<p data-end="1587" data-start="1236">The Victorian Government has secured the passage of the Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026, introducing a suite of reforms aimed at improving consumer protection and confidence in the apartment market.</p>

<p data-end="1587" data-start="1236">Resilience Insurance, Australia’s leading Latent Defects Insurance (LDI) provider, has welcomed the move.</p>

<p>The LDI elements of the Bill passed with bipartisan support and now moves to the Legislative Council where debate and passage are expected later this month. It represents a significant milestone in the national shift toward stronger, longer-term protection for apartment buyers.&nbsp;</p>

<p>The reform would deliver practical benefits across the housing system. Apartment owners will have stronger protection if major defects emerge, developers and builders will have a clearer quality framework to work within, and the State will reduce the risk of serious building failures becoming a long-term financial and social burden for households, communities and government.&nbsp;</p>

<p>LDI helps support apartment delivery while providing stronger protection for buyers and encouraging better construction outcomes.&nbsp;</p>

<p>Resilience LDI provides apartment owners with 10 years of insurance-backed cover for major structural defects from completion, with direct claim access to the insurer. This means owners are not required to first pursue developers or builders through costly legal action before accessing protection.&nbsp;</p>

<p>Resilience Insurance has been operating in Australia since 2022 and has already insured hundreds of development projects covering many thousands of apartments across Australia.&nbsp;</p>

<p>At approximately 1.8 per cent of build cost, it is a cost-competitive alternative to the traditional two per cent Strata Bond, bond while delivering significantly broader and longer protection.&nbsp;</p>

<p>“The Victorian Lower House vote shows that reforms like this succeed when they are practical, evidence-based and supported by industry," says Corey Nugent, CEO of Resilience Insurance.</p>

<p>"Victoria is moving quickly on a reform that will make a real difference for apartment buyers, while supporting better building outcomes and greater confidence in apartment delivery.</p>

<p>“This is step one. We look forward to the Bill completing its passage through the Legislative Council and to working with government and industry to implement the framework effectively.”&nbsp;</p>

<p>Fast Facts: What is Resilience LDI?&nbsp;</p>

<ul>
	<li>Resilience Latent Defects Insurance (LDI): Covers major structural defects for 10 years from completion.&nbsp;</li>
	<li>Consumer-first: Direct claim access, no need for lengthy legal action.&nbsp;</li>
	<li>Cost advantage: At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.&nbsp;</li>
	<li>Market leader: Resilience Insurance is the first approved LDI provider in NSW.</li>
</ul>


The Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026 has passed the Victorian Lower House, putting Victoria on track to become the first state to legislate an industry workable LDI framework as a formal alternative to the Strata Building bond. 

Joel Robinson

10-year Latent Defects Insurance for new apartment buyers set to land in Victoria

<p>Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.</p>

<p>Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.</p>

<p>There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.</p>

<p><img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" /></p>

<p>Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.</p>

<p>"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."</p>

<p>The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;</p>

<p>The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;</p>

<p>Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a></em></p>

<p><em>Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a></em><br />
&nbsp;</p>


Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

<p>Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.</p>

<p>The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.</p>

<p>Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.</p>

<p>The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.</p>

<p><img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" /></p>

<p>A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.</p>

<p>Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.</p>

<p>New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.</p>

<p>GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.</p>


First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

<p>A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.</p>

<p>The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.</p>

<p>Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368853]</p>

<p>The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.</p>

<p>GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available.</p>

<p>Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368851]</p>

<p>The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.</p>

<p>The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368852]</p>

<p>For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.</p>

<p>GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.</p>

<p>"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.</p>

<p>"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."</p>

<p>[smartcode_project_cta:default project_id=135876]</p>


GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<p><a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.</p>

<p>The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.</p>

<p>&nbsp;</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.</p>

<p>The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.</p>

<p><img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" /></p>

<p>A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.</p>

<p>The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.</p>

<p>"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.</p>

<p>The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.</p>

<p>Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."</p>

<p>The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.</p>

<p><img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" /></p>

<p>The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.</p>

<p>S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.</p>

<p>Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.</p>

<p>John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.</p>


First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

<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?

