High-profile apartment defect cases have changed the way many NSW buyers approach purchasing, putting greater scrutiny on building quality, strata records and the parties behind a development before a contract is signed.

The industry buyers are assessing today, however, is also different from the one in which cases such as Opal Tower and Mascot Towers emerged.

NSW has introduced a series of regulatory measures aimed at strengthening oversight of apartment construction, including Building Commission NSW, the Residential Apartment Buildings Act 2020 and the Strata Building Bond and Inspections Scheme. Under the latter, developers are required to lodge a bond, with independent inspections forming part of the process for identifying defects in new strata developments.

Those changes provide another layer of protection, but they haven't removed the importance of buyer due diligence.

[smartcode_project:default project_id=5743 project_image_fid=372394]

For purchasers considering an apartment, that means looking beyond the residence itself. Building and strata history, strata reports, the track record of the builder and developer, the condition of common property and any known or planned expenditure by the owners corporation can all form part of assessing a building before purchase.

Whether the development is already complete can also materially change what can be assessed.

An off-the-plan purchaser is necessarily buying before the finished product exists. A completed apartment, by comparison, can be walked through before contracts are signed, allowing the purchaser to see the finishes, common areas and broader building as they have actually been delivered rather than relying solely on plans and renders.

It also removes exposure to some of the uncertainties that exist between an off-the-plan purchase and completion, including construction delays, cost pressures and builder insolvency during the delivery period.

[smartcode_project:default project_id=5743 project_image_fid=927]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a> National Sales Director Ben Hamblett said that greater focus on tangible evidence is increasingly evident among apartment purchasers.

“The biggest shift we're seeing is buyers wanting proof, not promises,” Hamblett said.

“That's exactly why we deal in completed stock - you can inspect the building before you commit - and why we've backed every purchase with a cash bond against special levies.”

At <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> in Parramatta, that emphasis on a completed, inspectable product is already in place.

The 413-apartment, 46-level tower at 12 Phillip Street is being marketed by Projects by Equitifund, allowing prospective purchasers to inspect the residences, common areas and resident facilities before committing.

[smartcode_project:default project_id=5743 project_image_fid=375255]

The Lennox also introduces another layer to the due-diligence conversation through Strata Surety.

The vendor-funded arrangement provides purchasers with a cash-backed bond held in their own solicitor's trust account from settlement. According to Equitifund, the bond covers any special levy raised during the applicable cover period and is provided at no cost to the purchaser.

Special levies can create an unexpected cost for apartment owners where an owners corporation needs funding beyond its existing strata contributions. Under NSW strata law, a special levy requires approval by owners at a general meeting.

Equitifund Executive Chairman Greg Huxley said Strata Surety was designed to provide something more concrete than reassurance about that potential exposure.

“Buyers have every right to ask hard questions about strata risk - the industry has given them plenty of reasons to,” Huxley said.

“Our answer isn't a reassurance, it's a bond. Strata Surety puts real money behind that confidence, held by the buyer's own solicitor, not by us.”

[smartcode_project:default project_id=5743 project_image_fid=375281]

For The Lennox, its completed status also means purchasers can assess not only the apartment itself, but a building that has already been occupied and operating for several years.

Completed in 2021, the $300 million development, designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, comprises one, two, three and four-bedroom apartments, with open-plan living areas extending to private balconies. Interiors incorporate engineered timber flooring, stone benchtops and integrated appliances, while many upper-level residences have views across the river and surrounding district.

Its established amenity can similarly be inspected in operation. Resident facilities include the Watermark precinct with a 20-metre pool, outdoor terrace, barbecue areas, gym, fitness studio and conference room, while ground-floor retail addresses the river walk and surrounding public space.

The Lennox is also home to the Southern Hemisphere's first fully robotic residential car park, which has now operated for several years. Its nine-level basement combines three conventional parking levels with six automated levels, accommodating 327 vehicles using technology from German firm Lödige Industries.

[smartcode_project:default project_id=5743 project_image_fid=925]

The riverfront address puts The Lennox close to much of central <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a>'s existing infrastructure, including Parramatta Station, Westfield Parramatta, Parramatta Park, and the Church Street dining precinct.

The remaining apartments form part of a limited release secured by Equitifund, following the sale of the majority of residences before and shortly after completion.

The regulatory environment around NSW apartment construction has changed considerably since the defect cases that reshaped public discussion around the sector. For purchasers, however, regulation is only one part of the equation. The ability to investigate a building's history, review its strata position and, where possible, inspect what has actually been delivered remains central to making an informed apartment purchase.

At The Lennox, its completed status provides that opportunity before contracts are signed, while Strata Surety adds a financial backstop against special levies beyond the protections already provided under NSW strata law.

[smartcode_project_cta:default project_id=5743]

Joel Robinson

Buying with confidence: What NSW apartment buyers should check beyond the defect headlines

Too often, heritage buildings become the podium for a contemporary tower. At <a href="https://www.apartments.com.au/new-apartments/623-collins-607-623-collins-street-melbourne-vic-3000">623 Collins</a>, <a>Sterling Global</a> challenged its design team to reverse that process.

The brief to <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> was deliberately simple: "Don't design around the heritage. Design from it." It became the philosophy behind a project that draws inspiration not only from two landmark heritage buildings, but from Collins Street itself, a street layered with architectural history and civic significance.

That philosophy has shaped one of <a href="https://www.apartments.com.au/developments/melbourne-vic-3000">Melbourne</a> CBD's most considered residential projects, where the 1924 State Savings Bank and neighbouring Batman's Hill Hotel have become the architectural foundation for 623 Collins rather than remnants preserved beneath a new development.

[smartcode_project:default project_id=145324 project_image_fid=372749]

Rather than approaching the site as a blank canvas, <a href="https://www.apartments.com.au/developers/sterling-global">Sterling Global</a> saw the existing buildings as the beginning of the story.

"Sites like this rarely become available," the developer said.

"623 Collins wasn't simply an opportunity to develop a prominent CBD site. It was an opportunity to restore and reimagine one of Melbourne's important heritage landmarks while contributing to the continued evolution of Collins Street. For us, the existing buildings weren't constraints. They were the beginning of the story."

