The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

<html><body>
Given the outlook for the economy and the significant degree of monetary stimulus already in place to support economic activity, the RBA board judged that the current accommodative stance of policy was likely to be appropriate for "some time yet," the RBA June Board meeting minutes published today.
At recent meetings, the board had judged that it was prudent to leave the cash rate unchanged. And it appears for some time yet.
"Low interest rates were working to support demand, although it was difficult to judge the extent to which this would offset the expected substantial decline in mining investment and the effect of planned fiscal consolidation. 
<a href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2014/03062014" target="_blank">"Those uncertainties were likely to take some time to resolve</a>," the minutes advise. 
"The earlier decline in the exchange rate was assisting in achieving balanced growth in the economy, but less so than previously as a result of its higher levels over the past few months."
The board members noted that the exchange rate remained high by historical standards, particularly given the further decline in commodity prices over the past month. 
It noted a range of indicators of housing construction confirmed that a significant recovery was underway. 
"Residential work done picked up strongly in the March quarter," the minutes noted.
"Forward-looking indicators of new dwelling investment were at high levels relative to recent years, although building approvals had declined in recent months.
"In the established housing market, dwelling price growth had eased from the rapid pace seen in 2013 and auction clearance rates in Sydney and Melbourne had declined from the high rates that prevailed during much of 2013."
The minutes noted measures of consumer sentiment had fallen sharply over the past month and were now below their long-run average levels. 
However, it was noted that while low-frequency movements in confidence measures had been broadly associated with trends in consumption spending, there was little evidence from the historical record that high-frequency movements carried much predictive content.
In its post-meeting statement earlier this month, the RBA did not explicitly mention the deterioration in consumer confidence but comments around the improvement in business confidence and conditions compared with a year ago were removed.
ANZ believed there was a prospect the minutes could read a little more dovishly than the post-meeting statement.
ANZ concluded that the minutes were "slightly more dovish" than previous recent communications from the Bank.
ANZ suggested the key phrases included “Low interest rates were working to support demand, although it was difficult to judge the extent to which this would offset the expected substantial decline in mining investment and the effect of planned fiscal consolidation. Those uncertainties were likely to take some time to resolve.
ANZ advised this suggested that the Bank will err on the side of maintaining its very expansionary policy setting until it is clear that growth is above trend and spare capacity in the economy is reducing. 
"Our base case is that the Bank starts to remove monetary policy support in Q1 2015 and increases the cash rate by 100bps over the year," ANZ economist Justin Fabo said.
"This would be relatively gradual initial policy tightening by historical standards. 
"The risks, however, appear tilted towards a somewhat later start to policy tightening and/or more gradual cash rate hike increases if easy monetary policy is required for longer to support the transition in growth drivers in the economy."
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jchancellor-FAypfDUnLy

Uncertainties likely to take some time to resolve: RBA

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It’s coming up to tax time, which is great news for those few that enjoy filling out extra paperwork and visiting their accountant.
Last year, thousands of <a href="/news/aussies-scammed-out-of-89-million-in-2013-accc-report">Australians were scammed out of a combined $89 million in 2013</a>, according to an Australian Competition and Consumer Commission report that was released yesterday.
It’s unfortunately also a time of year when you’re more comfortable providing your details to sort out your tax return and get your affairs in order. Here are five tips from the Australian Taxation Office on being aware of, and recognising, signs of fraud and unscrupulous activity.
Simple tips to recognise fake SMS and emails that pretend to be from the ATO
These aren’t all ‘Nigerian Prince’ style emails that you can tell at a single glance should be deleted without opening and some can actually look convincing, the ATO warns.
If the emails are one or many of the below, then you may be dealing with a case of fraud:
<ul>
<li>Unsolicited 
</li>
<li>Not from a valid ATO address (but may look as though it is from an official email) 
</li>
<li>Do not address you by your name, or uses your email address instead of your name 
</li>
<li>Asks for your personal or financial details (in particular, date of birth, address or PIN number) – This is a big warning sign. The ATO notes they will never ask for these details via SMS or email 
</li>
<li>Poorly worded, containing gramma errors (pun intended) – this helps to avoid filters 
</li>
<li>Promises money – Do we need to explain why this one is unlikely? 
</li>
<li>Contains an attachment 
</li>
<li>Contains fake links (the ATO suggests moving your cursor over the link, not clicking, and seeing where you’ll be redirected to. If it’s not to the ATO’s official site, then don’t click it.)</li>
</ul>
If the SMS or email you have received fits the above categories - head to the official ATO website and give them a call.
Report SMS and emails offering tax refunds in exchange for your personal details
Tax refunds are calculated after you’ve reported your information – not before.
“Any SMS or email that requests additional information before a refund can be released is a hoax,” they warn.
If an SMS or email says that you owe money, or that your account is in arrears and you will be taken to court – it’s time to ignore it.
This information will not be sent in an email or as a text. The phone, mail, an external collection agency or a personal visit are the methods more likely to be used.
Use online services via the official ato.gov.au
Don’t use other websites or methods, other than phoning the official number, to do business with the ATO. If they text you, it’s probably not them.
You’ll be prompted to sign in with a TFN and password and often AUSkey. If you aren’t asked to login, beware – it’s not the ATO. Double check the address bar.
Keep your TFN and passwords secure
Don’t share your password, and do not respond to emails with your TFN or password.
When are SMS and emails used by the ATO? For promotional or information services. Reminders, notifications, requests for you to contact the ATO and confirmation may be sent in these formats.
YOU MAY ALSO WANT TO READ
ATO warns of tax time scammers:<a href="/expert-insights/finance/ato-warns-of-tax-time-scammers-here-s-how-to-spot-them"> Here's how to spot them</a>
ATO branded scam alert: <a href="/news/ato-branded-scam-alert-fake-landlord-tax-exemption">Fake landlord tax exemption</a>
Beware of tax scams: <a href="/expert-insights/finance/beware-of-tax-scams-how-to-make-sure-you-don-t-get-fleeced">How to make sure you don't get fleeced</a>
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jduke-EHk3XBmHkn

