Longstanding Gold Coast and Canberra developer <a href="https://www.apartments.com.au/developers/morris-property-group">Morris Property Group</a> is continuing to roll on with its Glitter Strip apartment pipeline, seeking to return to Mermaid Beach with a new 68-apartment development.

Morris, founded by Barry Morris in 1978 and one of the Gold Coast’s most prolific apartment developers over the past two decades, has filed plans for a 12-storey mixed-use building at <a href="https://www.apartments.com.au/new-apartments/36-seabeach-avenue-mermaid-beach-qld-4218">34-36 Seabeach Avenue</a>, on the prized eastern side of the Gold Coast Highway.

The 1,227 sqm site occupies a prominent corner position at Seabeach Avenue and the Gold Coast Highway, opposite the Mermaid Plaza retail and office precinct and around 140 metres walking distance from the future Mermaid Beach South light rail station.

<a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a> has designed the project, which will comprise 68 apartments across a mix of 48 two-bedroom and 20 three-bedroom residences.

The building will rise 12 storeys, reaching a maximum height of 36 metres, with the apartments accounting for a total of 156 bedrooms. The development application also seeks approval for short-term accommodation across the 68 apartments, while two office tenancies are proposed at ground level.

The plans show 108 car spaces across the development, with parking accommodated at ground level and within a three-level basement accessed from Seabeach Avenue.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="c2175c99-12fd-4a3c-9be1-89bbf258a90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.41%E2%80%AFPM_0.png?VersionId=iNLzWcE6gaAE76rafhEXfHve.4g4Se0p" />

Resident amenity will be concentrated on level two, where Fraser &amp; Partners has designed a recreation deck with a swimming pool, 90 sqm pool terrace, outdoor barbecue area and gym.

The broader communal offering will also incorporate landscaped spaces, with the planning documents noting the amenity has been designed to provide areas for recreation, social interaction and outdoor living.

The proposal would continue the transformation of the Gold Coast Highway corridor through Mermaid Beach ahead of the arrival of the light rail.

The site is zoned Neighbourhood Centre and sits within the Mermaid Beach/Broadbeach Light Rail Corridor neighbourhood plan. While the prescribed building height is 24 metres, the site is identified within an Urban Neighbourhood context providing for a 50 per cent height uplift to 36 metres.

Planning documents describe the stretch of the Gold Coast Highway between Broadbeach and Nobby Beach as increasingly characterised by medium and high-rise development, with the proposed Morris tower joining projects including Ventura, The Alfred, Oceans and Otto.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="911f193f-e381-4a55-be08-58be87fcf978" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.48%E2%80%AFPM.png?VersionId=oxVvLJaY.SOXEdXrIcogfyEXDfvCmmpM" />

The development would mark Morris Property Group's latest investment in Mermaid Beach, where it has already delivered two apartment projects.

Otto, at 1 Bondi Avenue on the western side of the Gold Coast Highway, comprises 70 apartments across nine storeys. The project was completed in 2019 and includes a residents' gym, recreation deck and swimming pool.

Morris also developed Oceans at 46 Ocean Street, a nine-storey, 70-apartment build-to-rent development completed in 2019. Oceans was the group's first build-to-rent project and incorporates commercial space at ground level.

The two existing Morris projects sit further north along the same Gold Coast Highway corridor as the proposed Seabeach Avenue development. Fraser &amp; Partners' planning analysis specifically identifies both Otto and Oceans among the established built-form precedents surrounding the site.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="14925119-7b71-4812-8149-340317512c7c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%203.00.15%E2%80%AFPM.png?VersionId=aEJqYuw_nTCjcin17BSD0piB1EFotTlj" />

Mermaid Beach represents only part of Morris' considerable Gold Coast footprint.

The family-owned developer has been particularly active in neighbouring Broadbeach, delivering projects including Sierra Grand, Eclipse, Synergy, Qube, Koko, Opus and Malo, while its current pipeline includes Maison and the two-tower Crest development.

Further south, Morris has also developed a string of projects in Burleigh Heads, including Element, Boardwalk and Sandbar, while Essentia expanded its footprint north into Surfers Paradise.

The Seabeach Avenue application has been lodged by PMM Broadbeach Pty Ltd and seeks a development permit for a Material Change of Use for multiple dwellings, short-term accommodation and office uses. Zone Planning Group prepared the planning application, with Fraser &amp; Partners commissioned as architect.

The project comes as the developer continues to expand its Gold Coast pipeline while retaining a significant presence in Canberra. Morris now has more than $2.5 billion of development in its national pipeline and has delivered more than 7,000 homes during its near five-decade history

Joel Robinson

First look: Morris Property Group returns to Mermaid Beach with new Seabeach Avenue apartment development

<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developers/fortis&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw3hvFB2uWTRfEyEcpTSnnK9" href="https://www.apartments.com.au/developers/fortis" target="_blank">Fortis</a>&nbsp;is continuing its stronghold on Sydn​ey’s eastern suburbs apartment market, launching&nbsp;in September&nbsp;its latest boutique&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developments/double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw0GI5S9-wNeiLUnM-d1uYkw" href="https://www.apartments.com.au/developments/double-bay-nsw-2028" target="_blank">Double Bay</a>&nbsp;development,&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw2YNouJQcFjiTTgVHbgDLA-" href="https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028" target="_blank">55 William</a>.

55 William presents&nbsp;just eight north-facing&nbsp;two-bedroom, three-bedroom and full-floor&nbsp;residences to the market, priced from $4.5 million.

The upcoming launch comes just weeks after Fortis secured approval for the $80 million development, its third eastern suburbs approval in two months. Construction is already underway, with completion targeted for 2028.

[smartcode_project:default project_id=152579 project_image_fid=376250]

55 William adds to a growing concentration of Fortis projects in and around Double Bay, a market the developer has become increasingly active in over recent years.

Fortis previously completed the nine-residence Marmont on New South Head Road, while it is currently developing a mixed-use residential and retail project at 12 Cross Street. Its wider Double Bay footprint also extends into commercial and retail development.

The developer's broader Sydney residential pipeline is particularly concentrated across the eastern suburbs, with projects spanning Doub​le Bay, Ro​se Bay, Wo​ollahra, Dar​ling Point, Poi​nt Piper and Eli​zabeth Bay.

[smartcode_project:default project_id=152579 project_image_fid=376253]

At 55 William, Fortis has again turned to MHN Design Union, the architecture practice behind several of its eastern suburbs projects, while London-based 1508 London has been appointed to handle the interiors and Wyer &amp; Co the landscaping.

