A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Joel Robinson

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

The long-planned transformation of Brisbane's historic Shafston Estate has taken another major step, with Capella Hotel Group announced as the luxury hospitality partner behind what will become Brisbane's first branded residences.

The project, to be known as Capella Residences Brisbane, is being delivered by Verso Projects at the landmark Kangaroo Point riverfront estate, with completion targeted for 2029.

The announcement follows a series of planning changes to the project over recent years. The site was originally approved in 2023 for a 15-level, 37-apartment development designed by Rothelowman for Burgundy Group before Verso Projects took over the 10,070 sqm riverfront holding and lodged revised plans with Kerry Hill Architects to increase the development to a 25-level tower with 51 apartments.

The latest announcement confirms Capella Hotel Group will bring its branded residential offering to the project, marking just the second Capella Residences development globally after Seoul, and the group's first branded residential project in Australia.

The <a href="https://www.apartments.com.au/new-apartments/23-castlebar-street-kangaroo-point-qld-4169">Castlebar Street development</a> will centre around the restoration of the heritage-listed Shafston House, one of Brisbane's oldest residences, originally constructed in 1851 by Reverend Robert Creyke as a single-storey cottage known as Ravenscott.

<img alt="Capella" data-entity-type="file" data-entity-uuid="2b9f4ce5-638f-4d6b-8082-3ca7e4b75fca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-09%20at%207.20.41%E2%80%AFAM.png?VersionId=f7aeqsW_DzOJI4FymWb3lD8NptSfsP7q" />

Capella said the project aligns with its focus on heritage-led developments, with the Brisbane estate combining the restored historic residence with a new luxury apartment tower and hospitality-inspired resident amenities.

Residents will have access to the Capella Living Room, a concierge-led communal space inspired by the group's luxury hotels, alongside landscaped gardens, six swimming pools, wellness and recreation facilities.

The broader estate will also include two riverfront homes, a six-berth private marina, porte cochère arrival experience, secure basement parking and a new section of public riverwalk along the Brisbane River frontage.

The heritage Postal Depot Building will also be retained and repurposed as a guest house, in line with the revised development plans.

The project represents another evolution for the site, which Kerry Hill Architects previously described as a rare opportunity to restore one of Brisbane's most significant heritage estates while creating a new benchmark for apartment living.

"The Shafston Estate provides a once-in-a-generation opportunity to restore one of Brisbane's finest heritage precincts and to reinstate residential use as a unique site perched on the edge of Kangaroo Point," Kerry Hill Architects said in its Urban Context Report accompanying the planning submission.

"The project will celebrate excellence in sub-tropical residential design, setting a new benchmark for vertical living in Brisbane."

Verso Projects, which now has an $8.5 billion development pipeline spanning more than 6,000 dwellings across apartments, townhouses, retail and commercial projects, said the partnership with Capella would elevate the development beyond a traditional residential project.

"We feel honoured to be restoring Shafston Estate to its former glory, elevating it to new heights of luxury and excellence underpinned by Capella's distinctive service ethos and design philosophy, and making it a standout landmark in Brisbane," Verso Projects CEO Steve Laffey said.

"By partnering with Capella, globally recognised for its refined approach to luxury hospitality and deep respect for cultural and historical context, we will elevate this project beyond a residential offering into a world-class destination."

Capella Hotel Group President Roland Fasel said Brisbane's emergence as a global city made it the right location for the company's Australian residential debut.

"Brisbane is a city on the cusp of something remarkable, and Capella Residences is our commitment to being part of that story," Fasel said.

"The Capella residential experience is more than luxury. It is about a sense of belonging to a place with deep meaning."

Private appointments have now opened for the project, with a display suite expected to open in late 2026 ahead of the planned 2029 completion.

Capella to launch Brisbane's first branded residences at Shafston House, Kangaroo Point

Lewis Land's latest apartment release within its <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan is targeting one of the Gold Coast's fastest-growing buyer groups, with almost a third of apartments at Solis priced below $1 million.

The seven-storey building at Biggera Waters will comprise 91 apartments, including 24 one-bedroom residences starting from $778,000, a price point Lewis Land says is aimed squarely at first home buyers struggling to enter the Gold Coast market.

<img alt="Harbour Shires" data-entity-type="file" data-entity-uuid="e7486e37-22f6-4c92-b212-9b0622070b8f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.34%E2%80%AFAM.png?VersionId=W8MJwJUCf6HkIyl_EVSksnd.QI6MZryY" />

<a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the developer deliberately allocated a significant proportion of the project to more affordable apartment types.

"First home buyers have been priced out of many parts of the Gold Coast, and we saw a clear opportunity to address this and play our part in a longer-term housing solution," Long said.

"That's why 24 of the 91 apartments being delivered at Solis have been designed and priced for the city's next generation of homeowners, quality one-bedroom apartments, half of which include an additional multipurpose room to maximise space and flexibility.

"This approach places 30 per cent of apartments in Solis under $1 million, and with close proximity to Harbour Town's future light rail extension connecting residents to the city's major employment and knowledge hubs, it's a win for buyers looking to secure their first property."

<img alt="Sores" data-entity-type="file" data-entity-uuid="550526d3-73ba-4710-9739-c5f4294a30ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.29%E2%80%AFAM.png?VersionId=cQQdXHt9wS0UXwZEm5Py5bH_3kAmzyhu" />

Designed by BDA Architecture, Solis will deliver a mix of one, two and three-bedroom apartments, with residences ranging up to 232 sqm. Apartments feature generous balconies and contemporary finishes, while residents will have access to Harbour Shores' lagoon pool, clubhouse, tennis court, gym, yoga studio and sauna.