Four ATO tips to protect yourself from end of financial year scams

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GUEST OBSERVATION
After much anticipation, the European Central Bank (ECB) finally announced some important policy changes that have seen the euro weaken by around one and a half cents against the Australian dollar. 
The fall reduces the cost of imports from the eurozone by over A$3,000 for every €100,000 in a little over a week.
So why has the ECB caused the sharp move in the currency?
Most of the talk has been around the decision to reduce the deposit rate for bank deposits. Going forward, the ECB will charge commercial banks a fee in the form of a negative deposit rate for parking funds with them. This is a first for a developed nation and is aimed at forcing the banks to release capital, i.e. lend more so the real economy can get easier access to money. A real headline grabber!
The other less sexy measure was a new Targeted Long Term Refinancing Operation, with the acronym TLTRO, likely to replace the previous LTRO. The difference? This one is now targeted (just add T to the beginning). This policy is another injection of cash into the banking sector with some caveats attached which make it more targeted than the previous version. Commercial banks now have to use the money specifically to lend it out to the private sector.
In its accompanying statement, the ECB decided to “intensify the preparatory work related to outright purchases in the ABS market”. In other words, it's now committed to embarking on a European-style quantitative easing program which will serve to weaken the euro.
But it’s not all about the euro
Coinciding with a weaker euro, we have seen the Aussie strengthening on the back of some better than expected domestic economic data and a rosier outlook for China. In this context the local unit has pushed through 94 US cents and is seeing some calls for parity once again. The combination of these two forces sees the AUD/EUR cross-rate edging closer to 0.7, a level not seen since November last year.
<img src="https://www.smartcompany.com.au/images/stories/vrondas%201606%20graph.jpg" alt="">
Whilst the trend is expected to continue, the <a href="https://www.ozforex.com.au/forex-tools/my-fx-dashboard?mode=advanced" target="_blank">chart above</a> highlights what could be a significant resistance point around 0.7116. For those businesses importing from Europe, a move above 0.7 to this level could represent a good opportunity to hedge some future exposures and lock in an exchange rate some 11% better than what it was in January of this year. Such significant cost savings should help deliver a better bottom line for businesses in the next financial year.
<a href="https://www.linkedin.com/in/jimvrondas">Jim Vrondas</a> is Chief Currency strategist, Asia-Pacific at <a href="https://www.ozforex.com.au/?cid=1300">OzForex</a>, a global provider of online international payment services and a key provider of <a href="https://www.ozforex.com.au/news-commentary/daily">Forex news</a>.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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po-LsXgBTHBmX