The six-level building will comprise a combination of two and three-bedroom apartments, including a garden residence, full-floor apartments, a sub-penthouse and penthouse. Each residence will have secure basement parking and private outdoor space.

A rooftop terrace for all residents, along with select apartments, enjoys views across Double Bay Harbour and toward the Sydney skyline.

Ceiling heights will reach up to three metres&nbsp;in select residences, while the kitchens will feature natural stone and integrated Gaggenau appliances.

&nbsp;

&nbsp;

The boutique nature of the project reflects the type of stock Fortis has increasingly targeted across Sydney's eastern suburbs, where larger apartments and smaller buildings are being pitched primarily toward local owner-occupiers and downsizers.

Fortis Group General Manager Ed Eve said the developer continues to see demand from buyers wanting to remain in the eastern suburbs but move into newer, lower-maintenance housing.

“We're seeing continued demand from local owner-occupiers and downsizers looking for high-quality homes that allow them to remain in the eastern suburbs, close to the lifestyle and community they know,” Eve said.

55 William is also one of the early projects to respond directly to the NSW Government's Low and Mid-Rise Housing reforms. Fortis had previously secured approval for just two townhouses on the 599 sqm site before revising the scheme to eight apartments following the planning changes.

Situated one street back from Double Bay's water's edge, the project enjoys an enviable harbourside setting within walking distance of Double Bay Village and the ferry wharf.

[smartcode_project:default project_id=152579 project_image_fid=376252]

Fortis has increasingly made the eastern suburbs a major focus of its Sydney pipeline. Beyond Double Bay, it recently completed the 14-residence Piper in Point Piper and has projects underway or planned across Rose Bay, Woollahra and Darling Point.

The developer recently secured approval for Verano in Rose Bay, a six-level development comprising 21 two, three and four-bedroom apartments, also designed by MHNDU.

55 William&nbsp;is soon to be release to the market with VIP appointments commencing early September,&nbsp;with residences priced from $4.5 million.

[smartcode_project_cta:default project_id=152579]

Fortis continues eastern suburbs push with 55 William launch

UAE-based developer Arada has unveiled plans for a $2 billion twin-tower apartment development in Broadbeach, marking its first move into Queensland as it continues its rapid expansion across Australia.

Arada will develop 952 apartments across two towers on a prominent site opposite the Gold Coast Convention and Exhibition Centre, with the project targeted for completion ahead of the Brisbane 2032 Olympic and Paralympic Games.

The project represents Arada's largest commitment to the Australian market since arriving in the country in 2024 and significantly expands a local pipeline that has now grown to eight projects and more than 5,000 homes.

It will also be the first major Queensland project delivered by Roberts Co since the tier-one contractor was acquired by Arada Group in 2025.

Plus Studio has designed the Broadbeach development, which will comprise one, two and three-bedroom apartments across two towers connected by a landscaped podium.

A significant resident amenity offering will include lagoon and lap pools, a gym, sauna and steam room, alongside a mist room, infrared room and salt scrub facilities. Communal terraces, private dining areas, a library, residents' lounge and work-from-home spaces are also planned. Around 1,200 sqm of retail and hospitality space will occupy the ground floor.

The site puts Arada in one of the Gold Coast's most active apartment markets, directly opposite the convention centre and within walking distance of Pacific Fair, The Star Gold Coast and Broadbeach's dining and retail precinct.

It also has immediate access to the Gold Coast light rail network and sits just a few blocks from the beach.

Arada Group Chief Executive Ahmed Alkhoshaibi said Broadbeach represented an opportunity for the developer to expand beyond its initial NSW pipeline.

“Broadbeach is a world-class address that gives us the canvas to create a community of exceptional design and lifestyle quality that genuinely enriches the daily lives of the people who call it home,” Alkhoshaibi said.

“This is our first development outside New South Wales, and it reflects our growing ambition to grow in key urban markets around the country.”

Alkhoshaibi said bringing Roberts Co into the project would give Arada greater control over the development and construction process.

“Delivering this project through Roberts Co, our own tier-one construction business, means we can bring the quality, pace and accountability that our buyers expect.”

The move into Broadbeach comes as Arada accelerates its Australian expansion following its entry into the market two years ago. The developer has assembled a pipeline of eight projects comprising more than 5,000 homes, while the acquisition of Roberts Co last year gave the group its own Australian construction capability.

Globally, Arada has a development portfolio valued at $50 billion comprising more than 55,000 homes across the UAE, United Kingdom and Australia.

The Gold Coast is emerging as the next major market for the developer, with strong population growth and infrastructure spending ahead of the 2032 Games continuing to underpin significant apartment development across the coastal strip.

Arada plots $2 billion Broadbeach towers in major Queensland move

Sydney’s downsizer market is changing, with a growing cohort of buyers prioritising the right home over simply finding a smaller one.

Coronation Property Head of Sales Cam Porter says the traditional idea of downsizing does not necessarily reflect what many buyers are now looking for, particularly those moving from established family homes across Sydney.

Instead, he says they are increasingly becoming “right-sizers”, seeking lower-maintenance homes without sacrificing the space, amenity or quality they have become accustomed to.

“We are increasingly seeing buyers who are not motivated by the idea of simply moving into a smaller property,” Porter says.

“They are right-sizers. They want a home that is easier to manage and better connected, but they still expect generosity, quality and a floorplan that supports the way they live.”

It is a subtle but important distinction in a market where apartment developers are increasingly targeting established owner-occupiers.

[smartcode_project:default project_id=135149 project_image_fid=377495]

For many of these buyers, moving from a house to an apartment is not driven by a desire to dramatically reduce their living space. Instead, the appeal is in removing some of the maintenance associated with a larger home while retaining generous living areas, storage and enough flexibility to accommodate family and friends.

Coronation’s sales team is seeing buyers place particular importance on natural light, practical storage and additional rooms that can be used as guest bedrooms, home offices or secondary living spaces.

Kitchens and dining areas are also playing an increasingly important role, particularly for buyers who regularly entertain or have children and grandchildren visit.

[smartcode_project:default project_id=135149 project_image_fid=377494]

“These buyers still want their home to feel generous,” Porter says.

“They may want less maintenance, but they are not looking for less life.”

The challenge for the broader housing market is providing enough of the right stock to encourage that move.

While much of the discussion around Sydney’s housing shortage has centred on the number of homes being delivered, Porter says the diversity of those homes is equally important.

Older homeowners can remain in large family houses for longer when they cannot find an appropriate alternative in the neighbourhoods where they have built their lives.

“The decision is rarely as simple as wanting fewer bedrooms,” Porter says.

