes, particularly as your average punter isn’t terribly well informed.</p>
<p>So how refreshing to see the latest research-based report from Simon Pressley of Propertyology. </p>
<p>He says: “Hobart is Propertyology’s tip to be Australia’s best-performed capital city property market in 2017."</p>
<p>“An under-rated economy, limited properties for sale, the tightest vacancy rates in Australia, a more controlled housing supply pipeline than mainland cities, and increased buyer activity are expected to drive property prices and rents higher.</p>
<p>“We have been actively investing in Hobart for a while and our buyer’s agents have observed first-hand price growth of 8 to 10 per cent over the past 12 months. We can only see buyer activity further intensifying and forcing stronger growth over the next couple of years.”</p>
<p>And Pressley makes this forecast for next year: “On an all-things-being-equal basis, double-digit price growth is well and truly on the cards for Hobart in 2017.”</p>
<p>He says the significant retraction in properties listed for sale has made it increasingly difficult for our buyer’s agents to find suitable properties for investors. “Properties are generally selling within a week of listing and often going for prices well above our own appraisal range. The market is red hot.”</p>
<p>All this is happening on the back of improving economic performance. There is now a long list of reports from name brands which have noted the improvement in the underlying fundamentals.</p>
<p>The latest to confirm that view is CommSec’s <em>State of the States</em> report, which notes Tasmania’s population growth is the fastest in five years and the state no longer ranks last overall. </p>
<p>“Tasmania has improved from 8<sup>th</sup> to 7<sup>th</sup> on the rankings,” it says. “Tasmania is 4th ranked on two indicators and 5<sup>th</sup> on three indicators. Annual growth on home lending is the strongest in the nation at 10.3%. Both home loans and home prices are lifting.”</p>
<p>State Treasurer Peter Gutwein says the report card is the best in five years. “But there is still a long way to go,” he says. He’s right, but a significant turnaround has been achieved already.</p>
<p>Another positive indicator for Tasmania is the level of infrastructure and construction work. The Deloitte Access Economics <em>Investment Monitor</em> report says: “The value of Tasmanian engineering projects under way has stayed well above $1 billion and there’s just under $1 billion worth of planned projects in the pipeline.”</p>
<p>The biggest under way is the $535 million Midland Hwy update. Work worth $239 million is ongoing on the freight rail revitalisation statewide and there is a $40 million extension of the Hobart Airport runway. The report says commercial building is also “coming along well,” with $1.5 billion worth of projects under way and a similar pipeline of planned work.</p>
<p>“The $689 million Royal Hobart Hospital project is still the largest project,” it says. “Planned work has been boosted, with University of Tasmania plans to move its science-technology-engineering building to Hobart’s CBD, at a cost of $400 million.”</p>
<p>The value of projects under way is up 27 percent to $2.9 billion. Adding planned projects, the total is $4.98 billion.</p>
<p>Tourism is big for Tasmania, with strong results for 2015-16. For the first time Tasmania had over one million interstate visitors, who spent $2 billion. Airline capacity rose by 173,658 new seats between the state’s two main airports and Melbourne, Sydney and Brisbane. TT-Line ran 33 extra day sailings over peak season, with visitors arriving on Spirit of Tasmania growing 17 percent.</p>
<p>In the 2015-16 summer, there were 59 cruise ship port calls in Tasmania — delivering 163,328 passengers and crew. Big growth in cruise ship visits is forecast for the next two seasons. The tourism industry supports 36,700 jobs or 15.3 percent of total jobs, and contributes $2.55 billion to the economy (10 percent of gross state product).</p>
<p>All of that provides a solid foundation on which real estate can continue to grow in Hobart, Launceston and Devonport.</p>
<p><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
<p class="Body"> </p>
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Solid foundations for real estate growth in Hobart, Launceston and Devonport

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<p>GUEST OBSERVER</p>
<p>It had to happen sooner or later when we start to see real estate sales reach levels never witnessed before, which is exactly what is happening now on Sydney’s lower north shore where sale prices are running amok.</p>
<p>The saying that real estate is not an exacting science is so true when one looks closely at real estate prices where the heat is now a blow torch and property valuers are having a lot of difficulty justifying selling prices to the lenders. For example; on a recent sale we made the valuer appointed by the lender submitted his valuation 10 per cent below the purchase price.</p>
<p>These are markets we have never seen where in the past Sydney would boom as one. This time what we have seen are scattered booms, with the other areas reporting solid results with nothing out of the ordinary.</p>
<p>One million dollar markets have jumped to two million dollar markets; two million dollar markets are now three and three million dollar markets are now four million dollars and so on. I must admit the progression from slow and steady to fast and furious has caught many by surprise although for purchasers we are now in the final selling stages for 2016.</p>
<p>To the untrained eye, it seemed like just another property market run. To the trained however, it resembles a “Houston, we have a problem.” For example, clearance rates on the lower north shore are now well into the 90 per cent zone which is the highest recorded in years.</p>