The focus on first home buyers resonated with purchaser Holly Humphreys, who said she and her boyfriend spent more than a year searching for their first property before shifting their attention from houses to apartments.

"We fell in love with the first house we bid on and got our hopes up, but after repeated knockbacks we learned not to get too attached," Humphreys said.

"We offered at the high end of price guides, but sales kept going even higher. That's where we really struggled and we needed to re-evaluate our budget and our expectations. Standalone houses were off the table, and we pivoted to apartments and townhouses."

Humphreys said it was encouraging to see developers recognising the growing demand from first home buyers.

"There's a growing number of young buyers looking to enter the market earlier because they understand that getting in now can make a real difference as prices continue to rise," she said.

"It's fantastic to see a developer recognise this and then actively take measures to deliver an apartment with us in mind."

Solis is the first development planned within the second stage of the Harbour Shores masterplan, with early works expected to commence in September 2026.

[smartcode_project_cta:default project_id=113271]

Lewis Land targets first home buyers at latest Harbour Shores release, Solis

Luxury apartment developer Abadeen has recorded $19.25 million in apartment sales across two of its Lower North Shore developments in the lead-up to the end of the financial year, headlined by the sale of a $6.75 million penthouse at <a href="https://www.apartments.com.au/buildings/koyo-crows-nest-5-rodborough-avenue-crows-nest-nsw-2065">KOYO in Crows Nest.</a>

The transactions also included the sale of a newly completed three-bedroom apartment at <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences in Cremorne</a> for $6.35 million, with the residence selling shortly after the project's first public inspections following completion.

The sales come as completed, owner-occupier-focused apartments continue to attract strong demand across Sydney's Lower North Shore, particularly from buyers looking for certainty and immediate occupancy.

The penthouse at KOYO spans 491 sqm across a single level and was designed by architect Koichi Takada. The development is one of Abadeen's flagship boutique projects in Crows Nest.

[smartcode_project:default project_id=108800 project_image_fid=370093]

Abadeen Executive Chairman and Founder Justin Brown said buyer activity lifted noticeably in the lead-up to the end of the financial year.

"We saw a clear increase in enquiry levels, inspection numbers and buyer engagement across our completed projects leading into the end of the financial year," Brown said.

"Buyers have become far more decisive over the past six months. The combination of improving confidence, limited supply and the ability to physically inspect completed residences is creating strong competition for premium apartments in the best locations."

Brown says the&nbsp;response to Park Residences following completion has been particularly strong.

"Buyers want certainty and are responding positively to the opportunity to walk through a finished product, inspect the quality firsthand and move in immediately," Brown suggested.

"Projects such as Park Residences and KOYO demonstrate that when the product is exceptional and the location is irreplaceable, buyers are prepared to act quickly."

[smartcode_project:default project_id=114246 project_image_fid=370116]

Abadeen CEO Joe Tack said quality continued to differentiate projects in the current market.

"Today's buyers are incredibly discerning," Tack said.

"They are seeking larger floorplans, premium finishes, walkability, lifestyle amenity and confidence in the developer delivering the project. Well-designed boutique developments continue to outperform because they offer something genuinely difficult to replace.

"The enquiry we are seeing across our completed and recently completed Lower North Shore portfolio is very encouraging, and we expect this momentum to continue into spring."

The sales follow increased enquiry across Abadeen's Lower North Shore portfolio which also includes <a href="https://www.apartments.com.au/buildings/northcote-collective-naremburn-2-northcote-street-naremburn-nsw-2065">Northcote Collective in Naremburn</a> which also completed recently.

KOYO penthouse headlines Abadeen's $19.25 million EOFY sales flurry

The City of Sydney has approved plans for <a href="https://www.apartments.com.au/developers/billbergia">Billbergia Group</a> and Metrics Credit Partners’ $3.5 billion Castlereagh Place project in the heart of the Sydney CBD

The towers will be among the tallest in <a href="https://www.apartments.com.au/developments/sydney-nsw-2000">Sydney</a>'s CBD, with more floors than any other residential tower in the city.&nbsp;

The 6,000 sqm site was acquired by the joint venture partners in 2024. It is the largest amalgamated land parcel in the Sydney CBD and comprises eight individual sites fronting Castlereagh, Pitt and Liverpool Streets.&nbsp;

<a href="https://www.apartments.com.au/new-apartments/castlereagh-place-sydney-324-348-pitt-street-sydney-nsw-2000">Castlereagh Place</a> will transform an underutilised city block into a landmark mixed-use destination, anchored by two 82-storey towers comprising 607 luxury residences above an 8-level podium housing a 209-room luxury hotel. A 1,000 square metre civic park on ground level features a curated mix of food, beverage and retail.

The plans have been refined over the past year to rebalance the residential and hotel offering, and reconfigure the retail footprint to create a stronger, more dynamic dining experience.

A three-level flagship building on the prominent corner of Pitt and Liverpool Streets will be the gateway to the Castlereagh Place lifestyle precinct. Set to become a Sydney icon, the building is capable of housing multiple hospitality venues.