Negative interest rates a boon for Aussie importers

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Serviceability is a crucial part of obtaining finance. Essentially, it dictates how able you are to meet repayments of your loan.
To banks and lenders this is crucial as it determines whether or not they can lend a certain amount to you - the less serviceable you are, the less you can borrow.
It is defined by a number of criteria. Largely, it looks at your income and financial situation against your debt and liabilities, as well as living costs. They’re trying to work out how much you can afford to set aside for a mortgage each month. Think of this as your “in” and “out” columns.
Your income covers money that you bring “in” from all sources – your salary, any child support you receive (if you provide child support, this will fall into your “out” column), any money you receive from rental properties or other investments, and so forth.
Your “out” column, or your outgoings, includes all repayments and current debt, such as for credit cards, living expenses and other ongoing costs. Any children you have, or dependents, will also fall into this category. Note that your 'living expenses' will be likely based on an amount that the lender considers appropriate for your type of household - just because you are particularly frugal does not necessarily mean that this will benefit the numbers on this occasion.
After you have both of these worked out - the remainder of your money is what is then looked at to determine whether you can afford to make repayments on a loan.
According to Build.com.au “When you’re looking for approval for a loan, your total monthly debt expenses are expressed as a proportion of your gross monthly income. This is known as the ‘debt service ratio’ - and it should be set at a maximum of between 30 and 35% of your gross income.”
Future rate rises are also calculated in, and some lenders include a "buffer" that can affect buy-and-hold investors. If you come up against a serviceability wall it isn't uncommon to find that you are deemed serviceable by a different lender due to varying criteria.
Homeloanexperts' Otto Dargan notes that there are three methods for calculating serviceability. These include Net Surplus Ratio (NSR), Debt Servicing Ratio (DSR) and Surplus/Uncommitted Monthly Income (UMI). He <a href="https://www.homeloanexperts.com.au/how-much-can-i-borrow/" target="_blank">notes that these are used by the bulk of Australian lenders and banks</a>.
Serviceability can be complicated when considering all of the different factors that the banks are required to consider to ensure you can repay your loan. Luckily, they can be fairly transparent about this process.
For instance, you can do some fairly quick serviceability checks online. While these aren’t foolproof, you’ll have a pretty good understanding of where you’re sitting.
For instance, there is <a href="https://www.google.com.au/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=8&amp;ved=0CHUQFjAH&amp;url=http%3A%2F%2Fwww.genworth.com.au%2Fdocs%2Fdownloads%2Fservicing-calculator_2013-06.xls&amp;ei=5KSXU5ObIsrjkwWeqoHICA&amp;usg=AFQjCNEiPSoi5ce-u6W4YMZuDin7fWsojw&amp;sig2=QkJbIxL827m6v84W-uM5qg" target="_blank">this fairly thorough Genworth calculator (note: this is an excel spreadsheet download)</a>.
Or you can try <a href="https://www.amp.com.au/wps/portal/au/AMPAUPlannersGeneral3C?vigurl=%2Fvgn-ext-templating%2Fv%2Findex.jsp%3Fvgnextoid%3Da498a451359c2210VgnVCM10000083d20d0aRCRD%20" target="_blank">one of the others in AMP’s range</a>.
Did you know that reducing the limits on your credit cards can help increase your serviceability? We will look at tips for how to increase your serviceability and the specific factors you should take a second look at tomorrow in our ‘how to’.
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What is serviceability? Investment terms explained