Instead of mimicking the ornate heritage architecture, Plus Studio studied the proportions, rhythm and craftsmanship of the original buildings before translating those characteristics into a contemporary 42-storey tower.

[smartcode_project:default project_id=145324 project_image_fid=372748]

"The brief challenged us to create a contemporary landmark that respected Melbourne's architectural history without becoming nostalgic," Plus Studio said.

"Rather than mimicking heritage, we sought to understand its proportions, rhythm and material language before translating those qualities into a distinctly contemporary architectural expression."

The practice says the State Savings Bank and Batman's Hill Hotel became the project's primary source of inspiration, allowing the heritage buildings and contemporary architecture to exist "in conversation rather than contrast." Generous planted terraces further soften the transition between old and new, creating elevated green spaces while reinforcing the dialogue between the restored podium and the contemporary tower.

That dialogue continues throughout the interiors, where Melbourne designer Fiona Lynch developed a material palette inspired by the idea of alchemy, balancing contrasting materials that reference both the Neo-Grec detailing of the original bank and contemporary urban living. The result is a series of spaces that feel timeless rather than trend-driven.

[smartcode_project:default project_id=145324 project_image_fid=354343]

The project will deliver 316 residences across four collections, Heirloom, Signature, Reserve and the Penthouse Collection, with each responding differently to its position within the building, from the restored heritage podium through to the upper levels of the tower. The Heirloom Residences retain defining heritage elements including original heritage windows, generous proportions and high ceilings, while the tower introduces contemporary homes with expansive layouts and elevated views.

Amenities have likewise been designed to support long-term city living rather than short-stay convenience. Residents will have access to concierge services, wellness facilities including a pool, cold plunge, sauna, steam room and gym, alongside private lounges, entertaining spaces and dedicated resident clubs.

Sterling Global says that approach is resonating with buyers seeking permanence rather than novelty.

[smartcode_project:default project_id=145324 project_image_fid=354347]

According to the sales team, purchasers are looking for enduring architecture, generous floorplans, heritage character and long-term value, with many commenting that 623 Collins "doesn't feel like another apartment development" because of the way the architecture has been curated around the site's history.

Situated on the prominent corner of Collins and Spencer streets, the project occupies one of Melbourne's most recognisable gateway sites, marking the western entrance to the city's best-known street. For Sterling Global, it also reflects a broader shift in city-making.

"Rather than maximising development yield, the project embraces adaptive reuse as a design philosophy, allowing heritage to inform architecture, interiors and the overall resident experience," the developer said.

"The result is a building that feels uniquely connected to Melbourne."

[smartcode_project_cta:default project_id=145324]

How Sterling Global designed 623 Collins from Melbourne's history

Avant Townhomes is adding to Ivanhoe’s family-sized housing options with <a href="https://www.apartments.com.au/new-townhouses/three-82-ivanhoe-382-upper-heidelberg-road-ivanhoe-vic-3079">Three 82</a>, a collection of just 16 four-bedroom townhomes on Upper Heidelberg Road.

The <a href="https://www.apartments.com.au/developers/intrapac-property">Intrapac Property</a> townhome division has taken a contemporary approach to the traditional family home, pairing larger floorplans with the lower-maintenance format of a townhouse.

[smartcode_project:default project_id=152069 project_image_fid=374394]

Designed by <a href="https://www.apartments.com.au/architects/arcadia-studio">Arcadia</a>, with landscaping by Landsite, the homes feature generous open-plan living and dining areas that connect directly to outdoor spaces, with layouts also designed to maximise natural light and privacy.

Natural stone is used throughout the interiors, including in kitchens that pair stone surfaces with bespoke cabinetry, considered storage and SMEG appliances.

The four-bedroom layouts include built-in wardrobes and a main bedroom with its own ensuite, while family bathrooms service the additional bedrooms. Each home also includes a lock-up double garage and intercom entry.

[smartcode_project:default project_id=152069 project_image_fid=374399]

Energy efficiency has been incorporated into the design through solar panels, double glazing and reverse-cycle heating and cooling, with the homes targeting 7-star energy ratings.

Rather than incorporating extensive communal facilities, Three 82 has been conceived around private residential amenity, with the 16-home scale keeping the focus on individual homes and their own indoor and outdoor spaces.

The development is located at 382 Upper Heidelberg Road, around one kilometre from Ivanhoe Village's cafés and retail and a short drive from Eaglemont Station and Ivanhoe Station.

[smartcode_project:default project_id=152069 project_image_fid=374393]

Several of Ivanhoe's established schools are also nearby, including Ivanhoe Girls' Grammar and Ivanhoe Grammar School. The address also provides access to the suburb's parklands and the wider Yarra River corridor.

<a href="https://www.apartments.com.au/project-marketer/nelson-alexander">Nelson Alexander</a> has been appointed to handle sales.

Construction is underway and progressing well, with Three 82 currently tracking toward completion in Q2 2027.

[smartcode_project_cta:default project_id=152069]

Three 82 brings boutique four-bedroom townhome collection to Ivanhoe

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/graya">Graya</a> has secured a prime Newstead site from fellow developer Fraser, subsequently lodging plans for The Silo, a major mixed-use residential project in Newstead designed around a new public laneway linking the James Street precinct with the wider Gasworks and Newstead neighbourhood.

Proposed for the corner of Chester and Morse streets, the <a href="https://www.apartments.com.au/architects/bureauproberts">Bureau^Proberts</a>-designed project places its strongest emphasis at ground level, where retail, landscaping and a new cobblestone pedestrian connection would open the site to the surrounding neighbourhood. The design team describes The Silo as “more than a residential building”, positioning the development as an extension of Newstead’s public realm rather than a standalone apartment tower.

“A new cobblestone laneway and landscaped connection between James Street and Gasworks unlock a missing pedestrian link, improving walkability and stitching together two of Brisbane’s significant urban destinations,” Bureau Proberts said in its Urban Design Report.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="0ea1b06a-75f5-40a5-b2c5-33c97bc86052" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/silo%20bldg.png?VersionId=KmjsAtNePu57_B31EM_DJ5T6KPJHtcmo" />

The Silo is planned as a mixed-use development incorporating apartments alongside a bar and centre activities including food and drink outlets, indoor sport and recreation, office and retail uses.