<p>It will be interesting to watch how the Reserve Bank of Australia (RBA) responds following their last commentary on Melbourne Cup Day. “In the established housing market, conditions had eased relative to a year earlier, although there had been some signs that conditions had strengthened a little more recently. Housing price growth in Sydney and Melbourne had increased in recent months and auction clearance rates in these two cities had risen.</p>
<p>In contrast, turnover and housing credit growth had been noticeably lower than a year earlier and the value of housing loan approvals had been little changed in recent months. Conditions in the rental market had continued to soften, particularly in Perth, where population growth had been easing and the rental vacancy rate had risen.’’</p>
<p>When you look at the respective market data we are witnessing some amazing data shifts. In Mosman, CoreLogic report that the average hold period is now out to 10.5 years where 3 years ago this sat at 7.5 years, so next year we can expect to see this blow out further to 12.5 years. The percentage of stock is another fascinating statistic where over the past year the percentage of stock offered is down to an all-time low for houses at 5.5 percent where ten years ago it sat at 10.00 per cent.</p>
<p>For apartments in Mosman the average hold is getting longer and now sits at 9.8 years and the percentage of stock on the market sits at a record low of 3.4 percent. These are the property accelerants that are driving prices up as stock levels are at record lows across Sydney. Whilst it is being reported that Sydney prices have climbed another 12.1 percent over the last year some areas would be double that plus some more.</p>
<p>Last week, Sydney boasted a clearance rate of 84.2 percent, although CoreLogic reported the number of properties currently listed for sale in Sydney was 10.1 percent down from the same period last year.</p>
<p>Now this is where it gets confusing when you look at household debt which is peaking at record highs and some suggesting that this is to be expected with a record low cash rate. How could this be expected when we have never had a record low cash rate before?</p>
<p>Lending remains strong and currently sits well above inflation and wage growth. Although it must be said that our banks are now in a much stronger position, and they will need to be. During 2016, liquid assets have made up around 20 per cent of the major Australian banks total assets which is up from an average of 15 per cent prior to the Global Financial Crisis (GFC). Although it should be added that since the GFC property values have climbed to new record highs.</p>
<p>So, I am in the school of thought that the major banks will start hiking rates upwards in 2017 to start slowing down the property markets although it should be noted that those who have mortgages have been stress tested at 7.00 percent.</p>
<p>Last year, we observed a fall in interest – only loans which are now on the rise again and that is a very dangerous sign. A recent survey by Digital Finance Analytics (DFA) revealed that four – in – ten interest – only borrowers had absolutely no idea when, or how, they will start to repay the principal and that 90 per cent are hoping to roll indefinitely their interest – only term.</p>
<p>Now this will have just the one ending as the banks will start rolling the clients as they should not have been approved in the first place. The Australian Prudential Regulation Authority (APRA) must take a long and hard look at interest – only loans as they are dangerous with a capital D!</p>
<p>In 2014 on this day there were 115 houses in Mosman on the market, this day last year 74 and today 54. For Mosman apartments they have reduced from 73 in 2014, 61 in 2015 and 42 today.</p>
<p>MOSMAN – 2088</p>
<p>Number of houses on the market this time last year – 74</p>
<p>Number of houses on the market last week – 57</p>
<p>Number of houses on the market this week – 54</p>
<p>Number of apartments on the market this time last year – 71</p>
<p>Number of apartments on the market last week – 49</p>
<p>Number of apartments on the market this week – 42</p>
<p>CREMORNE – 2090</p>
<p>Number of houses on the market this time last year – 15</p>
<p>Number of houses on the market last week – 6</p>
<p>Number of houses on the market this week – 5</p>
<p>Number of apartments on the market this time last year – 18</p>
<p>Number of apartments on the market last week – 24</p>
<p>Number of apartments on the market this week – 21</p>
<p>NEUTRAL BAY – 2089</p>
<p>Number of houses on the market this time last year – 8</p>
<p>Number of houses on the market last week – 7</p>
<p>Number of houses on the market this week – 8</p>
<p>Number of apartments on the market this time last year – 33</p>
<p>Number of apartments on the market last week – 28</p>
<p>Number of apartments on the market this week – 27</p>
<p> </p>
<p><em>ROBERT SIMEON is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. </em></p>
<p><em>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000.</em></p>
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robertsimeon-hRNTwJyXkQ

Lower North Shore markets are starting to run amok

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<p>Despite the recent slowdown, housing finance data highlights that investor activity in the housing market is starting to rise again and when you look at total returns from housing it’s no surprise.</p>
<div>
<p>The CoreLogic RP Data Accumulation Index which has been published since June 2009 highlights the total returns from residential property.  The total returns include both the increase in values as well as gross rental returns.  </p>