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Toni Collette and her musician husband, David Galafassi have secured a small reduction in the damages they must pay in their legal battle over abandoned plans to buy a Paddington terrace.
After a two day hearing, the NSW Court of Appeal ruled on Friday that the couple pay $602,500 to Industrie clothing label founder Susan Kelly for reneging on <a href="/expert-insights/investing/actor-toni-collette-and-muso-david-galafassi-fall-for-the-charms-of-contemporary-inner-city-paddington">their 2011 agreement to buy Kelly's double fronted Stewart Street property</a> (pictured in gallery above).
The revised damages bill represents a reduction of $212,407 on the original damages bill of $814, 907 ordered by Supreme Court Acting Justice William Windeyer last year.
The purchase price under the contract was $6,350,000, of which the purchasers paid a 5% deposit ($317, 500). The date fixed for completion under the contract was 30 December 2011.
But on the morning of 30 December 2011 the purchasers' solicitors advised that the purchasers did not have the funds necessary to enable them to complete and that they would not be able to proceed with the purchase.
The vendor responded that she did not accept the purchasers' apparent repudiation and intended to institute proceedings for specific performance.
On 4 January 2012 the purchasers' solicitors again advised that the purchasers were not financially capable of completing the contract and that they would be unable to comply with an order for specific performance.
On 20 January 2012 the vendor commenced proceedings in the Equity Division of the Supreme Court seeking orders for specific performance and, in the alternative, damages.
On 24 January 2012 Mrs Galafassi sent an email to the vendor and her husband apologising for their failure to complete. 
The email explained that the purchasers had been unable to sell their own home and had instead agreed to a property swap arrangement with the vendor of a different property, and in the process they had lost all their savings, meaning that they were unable to go through with the purchase. 
On or about 24 February 2012 Mrs Galafassi sent a further email again stating that there was no way they could comply with an order for specific performance if such an order was granted because they did not have the means to raise the funds to complete.
But the Galafassi couple pursued the latest court hearing where the NSW Court of Appeal ruled that Mrs Kelly was not entitled to "special condition interest", which is paid in cases where completion of a property deal is late.
The court found that since completion of the sale had not occurred, special condition interest did not apply.
But Ms Collette and Mr Galafassi will still have to forfeit their $317,500 deposit, taking the total bill to more than $920,000. Plus much of the legal expenses of Ms Kelly.
Ms Collette and Mr Galafassi had agreed to buy the terrace in September 2011 for $6.35 million, but when due to settle three months late they backed out.
"We feel sick about this, you and the vendors nothing but great and we apologise profusely," the couple said in an email to the McGrath selling agent Ben Collier.
"David and I feel absolutely sick about not being able to go through with the purchase of your house. We had every intention of doing so and it has broken our hearts. We can't apologise enough and totally empathise with your position. We are mortified. If we had the money we would happily be living in it by now," she emailed the Kelly's.
The Purchasers' email concluded with the plea: "Please reconsider taking us to court. It just makes a very sad situation much worse. We can no longer buy your beautiful house. Again, we apologise profusely. We don't have the finances to go through with the purchase. For the sake of both our families, I implore that you find a way to settle this less publicly. Understandably, all of this is not your concern. You thought you had sold the house and the sale has fallen through. We sincerely hope that you can understand our position and find it in your hearts to deal with this in another way."
The email contained the postscript: "ps...our lawyer was not entirely comfortable with us writing this letter and does not want it used against us. His advice is to state that this "appeal" is without prejudice and should not be used in a legal case against us, or in the press, and is very much confidential."
This article continues on the next page. Please click below.
<hr class="system-pagebreak">
On or about 24 February 2012, Mrs Galafassi sent a further email to the vendor's husband referring to recent publicity in the press and stating: "... I wanted to write to you in the hope that we can try and sort something out before good press becomes bad press. We are truly sorry for the position that we put you in last year, we can't stress that enough, but there has to be a way that this matter can be resolved. 
"If we can't settle it commercially, quickly, rather than legally, slowly, the value of Paddington may well be jeopardised once our legal teams get in to the Court room and the media have a field day. I am being perfectly honest when I say that there is no way that we could comply with an order to complete the purchase of Paddington if your order was granted. We don't have the means to raise the funds to settle on Paddington. When Bronte Road didn't sell at auction last November, we were very worried. 
"I fully appreciate that I am not in a good position but, without admitting that I am liable for anything, I understand that if you were to sell Paddington now, it is likely I would have to find the difference to satisfy a claim of damages if the price came in under the contract price that we signed. 
"So you would be in the same position as you would have been had you sold to us at the end of last year. Whether that happens or not, that all makes sense to me but what doesn't make sense is that the longer this matter is dragged out through legal processes (at least another month), the more damage it will do when the property is finally listed. 
"It would become like a forced sale and the media coverage would not force the price up! At the moment you have $315,000 and you still have the house, so in essence you are in a better position than you were at the end of last year. In my humble view I wouldn't put that position at risk."
Mrs Galafassi's email continued: "I am due to settle on the sale of our Bronte Road house in the next few days. As the article in the media said <a href="/news/actor-toni-collette-changes-her-mind-over-paddo-and-buys-again-in-bronte-title-tattle">we have 'swapped' our house for one not too far away</a>, and at the moment the story that we wanted to stay close to the ocean with our young family, is not too far from the truth. 
"My view is that if that story was maintained in the press, rather than coverage of all the details of a litigious battle, you will get a far better result than if you pursue me in the Courts. If you listed Paddington for sale now, who knows, you may get more than the price we agreed to pay. You just don't know. But if you don't get a higher price, well, then Dave and I may have to suffer the consequences of a damages claim. 
"Either way, you really are not going to be any commercially worse off, but we all will have avoided some of the stress, anxiety, time and effort that inevitably go hand in hand with litigation. I am not trying to avoid the consequences of our action but trying to consider more commercial and realistic options with more satisfactory outcomes for everyone, rather than paying lawyers to follow procedures and argue legal points on our behalves."
At trial the Galafassi couple contended, unsuccessfully, that these two emails were "without prejudice" and should not have been admitted into evidence.
About two months after the second email, the Kellys sold the house to Ernst &amp; Young accountant Ian Ball for $5.5 million. Ben Collier had shown the property to nine interested purchasers between January and April 2012; and that the offer ultimately accepted from Mr Ball on 24 April 2012 of $5,500,000 was an increase of $200,000 on his first offer.
Mrs Kelly then sued for the difference plus interest and land tax that arose on the December 31, since they had already bought their next home in Vaucluse.
Ms Collette wrote to Mrs Kelly's husband Nick in 2012, urging the couple not to proceed with the court case.
"I wanted to write to you directly in the hope that you will understand," she said in an email.
"We can no longer buy your beautiful house. We don't have the finances to go through with the purchase. For the sake of both our families I implore you to find a way to settle this less publicly."
The court has yet to finally decide on legal costs indicating that Ms Collette and Mr Galafassi should pay 65% of Mrs Kelly's costs though the parties are to be given the opportunity to make further submissions on costs, the chief Justice Thomas Bathurst and Justices Julie Ward and Fabian Gleeson proffered.
David Galafassi (First appellant) and Toni Galafassi (Second appellant) were represented by solicitors: YBR Solicitor and counsel: J Stoljar SC with J C Hewitt.
Susan Kelly engaged B A Coles QC with C G Carroll who were advised by solicitors, Osborne Lawyers. 
There were 66 prior cases cited in the matter which was first ruled on in May last year.
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Toni Collette's appeal secures reduced Paddington property sale damages legal bill