“People are weighing up their connection to a neighbourhood, the space they need for family, the quality of the home and whether it will continue to work for them over the long term.”

It also has implications beyond the downsizer market. Providing suitable apartments for smaller households can free up established houses for families who need the additional bedrooms and land, creating greater movement through the housing market.

<h2>Lillian targets the next stage of apartment buyer</h2>

It is a buyer Coronation is targeting at <a href="https://www.apartments.com.au/new-apartments/lillian-erskineville-9-metters-street-erskineville-nsw-2043">Lillian</a>, its new collection of apartments, terraces and penthouses at Erskineville Village.

Designed by Silvester Fuller, Lillian has been shaped around larger living spaces, natural light and flexible floorplans, alongside landscaped areas, wellness amenity and communal spaces for residents.

The development will form part of Coronation’s broader Erskineville Village precinct, which will combine new homes with green space, retail, hospitality and new pedestrian connections.

[smartcode_project:default project_id=135149 project_image_fid=377688]

McPherson Park will sit at the centre of the precinct, creating a significant new green space alongside the project’s retail and hospitality offering.

For Porter, the opportunity is to give buyers another housing option without forcing them to leave the part of Sydney they already know.

“People should be able to change the type of home they live in without having to change their entire life,” he says.

“For many buyers, Lillian offers the opportunity to remain connected to the Inner West and the city, while gaining access to a more convenient, walkable and considered way of living.”

[smartcode_project:default project_id=135149 project_image_fid=377687]

Coronation will explore the changing <a href="https://lillianresidences.com.au/news/lillian-x-space-x-downsizers-event-27-august/">right-sizer market at an event on August 27</a>, bringing together experts across property, design and lifestyle.

Held in partnership with SPACE, Poliform and Downsizer.com.au, the event will include a property market outlook from economist Michael Blythe alongside discussion around the considerations facing buyers planning their next move.

Attendees will also be able to learn more about the residences and amenity planned at Lillian Erskineville.

[smartcode_project_cta:default project_id=135149]

From downsizing to right-sizing: What Sydney buyers want from their next home

Family-owned builder and developer <a href="https://www.apartments.com.au/developers/omaya">Omaya</a> is bringing its 27-storey The Maybelle development to market, with the 229-apartment tower rising alongside Ismay Reserve near North Strathfield.

<a href="https://www.apartments.com.au/new-apartments/the-maybelle-21-parramatta-road-homebush-nsw-2140">The Maybelle</a> will comprise one, two and three-bedroom apartments, with its height providing elevated outlooks towards the Sydney skyline and Harbour Bridge, while other residences will look across neighbouring Ismay Reserve.

Designed by <a href="https://www.apartments.com.au/architects/squillace-architects">Squillace Architects</a>, the tower combines its parkside setting with proximity to the established retail, dining and transport amenity around North Strathfield.

[smartcode_project:default project_id=134873 project_image_fid=376196]

Residences will feature open-plan living spaces and a choice of two interior schemes, while communal amenity is spread across two elevated levels of the building.

Level 8 will be home to the Garden Pavilion, a full-floor resident space incorporating communal entertaining and breakout areas, seating and recreation spaces. Further up the tower, a landscaped Sky Terrace on Level 14 will provide another communal area with panoramic views towards the Harbour Bridge and Sydney skyline.

At ground level, the development sits directly alongside Ismay Reserve, where lawns, walking paths, children's play areas, picnic spaces and recreational facilities extend the green space available immediately around the project.

[smartcode_project:default project_id=134873 project_image_fid=376194]

The Maybelle is also within walking distance of North Strathfield and the Bakehouse Quarter, which provides a mix of cafés, restaurants, shops and everyday services.

Existing rail and bus services provide connections across Sydney, while the future North Strathfield Metro and access to the M4 will add to the transport options available around the precinct. Walking and cycling routes also extend via Powells Creek towards Sydney Olympic Park and its sporting, entertainment and parkland precincts.

Families are also well positioned for access to a broad selection of established schools and education options across Strathfield and the surrounding Inner West.

[smartcode_project:default project_id=134873 project_image_fid=376181]

Omaya has operated in Sydney for more than 35 years, managing projects from acquisition and design through to construction and delivery. The family-owned company is both developer and builder of The Maybelle.

Apartments start from $560,000, with the development protected by 10-year Latent Defects Insurance.

Construction is well underway, with completion expected by the end of 2026 and move-in anticipated from Q1 2027.

[smartcode_project_cta:default project_id=134873]

The Maybelle brings 27-storey parkside tower to market near North Strathfield

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

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Leading into the end of the financial year and the start of 2012-13, most of Australia’s property investors will be visiting their accountants and projecting their cashflow position for the coming year. Every property investor should consider a pay as you go (PAYG) variation. Often overlooked by investors, the PAYG system is a great way to increase fortnightly cashflow throughout the year. 
What could you do with extra cash each fortnight? Maybe save on interest costs by paying a current mortgage off faster? Fast-track savings for the next investment property deposit? Go on a holiday? There are so many possibilities.
 
The PAYG method of tax collection was introduced in July 2000 to replace previous versions of the same system, such as pay as you earn (PAYE). The system gives the option of claiming back tax regularly, rather than in one lump sum at the end of the financial year. A PAYG variation means that the property owner’s employer will reduce the amount of tax withheld to reflect set deductions like interest, rates and depreciation on a rental property. In essence it is a way of decreasing the amount of tax paid by the investor each pay period. 
It is important to note that submitting the PAYG variation does not replace a normal tax return. A tax return still needs to be filed at the end of the year to calculate the actual amount of tax liability. Your PAYG instalments for the year are credited against your assessment. 
A quantity surveyor can provide all current and future depreciation values for investment properties in a detailed tax depreciation report. Obtaining the report immediately after the purchase of a property will allow the maximum return from a PAYG variation, as the precise figures will make the instalments accurate. 
The flexibility provided to the Investor through a PAYG variation, combined with depreciation deductions identified by a quantity surveyor, can be of great help in managing the fortnightly cashflow of an investment property. 
Let’s consider a hypothetical situation:
A typical $400,000 investment property would show an average annual loss (or deduction) of $35,000 and an average income of $20,000 for the first five years. The deductions include costs such as interest on a $350,000 mortgage, management fees, maintenance and property depreciation. The total loss (income minus expenses) will result in a deduction for the owner of $15,000. In the 37% tax bracket the $15,000 deduction could generate a tax return (or credit) of $5,550. Under a PAYG variation, the investment property owner can adjust their fortnightly pay to anticipate this return, adding $213 to their pay packet each fortnight.
Bradley Beer is a director of <a href="https://www.bmtqs.com.au/" target="_blank">BMT Tax Depreciation.</a>
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PAYG tax variation can improve cashflow for property investors