“Castlereagh Place is designed to be the City's next great urban oasis - an energetic mixed-use precinct that pulses with life, day and night,"&nbsp;said Joseph Kinsella, Group Director of Billbergia.

"It will bring the vibrancy of places like Barangaroo and Darling Quarter into a more accessible, central destination at the very heart of Sydney."

Kinsella said the project will build on&nbsp;Sydney’s growing laneway culture with the City’s largest network of new activated lanes - an expanded, next-generation take on precincts like Angel Place, Palings Lane and Ash Street in Wynyard.

[smartcode_project:default project_id=134477 project_image_fid=374401]

Castlereagh Place has been designed by architects <a href="https://www.apartments.com.au/architects/fjc-studio">fjcstudio</a> in collaboration with Trias Studio, Aileen Sage and Polly Harbison Design, joint winners of an international design competition in 2018.&nbsp;

Signature design elements from the original scheme remain unchanged, while the public domain has been significantly enhanced, delivering 60 per cent more open-to-sky space.

Pedestrian access will also be enhanced through new laneways linking Pitt, Liverpool and Castlereagh Streets, drawing people into a new civic park with outdoor seating, landscaping and integrated public art.

With activated laneways supported by strong hospitality offerings, Castlereagh Place is tipped to become a vibrant new dining destination in the heart of Sydney’s CBD.

It marks the largest undertaking to date for the Billbergia and Metrics Credit Partners partnership. Together they are developing other underutilised Sydney sites into mixed-use precincts, including the $2.2 billion Concord Central and the $1.3 billion Chatswood Grand Residences.

Metrics Managing Partner and Group CEO Andrew Lockhart said Castlereagh Place is a landmark project that will redefine Sydney’s skyline.

"As the tallest residential high-rise development, the revitalised site will offer panoramic views across the CBD and surrounds. We are excited to partner with Billbergia to reinvigorate an underutilised site and create a sophisticated and contemporary mixed-use offering situated in the heart of Sydney.”

Total apartments within the towers have increased to 607 dwellings, with a focus on larger floorplans. Aligned to growing market demand, Castlereagh Place now comprises 299 three-plus-bedroom apartments, 198 two-bedroom units and 110 one-bedroom configurations.

[smartcode_project:default project_id=134477 project_image_fid=374402]

Resident amenities will include an exclusive residents club containing a gym, rooftop pool, dining rooms, co-working spaces, library, golf simulator, games room, cinema room, and access to an exclusive concierge service. There will be around 500 basement car spaces below the towers.

The development will also include a state-of-the-art wellness centre, set to feature a bathhouse with magnesium pools, hot/cold plunge pools and premium amenities.

&nbsp;

According to fjcstudio, the towers will feature distinctive yet elegant architectural design reflecting Sydney’s geometry and urban character, with a network of through-site links and intimate public spaces activating the streetscape.

"Castlereagh Place is a city-making project of significant scale and ambition," said Richard Francis-Jones, Design Director at fjcstudio.

"It will create a rich urban complex of public open spaces, landscaped gardens, and vibrant laneways. Defining these new public spaces and the important streetscape of Castlereagh Street is a sequence of fine-grained, diverse retail and hotel architecture designed in collaboration with Aileen Sage, Polly Harbison Design and Trias.

“Rising above the tree-lined, human-scale streetscape are two slender residential towers that will transform the city skyline and look towards the Harbour, Hyde Park, and the Royal Botanic Garden.”

Demolition and early construction works have commenced onsite at Castlereagh Place.

[smartcode_project_cta:default project_id=134477]

Billbergia, Metrics, approved for $3.5 billion Sydney skyscrapers

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>
Treasurer Wayne Swan has ruled out any changes to negative gearing arrangements for property investment despite the NSW Labor leader John Robertson saying there should be a debate about its effects on the property market.
Robertson is concerned about the potential of negative gearing to push up property prices and make property unaffordable for the next generation of home owners.
"Everyone, I think, is concerned about how their kids are going to buy a house, how they're going to get into it,” said Robertson in an interview on Sky News.
"In many circumstances, these are people who've got two or three investment properties and there's no real appreciation of what negative gearing is doing in terms of putting pressure on housing prices for their kids to get their first foot in the door."
A spokesperson for Swan says the government is committed to the current tax arrangements after ruling out changes to negative gearing in the 2010 Henry Tax Review.
According to ATO figures, about 1.7 million property owners used negative gearing to claim a net rental loss of $6.5 billion for the 2010/2011 financial year.
Robertson’s call for debate on the effects of negative gearing is backed by Cassandra Goldie, chief executive of Australian Council of Social Service, and was also flagged as a potential area of reform in the Homes for All report, the first public policy document released by the Sydney-based McKell Institute.
Goldie says the McKell report highlights that “negative gearing is at the heart of the problem with inflating house prices” while at the same time not increasing the supply of housing.
"We've got a crisis here so let's have a little bit of courage to deal with it,” she told Channel 10’s Meet the Press program.
Negative gearing is considered a cornerstone of property investment, allowing property investors to claim any loss made on an investment property as a tax deduction and thus reduce their tax bill.
The McKell institute’s Housing for All report says that “federal and state governments should favour tax policies which encourage housing supply over demand”.
It goes on to say that “all politicians of all parties recognise that negative gearing and untaxed capital gains add wealth to existing home owners to leverage for second homes and investment properties without any evidence that they increase overall supply significantly; and that increasing effective housing demand in a constrained housing supply results in an increase in house price inflation and in problems of affordability for those seeking to buy”.
“Tax exemptions such as negative gearing have allowed many people to purchase second, third or even more properties.
“In the past, these may have supported the rental market, but in a market where supply is constrained it simply increases the price of housing for everyone,” the report says.
The institute says consideration should be given to “phasing out of negative gearing over the long term in relation to existing properties but perhaps retained for new properties to stimulate supply”.
The report says that those opposed to removing negative gearing argue that such a move will increase rents or lead to less supply.
“There is little evidence for this argument. Our consultations with the banking industry suggest that housing will remain an asset class with or without negative gearing.
“Housing is an investment class which is easily understood, unlike shares or other financial instruments. It has a permanence – ‘bricks and mortar’ – and certainty which many investors like,” says the McKell Institute.
ANZ head of property research Paul Braddick agrees on the need for supply-side reforms but says removing the ability for property investor to negatively gear both existing and new homes would be “very risky”.
Last year ANZ Australia CEO Phil Chronican raised concerns about negative gearing saying governments should investigate whether negative gearing tax breaks are “fostering an unhealthy focus on housing as an investment vehicle, thereby compounding affordability issues”.
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lschlesinger-FZcF9M3vE6