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Getting legal advice when buying or selling is absolutely crucial.
There are often tweaks that are required to be made to contracts, and even your most standard property transaction comes with its own unique quirks and requirements.
Professional advice should be able to tell you exactly what you’re signing up for, anything specific that the vendor or buyer is requesting and what you can insert to add your own wants into the contract.
When it comes to choosing the expert to do this, you usually end up with either a conveyancing agent (conveyancer) or a lawyer. Which one of these is best is highly contended, and there are pros and cons to each.
Just Think Real Estate’s Edwin Almeida took this comparison on, noting that the majority of property lawyers and conveyancers he has met have been “great”, however “like every other industry, there are the bad apples that create the misbalance in opinions, of what otherwise is a great and critical service provided by both solicitors and conveyancers. “
The first point of discussion: Pricing. Everything comes down to the numbers, but it pays to know what it will cost you and what you’re paying for.
Firstly, notes Almeida, note that this isn’t the only difference between the two – although many do believe that it’s the biggest difference.
“Yes, most lawyers but not all, do charge more for the conveyancing process. However, I have in my time as a selling agent, noted that when things become difficult for conveyancers to handle, conveyancers inevitably refer the matter to a solicitor,” he said.
“With the trend of SMSF purchasing property, people feel more comfortable in paying the higher service fees; knowing and having the peace of mind that their conveyance matter is handled properly. Off the plan purchases, in a market where property values are particularly hot, people generally believe lawyers are more apt to act on their behalf.”
So, while lawyers on the whole are more expensive – you may be paying for their expertise.
Which brings us to the second point: Readiness to act.
“I have noticed that conveyancers act quicker with regard to the conveyance of the sale. This is notable particularly when exchanges are required to happen quickly and with few, if any, glitches. I often ask myself, is this because conveyancers only work on conveyancing and nothing else? I believe it is,” he explains.
He warns that solicitors he has dealt with in the past put the matters on the “back burner”.
“This is more noticeable in practices where it is typical of only having one lawyer and a paralegal,” he said.
Lastly, he notes that lawyers often seem to be less cooperative with real estate agents, often lacking communication. His suspicion is that this may be the case of the lawyer “that begrudges the commissions earned by the real estate agent when compared to the fees they charge, to do the conveyance”.
{qtube vid:=UERVnouElIk}
{module Would you prefer to use a property lawyer or a conveyancing agent?}
YOU MAY ALSO BE INTERESTED IN:
<a href="/expert-insights/finance/whats-the-difference-between-a-conveyancer-and-a-lawyer-and-do-i-really-need-one">What's the difference between a conveyancer and a lawyer, and do I really need one?</a> by Stephen Jensen
<a href="/expert-insights/investing/the-ins-and-outs-of-conveyancing-pamela-bennett">The ins and outs of conveyancing</a> by Pamela Bennett<a href="/expert-insights/investing/the-ins-and-outs-of-conveyancing-pamela-bennett"></a>
<a href="/expert-insights/investing/a-good-conveyancer-can-hold-a-property-transaction-together-penny-erskine">A good conveyancer can hold a property transaction together</a> by Penny Erskine
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Conveyancers or property lawyers? Who do you trust with your contract

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ME Bank cut the its one year Standard Home Loan rate by 0.05% and its five year Standard Home Loan rate by 0.4%.
The bank’s one year Standard Home Loan now has a 4.89% per annum interest rate, with a comparison rate of 5.35% per annum. The five year fixed Standard Home Loan rate is now at 5.39% per annum, with a comparison rate of 5.40%.
According to ME Bank, it currently offers the lowest three year and five year fixed home loan rates on the market. Chief executive Jamie McPhee said that the cost of fixed rate funding has been falling amidst persisting “global economic weaknesses” and growing expectations for fiscal tightening after the budget.
“Fixed rate funding costs are falling as the market pushes out expectations for future RBA rate movements. ME Bank has taken advantage of these falls and is passing on the savings to customers,” he said. He also noted the economy’s ongoing transition away from the mining sector and “below average” domestic economic performance.
McPhee warned customers not to be swayed by cash-back incentives offered by some banks.
“Cash back sweeteners can be nice in the short-term, but customers should understand they can save much more on their home loan in the long-term by locking in a lower rate," said McPhee.
For more interest rate coverage, see:
<a href="/expert-insights/finance/moderation-in-pace-of-house-prices-lately-despite-significant-yearly-growth-glenn-stevens-june-statement">Moderation in pace of house prices lately, despite significant yearly growth: Glenn Stevens' June statement</a>
<a href="/expert-insights/finance/thanks-to-low-interest-rates-affordability-at-highest-level-for-over-a-decade-hia-cba-index">Thanks to low interest rates, affordability at highest level for over a decade: HIA-CBA index</a>
 