<p>Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.</p>

<p>Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.</p>

<p>What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.</p>

<p>The appeal is relatively straightforward: flexibility.</p>

<p>Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.</p>

<p>For apartment residents in particular, the system has become increasingly valuable.</p>

<p>Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.</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/dVG5ChLHf7E?si=7FZ1Sk-Vm60JbLwi" title="YouTube video player" width="560"></iframe></p>

<p>Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.</p>

<p>That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.</p>

<p>Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.</p>

<p>The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.</p>

<p>Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.</p>

<p>Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.</p>

<p>The timing of that expansion aligns with broader changes in Australian shopping behaviour.</p>

<p>The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.</p>

<p>That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.</p>

<p>Parcel Locker systems have increasingly been viewed as part of the long-term solution.</p>

<p>The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.</p>

<p>Now, however, the convenience factor is driving mainstream usage.</p>

<p>For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.</p>

<p>The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.</p>

<p>The Parcel Locker model is also beginning to influence property development itself.</p>

<p>Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.</p>

<p>For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.</p>

<p>That reflects a wider evolution in how residential buildings are designed.</p>

<p>Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.</p>

<p>Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.</p>

<p>What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.</p>

<p>And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.</p>


How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

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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>
</div>
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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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terryryder-YECXbqmri2

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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ckusher-ujnxiKuFQs

New lending to investors and interest-only lending jumps over June quarter

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<p>According to the Australian Bureau of Statistics (ABS) November 2016 building approvals data there were 17,569 houses and units approved for construction across the country over the month. </p>
<p>Based on the seasonally adjusted series, the number of dwelling approvals rose by 7.0 percent over the month due to a substantial rebound in unit approvals.  Despite an increase in approvals in November, they are -4.8 percent lower over the year and are -18.6 percent lower than their peak in October 2015 when 21,588 houses and units were approved.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-1.jpg" alt=""></p>
<p>In November 2016 there were 9,503 houses and 8,066 units approved for construction throughout the country. Over the month, house approvals fell by -0.4 percent while unit approvals increased 17.3 percent. </p>
<p>Unit approvals tend to be lumpy and volatile, which goes a long way towards explaining the 17.3 percent increase in November following a -20.1 percent decline in September and -22.8 percent fall in October of last year. Year-on-year, houses approved for construction were -2.1 percent lower and unit approvals were down -7.8 percent. </p>
<p>Over the current construction cycle, house approvals peaked at 10,649 in April 2015 and unit approvals peaked at 11,763 over the month of October 2015.  November 2016 house approvals were -10.8 percent lower than the April 2015 peak while unit appears have fallen more dramatically, down -31.4 percent from their October 2015 peak.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-2.jpg" alt=""></p>
<p>Looking deeper into unit approvals by type, it becomes clear that the surge in new high-rise construction projects has slowed.  This data is split into three segments: townhouses, low-rise units (less than four storeys) and high-rise units (four storeys or higher). </p>
<p>The above chart highlights the volatility in unit approvals and also shows that the recent plunge of unit approvals is being driven by the high-rise unit sector. With ongoing concerns about oversupply of high-rise units in certain inner city markets and slowing value growth for units, it seems that developers are responding by seeking fewer new high-rise unit approvals. Another interesting trend over the past year or so has been the steady upwards trend in townhouse approvals. The substantial increase in high-rise approvals over recent years has occurred at the expense of townhouse and low rise approvals. </p>
<p>With the expected further slowing of high-rise unit approvals there is potential for a lift in townhouse approvals over the coming year.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-3.jpg" alt=""></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-4.jpg" alt=""></p>
<p>The two above charts show the proportion of dwelling approvals that were for units.  The data points to the fact that in most capital cities developers have recently slowed their submissions for unit building approvals. As a proportion of all approvals there have been some significant declines in unit approvals in Melbourne, Brisbane, Perth, Hobart and Darwin over the past six months.</p>
<p>The reality is that this is an appropriate response in most of these cities given how much unit construction has been taking place.</p>
<p>Hobart is the one exception where it could be argued that more unit construction is required, particularly given the booming tourism sector.  Sydney and Canberra have recorded no significant slowdown in unit approvals as a proportion of total approvals over recent months.  Sydney has been approving more units than houses for more than two decades where in most other capital cities the dominance of unit approvals over those for houses is a relatively new phenomena.</p>
<p>Unit approvals are trending lower, particularly for high-rise units, which is an appropriate response so late in the current construction phase. The reality is that at least initially, an increasing proportion of these units approved for construction may not be sold. There remains a substantial pipeline of construction work already underway which should keep residential builders busy for some time. </p>
<p>Should, as we expect, approvals soften further and remain well below their recent heights over the coming years absent a pick-up in non-residential or infrastructure construction, there could be some headwinds for builders and associated businesses. </p>
<p>Housing construction has been a significant driver of economic growth over recent years and a slowdown in this sector could also impact on economic growth over the coming years unless some other large industry segment can pick up the slack. <span> </span></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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Dwelling approvals bounce in November but don’t expect it to continue: Cameron Kusher