Government not contemplating changes to negative gearing: Wayne Swan

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In many parts of Victoria there is a shortage of rental homes and the only way the shortage will be fixed is if more individuals invest, i.e. buy housing for the sole purpose of providing it as rental accommodation.
The problem is that those who choose to do that face higher rates of stamp duty.
When the previous state government reduced stamp duty in 2007 it left the old higher rates in place for investors.
As a result, those who buy a house for the purpose of increasing the number of available rental homes pay a higher rate of stamp duty than they would if they were going to live in it.
The higher rate of stamp duty is in addition to the land tax, for which they are liable on an annual basis. It is not equitable to charge an investor land tax on the basis that the property in question is not their principal place of residence then charge extra stamp duty as well.
An investment home purchased for $400,000 is liable for $2,700 more in stamp duty than if it were purchased to live in. That is the equivalent of nearly five years’ worth of land tax.
Charging higher duty for investment properties can have two effects: firstly, it can act as a disincentive to individuals purchasing and providing rental accommodation; secondly, it can increase the cost of the accommodation to renters.
In the coming state budget the government should consider equalising stamp duty for all non-first home buyers.
Enzo Raimondo is CEO of the <a href="https://www.reiv.com.au/" target="_blank">Real Estate Institute of Victoria</a>.
 
 
 
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enzoraimond-7fvRFHPR52

Victorian government should give investors a fairer go and eliminate higher stamp duty rates for investors

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John Symond’s Aussie Home Loans has acquired wholesale mortgage aggregator National Mortgage Brokers (nMB) and is looking to make further acquisitions to grow its distribution reach. 
“We are on an expansion trail and see nMB as a strategic acquisition in building our distribution capability, which is no longer just focused on our established branded mobile and retail channels,” says Symond. 
“Our move into wholesale broking will complement our branded business, which we will continue to expand. With nMB, we will accelerate the rapid growth of a high-quality business-to-business channel. 
“This will be an extension to our existing business-to-consumer model under the Aussie brand and does not affect our existing operations,” he adds. 
"Our strategy is to grow the nMB business by acquiring other aggregators and putting them into the NMB business. We'll grow nMB in conjunction with growing our other separate distribution channels such as our retail stores and our mobile broker team," he told Brokernews.com.au. 
Established in 2001 and based in Melbourne, nMB has nearly 200 mortgage brokers throughout Australia, settles about $200 million in mortgages each month with a loan book of more than $8.2 billion. 
Gerald Foley, managing director of nMB, told Property Observer it would be “business as usual” for nMB brokers, with the only change being a “change in shareholding”.
 
“Aussie has a very strong retail lending business, and we are a strong wholesale business. An approach was made, and it all made good sense,” Foley says.
NMB will continue to operate as a separate entity under its own brand and will continue to be managed by its current executive team, led by Foley. 
“We are delighted to be joining Aussie’s great operation and look forward to growing our business with its support. Aussie has the mortgage broking industry’s leading business model and operating standards, as well as being a very strong and trusted player in the market,” says Foley.
Aussie currently has a loan book of over $42 billion with more than 250,000 mortgage customers, 700 accredited mortgage brokers and 150 retail stores. 
The acquisition of nMB will increase the Aussie group’s loan book to over $50 billion, settling approximately $1.2 billion in new mortgages each month and on target for 1,000 accredited mortgage brokers within the group this calendar year.
 
 
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John Symond’s Aussie Home Loans buys National Mortgage Brokers 

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While disappointing, today’s decision by the Reserve Bank to leave the cash rate unchanged at 4.25% does not mean borrowers should be complacent about their current mortgage providers, say Mortgage Choice and RateCity.com.au. 
Both are urging borrowers to examine their current home loans to ensure they’re getting the best deal.
 