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Banks are willing to provide loans to first-home buyers purchasing a new home off the plan – with the proviso that a lower valuation on settlement could force them to scramble for cash to make up the potential shortfall.
Their response follows a media report suggested the banks are reluctant to lend to off-the-plan first-home buyers.
The concern emerged ahead of changes to the NSW first-home owner grant from October 1, which will provide $15,000 towards a new home (including those bought off the plan) but nothing for first-home buyers purchasing an established property.
CBRE managing director David Milton was reported in the Sydney Morning Herald as saying that banks “frowned” on lending to first-home buyers.
He said the issue was one of confidence for first-home buyers, as banks were only willing to provide a conditional six-month loan approval, when a project could take much longer to complete.
“An off-the-plan project can take from 18 months to over two years to complete,” Milton said.
But he acknowledged to Property Observer that this was not applicable to all transactions and that the scenario of final property valuations being less than the off-the-plan valuation was only a problem when markets are in downturn.
Westpac, Commonwealth Bank, Suncorp and NAB have all told Property Observer they will finance long-term off-the-plan purchases, but with an understandable caveat around the final valuation.
“There has been no change to our first-home buyer policy,” a spokesperson for Westpac tells Property Observer.
“We give people approval in principle if they are buying off the plan. We will do an assessment based on the information provided and all the normal stuff we do in assessing a home loan application,” he says.
The bank will provide a conditional approval for up to for six months, which the bank says gives borrowers an idea if they should go ahead and make the purchase.
“There is the risk element that the apartment will not be built by the time the offer lapses – but there has always been that risk element. It’s the same for people who buy at auction with a long settlement plan,” he adds.
“If it does take longer, the borrower can come back to Westpac and go through the same process of assessment but in the knowledge we have been involved before.
“However, there may be a price valuation difference.”
Suncorp, which has been an active lender to first-home buyers this year, according to AFG figures, will also provide financing for eligible borrowers but has flagged the valuation at settlement as a risk the buyer must bear.
“Banks absolutely want to ensure the quality and value of the end product meets what the developer has specified and agreed to build,” says Suncorp Bank executive manager for personal lending Tony Meredith.
“When a bank agrees to finance a new home construction it is essentially committing to something that is only proposed on paper at the initial stage, which means making sure the end product is in line with this proposal is crucial.
“New construction loan customers are told this up front, so there are no surprises,” he says.
Meredith says customers can also protect themselves and their deposits by ensuring the contract stipulates that the end product needs to meet the market valuation.
The Commonwealth Bank says its provides a conditional loan approval available for up to 18 months if lenders mortgage insurance (LMI) is not applicable and up to six months if LMI is applicable.
To avoid LMI a borrower needs about a 20% deposit.
“Applicants must be able to demonstrate genuine savings of at least 5% of the purchase price, grants or subsidies are not able to be used for the deposit,” says a spokesperson for the Commonwealth Bank.
The bank says it will not accept guarantees from parents in these situations.
As in the case of Westpac and Suncorp, the Commonwealth Bank’s loan approval is conditional subject to a satisfactory “on completion” valuation conducted 90 days before settlement and re-confirmation of the customer's financial details.
“If there are any changes to the security position and / or the repayment capacity, the approval may be withdrawn.”
A spokesperson for NAB says all home loan applications are considered on a case-by-case basis, “taking into account property value, including size and location – as well as the customers' deposit and ability to repay”.
The bank’s home loan applications are valid for 90 days, from approval to settlement, for all property types and buyers. “This ensures the approved loan amount reflects both the current value of the property and the customers' ability to repay the loan, at settlement.”
Assurances by the banks that they will lend to these borrowers are supported by mortgage broking franchise Mortgage Choice, “provided they have a deposit of at least 5% including evidence of genuine savings, additional funds to cover expenses associated with property ownership, and are able meet the individual lender’s loan serviceability criteria”.
But Mortgage Choice spokesperson Belinda Williamson says raising a deposit of about 10% – even if not required – is particularly important for those buying off the plan to help protect them against valuation variances.
“If the valuation on the completed property comes in lower than the purchase price that was agreed at the time of making a deposit, the borrower will be required to make up the shortfall,” she says.
Williamson says first-home buyers are generally more at risk, “as they often lack the available equity or funds to fill this gap,” she says.
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Banks willing to finance off-the-plan first homes but buyer must take valuation punt 

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About 42% of taxpayers will use any tax refund they receive from the Australian Tax Office (ATO) to pay off their debt, including their mortgages and credit cards, according to a new Bankwest survey.
The 2011-12 Taxing Time survey found – not surprisingly - that taxpayers have a very thrifty mentality as the end of the financial year looms just three days away.
Of the 42% who said they would some of their refund to pay off debt (up from 39%), the majority will focus on paying off their credit cards (63% versus 50% last year) while just over a third will use the refund to pay off more of their mortgage (34% versus 47% last year).
The same proportion of respondents this time round – 31% – said they would put some of the refund into their bank accounts, while nearly one in five (19%) said they would use the money to on basic commodities including rent and food. 
A lower proportion than last year – 15% compared, with 18% – said they use some of the money to indulge in something “exciting” like a new TV or a holiday.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/06/bankwestjune27.gif"><img src="/images/stories/2012/06/bankwestjune27thumb.gif"></a>
Taxpayers also expect to receive less from the government this year. 
The average expected tax return has decreased 13% across Australia to $2,017 for 2011-12 from $2,317 in 2010-11 financial year. 
The proportion of respondents who expect to receive a tax refund has dropped to 73% this year from 78% in the last financial year, while the proportion of people expecting to pay additional tax has increased to 9% from 6%. 
The results are based on an online survey of 800 people aged 18 and over carried out in May this year by CoreData on behalf of Bankwest.
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Thrifty taxpayers plan to use tax refunds to pay off home loan and credit cards: Bankwest survey