<p>The first chart shows the annual change in the total returns (accumulation) index over time. While combined capital city home values recorded longer and deeper falls during 2011-12, total returns were negative for only a short period of time thanks to the uplift from rental yields. More recently you can see that the annual change in total returns across the combined capital cities has remained quite strong.</p>
<h3>Combined capital city annual changes in total returns for houses and units</h3>
<p><a href="/images/2016/06/09/2016-06-06--img1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/09/2016-06-06--img1.jpg" alt=""></p>
<p><br><br>Over the 12 months to May 2016, combined capital city home values have increased by 10.0 percent while total returns have been recorded at a higher 13.9 percent. Looking at the individual capital cities, all cities except for Perth have recorded positive total returns over the past year. Sydney and Melbourne which have been the most active investment markets have seen the highest total returns at 16.9 percent and 17.5 percent respectively over the past twelve months. It should be noted that gross rental returns in both of these cities are now at record lows highlighting that the majority of these returns have come via an increase in home values.</p>
<h3>Annual change in capital city total returns, 12 months to May 2016</h3>
<p><a href="/images/2016/06/09/2016-06-06--img2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/09/2016-06-06--img2.jpg" alt=""></p>
<p>The third chart highlights the total returns over the past five years across all capital cities. Again, Sydney in particular, has seen far superior total returns compared to all other capital cities. </p>
<p>Melbourne has also experienced relatively strong total returns over the past five years. </p>
<p>Again this highlights why these two cities in particular have remained so popular with investors. In all other capital cities returns from residential property have been positive.  In many of these cities the total returns have been driven more so by the rental returns rather than the capital growth which has been the key driver in Sydney and Melbourne.</p>
<h3>5 year total change in total returns, to May 2016</h3>
<p><a href="/images/2016/06/09/2016-06-06--img3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/09/2016-06-06--img3.jpg" alt=""></p>
<p>Despite the recent rebound in value growth, the mature capital growth cycle and record low rental returns in Sydney and Melbourne, total returns are unlikely to be as strong in these cities over the coming years. A more balanced investment approach which focusses on moderate capital growth and relatively strong rental returns is likely to be a superior housing investment profile over the coming years. </p>
<p>This data also highlights why housing investment has been so popular. In a low interest rate and subsequently low return environment housing has, over recent years, offered attractive returns. Whether this continues to be the case remains to be seen.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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ckusher-ujnxiKuFQs

Total property returns show why housing investment remains so popular: CoreLogic

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<p><em>Hi Margaret, my wife &amp; I live on 50 acres we bought the property 20 years ago , built a house &amp; lived in since. We have 10 cows which we make a little money on each year &amp; is the only income of the property. Our main income is away from the property (apart from the office &amp; shed) my question is would we be CGT exempt because we use the other 45 acres for farming, although it's not our main source of income?</em></p>
<p>Answer:<br><br>The answer to this question has many parts and depends on a number of circumstances, and so I checked with Property Success tax expert Ian Rodrigues to see what he thought about it.<br><br>The first this to check is the actual date that you purchased the property.  It appears to be after they introduced the Capital Gains Tax rules but that is worth checking first as if it was before, then everything changes.  It's also important to know if you bought the property or if it was passed to you, perhaps through an inheritance as this impacts as well.<br><br>The Principal Place of residence exemption should apply to the house and surrounding land up 2 hectares (about 5 acres). You mention an office and shed - were these rented out, or did you use them for conducting any kind of business, and subsequently claim any proportional deduction on them?  If you did then this will mean that a part of your principal place of residence will be considered to be liable for capital gains tax and this will need to be established.<br><br>The rest of the land outside the 5 acres are subject to CGT regardless of how they were used. There are major issues to consider here in regard to:-<br><br>        1. was farming a business for tax (and so, what went into your tax returns?). Small business CGT concessions could apply here and<br>        2. what is the valuation split of PPOR and acres? Sometimes the house is the substantial part of these acres and therefore carry the much of the value of the entire block, and at other times the acres are prime land and therefore make up a substantial part of the calculations. <br><br>Your situation is a little complicated,  and it is absolutely critical that you get advice based on all the facts of this situation. Although the outcome may end up the same, you need some serious planning put in place, as you may have access to small business CGT rules and super rollover rules too. </p>
<p><span>Have a property question? </span><span><em> </em><a href="mailto:%20&lt;script%20type='text/javascript'&gt;%20/n%20&lt;/script&gt;&lt;script%20type='text/javascript'&gt;%20%20&lt;/script&gt;This%20email%20address%20is%20being%20protected%20from%20spambots.%20You%20need%20JavaScript%20enabled%20to%20view%20it.%20&lt;script%20type='text/javascript'&gt;%20%20&lt;/script&gt;" target="_blank"><span><em>Ask Margaret!</em></span></a></span></p>