“I’m sure borrowers and consumers alike were hoping for a cut by the Reserve Bank to the cash rate ahead of the Easter long weekend,” says Mortgage Choice spokesperson Belinda Williamson. 
“However, the bank has made it fairly clear that they need our domestic data, most of which will be updated this month, to decline further before they feel compelled to move rates. “Nevertheless, today’s decision to keep the cash rate on hold at 4.25% is no cause for complacency among home loan borrowers. “Borrowers who allow their home loan to lay idle and assume their lender is doing everything they can to help them reach their home ownership goal may be surprised at what they could be missing out on,” she says. “Without comparing their lender’s loan products to those offered by others, they may be passing up the opportunity to save thousands of dollars in interest and shave months, or even years off their home loan term. “Now is a good time for borrowers to investigate how their lender rates against others in the market in terms of product pricing, service quality, accessibility, and the flexibility to accommodate your changing needs or circumstances,” she says.
 
RateCity CEO Damian Smith says borrowers don’t have to accept higher mortgage costs. 
“We’ve found 14 lenders that lifted their variable rates by as much as 15 basis points last month, which is worth an extra $30 per month for a $300,000 mortgage (based on a rate of 7% compared to 7.15% over 25 years),” Smith says. 
“This follows 44 lenders lifting rates in February – despite neither month seeing any change in the official cash rate."
“Rates will continue to be volatile, with frequent small movements from lenders most months this year. 
“But that doesn’t mean borrowers should accept higher rates. The slow mortgage market – where there were 200,000 less mortgages written last year compared to five years ago – means the ball’s in the borrower’s court. 
“Borrowers should compare what their lender is charging by using credible financial comparison websites like RateCity and demand a discount if it’s higher than what other lenders are offering. If they can’t beat it, then make the switch.” 
According to Smith, most lenders, particularly major banks NAB, Commonwealth Bank and Westpac, are likely to wait for ANZ’s announcement of any rate movements from its Rate Review meeting on April 13 before they decide to move their rates. 
“ANZ Bank has become the de facto price setter for the mortgage industry as we believe that most lenders will wait until after ANZ reviews rates on Friday, April 13 before deciding whether to move their own rates. 
“What this means is that we now need to know both the RBA’s decision and the ANZ’s decision before seeing what the rest of the market will do,” he says.
 
 
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Rate hold decision no cause for borrower complacency: Mortgage Choice and RateCity

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The popularity of fixed-rate loans jumped to a four-year high in March as borrowers grew more concerned over where interest rates were heading, new Mortgage Choice figures show.
Fixed-rate loans accounted for 26% of approved home loans written by Mortgage Choice mortgage brokers in March, up from 20.6% in February and well above the 12-month average of 17.7%.
Borrowers chose fixed rate products despite 14 out of 27 lenders represented by Mortgage Choice raising their fixed interest rates over the month.
This was the highest level reached since March 2008, a time when 35% of all new home loans were fixed rates, and is well up on this same period last year when only 10% were fixed rate loans.
<img width="470" src="/images/stories/mcapril4.png">
<a target="_blank" href="/news">Mortgage broker AFG</a> also recorded a spike in demand for fixed-rate loans in March, which soared to a record of 25.4%, just above the previous high of 25.3% recorded in February 2008.
“The record swing towards this loan type indicates borrowers have some concerns over the future direction of home loan interest rates – whether this is the Reserve Bank moving the cash rate or lenders moving their interest rates independently of this benchmark,” says Mortgage Choice spokesperson Belinda Williamson.
“Borrowers’ appetites for fixed-rate loans may have also been spurred on by competitive lender pricing.
“However, it will be interesting to see if fixed-rate loan demand tapers off in coming months, as interest rates on these products have begun edging upwards. When reviewing the rate movements across our 27-strong lender panel, 14 lenders raised their interest rates on fixed rate home loans in March,” she says.
<img width="470" src="/images/stories/mcapril4.jpg">
 
 
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Demand for fixed-rate mortgages jumps to highest level in four years: Mortgage Choice

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Fixed-rate mortgages accounted for a record 25.4% of all loans written by AFG mortgage brokers in March as uncertainty over where interest rates are heading compelled borrowers to fix rates.
According to the latest AFG Mortgage Index, demand for fixed-rate products increased from 23.2% in February and 18.6% in January and has been above 16% since September 2011.
In March 2011, fixed-rate mortgages accounted for just 6.6% of all loans written by AFG mortgage brokers.
Click to enlarge
<a href="/images/stories/afgapril4.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/afgapril4thumb.gif"></a>
The record proportion of fixed-rate loans written in March 2012 was just higher than the 25.3% achieved in February 2008, which followed a period of RBA monetary policy tightening with three 0.25% cash rate increases between August and February 2008 taking the official rate to 7%.
Click to enlarge
<a href="/images/stories/fixedrate1.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/fixedrate1thumb.gif"></a>
“The reason that fixed-rate home loans are at such record highs is quite simply because many borrowers are concerned about the future of interest rates,” says Mark Hewitt, general manager of sales and operations at AFG. 
“This nervousness probably also accounts for the weighting of investors in the property market – there’s a lot of them proportionally because first-home buyers and upgraders are sitting on their hands.” 
The AFG Mortgage Index also shows that for the second month in a row, the average new home loan across Australia was above $400,000 ($404,000 in March). 
However, loan-to-valuation ratios remain steady at just under 68%, “indicating that buyers are not taking on greater levels of debt to fund their purchases”.
AFG says this also reflects the market’s large proportion of investors, who typically use equity in one property to help pay for another. 
“There’s a disconnect between what’s happening in the non-mining economy – which is most of us – and out of cycle rate rises. 
“The best thing the RBA could do to stimulate confidence among buyers and upgraders would be to cut interest rates tomorrow,” says Hewitt. 
The AFG Mortgage Index also shows a clear divide in the drivers of mortgage markets in the Eastern and Western seaboards with investors continue to dominate the NSW market, accounting for two out of five new mortgages and lower levels in Victoria (just under 40%) and Queensland (one third of all loans). 
In WA, a reduction in investor interest has been supplanted by a rise in first-home buyers. 
First-home buyers are more active in WA than any other state, comprising 20% of the mortgage mix, far outstripping their share of NSW (on 13.4%), Victoria (15.2%) and the more affordable Queensland market (16%).
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Fixed-rate mortgage demand surges to record high: AFG