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The Tax Office has issued a warning about the growing number of scams being reported, attempting to trick businesses into paying more for dodgy tax services, which scammers say will provide an even bigger return.
This comes just days after the Fair Work Ombudsman <a href="https://www.smartcompany.com.au/industrial-relations/050333-fair-work-ombudsman-imposters-on-the-loose-four-ways-to-spot-them" target="_blank">warned businesses</a> of similar types of workplace authority scammers.
Commissioner Michael D’Ascenzo said the office so far has received over 5,000 reports of phishing emails using the ATO name, and over 3,000 reports of attempting phone scams.
These fake emails use the ATO graphic, and the message identifies the sender as being part of the ATO.
D’Ascenzo says businesses need to remain vigilant.
"The ATO tends to report higher incidences of scams at this time of the year," D'Ascenzo said.
"With the end of financial year approaching and many people expecting refunds, scammers are using this opportunity to pretend to be from the ATO. It is important that the community stays vigilant as scammers are increasing their efforts to make scams appear more genuine and legitimate."
The ATO says victims have reported calls at any time of the day, and on any day of the week. The problem is that when these scammers get any piece of information – including just your name or bank details – they can commit identify fraud to lodge returns in your name.
“Anyone can be a victim of a scam,” D’Ascenzo said. “If correspondence seems suspicious, too good to be true, asks you for personal details or cannot be verified through an official source, it is likely to be a scam and should be reported.”
But there’s some good news too. Phishing emails can be easy to spot – the formatting won’t be quite right, or the email it’s sent from has spelling errors.
“Be cautious of phone calls or emails suggesting you are due a refund or asking you to transfer money overseas,” the ATO says.
“The ATO will never ask you to provide credit card details or copies of personal identification such as driver’s license or passport in an email.”
Here are a few examples of phishing emails from the ATO website, so grab an official email from the tax office you have on hand and compare it with these:
<img src="/images/stories/2012/06/taxemail1.jpg" width="470">
<img src="/images/stories/2012/06/taxemail2.jpg" width="470">
<img src="/images/stories/2012/06/taxemail3.jpg" width="470">
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ATO warns of tax time scammers – here’s how to spot them

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Queensland will extend stamp duty concessions to a wider range of home buyers from July 1, as a batch of other state government handouts and concessions come to an end.
The Queensland state government will reinstate the transfer duty home concession scheme, which was abolished on August 1 last year, from July 1, 2012.
It will provide a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase.
The buyer must occupy the home for a period of 12 months – an applicant may lose the concession if he sells or leases part or all of the home before moving in or within a year of moving in.
A separate stamp duty concession scheme remains in place for first-home buyers, who pay no duty on purchases up to $500,000, with a phasing-out rebate applicable for values up to $600,000. To qualify, the buyer must be eligible for the first-home buyer grant of $7,000.
NSW
The new financial year will also bring in the NSW government’s <a href="https://www.propertyobserver.com.au/residential/the-25-things-investors-need-to-know-about-the-nsw-%245000-new-home-grant-scheme/2012061255077" target="_blank">new home grant scheme</a>, which will provide a $5,000 grant to buyers of new homes, whether off the plan or newly built, with a value up to $650,000 and to buyers of vacant land that is intended to be the site of a new home valued up to $450,000.
The scheme will replace the far more generous <a target="_blank" href="https://www.homebuyer.nsw.gov.au/newhomes.php">NSW government's home builders’ bonus</a>, which provides full exemption on stamp duty for new homes up to a value of $600,000 and vacant land up to $400,000.
Victoria
From July 1 two bonus schemes aimed at first-home buyers in Victoria will no longer be available – the $13,000 first-home bonus, which has run for three years, and the $6,500 regional bonus, which has run for two years.
These schemes will not be replaced.
Instead, first-home buyers will have to wait until January 1, 2013, when the <a target="_blank" href="https://www.sro.vic.gov.au/sro/sronav.nsf/LinkView/C88211C9E07486F0CA2578B70001025018E490D796850F8ECA2575C1008187C7">existing 20% stamp duty discount first-home buyers spending less than $600,000 on a home purchase will be increased to 30%.</a>
The stamp duty discount will rise to 40% on January 1 2014 and to 50% on September 1 2014.
To qualify for the stamp duty discount, first-home buyers must also qualify for the federal $7,000 first-home owners’ grant.
South Australia
From July 1,the  <a target="_blank" href="https://www.revenuesa.sa.gov.au/fhog/bonus8000">first-home bonus grant of up to $8,000</a> available to first-home buyers who qualify for the federal $7,000 first-home owner grant will be reduced to $4,000 and will be fully abolished from July 1, 2013.
Stamp duty cuts have already been introduced for off-the-plan buyers in the Adelaide City Council area, including North Adelaide, aimed at encouraging higher-density inner-city living.
Between May 31, 2012, and June 30, 2014 the state government is offering a full stamp duty concession for off-the-plan apartments valued up to $500,000, providing a maximum concession of up to $21,330.
From July 1, 2014, to June, 30, 2016, there will be partial exemptions, meaning a concession of up to $15,000.
ACT
The <a target="_blank" href="https://www.revenue.act.gov.au/home_buyer_assistance/home_buyer_duty_concession/1_January_2012_-_30_June_2012">home buyer concession scheme (HBCS)</a> will end on June 30. The scheme provides stamp duty concessions on homes worth up to $470,000 and vacant land up to $260,000. To qualify, applicants must satisfy a combined income test for one year prior to the date of the grant starting from $120,000 for applicants with no children and up to $136,650 for applicants with five or more children.
No new schemes were introduced in the May 2011-12 ACT budget.
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Queensland to introduce owner-occupier stamp duty cuts from July 1 as other state schemes come to an end