 
 
 
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jrichardson-uRX5hFdKfN

ME Bank cuts rates for one and five year fixed Standard Home Loans

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In general terms, in order to claim input tax credits (ITCs) under the GST system, an enterprise must be carried on. This can be a tricky issue when property developments are concerned, as two taxpayers recently found out to their detriment before the Administrative Appeals Tribunal (AAT).
A business needs to be carried on before claims for ITCs can be made and this is where the taxpayers ran into trouble before the AAT.
In that case, the two taxpayers failed before the AAT in a matter concerning a number of ITC claims in respect of purported acquisitions made in relation to two property developments.
The first taxpayer (a company that was the trustee of a trust) and the second taxpayer (a partnership of two individuals) claimed to have made acquisitions in relation to a 4900 acre property development near Goulburn in NSW. The first taxpayer also claimed to have made acquisitions in relation to another property development in Grenfell NSW.
Both taxpayers were registered for GST. However, the Tax Commissioner issued to both taxpayers amended assessments denying ITCs claimed on those purported acquisitions – in the first taxpayer's case, for the tax periods April 2010 to June 2011, and in the second taxpayer's case, for the tax periods April 2009 to December 2010.
The Commissioner's position was that neither taxpayer carried on an enterprise at all, so that neither of them could be entitled to any ITCs. The Commissioner also imposed a 50% administrative penalty.
The tribunal dealt mainly with the arrangements of the first property development as it was of the view the arrangements did not differ materially from the second development. The tribunal noted there had been some work done on the property; however, the parties disputed what that work consisted of, how much of it was done, who it was done for, and whether it had been paid for.
The taxpayers said they were "principal contractors to the project". The project was presumed by the tribunal to be the development of the property for eventual subdivision. However, the tribunal noted that exactly what the "principal contractors" did in respect of the property remained the subject of "quite profound mystery". It also said the same observation applied in respect of what the "principal contractors" were supposed to have acquired from various entities, described by the taxpayers as the "subcontractors", who were said to have undertaken some of development activities.
The tribunal understood the case put by the taxpayers as follows: the owner of the property engaged the principal contractors to get certain work done on the property; the principal contractors in turn engaged subcontractors to do the physical work; the subcontractors did the work and charged the work to the principal contractors; and the principal contractors bundled up the charges with a 20% mark-up and on-charged the owner of the property.
The total amount invoiced to the first taxpayer by the subcontractors (in relation to both property developments) was over $250,000. The total amount invoiced to the second taxpayer was over $820,000. However, the tribunal said the invoices themselves were "short on detail". The tribunal also noted that the Commissioner had notified the taxpayers his doubts concerning the work undertaken on the property after he was informed by the relevant council authority that approval to subdivide the property had been refused.
The tribunal said each taxpayer's claim for ITCs failed "at the most basic level". It said that an entity is not a "project manager" simply because someone says it is, and it was important that, to carry on an enterprise (thus enabling the ITC claim to potentially succeed), "an entity must do something".
The tribunal was unable to identify the "activity" that the taxpayers were undertaking in respect of the properties. It was also not satisfied that either of the taxpayers, in relation to the relevant property developments, carried on any activities "in the form of a business". A key issue identified was the difficulty the taxpayers had in articulating the arrangement between themselves, landowners and subcontractors. The AAT said it could not see that either taxpayer did much at all, beyond receiving invoices from the subcontractors and it rejected any notion that receiving invoices is relevantly an “activity”.
The tribunal member (Deputy President Frost) said the taxpayers "could not take me to any document that set out an agreement, between either of the landowners and either of the applicants, that the applicants would perform services or tasks, engage or co-ordinate third parties, or even make arrangements of any kind in relation to the development of the properties".
That, to say the least, was not helpful to the taxpayers' cause.
The tribunal was of the view the "true arrangement" was work was done for, and the supplies were made to, the owners of the properties, and that at most, the taxpayers agreed to pay for some of the supplies. The tribunal found, on the balance of probabilities, that there were "supplies" by the subcontractors; however, it was of the view that any supplies were not made by the subcontractors to the taxpayers. It said it could not see any indicators of a business being carried on. Accordingly, it held the claims for ITCs were not sustainable.
Although not required to, the tribunal also rejected the taxpayers' argument that "promissory notes" issued by them to the subcontractors for work done constituted consideration at the time of the supplies. The tribunal also affirmed the penalty at 50% of the shortfall amount.
The tribunal said the arrangement involved multiple entities, many of them not at arm's length, and that given the type of arrangement involved and its size, independent advice should have been obtained.
This case is a clear demonstration of the need to properly and fully document the operations of a business. The need to obtain clear and independent advice on any business proposition, be it property development or something else, is also a "take-away" message from this case.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
Photo courtesy of Chris Tolworthy/Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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thayes-XhNcNKLNWa