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<div>GUEST OBSERVER</div>
<div> </div>
<div>Australian Finance Group (AFG) released its index for the final quarter of 2016, reporting more than $15 billion in mortgage lodgement volume.</div>
<p><span>The index, which is not seasonally adjusted, rose by 9.9 percent over the year to December.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/12/AFG5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/12/AFG5.jpg" alt=""><br><br><span>Nationally, the average mortgage size of $488,875 was up from $475,083 from the prior year.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/13/AFG2.jpg" alt=""><br><strong><span style="text-decoration: underline;"><br></span></strong></p>
<div><strong><span style="text-decoration: underline;">"Tale of two seaboards"</span></strong></div>
<div class="separator"> </div>
<div class="separator">Over the year there was strong growth in lodgement volumes in both New South Wales (up 10 per cent) and Queensland (18 per cent), but the real driver of growth was Victoria with a substantial 23 percent rise. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG3.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/13/AFG3.jpg" alt=""></div>
<p><br><span>Offsetting this, investors have backed off from Western Australia and the Northern Territory.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG4.jpg" target="_blank">Click to enlarge</a><br><br><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/13/AFG4.jpg" alt=""><br><br></p>
<div>In the December quarter the average mortgage size scaled fresh heights in each of the three most populous states. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG1.jpg" target="_blank">Click to enlarge</a></div>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/13/AFG1.jpg" alt=""><br><br><strong><span style="text-decoration: underline;">Investor rebound</span></strong><br><br><span>Finally, the share of AFG's market relating to investors ticked back up to 34 percent.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG6.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/13/AFG6.jpg" alt=""></div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>While activity in South Australia was flat, the weakness of the WA market in 2016 was evident, with the recent introduction of a new first home owners grant in the state designed to combat this. </div>
<div> </div>
<div>Loan to value ratios across the year were fairly consistent at around 69 percent, about 0.7 percent lower than in 2015.</div>
<div> </div>
<div>Over the year non-major lenders have been pinching market share away from the main players, a trend that AFG expects to continue into the new year as consumers increasingly recognise the potential benefits of using a broker.</div>
<div> </div>
<div><em><span>PETE WARGENT </span>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></div>
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NSW mortgage size passes $600,000 average: Pete Wargent