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Some investment commentators would no doubt believe that investors who negatively gear new investment properties and shares at this time must have rocks in their head.
Residential property prices are still falling in most Australian states, and the highly volatile local share market returned a negative 6.8% in the 12 months to February.
And the Reserve Bank’s latest margin lending statistics underline the extreme reluctance of many investors to borrow to invest. Australia’s total margin lending debt, taken to gear shares, plummeted to $15 billion by December last year – the lowest level in eight years.
Just think that the margin lending debt is 64% down on the record $41.6 billion reached in December 2007 on the eve of the GFC.
Unquestionably, it would be a contrarian approach to negatively-gear your new investments. But given the depressed state of the residential property and the local sharemarket, a case could be mounted for going against the herd of investors who are cutting back on both their investment and personal borrowing.
Further, there is another powerful reason why some older, contrarian investors may decide to take bigger risks by negatively gearing their investments.
The standard annual cap on concessional superannuation contributions by members over 50 – mainly salary-sacrificed, compulsory, and deductible contributions by the self-employed – will halve to $25,000 from July. This will diminish valuable potential tax breaks for middle and higher-income earners.
And in turn, more investors are likely to consider gearing property and shares (outside super and through self-managed super funds) as a way to partly address this looming reduction in tax breaks.
The halving of these caps means that super fund members with a marginal tax rate of 46.5% will lose tax savings of up to $7875 a year from 2012-13 while those with a 38.5% marginal rate will lose up to $5875 a year. Much will depend on an investor’s circumstances.
Gear shares
Negatively geared shares provide a relatively straightforward way to help maximise tax and investment opportunities for investors that understand the greater risks involved. In short, gearing magnifies capital gains and losses.
A share is said to be negatively geared when the interest on the investment loan exceeds its dividend income – and the shortfall is deductible against the investor’s other income.
However, a phenomenon in this volatile sharemarket is that the dividend yields of some popular quality shares are markedly higher than the interest payable on investment loans once the value of franking credits are taken into account.
Ross Bird, head equity strategist for investment researcher Morningstar Australia, points out that the average forecast grossed-up yield (which includes franking credits) of the four big banks is 10.1% for 2011-12, rising to 10.8% for 2012-13. (The forecasts are by Morningstar analysts.)
And Morningstar’s forecast grossed-up yield for dividend champion Telstra is a breathtaking 12.4% for both 2011-12 and 2012-13. (The yield was even higher before the recent rise in Telstra’s share price.)
Yet investors should expect to pay a little more than 9% for a variable rate margin loan and about 8.25 to 9% for a fixed-rate loan (<a target="_blank" href="https://www.ratecity.com.au/margin-loans/low-rate">depending on the terms and conditions</a>).
This means that a geared portfolio comprising of, say, the big banks and Telstra won’t be negatively geared. It will be positively geared with the dividends easily outstripping the interest on a margin loan.
However, grossed-up dividends are unlikely to exceed interest on a loan to finance a properly diversified share portfolio – depending, of course, on the level of gearing. Bird gives the example of what Morningstar classifies as its “sustainable portfolio”.
This regularly updated portfolio currently comprises: QBE, Ramsay Health Care, Telstra, Westfield Group, Westpac, Seek, JB Hi-Fi, CSL, Computershare, Commonwealth Property Fund, Cochlear, Bendigo Bank and APA. The portfolio’s forecast grossed-up yield is 7.4% for 2011-12, rising to 7.8% for 2012-13.
Bird describes this portfolio as “almost self-funding” if geared. “The portfolio is designed for moderate capital growth with a healthy income stream,” he explains.
Key points to keep in mind that even if a portfolio is not negatively geared, interest on the investment loan is tax-deductible – and the investor is getting exposure to the sharemarket when shares are still relatively cheap.
Gear property
If you believe that prices are beginning to bottom out in your selected market, now might be a good time to begin thinking about gearing a residential property investment over the next few months or so.
As reported by Property Observer, <a target="_blank" href="https://www.propertyobserver.com.au/residential/residential-investment-property-capital-city-house-rental-yields-from-best-to-worst/2012013153198">RP Data-Rismark calculates that the indicative rental yield for all capital houses was 4.4% in January</a>. This compares to an average variable rate of 6.99% charged by the four big banks for what interest-rate researcher Canstar regards as “outstanding value” <a href="https://www.canstar.com.au/home-loans/compare/variable-rate-investment-home-loan">property investment loans</a>.
Louis Christopher, managing director of SQM Research, believes another rate cut would be necessary to mark the bottom of the Sydney and Melbourne markets where auction clearances are lower than last year’s levels. However, he suspects that the Perth residential market has either bottomed or is near to it.
In all, Christopher says it is “not a bad time” for investors to begin researching for their next residential investment.
Gear through a SMSF
Sydney tax lawyer Robert Richards says gearing an investment through a self-managed super fund (SMSF) is a way to expand a fund’s assets despite the looming cut to the standard concessional contributions cap for members over 50.
Under superannuation law, SMSFs can borrow to invest subject to strict provisions. The geared asset must be held in a special trust until the final payment of the loan, and lenders cannot make a claim against any other fund assets in the event of a default.
There is plenty to consider. On one side, an SMSF-held asset will produce much lower negative-gearing tax benefits than if the asset was in the name of a top marginal taxpayer.
But once the investment’s income exceeds the interest debt, the rental income is taxed at a maximum of 15%. And the eventual capital gains are taxed at just 10% (if the asset is not sold within 12 months of purchase) or CGT-free if sold when the asset is backing the payment of a superannuation pension.
Finally, no investor should gear an investment without being aware of the risks. As Richards says: “While gearing increases the opportunity for greater capital gains, it also exposes you to greater capital losses".
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/index.php">SmartCompany</a>.
 