Architecturally, Bureau Proberts has conceived the building as a collection of vertically expressed, stepping forms rather than a single uniform tower. The composition rises from an articulated podium before being broken by a triple-height landscaped recreation level, with the upper section becoming more compact before terminating in a landscaped rooftop garden.

The project's name and architectural language draw directly from Newstead's industrial history. Patterned off-form concrete is proposed as the principal façade material, complemented by slender metal rod balustrades and extensive planting. The cylindrical and vertically ribbed elements give the building its silo-like expression, while curved balconies and planted edges introduce a softer subtropical layer.

“The Silo reinterprets its robust forms, scale and materiality through a contemporary subtropical architectural expression, creating a building that acknowledges its industrial legacy, while responding to the way the precinct is occupied today,” Bureau^Proberts said.

The recreation level is one of the defining breaks in the tower. Plans include a lap pool, mature subtropical planting and shared resident facilities within an elevated communal garden. Landscaping continues through the podium and onto the rooftop, where a further garden forms what the architects describe as a “subtropical crown” to the building.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="f8451036-35a4-49a9-8d88-2ef4438eba3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Silo%20Lane.png?VersionId=h8N31_rYmCEqoNrpt4kbYVQhJGZn60LH" />

At street level, the development has been designed to establish a more permeable block. Retail and hospitality tenancies address the public realm, while landscaped pedestrian spaces lead into the new laneway connection. Renders in the design report show the proposed “Silo Lane” as a substantial opening through the podium, framed by cylindrical concrete forms with cascading planting above.

The Silo continues Graya's move into larger apartment developments after building its reputation across high-end residential projects in Brisbane and the Gold Coast.

Graya buys Frasers Newstead site, plans The Silo between James Street and Gasworks precincts

<a href="https://www.apartments.com.au/developers/wickton">Wickton</a>’s completed Linacre Rise development in Hampton is giving Bayside downsizers the opportunity to move into a spacious apartment near the beach, with the developer covering stamp duty for a limited time.

The 27-residence development has been designed for buyers who want to simplify their living arrangements without giving up the space, warmth and quality associated with a long-term family home. Most apartments have already been secured by Bayside locals, leaving a select collection of two and three-bedroom residences and penthouses available.

Two-bedroom apartments are priced from $1.275 million, three-bedroom residences from $2.25 million and penthouses from $3.375 million, with the completed homes available to inspect and move into now.

[smartcode_project:default project_id=95289 project_image_fid=366760]

<a href="https://www.apartments.com.au/buildings/linacre-rise-hampton-8-10-linacre-road-hampton-vic-3188">Linacre Rise</a> occupies an elevated position on one of <a href="https://www.apartments.com.au/developments/hampton-vic-3188">Hampton</a>’s quiet, tree-lined streets, around 250 metres from the bay and 500 metres from Hampton’s village centre. Its setting gives residents access to the beach, local cafés, shops and Hampton Train Station while retaining the feel of an established residential neighbourhood.

Architecture and interiors by <a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a> draw on the warmth and permanence of traditional brickwork, with the building integrated into terraced landscaping by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>. Ground-floor apartments are elevated above the street and include private garden courtyards, while several upper-level residences have generous balconies and outlooks toward the bay.

Inside, the residences favour natural materials and generous proportions. Herringbone-pattern European oak flooring, natural stone benchtops, premium joinery and Swiss V-ZUG appliances are among the key inclusions, while integrated storage has been incorporated across kitchens, bathrooms, studies and living areas.

The kitchens have been planned as practical spaces for both everyday use and entertaining, with substantial island benches, detailed cabinetry and adjoining dining and living zones. Full-height wardrobes, plush bedroom carpeting and carefully considered lighting reinforce the residential character Wickton sought to retain for buyers moving from larger homes.

[smartcode_project:default project_id=95289 project_image_fid=366769]

A Linacre Rise purchaser said the completed apartment had delivered the space, outlook and construction quality they had been seeking.

“The unit is very light, has views to die for over the bay, all construction materials and fittings are premium quality, we have secure parking for three cars, EV charging at very competitive rates, the neighbours are friendly and there is just a lovely ambiance about the place,” the purchaser said.

Environmental features include solar panels, shared electric vehicle charging stations, rainwater harvesting for toilet flushing and landscape irrigation, double-glazed windows and water-efficient fixtures and appliances.

[smartcode_project:default project_id=95289 project_image_fid=366762]

The development was built by Balmain &amp; Co, with Wickton managing the broader development process through its in-house team.

For downsizers, the project’s completed status removes much of the uncertainty associated with buying off the plan. Purchasers can inspect the finished apartments, understand their outlook and proportions, and move in without waiting for construction to conclude.

The remaining selection includes north-oriented balconies, corner configurations and penthouses with elevated bay views. The developer-paid stamp duty initiative is available for a limited time, with potential savings of up to $200,000 depending on the residence purchased.

[smartcode_project_cta:default project_id=95289]

Limited-time stamp duty offer at completed Linacre Rise apartments in Hampton

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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Well it’s that time of the year when Australian taxpayers prepare themselves to get their annual slap across the face with a couple of moist lettuce leaves.
Yes – the 2014/15 federal budget is now less than one day away and just like the budgets before this one the warnings, threats and pugnacious leaks usually amount to next to nothing. The reason why? Politicians have an addiction to being re-elected which is contingent on strong polling performances despite our economy growing slightly below trend.
Historically real estate has been a minor player come budget time with the government of the day preferring to address the industry from more of a macro positioning given that is by far an easier option when compared to a micro-economic analysis. For all intents and purposes if the real estate/housing demographic were that essential, then it would be fair to say there would actually be a designated Housing Minister which is not the case with the Abbott led government.
Although it should be noted that <a href="/expert-insights/finance/governments-take-out-a-lot-more-through-property-tax-than-is-given-back">governments take out a lot more through property tax than is given back </a>– real estate is a cash cow of choice for all three levels of government – including through stamp duty, land tax, capital gains tax, rates and infrastructure charges. It would be reasonable to suggest that one of the compelling reasons as to why the GST has been left out until the next election is because the state governments reneged on their 2000 tax obligations when the GST was introduced. If and when the GST is discussed the states and territories will have to make some significant tax adjustments given the decision will be made by referendum.
Negative gearing will escape greater scrutiny in this year’s budget despite the government having to fund $5 billion each year and growing tax concessions.
Given the ongoing debates attributed to housing affordability it will only be a matter of time before we see a tapering in the annual tax concessions which would also lend significant weight to investors contemplating a move away from traditional bricks and mortar – any such decision would be staggered over a 15 to 20 year period.
<a href="https://www.rwm.com.au/files/2014/05/8-05-2014-1-19-04-PM.jpg"><img class="aligncenter size-full wp-image-8531" src="https://www.rwm.com.au/files/2014/05/8-05-2014-1-19-04-PM.jpg" alt="8-05-2014 1-19-04 PM" width="646" height="395"></a>
Source: OECD
 