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<div>GUEST OBSERVER</div>
<div> </div>
<div>I recently wrote here how it looked as though new home finance had shaped into quite a neat double top formation.</div>
<div> </div>
<div>In November, finance for new owner-occupier purchases increased a bit, but overall the trendline does suggest that a second peak is forming. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/23/A1.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/23/A1.jpg" alt=""></div>
<p><br><span>The slight rebound ties in with the rebound in new home sales in the month, previously noted </span><a href="https://petewargent.blogspot.co.uk/2017/01/new-home-sales-rebound" target="_blank">here</a><span>.</span><br><br><strong><span style="text-decoration: underline;">Mainly investors buying new</span></strong><br><br><span>It's often said that investors mainly invest in established housing, with charts produced to prove it.</span><br><br></p>
<div>Of course, with the total dwelling stock only increasing by less than 2 per cent over the year to September 2016 to 9.76 million, it stands to reason that most investors will buy established - there just aren't that many new properties in any given year. </div>
<div> </div>
<div>I have been more interested to know what percentage of the new housing stock was purchased by owner-occupiers, but nobody I have asked seems to know (or even care about) the answer.</div>
<div> </div>
<div>The housing finance figures show that owner-occupiers financed the construction of only 68,200 homes and the purchase of just 31,490 dwellings. </div>
<div> </div>
<div>What the housing finance figures don't capture is that some owner-occupier buyers of new homes are cash buyers.<br><br>But nevertheless, it's clear that largely the buyers of new dwellings are investors, albeit many of them from overseas.</div>
<div> </div>
<div><em><span>PETE WARGENT </span>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></div>
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New housing finance is topping out: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>The Australian Bureau of Statistics (ABS) released lending finance data earlier today and when it is paired with the earlier housing finance data release, the figures provide insight into the value of mortgage lending over the month in each state and territory. </p>
<p>Over recent months investor demand for mortgages has been trending higher and this is being largely driven by resurgent investor demand in New South Wales and Victoria. </p>
<p>Of course the capital cities of these two states have consistently recorded the strongest value growth of all capital cities over the past five years and also have the lowest rental returns.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/25/chart-1-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/25/chart-1-3.jpg" alt=""></p>
<p>The data analysed is based on the value of mortgage finance commitments. </p>
<p>Given this it is important to consider that more expensive markets (such as NSW) will tend to result in borrowers taking out larger mortgages whereas borrowers in more affordable markets will generally take out smaller mortgages.  More than half of all the mortgage lending to investors in November 2016 was lent in New South Wales and with a further 24.5 percent in Victoria, three quarters of all mortgage lending to investors occurred in the two most populous states.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/25/chart-2-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/25/chart-2-3.jpg" alt=""></p>
<p>Looking only at new lending (that is excluding refinances) investors accounted for 56.7% of the value of lending in New South Wales in November 2016.  Looking over the past four years, the value of new lending to investors in New South Wales has been greater than new owner occupier lending for 42 of the past 48 months. </p>
<p>Victoria was previously seeing slightly more than 50% of new lending to investors but was recorded at 45.0% in November 2016.  Across the remaining states and territories, the proportion of total new lending to investors in November 2016 was recorded at: 39.7% in Queensland, 37.1% in South Australia, 31.0% in Western Australia, 26.1% in Tasmania, 40.3% in the Northern Territory and 38.7% in the Australian Capital Territory.</p>
<p>It’s clear that demand for mortgages from the investor segment is picking up, particularly in New South Wales and Victoria, which are proxies for Sydney and Melbourne respectively.  With a low cost of borrowing and many owner occupiers having seen substantial increases in housing equity in Sydney and Melbourne over the past 4.5 years it is easy to understand why investor demand is rising. </p>
<p>On the other side of things, you have a value growth phase that has now run for 4.5 years, largely focussed on two major cities and rental returns at historic low levels in these cities.  Investors should be considering the potential risks, especially as housing supply is responding and that the value growth phase is now quite mature.  While many have seen a substantial increase in the value of properties and may continue to do so, at some point growth will slow. </p>
<p>With record low yields, slow rental growth and additional housing supply entering the market over the coming years, if investors need to start relying on rental returns rather than increase in the asset value, boosting those returns is likely to prove difficult.</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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News