 
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Is it time to negatively gear property or shares?

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Mortgage broking groups Mortgage Choice and Loan Market Group are calling on the Reserve Bank to cut interest rates next month to help encourage more first-home buyers back into the market. 
Mortgage Choice CEO Michael Russell says a rate cut is needed to stimulate the non-mining sector. 
“We’re already witnessing the extremes of a two-speed economy, evidenced in slowing demand for property and a struggling retail sector,” Russell told Property Observer. 
Russell also believes that if the government remains committed to the first-home owners’ grant, then it should look to “make it more equitable by indexing it to the median house price and backdating it to its first anniversary, July 2001”.
However, Bendigo and Adelaide Bank chairman Robert Johanson is opposed to the government intervening in the housing market and calls the grants <a href="https://www.propertyobserver.com.au/residential/federal-government-must-decide-if-housing-industry-warrants-a-handout-in-may-budget/2012032053937">“bad policy”, which unnaturally drive up the cost of housing.</a>
"The government were just giving people money to get into new houses, which transferred the value to the sellers. It just puts costs up," Johanson says.
"I think it's a waste and a distraction," he says.
BIS Shrapnel senior manager Angie Zigomanis says first-home buyer incentives bring forward demand and consequently result in a drop off further on – as has been the case in Victoria. Loan Market recorded a 20% drop in the number enquiries from first-home buyers nationwide during March. 
The fall was greater in New South Wales and Victoria with activity in those states down 25% and 23% respectively in March compared to February. Only Queensland bucked the trend with a 3% rise. 
Percentage change in first-home buyer enquiry March 2012 compared to February 2012 
<table cellpadding="0" cellspacing="0" border="1" style="width: 300px;"><tbody>
<tr>
<td valign="top" width="308">
National
</td>
<td valign="top" width="308">
-20%
</td>
</tr>
<tr>
<td valign="top" width="308">
NSW
</td>
<td valign="top" width="308">
-25%
</td>
</tr>
<tr>
<td valign="top" width="308">
VIC
</td>
<td valign="top" width="308">
-23%
</td>
</tr>
<tr>
<td valign="top" width="308">
QLD
</td>
<td valign="top" width="308">
+3%
</td>
</tr>
<tr>
<td valign="top" width="308">
SA
</td>
<td valign="top" width="308">
-8%
</td>
</tr>
<tr>
<td valign="top" width="308">
WA
</td>
<td valign="top" width="308">
-12%
</td>
</tr>
<tr>
<td valign="top" width="308">
TAS
</td>
<td valign="top" width="308">
unchanged
</td>
</tr>
<tr>
<td valign="top" width="308">
NT
</td>
<td valign="top" width="308">
unchanged
</td>
</tr>
</tbody></table>
Source: Loan Market Group
 
Loan Market corporate spokesman Paul Smith says the decision by the RBA to leave rates on hold and the major banks lifting their variable rates in February has deterred first-time buyers. 
“There had been a revival in the first-home buyer sector late last year and early this year on the back of the RBA twice cutting the cash rate in November and December, 2011,” he says. 
“But the combination of official rates staying on hold and the banks raising rates independently of the RBA has caused some confusion in the marketplace as some buyers are unsure exactly where home loan interest rates are headed.”
Smith says many sectors of the economy would welcome an interest rate cut next week. 
A Loan Market consumer survey has found more than 70% of respondents expect the RBA to cut the official rate in March. 
“Although some progress has been made in the European debt crisis, and many economic indicators are within target, there remain stalled sectors that would benefit from an April rate cut by the RBA,” Smith says. 
“The RBA has noted that the banks no longer face the cost of funding pressures that caused them to lift their home loan rates independently of the central bank. 
“So if we get a cut in the cash rate on Tuesday consumers will be hoping their lenders follow suit and pass on the reduction in full,” says Smith.
 