As with every budget the Real Estate Institute of Australia (REIA) had their say into negative gearing and pointed out that Australian Taxation Office (ATO) data shows fewer than 80% of total individual taxpayers that are claiming a tax deduction from property earn less than $80,000 per annum.
The OECD eloquently summed up Australia’s economic position this week when it released their economic outlook for May:
“Output is projected to increase by 2 ½% in 2014 and by nearly 3% in 2015, with a general pick – up in demand offsetting declining investment in the resources sector.
"Some economic slack will remain and the unemployment rate will not begin to edge down until the second half of 2015. As a result there will be little inflation pressure, although rapid growth in house prices and mortgage lending requires continued attention.
"Given near – term uncertainties in the re – balancing of the economy away from investment in the natural resources sector, heavy front loading of fiscal consolidation should be avoided.
"Against the backdrop of the projected recovery, monetary stimulus should start to be withdrawn in the first half of 2015.”
It will be fascinating to see how much of this the federal government adopts with next week’s budget.
<a href="https://www.rwm.com.au/files/2014/05/26-04-2014-10-07-22-AM.jpg"><img class="aligncenter size-full wp-image-8533" src="https://www.rwm.com.au/files/2014/05/26-04-2014-10-07-22-AM.jpg" alt="26-04-2014 10-07-22 AM" width="660" height="364"></a>
Source: Australian Property Monitors
With regard to the OECD’s concerns regarding house prices and mortgage lending it should be noted that the house prices showing the greatest gains are in the lower price ranges and not the top-end markets.
From the above graph I would suggest that the vast majority of Sydney suburbs would be showing their yearly price increases of between 5.00 and 10.00% – which is not a concern. We will only see property stress once the RBA starts moving up the cash rate.
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robertsimeon-hRNTwJyXkQ