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No argument – making a buck is harder these days – it’s a jungle out there, folks, and survival depends, for mine, on working longer and smarter.
Part of any worthwhile strategy can mean extracting the best out of what we already have.
When it comes to property, more than 90% of investors, according to recent survey results, are the “lock and leave” type – or the passive investor profile.
That laissez-faire approach sometimes extends to overlooking less-obvious ways of decreasing the costs of holding property. Surprisingly, one of those most often overlooked is depreciation.
Brad Beer, of BMT Quantity Surveyors, sent through an interesting note the other day about his research, which affirms that 80% of property investors are not taking advantage of the property depreciation laws – basically missing out on some worthwhile coin, if you ask me.
Brad reckons that on average, investors find between $5,000 and $10,000 as a first full-year deduction.
Owner-investors are seemingly au fait with the tax advantages of negative gearing, but according to BMT, the depreciation benefits of property are less understood.
Many buyers of new investment property cite the tax benefits of depreciation as a reason to buy new. And while this should not be the main consideration for purchasing, those benefits can result in a significant boost to cashflow.
But you can also claim depreciation on renovated properties. You just need to know what you are doing. In this regard, it pays to employ a quantity surveyor who is trained in the area of tax depreciation. Good advice can make a difference to investor decisions both prior to and after purchase, and can impact greatly on the long-term quality of the investment. It really is money for jam.
Briefly, let’s just look at one straightforward example of how much money could be involved. In fact, you can even try out one of the simple depreciation apps for yourselves – there are dozens out there. But by way of example, a $500,000 new Brisbane apartment, built to a high standard of finish, could net the buyer about $100,000 in the first 10 years, with $14,000 paid after the first year, if using the diminishing value method.
Again, expertise is key. For new property, a quantity surveyor’s work will cover a 40-year period – so there are even more savings available beyond the first 10 years.
For those who are new to the investor game, or are thinking about it, the potential of both new and old properties to attract depreciation benefits, which the owner can claim as a tax credit, can be somewhat of an unknown quantity. And given the widely held perception that older properties will attract no claim, it really is worth having an expert look into any property scenario.
For new property you’ll need a valuation of the building from a quantity surveyor who is registered with an ATO accreditation.
And for property that is not new, you’ll need a construction date and other information so that a depreciation schedule can be drawn up.
A property depreciation report will make life easy for accountants and should include the following technical and service aspects:
<ul>
<li>A site inspection</li>
<li>A list of values for fittings, fixtures and the structural elements of a building</li>
<li>Calculated deductions projected for up to 40 years</li>
<li>Cover any extensions or renovations – even those of a previous owner</li>
<li>Accelerated depreciation for assets that qualify</li>
<li>100% deductions for immediate write-off for items that qualify</li>
<li>Deductions split based upon applicable ownership ratios</li>
</ul>
The report fees, of course, are 100% tax-deductible.
Yes, property has had a bad rap of late; but as we reported recently there is some good news afoot, especially in Brisbane, where the market is starting to turn. And in spite of lingering negativity and a changing prognosis for the way forward for the property market, investment property that is well-located and actively managed remains, in my opinion, one of the best ways for everyday Australians to generate wealth, with its attractive combination of capital growth, rental income and generous tax breaks.
More than ever, it is important to pay attention to detail more and make sure that we maximise whatever advantages are available.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition. Michael has launched a new initiative, called<a href="https://www.matusik.com.au/" target="_blank"> Think Matusik</a>. Think Matusik brings together expert opinion and select property opportunities.
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Property investors who don’t take advantage of depreciation laws are missing out on worthwhile coin

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Yet again the end of the financial year comes around, and it’s time to do your tax return or better – save on tax payable. Apart from the usual receipts and items claimable, for which I hope you have a more efficient system in place than the old shoe box, there are ways to save on your property investments and mortgages. Here are only a few tips on how and where you may be able to reduce your tax bill. 
1)      With four interest rate cuts since the beginning of the 2011-12 financial year, now may be the right time for you to consider refinancing your home. Do this before the end of the financial year, and the cost and saving could affect the tax payable.
2)      When refinancing consider pooling personal and car loans into your mortgage as well as store cards and credit cards. This could further reduce your monthly outgoings for the year ahead. 
3)      Did you know that the interest paid on an investment loan is tax deductable? Add to this the depreciation of the property and its fittings, any repairs or maintenance you have undertaken, any management fees or rental losses, and it could make a considerable tax deduction. 
4)      Did you know that you can pre-pay your interest on your mortgage and in terms of investment properties? This would present a welcome reduction of tax payable. If you are paying off your business premises, the same strategy may apply. 
5)      Use debt recycling strategies, where as you use existing equity to purchase an investment property with an interest-only loan and pooling the majority of your cashflow through an offset account effectively reducing the interest payable. Such strategy will allow you to claim the investment interest against your tax bill, while also reducing your loan amount. 
Obtaining sound financial, taxation and investment advice is highly recommended in order to implement the above strategies.
Robert Projeski is a leading property finance expert and the founder and managing director of <a href="https://%20www.amo.com.au" target="_blank">Australian Mortgage Options</a>. He has appeared on radio and TV and written extensively on property and finance matters.
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Five end-of-financial-year tax tips for property investors