 
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Mortgage brokers call for rate cut and first-home owners’ grant changes

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Recently Gina Rinehart's problems with her children have been front page news across the nation.
There have been a few lessons from this saga that we can all learn from.
The main points are summarised below:
You may recall that her family trust had a vesting date that triggered a capital gains tax of $100 million per beneficiary. Most if not all trust deeds have an 80-year vesting date, which means that the trust deed ceases to exist at this point and all assets than pass to the beneficiaries, triggering stamp duties and capital gains tax.
The problem with this is where normally a person sells a property to than have the cash to pay the tax, when a trust "vests" the beneficiaries end up with a huge tax liability but no cash to pay for it.
Hence he or she is forced to sell the property to pay the tax – but what if he or she wants to hold onto it?
Then the beneficiary would need to find cash elsewhere to fund the tax. Or he or she could borrow from the bank (assuming he or she can secure a loan) with the property as security.
In either case it's not an ideal situation to be in.
You may say that 80 years is a long time and you won't be around to worry about it, but you will leave a huge problem for your children and grandchildren.
In Gina's situation this could potentially send the children into bankruptcy as they will have a $100 million tax bill each (as reported) without either the asset or the cash to pay the tax. Not a good position to be in.
Lesson 1:
Make sure that your trust deed does not have a vesting date. The Chan &amp; Naylor "Property Investors Trust" deed is one such trust deed that does not have a vesting date.
It also has an approved product ruling from the ATO and allows the negative gearing to be claimed against your salary and protects the property from litigation and at the same time keeps it within the family bloodline and away from the childrens’ in-laws in case of a marriage breakup.
Lesson 2:
Make sure you retain control of the money by remaining as trustee. The trustee has full control over the assets. You may recall Gina's children attempted to remove her as trustee. With control you can still distribute funds to them but at your discretion.
Lesson 3: 
Make sure you retain the position of appointor. The appointor has the power to remove and appoint a new trustee. The appointor is the most powerful person in the trust. In most husband and wife situations, they hold the appointor position jointly.
Lesson 4:
With marriage break-ups at an all-time high (above 30% and higher because many unwed people live together and their break-ups are not recorded as marriage break-ups).
Do not pass any assets across to the children until after one partner dies. You can still lend children money but register a mortgage or caveat over the property or assets. You can call those funds back in case their marriage breaks up.
Lesson 5:
Property that you hold can still be provided as security for a bank to lend money to your children to purchase their homes with. The bank will hold their home as the main security (80%) and should something go wrong than you are only exposed to 20% being the top-up security held on your property. You can safeguard this with a second mortgage over their property.
Lesson 6:
Never hold investment properties in your own name but in a property investors trust (PIT), because at your discretion you can still distribute rental income to them from the PIT. You can still put the property up as security for a loan from the bank for them and when you are ready to pass control and ownership to them the title on the property can be changed (i.e., trustee can be changed) with no stamp duty or capital gains tax.
If you held the property in your own name and attempted to transfer the title to your children (before your death) there will be stamp duty and capital gains tax to pay.
The problems experienced by Gina Rinehart and her children are not problems that you only find in the rich.  They are experienced by everyday people who have assets such as property. The only difference is that problems of the rich get published in newspapers.
Most importantly, make sure you get good advice before you do anything. It's very expensive to try and fix something after the event.
As my mother would say, "An ounce of prevention is better than a pound of cure".
Ed Chan is a founding partner of <a target="_blank" href="https://www.chan-naylor.com.au/">Chan and Naylor</a> accountants and a leading property tax specialist. He has co-authored three best-selling books as a seasoned property investor who understands the relationship between property investment and tax.
 
 
 
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echan-hSGJw4wwC5

Six lessons from Gina Rinehart and the importance of using the right kind of trusts

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Aussie Home Loans founder John Symond has warned that borrowers will burst like tomatoes unless the RBA cuts rates.
“People are like tomatoes that have been squeezed too much. At some stage they'll burst. They've had a gutful,” Symond said on Ross Greenwood’s Money News show on 2GB.
Speaking also to David Koch on Sunrise, Symond joined the likes of Yellow Brick Road’s Mark Bouris by heaping more pressure on the Reserve Bank to cut interest rates and inject some confidence into the housing market and economy in general.
“The government and they RBA are a bit out of touch by not accepting that parts of the economy, especially small businesses, is doing it really tough at the moment,” Symond said.
“As well as the Australian economy has performed relative to other economies, we could easily get into the situation where the economy could stall,” warned Symond.
“We need an injection of good news and an injection of confidence – the best way to do that is to start dropping interest rates.”
Symond said the basic principles of supply and demand suggested the housing market was unlikely to recover anytime soon, pointing out that there were currently more than 300,000 houses listed for sale on the market, the highest in Australia’s history.
“We have an oversupply of sellers versus buyers, which suggests the housing market will remain soft,” he said.
Furthermore, he also expressed concern at the increase in self-employed borrowers facing mortgage difficulties as noted in the increase in low-doc loan arrears (loans principally used by those self-employed) in the recent Fitch Dinkum Index for the December 2011 quarter.
According to Fitch, the percentage of low-doc borrowers more than 30 days in arrears increased to 6.62% in the December quarter, up from the 6.26% rate in the September quarter.
“Mortgage arrears are a worry because they are trending in the wrong direction,” said Symond.
“Houses are taking twice as long to sell, and if you’re in trouble it’s going to take you twice as long to sell your property – if you can in fact sell it.”
Symond’s criticism of the RBA follows an attack in early March from Mark Bouris over the central bank’s decision to leave rates on hold in February (following which the major banks lifted their standard variable mortgage rates).
In a series of tweets Bouris said the central bank needed to take into account that Australia had a multi-speed economy when determining interest rate settings.
“What's the basis of the RBA decision? They keep rates on hold because everything looks OK but you just need to scratch beneath the surface,” tweeted Bouris.
 
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