Budget week is all about huff and puff

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As we approach the federal budget, once again we have to endure another round of economic nonsense as the Treasurer tries to convince ordinary Australians that the country is running out of money – facing a ‘budget crisis’.
So ingrained is this message, that few question it.
Instead, <a href="https://www.3aw.com.au/blogs/3aw-drive-blog-with-tom-elliott/my-fivepoint-plan-to-fix-australias-budget/20131211-2z5mw" target="_blank">talk radio</a> is flooded with callers outraged at the ‘debt burden’ they imagine will be passed onto their children. A lifetime of work and servitude lay ahead – not only charged with the responsibility of paying down their own debt – but the government’s debt as well!
For an administration that wants to retain leadership through blaming the last government for the ‘mess’ they’ve reputedly left us in, it’s a convenient message to sell.
‘Fiscal responsibility’ is the catch term of the day, cuts to health services, education, welfare, job seekers allowance, wages, and proposed back to work assistance for those laid off  from the car industry - you name it, it’s on the table. 
Everything that is, except the golden egg of speculative windfall gains that can be gleaned from the increasing value of land.
In countries such as <a href="https://catherinecashmore.com.au/wp/?p=400" target="_blank">Germany</a>, they have historically managed to divert speculation away from residential real estate, with the focus being on productivity instead. Here we’re all subject to an economy built on the retirement ‘wealth egg’ of land – our personal economic leverage for all lifestyle and business needs.
It used to be called Monopoly. Today its termed - 'Getting onto the property ladder'. 
The rules of the game are simple.  The player uses as much debt as they can borrow - to buy and hold as much as they can – and those who got in at the beginning of the lending boom, securing the best plots available, win the game.
In relative terms, the ordinary home owner doesn't advantage much, but what else can they do? Retire still renting? Or become a contestant and hope their house yields enough appreciation to support them when they retire.  (But not so much that their children can't get a foot onto the first rung of course, and leave home before the age of 40.)  Our lives are therefore spent working to pay off a mortgage - or two. (That is, unless you're an unlucky tenant who doesn’t have the funds to buy, in which case you play a game called The Rental Trap.) 
The question we ask however is: at what expense? – Or perhaps at whose expense?
As demonstrated by a recent <a href="https://hia.com.au/~/media/HIA%20Website/Files/Media%20Centre/Media%20Releases/2014/national/Residential%20Land%20Market%20Pressures%20Continue%20to%20Mount.ashx" target="_blank">HIA report</a> – land values continue to skyrocket – with the weighted median across all capitals during the final quarter of December 2013, rising to the:
“Highest level on record… a 22.3% increase on the final quarter of 2012.”
 <img src="/images/2014/05/12/cashmore%20may%2012%20one.png" alt="">
Or perhaps it can be better illustrated on a graph <a href="https://www.newgeography.com/content/004261-urban-containment-land-price-up-5-times-income-smaller" target="_blank">Wendell Cox</a> (author of the <a href="https://www.demographia.com/dhi.pdf" target="_blank">Annual Demographica Housing Affordability Survey</a>) constructed which cuts through the usual measures used to convince readers that “housing has never been more affordable”, with overwhelming focus on mortgage serviceability rates alone.
Instead, it demonstrates the speculative nature shaping the property cycle, which affects not only established house prices, but building activity as lot sizes reduce, whilst land price per square meter, outpaces income growth considerably.
  <img src="/images/2014/05/12/cashmore-may-12-two.jpg" alt="">
<a href="/expert-insights/investing/who-is-really-benefiting-from-the-property-cycle-and-at-what-cost">The smoke screen debates on affordability and scrapping negative gearing</a>, are just that, smoke screens.  Something that was subsequently confirmed upon release of the government's Commission of Audit, which ruled out any consideration of a change to housing policy – better to tax income instead – easier for the top 10% to avoid it, whilst low to middle income earners suffer the shortfall.
Importantly, the Commission of Audit’s terms of reference was to concentrate on direct government expenditure - such as grants and transfer payments rather than tax expenditure - rebates, exemptions and so forth (such as negative gearing, capital gains).
We all have to shoulder the burden, tighten belts, work harder – pensioners included!
‘All’ that is, except those imposing the rules – whose entitlements are immune from any fiscal responsibility.  
Yes – the members of our federal government - the issuers of our monetary supply, offset through taxing those who do have to earn dollars before they can spend it – whilst our government earns nothing – but is rather elected, and charged, to manage the budget in the best interests of its working population to promote economic growth – for which education, health, back to work initiatives and so forth, are vital pillars.
There is no evidence and no economic wisdom that indicates running a surplus under current conditions is good for the economy, especially if that surplus is to be achieved through the measures suggested. 
Article continues on next page. Please click below.
<hr class="system-pagebreak">
The Henry Tax review set out a framework that would move us to good model of economic management - a well managed deficit in order to achieve this is better than a running for a surplus at any cost - harming productivity in the process - as well as exacerbating private debt - which is high by any measure.
Something, <a href="https://www.youtube.com/watch?v=D0iFiUfDqSw" target="_blank">Steve Keen</a> does an excellent job of demonstrating in a recent lecture given in Sydney, in which he shows the inevitable consequence to GDP should our government attempt to presently do so.
Economic orthodoxy, which stubbornly insists austerity measures to pay down government debt, should take precedence whilst imposing onerous taxes on its working population, are lessons that should have been learnt following the Great Depression in the 1930s.
There is nothing new about this – indeed, Australia’s oldest PhD at 93  - Dr Elisabeth Kirkby - has just written a 100,000 word thesis on it. And whilst valuable lessons reaped from the grains of history are ignored, the patterns that led to our greatest economic disasters are repeated.
What all demonstrate is, when the government tightens its belt, for no other reason than a vain attempt to spruik a surplus, it has the unwonted effect of withdrawing money from the economy – leaving the private sector (the working class population) to pick up the slack.
Therefore “repairing the [government] budget” with the claim it’s putting Australia “on the right track” – is not putting the fate of Australians on the right track.
It is the government’s responsibility to manage the monetary system for the needs of its population (whether surplus or deficit) - spending enough money into the economy to keep employment and productivity boosted, which by design, reduces pressure on the welfare state.  
Yet it chooses instead to penalise productivity and ignore tax expenditures such as the capital gains exemption on owner occupied housing or scaling back negative gearing.
In this respect, it is economically irresponsible to have a growing deficit offset by tax receipts that reward speculation and by consequence, widen the wealth gap between rich and poor.  Ironically, the very gap the tax and transfer system is supposed to narrow.
In other words, we are not burdening our children with debt – we are burdening them poor economic management.
As austerity measures bite and the retirement age increases, the majority of Australian’s will be working longer and harder – and whilst the government pays down its reputed debt burden – private debt levels will continue to increase as families borrow to afford the basic necessities they need, most likely leveraged against their own homes.