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mlomas-KC9MUPZ6Ca

CGT exemption and farmland: Ask Margaret

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<div>It's the end of financial year!</div>
<div> </div>
<div>It was a really strong finish to the year for share markets today, closing up by 1.8 percent. However, the Aussie stock markets finished the financial year down by an underwhelming 4.1 percent.</div>
<div> </div>
<div>With the tax year now having come to an end, it will soon be time to lodge those tax returns.  </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Holiday homes under scrutiny this year</span></strong></div>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div>Last year, the Australian Taxation Office (ATO) designed and implemented new compliance strategies for foreign investors in Australian property, including stakeholder engagement (with advisers, agents, and associations), improved data matching, and a broad investigation strategy into illegal foreign purchases.</div>
<div> </div>
<div>This year - as well as those claiming excessive work-related expenses such as travel expenses, self-education, uniform, mobile phone, and internet costs – it is resident Australians with rental properties that are more likely to be under scrutiny from the ATO at tax time - in particular those will holiday homes.</div>
<div> </div>
<div>During the past year ATO Commissioners have advised Farifax Media and SBS News that they have been in contact with thousands of owners of rental properties in order to clarify their entitlements or request clarification about claims that they've made. </div>
<div> </div>
<div>The ATO has further reportedly sent correspondence to some holiday home owners recommending that they "review the nature of their claims" before dropping in their next returns...oops!<br><br>
</div>
<div>With well over 2 million Australians lodging tax returns declaring ownership of a rental property - spread widely across all income brackets – the landlord sector is substantial, and there are potentially significant liabilities to be raised by the ATO.</div>
<div> </div>
<div>Click to enlarge</div>
<div><img src="/images/2016/07/01/ATO1.jpg" alt=""></div>
<div> </div>
<div>Owners of holiday homes should take a good deal of care not to make claims for net rental losses for periods when their property has not actually been made available for rent. </div>
<div> </div>
<div>In particular owners of holiday homes claiming deductions for a full year when the property has been vacant for long periods might expect to get a tap on the shoulder from the tax office.</div>
<div> </div>
<div>According to ATO legislation the principles that apply to a rental property also apply to a holiday home if it is rented out - if you rent out your holiday home, you can claim expenses for the property based on the proportion of the income year it was rented out or was genuinely available for rent.</div>
<div> </div>
<div>However, if a holiday home is advertised in ways that limit its exposure to potential tenants, then the property may not be deemed “genuinely available” for rent – for example, if the property is not widely advertised, or if the advertised rents are set at unrealistically high levels.</div>
<div> </div>
<div>Since the ATO’s interest was flagged some months ago, net rental losses declared or claimed on holiday homes could be lower this year as this loophole is sewn up...</div>
<div> </div>
<div><strong><span style="text-decoration: underline;"><em>Airbnb </em>and online networks</span></strong></div>
<div> </div>
<div>There may also be some confusion relating to the rise of online networks such as <em>Airbnb</em>, with more Australians than ever before choosing to rent out their own homes, or a part of their homes. </div>
<div> </div>
<div>Remember, rental income is assessable and therefore you may have tax to pay at year end - don't try to be sneaky and under-report rental income it or you may be penalised! </div>
<div> </div>
<div>For <em>Airbnb</em> hosts there are two types of allowable deductions. Firstly, there are costs directly associated with generating rental income or with the rental area (for eaxample, photography, commercial cleaning costs, food for tenants, <em>Airbnb</em> fees and commissions, or food made available to tenants). </div>
<div> </div>
<div>And secondly there are costs which may be apportioned, often based upon the applicable floor area, including your mortgage or rent, utilities, internet and phone costs, insurance, and so on.</div>
<div> </div>
<div>Keep records and receipts through the financial year and make sure you set aside some money for the tax liability!</div>
<div> </div>
<div>Also, be aware of the potential legal and liability risks or short term tenancies and other tax implications thereof, such as capital gains tax (the principal place of residence is normally exempt, but generating rental income from the home may trigger a change in this status).  </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Repairs and maintenance</span></strong></div>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div>There is also often genuine confusion for some property investors over what deductions can be claimed.</div>
<div> </div>
<div>Perhaps the most common mistake made by landlords on lodged tax returns is claiming deductions for repairs and maintenance for expenses which are actually capital costs. </div>
<div> </div>
<div>Property investors are not allowed to claim repairs and maintenance deductions for defects or pre-existing damage that was in evidence at the time they acquired the property. Such improvements are considered to be capital in nature.</div>