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Balancing a real estate market is not an easy task.  Too much supply and prices fall – too little and they rise. Over time, various incentives – negative gearing, grants for first-home buyers, reduced stamp duty rates for off-the-plan sales and new homes, have been introduced, changed, and intermittently withdrawn by government “movers and shakers”. All have the effect of falsely influencing consumer demand one way or another.  Sometimes it’s done in favour of the investor, sometimes the home buyer, however in most circumstances it results in price increases rather than the opposite.
As the RBA is well aware, it’s a fine line you tread when it comes to maintaining stability. It takes careful analysis of a broad range of data and an intrinsic understanding of various micro markets before decisions are made.  However when it comes to the property market, state laws seem to dictate their own agenda, not to mention the federal government stirring the pot whenever it’s time to collect more revenue.
For example, when the budget came out, Wayne Swan saw fit to remove the 50% CGT discount – previously available for non-residents who have held property for a 12 month period or more – with no warning and a little addition added to “honour the discount in relation to any existing accrued capital gains ONLY if the non-resident obtained a market valuation for the asset as at May 8, 2012”.
<a href="https://www.propertyobserver.com.au/overseas/budget-cgt-change-could-be-extremely-expensive-for-expat-and-offshore-investors-michael-matusik/2012051454689" target="_blank">As Michael Matusik correctly pointed out earlier this year</a>, the sudden change will reduce demand from foreign and expat investors.  Considering most offshore purchases of property are new home or off-the-plan sales, it will adversely affect construction resulting in further stagnation of supply concentrating demand on existing dwellings.  GFC aside, metropolitan property prices in Australia are counted amongst the world’s highest. Therefore it’s vital we plan our cities effectively if the aim is to keep real estate affordable and reduce inner-city inflation in the established housing market.  It’s something our governments have yet to achieve – as analysis of boom/bust housing cycles prove.
Encouraging broad-based investment with policies such as negative gearing, which incites investors to enter into the established housing market rather than the “new home” market, do nothing to increase the supply and stimulate the many retail offshoots that benefit from construction. However it’s vital we do so if we value our ethical responsibility to provide enough affordable choices for home buyers and also magnify the supply of rental accommodation.  As the recently released 2011 census data shows, the national median weekly rent has risen 50% since the last census in 2006.  Not surprisingly there’s also an increase in the number of households getting stuck on the rental ladder, with 10% paying in excess of 30% of their income for the privilege.
Those in favour of negative gearing always base their arguments on the historical data, which proved a rise in yields in Sydney and Perth when the policy was withdrawn during the Hawke government in 1986-1988.  There are a few issues with this – firstly, the policy changes were not in effect long enough for a reasonable adjustment of market demand to be established.  For example, due to a very low vacancy rate at the time in both Sydney and Perth, rents naturally rose.  It’s worth noting – as others have done, including Saul Eslake, on numerous occasions – that rents did not rise nationally and in Melbourne, growth actually slowed.  If the market had been allowed to adjust to the changes, the consequence would likely have eventuated in investor demand decreasing in the established market, levelling the playing field somewhat for first-home buyers to gain a foothold.
It’s also worth noting at the same time the policy was withdrawn, the Hawke government encouraged the supply of new housing by the introduction of:
“Accelerated depreciation for new buildings or major renovations in order to create more rental property and more opportunities for renters”. (Keating, 1985).
Unfortunately, two years of changes were not enough to monitor the success or otherwise of the plan.  Lobbying from the real estate industry and investors, who had previously benefitted from the scheme, resulted in political back-pedaling.  All in all, it was badly handled.
No other country has such generous negative gearing policies as Australia when it comes to property investment.  Yet investors don’t leave these markets in droves.  With the policy as it stands, there is no limitation on the number of residential homes a single investor can claim against.  Consequently, we see large property portfolios acquired by a smaller percentage of the population who benefit most from reducing their tax burden and consequently, less supply for the majority market.
We need a phasing back of the current policy while at the same time planning outer-suburban and rural/regional growth with infrastructure – if not already established, then at least approved and funded – to ensure we continue to provide feasible options for home buyers and not just vacant dwellings in paddock lands.
While we will always need property investors to assist the supply of rental accommodation, for those unwilling or unable to purchase, property should not become a speculators’ domain.  Over-investment in property markets drives up demand and consequently prices, resulting in higher rent – not lower.  Rather, property’s prime function as an abode for shelter should be respected in so much as any policy is aimed at making it an achievable option for our growing populous.
<hr class="system-pagebreak">
However, it’s not just distortion from negative gearing that has negative effects on property prices.  The other initiatives I mentioned at the start of this article, such as the first-home owners’ grant, have done their fair share to ramp up debt in Australia’s residential market.  For example, I was recently asked to negotiate on a property that was purchased late 2009, when the first-home owners’ boost was available.  The one-bedroom unit in question was acquired off the plan, therefore, when reduced stamp duty had been taken into account, along with federal and state incentives, the owner would have benefitted from some $30,000 ‘saving’.  However – even taking into account comparable sales during the same period when purchased – the asking price at the time was easily $30,000 in excess of what it should have been – arguably even $50,000 in excess. Three years later, and the owner of the property in question never moved into the home due to a change in circumstance (boy meets girl).  Consequently – the property is “as new” – never lived in.
The documentation provided in the vendor statement shows the mortgage still owing on the home (in excess of 80%) remains above current market value.  Clearly the grant did little to help this vendor purchase – it simply helped him spend above and beyond what the commodity was worth and landed a first-home buyer – now starting a family – with a debt burden he won’t be able to resolve with a quick sale.  It’s one of the more interesting examples of many similar stories I come across monthly.
Despite the many incentives offered under the guise of “helping affordability”, Australia’s household debt-to-income ratio has accelerated to a little under 150%.  Perhaps it’s time to admit that the intention in the first place was not to assist affordability at all. Rather they were introduced to “prop up” the property market subsequently encouraging a greater debt burden. Considering the tax revenue governments receive from the housing market it’s no surprise there’s a fear of any natural reduction in demand. Stamp duty – taken under the guise of covering “transaction costs” – is without doubt an extortionate tax albeit a major source of revenue.
The question of how/if to replace it has been debated for years, however as Andrew Leigh MP noted in 2009 observations on the <a href="https://andrewleigh.org/pdf/StampDuty.pdf">“impacts of stamp duty on housing turnover"</a> show a <a href="https://andrewleigh.org/pdf/StampDuty.pdf">“10% increase in stamp duty lowers turnover by 1-2% in the first year, and by 4-5% if sustained over a three-year period.”</a> The reluctance to sell due to stamp duty charges has the potential of encouraging a “mis-match” between the type of property and family size.  It’s doubtful we’ll see any short-term answer to housing tax reform, therefore other strategies to improve affordability and create a greater supply of residential housing and supporting infrastructure are required.
Despite all the handouts, incentives and abundance of market meddling, we’re no closer to solving Australia’s housing problem than we were decades ago. As the 2011 census shows, Australia’s population has grown by nearly five times over the past 100 years and yet the vacancy rate for the last 30 of those years (the true guide to the housing shortage) has never exceeded 5%.
No one likes the idea of losing equity in their principal place of residence, however there’s a reluctance to accept that the pre-GFC relatively long-lasting boom in house prices is no longer a feature of Australia’s real estate terrain. RBA governor Glenn Steven’s has twice sought reason to warn us about, once in 2010 when he stated:
"I think it is a mistake to assume that a riskless, easy guaranteed way to prosperity is just to be leveraged up into property. It isn't going to be that easy,"
And <a href="https://www.propertyobserver.com.au/economy/the-rba-s-glass-half-full-chart-presentation-to-the-prime-minister-s-global-economy-forum/2012061255091">more recently in his “Glass Half Full Speech”</a>, when he stated that the return to confidence we don’t need is;
“The kind of confidence based on nothing more than expectations of ever-increasing housing prices, with the associated willingness to continue increasing leverage, on the assumption that this is a sure way to wealth, would not be the right kind.”
The RBA has made it clear it is not in the business of creating boom bust cycles.  However there’s an overall reluctance by state and federal government to take its fingers out the pot and stop feeding a beast that will forever require market meddling to prevent a return to what Glenn Stevens calls “building wealth the old-fashioned way” – careful saving and strategic long-term educative planning.  If it weren’t for the commodity boom propping up weakness in the economy, we’d have suffered the same demise as Europe. In such a case, Prime Minister Julia Gillard wouldn’t have been giving lectures to world leaders at the G20 summit – she would have been receiving them.
Market meddling in the housing industry is based partly on greed and partly on a broad misunderstanding of the policies needed to balance it for all – not just a few. As the 2011 census data has shown, home ownership is reducing, not increasing. We don’t need meddling in the housing market from those sitting behind desks – who don’t work daily with buyers, sellers and renters, and therefore have little understanding of housing market dynamics outside of ‘on paper’ data.
A healthy market is one that is allowed to rise and fall thereby establishing its own long-term trend.  The role of government should be to provide equal opportunity for all and not target policy initiatives on a select few. We need more than a CEO sleep-out, which managed to reach top trending spot on Twitter last week, to raise awareness of the fundamental need for affordable secure shelter.  There’s not a single country that has completely cracked the problem of homelessness, however I have great belief in Australia – one of the pioneers of democratic rights – as a country with abundant potential to do so.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition. She is Channel Ten’s property expert on <a href="https://ten.com.au/the-circle.htm">The Circle</a>.
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catherinecashmore-6LXia3pPQj