Notwithstanding, most of our debt, is bank created debt – arguably, a far greater concern than government debt.
For those that need a reminder – as demonstrated in the latest <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4102.0main+features202014" target="_blank">ABS social trends report</a> – total household debt was $1.8 trillion as at the end of 2013 - higher than it has been at any other time over the past 25 years.
<img src="/images/2014/05/12/cashmore-may-12-three.jpg" alt=""> 
Real Household Debt Per Person, Source: ABS
Low interest rates aside - $1.8 trillion is a hefty figure.
To put it in some kind of context – a trillion, is a thousand billion. 
The sun is set to burn out in approximately 5 billion years. A trillion is so large; it’s almost meaningless in real terms.
Total government debt is around $542 billion (as at March 2014 - <a href="https://www.rba.gov.au/" target="_blank">RBA</a>) – that’s about 35% of GDP.
In contrast, our household debt to GDP ratio is estimated to be around 97% (as at December 2013 - <a href="https://www.rba.gov.au/" style="line-height: 1.3em;">RBA</a>) - assisted by low interest rates and an array of financial products to ‘woo’ new borrowers into the property market (such as shared equity schemes, interest only loans, redraw facilities, offset accounts and so forth). 
Notwithstanding – the increase in bank created debt is a far greater issue than \government debt.
Therefore instead of our current leaders asking Australian’s what they can do to assist government debt. We should be asking the government what it will do to assist private debt. Particularly as we move forward over the next 12 months or so, and the lending cycle turns.
Capitalism?
Of course, this problem is not unique to Australia.  Thomas Piketty’s book <a href="https://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X">Capital in the 21st Century</a> has just come out to great acclaim, choc full of statistics to demonstrate how income earners – the vast body of productive workers, who prop up the local economy through the taxes they pay and products they produce - are the losers, compared to those who hold stores of unproductive wealth. 
The book focuses on the ‘1%-ers’– advanced through gifts of inheritance – those who hold the vast majority of assets; controllers of the stock and bond markets - collecting their economic rent by way of hording property, and effectively, buying protection through lobbying seats of power.
It’s an age old game and in a world where gaining political leadership is only possible with vast sums of advertising dollars, lobbying is crystallised into the system.
We’re currently seeing this with the <a href="https://www.3cr.org.au/economists/podcast/renegade-economists-07052014" target="_blank">ICAC investigation</a> as it uncovers a web of alleged political corruption, with illegal donations from property developers and other sources, funnelled into a Liberal Party <a href="https://www.smh.com.au/nsw/icac-to-be-suspended-as-mike-gallacher-investigated-for-serious-electoral-funding-irregularities-20140506-zr59n#ixzz30xGqICRV">slush fund</a>.
Meanwhile, Clive Palmer has been accused of “<a href="https://www.theaustralian.com.au/national-affairs/palmer-spending-like-a-drunken-sailor-on-poll/story-fn59niix-1226871364428" target="_blank">spending money like a drunken sailor</a>” to secure a third seat in Senate for his PUP party.
Palmer reportedly entered the leadership battle due to “poor policy decisions” by the Gillard government – the carbon tax in particular being highlighted, which promised to negatively impact his core business.
However, his other policy evaluations leave much to be desired.
For example, Palmer’s <a href="https://palmerunited.com/national-policy/" target="_blank">housing affordability</a> plan, is to make home loans tax deductable for the first $10,000 – a move which will unquestionably push land prices higher, as future buyers factor the savings into their budget and adjust price expectations accordingly.
But then, considering Mr Palmer’s significant land holdings, which are said to <a href="https://en.wikipedia.org/wiki/Clive_Palmer" target="_blank">include</a>;
<ul>
<li>“A six bedroom, 11 bathroom, 22 car garage property in Queensland - along with;</li>
<li>An array of golf courses. As well as;</li>
<li>“Family and associates” owning a total of “11 homes in the Sovereign Islands” on the banks of the Southport Broadwater - as well as;</li>
<li>“Other known properties at Broadbeach Waters on the Gold Coast, Fig Tree Pocket in Brisbane, Jandowae on the Darling Downs, Queensland, and Port Douglas” and notwithstanding;</li>
<li>“An undisclosed number of properties held in trust for their daughter.”</li>
</ul>
I suspect lowering land values, may not be top of mind.
The wealth tax solutions Piketty proposes to stop the gap widening fail not only by the confused definition of what one would consider wealth (a Rembrandt painting, or luxury yacht for example?), but also that of capital.
In modern terminology, capital is used for anything that yields a profit – which under our current system includes land. However, in classical terms, capital is a factor of production - a depreciating asset and one, which can be reproduced.
In a society built on the foundation of free markets, factors of production flourish under competition. If one widget costs too much, an entrepreneur will find an innovative way to produce the same widget at a cheaper price. 
It’s called capitalism.
Land however is not a factor of production. It can’t be moved or reproduced and it’s limited in supply. Therefore the revenue stream generated from the unimproved portion alone is due to its locational advantage, and little else.
The free market activities in a capitalist society, cause land values to increase – and considering this is through no act of individual exertion on the vendor’s side, but rather the collective efforts of the community, it makes sense that most consider owning a well located plot of land, better than both money in the bank and the wages they have to earn.
This is why increasing charges on the revenue stream ensuing from the locational value of land, and recycling it back into the community - (which is where it came from, and where it belongs) – by way of a tax shift offproductivity (wages) and onto our valuable and limited natural resources - was termed the ‘least bad tax’ by the capitalists <a href="https://www.macrobusiness.com.au/2013/11/land-tax-must-kill-negative-gearing-stamp-duty/" target="_blank">Milton Friedman and Winston Churchill</a> – to name but a few. 
Rising land values harm capitalism, they increase the rent for small business owners, always benefitting the landlord but never benefitting the wage earner. Furthermore, rising land values force young people out of the market, whilst making those in the market wealthy – and widening the gap between rich and poor.
When land prices inflate, jobs are lost as more revenue is taken away from productivity and soaked into the ground.  
It’s not called capitalism; it’s called capitalising - taking advantage of community created revenue - the total of which is pocketed by the land owner.
This is why land prices are so high and vested interests of policy makers <a href="https://catherinecashmore.com.au/wp/?p=503" target="_blank">always act</a> to push them higher.
The great man Buckminster Fuller – architect, systems theorist, author, designer, inventor, and futurist – once said:
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” (H/T author of soon to be published book Land by <a href="https://medium.com/p/18066c10ac50" target="_blank">Martin Adams</a>)
We live in a democracy, therefore any change to the status quo needs to come from the ground up – we will never get it from the top down.
The Henry tax review set out recommendations for transitioning our economy based on the ideas penned above. 
 How we get there is worthy of debate – however thankfully, due to the internet and a new age of enlightened priced out folk, we can start that debate in 2016/17 by using our own preference and economic wisdom to vote a government which acts to widen the rich/poor divide out.  By which time there may be better options to vote in.   
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catherinecashmore-6LXia3pPQj