The tricky business of property development and GST credits

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First home buyers are back at record lows.
Loans to first home buyers as a proportion of total new home loans fell 4% in the year to April – the share of first-time buyers in the market equalled the record November 2013 low at 12.3% of all loans.
Meanwhile the value of investor home loans rose by 2.3% to a record $11 billion in April, surging some 29.9% in the same 12 month period, filling the void.
First home buyer mortgages peaked in May 2009, accounting for 31.4% of total new home loans on the back of boosted government grants.
Craig James, the CommSec economist noted the first home buyer finance levels were well below the long-term average of 20%.
The St George senior economist, Hans Kunnen attributed the lack of first home buyers to state governments scrapping first home buyer grants for existing dwellings and the solid increase in house prices over the past year.
First home buyer families might need three income sources in future, he told Ross Greenwood's 2GB Money News.
Total housing finance edged 1.7% higher in April, in seasonally adjusted terms to $27.89 billion, while commitments for owner-occupied housing rose 1.4% and investor commitments by greater 2.3%, the Australian Bureau of Statistics ­figures showed.
The average home loan across Australia stood at $323,400 in April, up 7.2% on a year ago
Fairfax Media columnist Michael Pascoe noted the RBA had intriguingly dropped first home figures from its <a href="https://www.rba.gov.au/chart-pack/" target="_blank">June economic data chart pack</a>, perhaps as a consequence of rising concerns about the underestimating of first home buyer statistics.
<img src="/images/2014/06/11/fhb%20june%2011%20one.gif" alt="">
A RBA spokesperson advised Property Observer that the Bank had decided to remove the data from the graph while it is being reviewed by the provider.
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First home buyers fall back to record lows