<div> </div>
<div>Where investors are unsure they would be well advised to check the rules relating to deductions made available by the ATO for free online, or to engage a tax agent or property specialist tax accountant that is familiar with the rules. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Net rental losses declining</span></strong></div>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div>Declared net rental losses have declined sharply in recent times, falling by more than half over the last two tax years for which data is available, largely due to lower interest rates. </div>
<div> </div>
<div>The average net loss claimed by investors has fallen by 64 per cent since 2008 as mortgage repayments have become cheaper. These figures will continue to decline in 2015 and 2016 with interest rates having fallen.</div>
<div> </div>
<div><a href="/images/2016/07/01/NG.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/07/01/NG.jpg" alt=""></div>
<div> </div>
<div>While the ATO will doubtless generally be looking for expenses claimed in error as part of their investigative reviews or audits, it is worth noting that many investors also fail to claim deductions which they are entitled to. </div>
<div> </div>
<div><a href="/images/2016/07/01/NG2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/07/01/NG2.jpg" alt=""></div>
<div> </div>
<div>In particular, not all owners of rental properties are aware of the potentially generous capital allowances and tax depreciation deductions for plant and equipment which are available under the tax legislation.</div>
<div> </div>
<div>If you are in doubt, a property specialist tax accountant can help you to avoid making costly mistakes!</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Tips and traps for property investors: Pete Wargent

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<p>Australia is a nation full of highly confused real estate consumers. They’re befuddled because there is so much conflicting data on matters relating to residential property, especially on prices.</p>
<p>The confusion arises because of the widespread acceptance of anything labeled “research” as fact. Media these days is driven by under-resourced journalists and there’s a growing tendency to recycle press releases as articles, without the scrutiny that once was common in the industry.</p>
<p>Back in the day, publishing a press release (which, by definition, is someone’s propaganda) verbatim was a sacking offence. These days it’s mainstream journalism, especially in real estate. Most of the online “news” services that send out daily bulletins consist almost entirely of contributed material. The journalistic content is close to zero. </p>
<p>Any press release from a name research company featuring price data will be published without question. If the press release says Sydney prices are still soaring, that will be the headline in multiple media outlets, including some of our biggest newspapers.</p>
<p>The problem is that price statistics are often very rubbery figures. One of the ways we know this is by comparing price data from multiple sources. The differences and contradictions are quite stark. </p>
<p>Recently I wrote a report which focused on the latest price data for the eight capital cities from four different research sources. The areas where they disagreed were far more numerous than the ones where they were broadly in concert.</p>
<p>Two sources claimed Sydney prices were still growing at an annual rate around 11 percent, while the other two said the annual growth rate was down to 1.2 percent and 2.6 percent.</p>
<p>One source said Darwin house prices were unchanged while another recorded an 8 percent decline. Two sources said Canberra apartment prices were rising and the other two reported they were falling. All four agreed that Darwin apartment prices were falling but the rate of decline ranged from 0.2 percent to almost 10 percent.</p>
<p>Annual price growth for Melbourne houses ranged from 7 percent to 15 percent. One said the capital city average was 2.7 percent annual growth in house prices while another claimed it was 8.2 percent.</p>
<p>There are myriad other examples.</p>
<p>We know that different research companies have different methodologies and parameters, but consumers are entitled to think that the movement of prices in a particular location is a mater of fact: when media reports one week that they’re rising and the next that they’re falling, confusion is understandable.</p>
<p>It seems no one in media has noticed the discrepancies.</p>
<p>And now we have the Reserve Bank revealing that it disregarded price data from one of its regular sources. Apparently a change in methodology resulted in the research entity overstating price growth in Sydney and Melbourne.</p>
<p>At the time those figures were published, I challenged them because I thought they were clearly wrong. They contradicted known trends in the market and also conflicted with data from other more credible sources. </p>
<p>But media outlets across the nation published those erroneous figures as fact. There were numerous headlines declaring the fading Sydney boom had been reactivated somehow, miraculously, in contradiction of all previous data.</p>
<p>Inevitably this was accompanied by observers shouting about bubbles, affordability crises and young Australians priced out of the market, doomed to a lifetime of renting.</p>
<p>Worse, one of the big-name global ratings agencies rushed out a warning about the re-inflation of the Australian house price bubble, based purely on a single month’s price figures from one research source. It says something about the credibility of the ratings organisation that the basis for them issuing international press statements was so flimsy.</p>