Governments must stop meddling in property markets – and negative gearing has to go

<html><body>
Mining states Western Australia and Queensland have recorded the biggest rises in the percentage of households in mortgage stress, according to the results of the 2011 census.
The census reveals the percentage of households with mortgage repayments greater than 30% of household income – the widely accepted measure of mortgage stress.
In WA, this figure has risen from 7.8% to 10.2% of households in the space of five years, while the proportion of Queensland households in mortgage stress has increased from 7.7% to 9.7%.
WA now has the second highest proportion of borrowers in mortgage stress, behind NSW (10.5%), having surpassed Victoria (10.1%) since the 2006 census.
The biggest rise in mortgage repayments between 2006 and 2011 occurred in the Northern Territory – up $758 – followed by WA ($737).
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td valign="top" width="86">
State
</td>
<td valign="top" width="80">
Monthly mortgage repayment - 2011
</td>
<td valign="top" width="80">
Monthly mortgage repayment - 2006
</td>
<td valign="top" width="77">
Difference
</td>
<td valign="top" width="82">
% households with mortgage repayments greater than 30% of household income- 2011
</td>
<td valign="top" width="82">
% households with mortgage repayments greater than 30% of household income- 2006
</td>
</tr>
<tr>
<td valign="top" width="86">
NSW
</td>
<td valign="top" width="80">
$1,993
</td>
<td valign="top" width="80">
$1,517
</td>
<td valign="top" width="77">
$476
</td>
<td valign="top" width="82">
10.5%
</td>
<td valign="top" width="82">
9.6%
</td>
</tr>
<tr>
<td valign="top" width="86">
VIC
</td>
<td valign="top" width="80">
$1,700
</td>
<td valign="top" width="80">
$1,252
</td>
<td valign="top" width="77">
$448
</td>
<td valign="top" width="82">
10.1%
</td>
<td valign="top" width="82">
8.7%
</td>
</tr>
<tr>
<td valign="top" width="86">
QLD
</td>
<td valign="top" width="80">
$1,850
</td>
<td valign="top" width="80">
$1,300
</td>
<td valign="top" width="77">
$550
</td>
<td valign="top" width="82">
9.7%
</td>
<td valign="top" width="82">
7.7%
</td>
</tr>
<tr>
<td valign="top" width="86">
SA
</td>
<td valign="top" width="80">
$1,500
</td>
<td valign="top" width="80">
$1,018
</td>
<td valign="top" width="77">
$482
</td>
<td valign="top" width="82">
8.8%
</td>
<td valign="top" width="82">
6.9%
</td>
</tr>
<tr>
<td valign="top" width="86">
WA
</td>
<td valign="top" width="80">
$1,950
</td>
<td valign="top" width="80">
$1,213
</td>
<td valign="top" width="77">
$737
</td>
<td valign="top" width="82">
10.2%
</td>
<td valign="top" width="82">
7.8%
</td>
</tr>
<tr>
<td valign="top" width="86">
TAS
</td>
<td valign="top" width="80">
$1,300
</td>
<td valign="top" width="80">
$867
</td>
<td valign="top" width="77">
$433
</td>
<td valign="top" width="82">
7.5%
</td>
<td valign="top" width="82">
5.6%
</td>
</tr>
<tr>
<td valign="top" width="86">
NT
</td>
<td valign="top" width="80">
$2,058
</td>
<td valign="top" width="80">
$1,300
</td>
<td valign="top" width="77">
$758
</td>
<td valign="top" width="82">
7.7%
</td>
<td valign="top" width="82">
6%
</td>
</tr>
<tr>
<td valign="top" width="86">
ACT
</td>
<td valign="top" width="80">
$2,167
</td>
<td valign="top" width="80">
$1,500
</td>
<td valign="top" width="77">
$667
</td>
<td valign="top" width="82">
7.8%
</td>
<td valign="top" width="82">
6.5%
</td>
</tr>
<tr>
<td valign="top" width="86">
Nation-wide
</td>
<td valign="top" width="80">
$1,800
</td>
<td valign="top" width="80">
$1,300
</td>
<td valign="top" width="77">
$500
</td>
<td valign="top" width="82">
9.9%
</td>
<td valign="top" width="82">
8.4%
</td>
</tr>
</tbody></table>
Source: Census 2011 (ABS)
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Mortgage stress levels rise most since 2006 in WA and Queensland: ABS census 2011

<html><body>
Median monthly mortgage payments increased by $500 between 2006 and 2011, representing a 38% increase over this time frame, according to the 2011 census.
This is lower than the <a href="https://www.propertyobserver.com.au/landlords/renters-paying-50-more-a-week-in-rent-since-2006-with-increase-in-proportion-of-households-experiencing-rental-stress-abs-census-2011/2012062155220" target="_blank">50% increase in weekly rental payments</a> recorded between the two censuses.
The median monthly mortgage repayment in Australia was $1,800 in the 2011 census, compared with $1,300 in the 2006 census.
For 9.9% of households, their mortgage repayment was more than 30% of their income – the common definition of mortgage stress – up from 8.4% in the 2006 census.
<table cellpadding="0" cellspacing="0" border="0" style="width: 470px;"><tbody>
<tr>
<td width="319">
<a title="Measures the monthly amount spent on mortgage repayments for occupied private dwellings being purchased, including dwellings being purchased under a rent/buy scheme." target="_blank" href="https://www.censusdata.abs.gov.au/ausstats/abs@.nsf/Lookup/2901.0Chapter41802011">Mortgage monthly repayments</a>
</td>
<td width="104">
Australia
</td>
<td width="38">
%
</td>
<td width="101">
2006
</td>
<td width="38">
%
</td>
</tr>
<tr>
<td width="319">
Median mortgage repayments
</td>
<td>
1,800
</td>
<td>
--
</td>
<td>
1,300
</td>
<td>
--
</td>
</tr>
<tr>
<td colspan="5" width="602">
 
</td>
</tr>
<tr>
<td width="319">
Households with mortgage repayments less than 30% of household income
</td>
<td>
--
</td>
<td>
90.1
</td>
<td>
--
</td>
<td>
91.6
</td>
</tr>
<tr>
<td width="319">
Households with mortgage repayments greater than 30% of household income
</td>
<td>
--
</td>
<td>
9.9
</td>
<td>
--
</td>
<td>
8.4
</td>
</tr>
</tbody></table>
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