Economic nonsense and the consequences for future generations

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GUEST OBSERVATION
Australia has had unprecedented growth in GDP since December 1991 and avoided the both the 1998 Asian financial crisis and the global financial crisis in 2008, without a recession. Compared to most of the OECD countries who have suffered increases in unemployment and long term unemployment since then, Australia has powered ahead.
It is true that as the global financial crisis hit and tax revenues fell, Australia introduced a series of stimulus measures to tackle the crisis that moved the economy from a budget surplus to budget deficits. For what they are worth, the rating agencies have given Australia a triple A rating, which means that they are not concerned about our budget deficits or debt.
How we are doing now
As the commodity boom has come to an end, the Australian economy has slowed down but has not gone into a recession. It is certainly not in crisis. In my recent paper, <a href="https://ftp.iza.org/dp7505.pdf">Australia: the miracle economy</a>, I studied the behaviour of the Australian economy compared to some of the OECD countries: according to the OECD our economy has had a stellar performance.
On important macroeconomic indicators, including GDP, unemployment, inflation, Current Account Balances, and debt, Australia compares very favourably. Our GDP has been growing consistently, and our unemployment rate has been consistently lower than most OECD economies since the GFC.
Australia has the lowest debt (measured by Gross Financial Liabilities) in the OECD. In 2013, Australia’s Debt to GDP ratio was 34.4 %, Germany was 80.9 %, the UK at 111.6 %, USA at 106.5 % and the OECD average was 112.0 %. Debt crisis? What debt crisis?
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47952/width668/wygjz2nc-1399447632.jpg" alt="">
Government Debt to GDP Ratio
Even Germany took until the end of 2012 to catch up with Australia. Some of the OECD countries have been concerned about deflation, but Australia has managed to go through the crisis with negligible inflation. We have had current account deficits (CAD) for more than a hundred years, except for very brief spells of a surplus. However, since the GFC, only Germany and Italy have had lower CADs.
However, the Coalition government has been arguing that the economy is in dire straits and is going to collapse because of a large budget deficits and a ballooning government debt. It is threatening to cut back on welfare, health, education, and the public service. These mirror austerity measures that have failed to return many OECD countries back to growth. But the same time it wants to abolish the mining tax and the carbon tax: one set of policies to hit the poor and another to help the rich.
Given the announcement of cuts back on government expenditures at a time the economy is slowing, recent proposals to introduce an income tax - or deficit levy - would lead to an even greater fall in aggregate demand and increased unemployment.
How we got here
Thanks to several mining booms and strong demand from Australia’s largest trading partner, China, the Australian economy has had continuous growth since December 1991, with GDP growing even through the GFC. The OECD has <a href="https://www.oecd.org/eco/surveys/australia2012.htm" target="_blank">repeatedly stressed</a> the stellar performance of the Australian economy, saying that with “its 21 years of uninterrupted growth, Australia stands out among OECD countries.”
In comparison, most of the other OECD economies faced falls in GDP that continued for several years.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47954/width668/jw4ypw6x-1399447752.jpg" alt="">
Australia leads in the GDP Race.
In the United States, GDP levels did not reach the pre-recession period until 2011; similarly, Germany - the wunderkind economy - did not reach the pre-recession levels until the same year.
While is hotly debated, many economists are convinced (including Nobel Laureate Joe Stiglitz) that the timely introduction of a stimulus package was instrumental in avoiding a recession. At the same time countries like Greece and Portugal, Spain, Italy that introduced major austerity measures are still wallowing in a deep recession.
What’s next?
While our manufacturing sector has underperformed due to strength of the Australian dollar, the OECD points to a favourable future for our economy:
"Non-mining tradable sectors have struggled with the strong exchange rate driven by the mining boom. However, fundamentals remain solid with the unemployment rate close to its structural rate and inflation and public debt low. Growth strengthened in 2012, and the outlook is positive, even though there are mainly negative risks stemming from the external environment, to which Australia is however less vulnerable than many other OECD countries."
In its most recent report on Australia, the OECD forecasts a general pick-up in demand to off-set declining investment in the resources sector, although it warned “rapid growth in house prices and mortgage lending requires continued close attention”.
The IMF downgraded its economic forecasts for Australia late last month in a move <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-04-28/imf-downgrades-economic-growth-forecasts-for/5416704" target="_blank">interpreted</a> as an implied message not to bring down too harsh a budget.
It is certainly true that the Australian population is ageing and that older people require more spending on health. Over the future years, we would certainly see increasing expenditure on health, partly due to ageing but also due to the improvements in medical knowledge.
The National Disability Insurance Scheme (NDIS) will certainly make increasing demands on the budget. But as long as we as a society believe it is a good thing, we need to find finances to pay for it. To increase government revenues, we should consider an inheritance tax, remove negative gearing, close down overseas detention centres, introduce a progressive Medicare levy and remove the concessions on capital gains taxes, to name a few.
As long as our interest on debt does not grow faster than our growth rate of GDP, the economy will not collapse.
The Financial industry’s gurus, the ratings agencies, have continued to give Australia triple A ratings, <a href="https://www.smh.com.au/business/the-economy/australias-triplea-safe-amid-strong-finances-moodys-20121114-29blj" target="_blank">just as Moody’s in its recent report</a>. It is clear that the finance industry, the OECD, and the IMF are not worried about the health of the Australian economy or its budget deficits or debt. Why, in that case, do the politicians both on the right and the left mouth these words of “budget responsibility” and “budget surpluses”?
Raja Junankar is honorary professor at the Industrial Relations Research Centre at Australian School of Business, emeritus professor, University of Western Sydney and Research Fellow of the Institut zur Zukunft der Arbeit (IZA) in Bonn, Germany. He has received funding from the OECD.
This article was originally published on The Conversation. 
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jake-cSmGT7VXVf

The state of the Australian economy

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CEO of Ray White Surfers Paradise, Andrew Bell, has said that he welcomes the legislation changes in Queensland that will stop price guides being put on auction properties.
Bell said that the state government were right to stamp out the flawed practice, saying that setting price guides did not serve the best interests of buyers.
“Auctions are meant to be presented based on a free market system and this has been recognised by the state government under these legislative changes,” he said.
“People have missed out on properties because of misleading price guides under systems which allow price guides, such as in the southern states where there is a great deal of consumer dissatisfaction.”
Despite this, Consumer Affairs Victoria has recently been in record noting that there are few complaints, while others cannot agree on the severity of the problem in New South Wales or Victoria.
He said that price guides are often not reflective of a property’s selling range.
An amendment does, however, allow electronic listings provider to be given price range information to determine a search criteria – however, only if they are “satisfied” the provider won’t disclose this information.
{module Do you think the changes should be rolled out to other states and territories?}
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jduke-EHk3XBmHkn