<p>The message for real estate consumers is to take real estate statistics with several grains of salt. It’s alarming how many people base investment decisions on published data from a single source, reported verbatim by an unquestioning media.</p>
<p>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></p>
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Property price statistics are often rubbery figures: Terry Ryder

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<p>This week I sat around a table with a group of very important people.  What made them so important? </p>
<p>Well, with input from these particular people we could make a massive difference in the result of this property development.</p>
<p>We were meeting to brainstorm the best way to plan, design and build six villas on a 2000sqm block of land that I had sourced for my client.</p>
<p>The land we’d sourced is located in the Lower Hunter Region. The main economic driver for this suburb was a fairly recently opened expressway that now connected it with Newcastle and other major metro areas where employment opportunities lay. The city in which we will build has been awarded the accolade of the fastest growing inland town in NSW.</p>
<p>Ok back to the meeting.  The most important person there was our client, let’s just call him Jim. Whilst obviously important to me, he should be congratulated for taking on what is a very exciting property development. Jim has vision and can see the potential that I do in this project. Jim has a clear strategy; to create wealth through developing property as quickly as he can. </p>
<p>He understands he has a set number of years before he retires and he doesn’t want to muck around. This is Jim’s second development with Property Bloom so he is well on his way. If all goes to plan (which is what the meeting was about) Jim will come out with a very handsome amount of equity that will be created through the development process. He could use this to pay down any personal debt and continue to build his property portfolio.</p>
<p>Also at the meeting was our town planning consultant. This man has invaluable experience working with the local council and gave us a clear strategy on how to tackle the Development Application (DA). This was not straight forward as we need to consider the lending criteria and stage the DA in the correct way so it can be financed. </p>
<p>Next to him was our architect. When I met him, I was impressed to find out he used to be a carpenter.  This meant he had actually worked on a building site! </p>
<p>This is a rare find, so I immediately thought he was pretty important.</p>
<p>Our builder has been in the game for over 20 years and bought along his construction manager who is very experienced and managers all the builder’s projects. I thought this was a great initiative as this guy is going to be directly overseeing our build, so what a great idea to include him at the design stage.  I’m sure he’ll take more ownership having been involved at this early level.</p>
<p>Also in attendance was the builder’s senior estimator who is the man who prices every aspect of the project, every square and lineal meter of it...so very important to have him there as he could tells us the areas where the big costs lay.</p>
<p>The final person was one of my project managers who had managed many projects not just for Property Bloom but for other builders so he has a strong understanding of the way builders work and also in the planning phases. </p>
<p>I had called the meeting as we had just received a price back from the builder on our initial concept plan and we wanted to see how we could bring down the costs to increase the profit.</p>
<p>The architect, construction manager and the estimator started bouncing off each other on the engineering of the two double story villas, was there a way to decrease the metal beams required? </p>
<p>Did we need double story? Yes.  </p>
<p>We were happy with the floor plan design of the villas, so our focus switched to the site levels and the extent of the retaining required. There was some fall on the land which meant the development would be stepped. It wasn’t long before an agreement was made to minimise the height of the walls so that they didn’t need to be engineered instead by clever slab design and site preparation.</p>
<p>We talked about the best and most cost effective way to subdivide the villas with the planning consultant and then discussed maximising the street appeal and front façades of the villas.</p>
<p>The table was buzzing and I found myself quietly reflecting on how lucky I was to do this for a job. I loved the interaction between my team and pondered on the value of the accumulated expertise of the people I had on my side. </p>
<p>We left the meeting on the final note of an amount that we’d be happy to wipe off the costs; the architect would proceed with more detailed plans and work with the estimator to ensure he had the details to deliver the next round of costings.  The solutions that were found in that one hour meeting are very exciting. </p>
<p>Every property development needs a good team. So don’t try and tackle it all on your own. As Oprah says, you can be lifted higher by others, so get yourself a group of experts that you can rely on and enjoy the process.</p>
<p><em><em>Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a><a href="https://www.propertybloom.com.au/">.</a></em></em></p>
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jochivers-wq5Bp59R5a

Use the property development experience of others: Jo Chivers

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<div id="post-body-1153754225725279273" class="post-body entry-content">
<div>According to the Department of Immigration and Border Protection (DIBP) the significant investor visa (SIV) programme is designed to be:</div>
<div> </div>
<div><em>"...a pathway to provide for significant migrant investment into Australia under the Business Innovation and Investment visa programme".</em></div>