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There has been <a href="/expert-insights/buying/the-property-boom-is-over-a-good-headline-but-no-evidence-to-back-it-up">a lot of media chat</a> about house prices "falling" in May, which is basically a result of the famed Daily House Price Index recording a decline in that month (as it has done every May, due to seasonality).
Meanwhile, back in the real world, the housing markets continue to look strong, with the <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0" target="_blank">ABS Housing Finance data</a> recording further increases in April.
<a href="https://4.bp.blogspot.com/-AXUV3ocvw0c/U5Z10in1aeI/AAAAAAAANxM/iG9g2ZabZ5g/s1600/ABS+housing+finance.jpg" style="line-height: 1.3em;"><img src="https://4.bp.blogspot.com/-AXUV3ocvw0c/U5Z10in1aeI/AAAAAAAANxM/iG9g2ZabZ5g/s1600/ABS+housing+finance.jpg"></a>
This comes as no surprise, because, as I posted <a href="https://petewargent.blogspot.com.au/2014/06/record-high-mortgage-demand-in-may" target="_blank">here</a>, other mortgage market data has suggested the same thing, with Australian Finance Group (AF) recording the its highest mortgage demand ever in May.
In particular, AFG's data suggested to me that the markets are being driven by property investors more than ever before, a direct effect of the lowest interest rates we have seen in a generation.
At long, long last it also seems that the penny is beginning to drop that first home buyers are not (and never were, in fact) "on strike" - they're still around but often in a different guise than in previous cycles.
Some are buying but a little later in life than before, others are buying yet aren't being recorded as first-timers, others still are buying as investors and as such slip through the net in that manner.
Shifting trends, yes... but not a "strike".
Construction?
Remember that through this property cycle in Australia what we really want to see is heavy investment in new dwellings in order to generate dwelling construction and economic activity to offset the coterminous decline in mining investment.
On the face of it, construction finance for owner occupiers still looks strong for owner-occupiers on a moving annual basis.
However, what this chart doesn't quite show so clearly is that the data for the last few months is beginning to look decidedly sketchy.
Hopefully I'm wrong, but the peak may soon be in for this segment of the market:
<div class="separator"><a href="https://3.bp.blogspot.com/-lkJg4iJcsB8/U5Z2kCkPncI/AAAAAAAANxU/NRRSmk98TjE/s1600/CFOO.jpg"><img src="https://3.bp.blogspot.com/-lkJg4iJcsB8/U5Z2kCkPncI/AAAAAAAANxU/NRRSmk98TjE/s1600/CFOO.jpg"></a></div>
On the other hand construction finance for investors is very strong and looks to be heading for a record heights on a moving annual basis:
<div class="separator"><a href="https://2.bp.blogspot.com/-AdMP-Wzd3wM/U5Z2kD0p9UI/AAAAAAAANxc/8dSzdgyCZ_I/s1600/CFI.jpg"><img src="https://2.bp.blogspot.com/-AdMP-Wzd3wM/U5Z2kD0p9UI/AAAAAAAANxc/8dSzdgyCZ_I/s1600/CFI.jpg"></a></div>
In aggregate, finance for new dwellings remains strong which bodes well for the construction index, particularly for apartments.
Investor loans shatter all-time records
As for total property investment loans in April, the monthly figure printed at an astonishing $10,978,872,000.
That is comfortably the highest aggregate of monthly property investment loans ever recorded in Australia, roundly plonking a very large question mark against the suggestion that property prices have been receding.
<div class="separator"><a href="https://2.bp.blogspot.com/-ibINLNmRdS4/U5Z2kGnDYfI/AAAAAAAANxY/u95-PjW85ts/s1600/Invloans.jpg"><img src="https://2.bp.blogspot.com/-ibINLNmRdS4/U5Z2kGnDYfI/AAAAAAAANxY/u95-PjW85ts/s1600/Invloans.jpg"></a></div>
That's certainly the on the ground experience in Sydney: the idea that one might pick up under market value bargains based upon the supposedly falling prices is absurd. For decent properties, you'd be outbid very time.
The <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5671.0" target="_blank">Lending Finance data</a> for April to be released on Friday will provide more detail by state, and I have little doubt that rolling 12 monthly property investment loans in New South Wales will be at or close to record highs.
There are simply far too many investors in the market for it to be otherwise.
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Strike or shift?
There's been a long-running debate about the so-called "first home buyer strike" in Australia.
It never really made any sense, since first home buyer numbers have remained very solid in states which have grants for first-times such as Western Australia, where <a href="https://www.afgonline.com.au/wp-content/uploads/2014/06/WA-June-14.pdf" target="_blank">20-25% of loans written</a> continue to be for first-timers.
Yet mysteriously FHBs had apparently disappeared in states such as New South Wales, crowded out by greedy Baby Boomer investors.
I summed up the basic issue incomplete records issue at the beginning of the year <a href="/expert-insights/buying">here</a>.
Further, as noted <a href="https://petewargent.blogspot.com.au/2014/04/investment-mortgages-crunch-all-time" target="_blank">here</a> as mortgage data broke new record heights, it's important to listen to what the data is actually telling you, which has not been commensurate with an entire sector of the market casually sitting on the sidelines.
There has been a shift, certainly.
First home buyers are getting older, often buying in couples rather than alone.
Many are choosing to buy an investment property as their first step, especially in Sydney.
But they are not "on strike", as has been claimed.
RBA reporting
The Reserve Bank released its chart pack to the end of May last week <a href="https://www.rba.gov.au/chart-pack/index" target="_blank">here</a>, and it seems that the central bank has at long last reached the same conclusion, completely stripping the first home buyer data out of its chart pack.
<div><img src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6br-hla-small.gif?accessed=2014-06-10-08-22-50" alt="Housing Loan Approvals graph" width="400" height="320"></div>
Previously, the split had been shown between owner-occupiers, investors and first-timers, but since the FHB data was both incomplete and non-sensical, a decision has clearly finally been reached to have it pulled.
Other RBA charts show building approvals to be approaching something of a crossroads, although remaining close to record highs:
<div><img src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/5bl-privbapp-small.gif?accessed=2014-06-10-08-41-45" alt="Private Residential Building Approvals graph" width="400" height="316"></div>
And dwelling prices remain in an uptrend.
<div><img src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6bl-dwelpri-small.gif?accessed=2014-06-10-08-41-45" alt="Housing Prices graph" width="400" height="330"></div>
The rest of the chart pack, which you can see <a href="https://www.rba.gov.au/chart-pack/index" target="_blank">here</a> makes for interesting reading as always.
In particular, note the near-exponential rate of growth in bulk commodity export volumes which are now overwhelmingly driving Australia's economic growth.
<div><img src="https://www.rba.gov.au/chart-pack/images/16-17-balance-payments/16tr-bcomx-small.gif?accessed=2014-06-10-08-43-32" alt="Bulk Commodity Exports graph" width="400" height="332"></div>
With a third of Australia's annual exports by value destined for China, it's a highly leveraged play.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His new book '<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>' is out now.
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