<div> </div>
<div>From the inception of the SIV programme in November 2012 until 30 June 2015 there had been some 2,573 applications lodged, but only 879 visas actually granted.</div>
<br><a href="/images/2016/08/30/SIV2.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/08/30/SIV2.jpg" alt=""><br><span><br></span><span>There can necessarily be a lag between application lodgement and visas being granted.</span><br><span><br></span><span>The service standard is 6 to 9 months for the Business Innovation and Investment category.</span><br><div> </div>
<div>The latest available statistics from the DIBP showed that 495 of the outstanding applications lodged prior to 1 July 2015 have now been granted.</div>
<div> </div>
<div>A further 20 applications lodged after 1 July 2015 have also been granted in the financial year to 31 May 2016.</div>
<div> </div>
<div>This means that the May 2016 figures recorded a total of 515 SIVs issued for the 11 months for the financial year to date.</div>
<br><div class="separator"><a href="/images/2016/08/30/SIV1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/30/SIV1.jpg" alt=""></div>
<div> </div>
<div class="separator">The geographically segmented figures show that high net worth applicants are overwhelmingly focused on Melbourne, and then Sydney...with daylight third. </div>
<div class="separator"> </div>
<div class="separator">This reflects that Melbourne and to a somewhat lesser extent Sydney have been the two key destinations and markets of interest for Chinese investors since around 2012.</div>
<div class="separator"> </div>
<div class="separator">Indeed, the Foreign Investment Review Board (FIRB) Annual Report showed that real estate applications tripled in two years, driven overwhelmingly by a deluge of Chinese investors into Victoria, New South Wales, and Queensland. </div>
<div class="separator"> </div>
<div class="separator">The DIBP statistics for the top five source countries correspondingly show that more than 90 per cent of applicants for SIVs have also been Chinese. </div>
<br><div class="separator"><a href="/images/2016/08/30/SIV3.jpg" target="_blank"> Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/30/SIV3.jpg" alt=""></div>
<br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br><div>Since the commencement of the significant investor visa programme in 2012 there have now been a total of 1,397 SIVs granted, leading to just a shade under A$7 billion of investment in complying assets.</div>
<div> </div>
<div>It's difficult to say what the expected take-up for the SIV ever really was, but fewer than 1,400 visas sounds suspiciously like a fizzer of an initiative to me (albeit the composition and destination of applicants says something of note about where capital invested in Australia is coming from and where it is headed to).</div>
<div> </div>
<div>Previously SIV investors were opting to drop money into passive investments such as qualifying government bonds and residential real estate schemes - not really what Australia needs more of, tbh! - which led to a much-needed reassessment of the requirements for complying investments.</div>
<div> </div>
<div>Unfortunately interest in SIVs has been dampened since, following consultation with stakeholders, the rules were amended to require a greater share of the $5 million required investment to hit up venture capital products (at least 10 per cent) and emerging companies (minimum 30 per cent), investments that are typically associated with a higher risk of loss, whether perceived or real.</div>
<div> </div>
<div class="separator"><a href="/images/2016/08/30/DIBP.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/30/DIBP.jpg" alt=""></div>
<div> </div>
<div><span style="text-decoration: underline;"><em>Source: DIBP</em></span></div>
<div> </div>
<div>The most timely available statistics for expressions of interest, invitations, and applications lodged suggest only a modest ongoing flow of interest in the SIV.</div>
<div> </div>
<div>Requiring wealthy Chinese with A$5 million to invest in venture capital projects and emerging companies is a fabulous idea...on paper.<br><br>In reality, however, this may be too ambitious and result in the killing off of SIV applications given that wealthy foreigners are unlikely to be familiar with the products and ventures in question, and therefore remain understandably reluctant to commit.</div>
<div> </div>
<div>It wouldn't be a surprise to see the rules amended again or relaxed to allow Chinese investors to provide project funding (not passive investment) for residential and commercial real estate developments, or for infrastructure projects.</div>
<div> </div>
</div>
<div class="post-footer"> 
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Slow take up of Significant Investor Visa: Pete Wargent 

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<p>The Australian Prudential Regulation Authority (APRA) released its June 2016 quarter property exposures data earlier this week. </p>
<p>The data looks at exposure to the property market by Australian Authorised Deposit-taking Institutions (ADI).  It’s valuable because it provides deeper insight into lending from mortgage lenders which isn’t available from the Australian Bureau of Statistics (ABS) monthly housing finance data.</p>
<p><a href="/images/2016/09/05/Chart-1-3-580x206.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-1-3-580x206.jpg" alt=""></p>
<p>At the end of the June 2016 quarter, across all Australian ADI’s, there was $1.437 billion in outstanding residential mortgages to households. </p>
<p>The value of outstanding mortgages has increased by 8.1 percent year-on-year, which is the slowest year-on-year growth rate since the June 2014 quarter. </p>
<p>Outstanding mortgages include $930.4 billion outstanding to owner occupiers and $506.3 billion outstanding to investors. </p>
<p>The value of owner occupier mortgages has increased by 14.8 percent year-on-year, its largest rise since March 2010. </p>
<p>The value of investor mortgages outstanding has fallen by -2.4 percent year-on-year, its greatest decline on record. </p>
<p>To put the investor lending slowdown into perspective, 12 months ago investor mortgage credit had increased by 12.7 percent.</p>
<p><a href="/images/2016/09/05/Chart-2-3-580x204.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-2-3-580x204.jpg" alt=""></p>
<p>Taking a look at potentially higher risk forms of lending, in June 2016 there was $557.0 billion in outstanding mortgage credit for interest-only mortgages, $2.753 billion for reverse mortgages, $24.7 billion for low-documentation mortgages and $1.0 billion in other non-standard mortgages. </p>
<p>Almost two-fifths of the value of outstanding mortgages (39.3 percent) is for interest-only mortgages. </p>
<p>Year-on-year there have been increases in the value of mortgage credit for interest-only (+7.7 percent) and reverse mortgages (+1.8 percent) while credit for low-documentation (-16.2 percent) and other non-standard loans (-8.5 percent) has fallen.</p>
<p><a href="/images/2016/09/05/Chart-3-3-580x203.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-3-3-580x203.jpg" alt=""></p>
<p>The average outstanding mortgage balance was $252,100 which was 4.5 percent higher over the year to June 2016. </p>
<p>Across the different mortgage types the average outstanding balances were recorded at: $308,000 for loans with an offset, $335,200 for interest-only loans, $97,400 for reverse mortgages, $191,000 for low-documentation loans and $191,900 for other non-standard loans.    </p>
<p>The average balances have increased over the year for loans with an offset (+4.4 percent), interest-only mortgages (+4.6 percent) and reverse mortgages (+2.7 percent) and fallen for low-documentation loans (-1.2 percent) and other non-standard loans (-2.2 percent).</p>
<p><a href="/images/2016/09/05/Chart-4-1-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-4-1-580x210.jpg" alt=""></p>
<p>Looking at new lending over the June 2016 quarter, there was $98.4 billion in new mortgage lending, $64.4 billion of which was for owner occupiers and $34.0 billion for investors.  It was a record quarter with the value of lending 20.7 percent higher over the quarter and 2.1 percent higher year-on-year. </p>
<p>Over the quarter the value of lending to owner occupiers rose by 15.2 percent while investor lending jumped 32.5% to its highest level since June 2015. </p>
<p>Year-on-year owner occupier lending is 16.2 percent higher while investor lending is -16.9 percent lower. While investment lending has certainly increased of late, it is difficult to know exactly how much is being driven by more volume and how much is being driven by borrowers taking out larger mortgages.</p>
<p>No data was available this quarter on new low-documentation lending however, there was $35.6 billion in interest-only lending, $136 million in other non-standard loans, $47.4 billion in loans from a third part source $3.5 billion worth of loans approved outside of serviceability. Although new interest-only lending is -19.1 percent lower year-on-year, it increased by 25.1% over the quarter which is in line with the significant jump in new lending to investors. </p>
<p>It was also the largest quarter since June 2015 for other non-standard loans. The $3.5 billion of loans approved outside of serviceability was the lowest since the March 2015 quarter.</p>
<p><a href="/images/2016/09/05/Chart-5-1-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-5-1-580x210.jpg" alt=""></p>
<p>Looking at the loan-to-value ratios (LVR) on new mortgages over the quarter it is clear that lenders and or borrowers are becoming more conservative and using larger deposits.  Over the quarter, a record-high 78.0 percent of mortgages had an LVR of less than 80% (meaning the borrower had a deposit of at least 20 percent). </p>
<p>Over the quarter the value of lending increased across each of the LVR bands shown however, year-on-year the value of lending for LVRs of less than 60 percent is up 19.2 percent, for LVRs between 60 percent and 80 percent it is -1.1 percent lower, for LVRs between 80 percent and 90 percent it is 6.1 percent higher and for LVRs above 90 percent it is -20.7 percent lower.  Encouragingly, just 8.3 percent of all new mortgages had an LVR of more than 90 percent which is a record-low.</p>
<p>Overall the data shows that there has been a rebound in new lending to investors and a commensurate increase in interest-only lending over the past quarter.  After annual investor housing credit growth has slumped to well below APRA’s 10%pa speed limit it is clear that some lenders have scope to dial-up their lending to investors.  It also shows that despite historically weak rental markets and record low rental yields that there remains demand from the investment segment of the market.</p>
<p>While investment lending has lifted over the past quarter, the data is showing there is a more conservative approach to high LVR lending. The ongoing declines in lending with an LVR above 90 percent is encouraging because it should lead to reduced risk.</p>
<p>Over the coming quarters we’ll be closely watching how much higher investment lending lifts.</p>
<p>Keep in mind that despite record low yields, the returns are still superior to putting money in a term deposit, especially once you factor in the recent capital growth as well. Interest-only lending trends will also be important to watch with APRA already having raised concerns about that particular type of lending.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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