Ray White Surfers Paradise’s Andrew Bell welcomes Queensland legislation changes

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GUEST OBSERVATION
The Victorian government has decided to reduce payroll tax by 0.05%, from 4.9% to 4.85%. The decision comes as the Commonwealth government contemplates an increase in income tax via a deficit levy.
But if the objective is to increase national productivity to meet growing expectations for government services, as well as private consumption, logic would shift the tax burden away from income tax and increase payroll tax. This approach might even provide the basis for more effective and transparent commonwealth-state financial arrangements.
Stand-alone taxes are not the answer
A comprehensive income tax system would include tax on wages, but also on capital income, where capital income is the return on accumulated savings, such as superannuation earnings.
Commonwealth taxation is reasonably comprehensive for wages, with fringe benefits concessions and tax breaks for superannuation for those on middle and high incomes.
In the case of capital income, there are many concessions, including the exemption of income earned on savings invested in owner-occupied homes, the half rate on capital gains and the low flat rate on superannuation fund earnings; interest and dividends face no concessions. A progressive rate schedule is applied to taxable income.
By contrast, a comprehensive payroll tax would fall on all labour remuneration, but not on capital income.
In Australia, the states impose payroll tax on a base that covers about half of all salaries. The largest concession is the exemption of small businesses, with the definition of small business varying across the states (and territories). There are exemptions also for other governments and charities. Above the threshold, a flat marginal tax rate is applied, again with different rates in different states.
Measuring the real impacts of tax
The ultimate outcome of income tax, and especially of payroll tax, is often misunderstood. It is generally accepted that most of the effect, if not all, of the income tax is borne by households as lower disposable income to buy things; with the tax revenue used to fund government goods and services. But in reality, most of the income tax on labour income is first paid by employers as a PAYG deduction from salaries.
And the economic impact of payroll tax should also be on households as lower take-home pay. Initially, businesses pay the payroll tax bill to government, and with a jump in labour costs some are forced to reduce the number of people they employ, boosting unemployment.
The increase in unemployment induces a slower rate of increase in market wages in order for the labour market to return to a new near full employment equilibrium. That is, in the longer run, households bear payroll tax as a lower market wage and take-home pay.
Further, consider the current payroll tax with its exemption on the half of employees working in small businesses. While large businesses write the payroll tax cheque, ultimately the tax is passed on as lower market wages and take-home pay for employees of both small businesses and large businesses.
At the same time, the selective payroll tax on large businesses distorts the employment mix away from large to small businesses with a loss of national productivity.
Replacing the current payroll tax, with its small business exemption, with a comprehensive base and lower flat rate payroll tax would also result in lower market wages for all employees. But, the distortions of the current system to the mix of big and small businesses would be removed, resulting in a net increase in national productivity.
The case for a shift from income tax to payroll tax
Shifting the tax burden away from income tax and onto a comprehensive payroll or consumption tax would reduce the effective tax burden on capital income, leading to an increase in aggregate investment and a more productive mix of different investment and saving options with a final economic impact on higher real wages and household income.
Since the arrival of Governor Phillip, Australia has been a net importer of foreign capital to meet its investment needs. Foreign investors, with options to place their savings in many other countries, require at least an alternative world return on the Australian investment after Australian tax.
A lower Australian tax on capital income, for example a lower income or corporate tax rate, means some marginal Australian investments with a lower pre-tax return become worthwhile. In time, the increased investment means a larger stock of capital and technology per Australian worker, feeding into higher labour productivity and market wages.
Finally, a broader base payroll tax, and possibly also a higher payroll tax rate, along with a reformed land tax, offers a desirable tax reform package to increase the tax revenue of the states.
John Freebairn is a professor at the Department of Economics at University of Melbourne.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Australia’s tax system is half-baked and a deficit levy won’t help

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An interesting release <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3401.0Main+Features1Mar%202014?OpenDocument" target="_blank">from the Australian Bureau of Statistics yesterday</a> which has been reported as Australia's immigration having peaked.
Is it true?
Perhaps yes, but it's also probably best not to get suckered into confirmation bias and to put the numbers into a bit of a wider context.
Mainly as a point of interest, short term visitors to Australia dipped a little in March to 561,000 having hitting a record high at end of last year.
<div class="separator"><img src="https://2.bp.blogspot.com/-6TRKjyufCdY/U2sJFjaklyI/AAAAAAAANCM/eOqYaVdeRdc/s1600/STA.jpg"></div>
<div>All very interesting, but what we're far more interested in is long-term arrivals and net long-term migration into Australia.</div>
On a rolling 12 monthly basis, long term arrivals indeed dipped to 'only' 766,270.
<div>This remains simply miles above Australia's long term average figure. </div>
<div> </div>
<div>The "populate or perish" notion has been around since World War II but interestingly it was only in the mid 1990s that we really started to see the massive annualised increases in long-term arrivals. </div>
<div class="separator"><img src="https://4.bp.blogspot.com/-Xn8C1mE0iK8/U2sJo_UMtdI/AAAAAAAANCU/RuOPyiiF7oY/s1600/LTA1.jpg"></div>
Of course, some choose to depart these shores too, and the rolling 12 monthly long-term departures equivalent figure for March was 380,910.
Netting the two off against each other over the long-term and dropping the figures into a chart reveals the following trend:
<div class="separator"><img src="https://4.bp.blogspot.com/-fi_Do9-SAiY/U2sKoADxedI/AAAAAAAANCg/KXjUb-VePss/s1600/LTM.jpg"></div>
That is, net long term migration into Australia of 385,360 on a rolling annual basis. That's huge. 
It's true that figure is down a little on the peaks we saw in January 2013 (411,000) and September 2009 (409,000), but it's still a massive net long-term migration figure into Australia.
This is particularly so when it's considered that the immigration is focused so heavily on only four capital cities. 
Remember too that it's estimated that in Australia there is one birth every 1 minute and 42 seconds as compared to one death only every 3 minutes and 36 seconds.
For that reason when the full demographic statistics are released for 2013 next month it wouldn't be at all surprising to see that Australia's population increase across the year by 400,000+ people to a total of around 23.3 million.
As of 8 May 2014, the <a href="https://www.abs.gov.au/ausstats/abs%40.nsf/94713ad445ff1425ca25682000192af2/1647509ef7e2" target="_blank">ABS population clock</a> estimates that the Aussie population is 23,481,800.
For what it's worth, I'd be unsurprised to see the net long-term migration into Australia fall a little back towards the 300,000 level over the next couple of years. 
It's still impossible to describe that as anything other than very strong growth, though.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
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pwargent-M4siyDbqQY

Has immigration into Australia peaked?

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GUEST OBSERVATION
Buyers will naturally see the front of your home first.
Impressions are quickly formed and many potential buyers will make up their mind before even setting foot inside your house.
Look at your property from the footpath or across the street. Ask yourself whether your home seems inviting. Be honest and consider:
<ul>
<li>Are there any problems that can be easily and cheaply fixed? </li>
<li>Is there any chipped paint? </li>
<li>Would planting flowers or shrubs improve the garden? </li>
<li>Is the garden tidy? Do I need to mow the law, clear the doorstep or weed the garden?</li>
</ul>
Let go and think like a buyer
Selling a home is an emotional process, particularly for people who have been forced to sell. However, it is still possible for you to let go of your home emotionally. Imagine handing over the keys to the new owner. Allow potential buyers to picture themselves living in the house by:
<ul>
<li>Removing your personal photographs </li>
<li>Allowing them to park in your driveway</li>
</ul>
Clear the clutter 
You’re not just selling your home – you’re selling the image of a comfortable lifestyle so you want your house to look as clean and clear as possible.
Often we get so used to our own clutter that we can’t even recognise that it needs to be moved. Ask a friend or family member who does not live at the house to help identify unnecessary clutter.
Be sure to:
<ul>
<li>Clear benches </li>
<li>Remove excess books from bookcases. </li>
<li>Place everyday items in a box so when the potential buyers visit, you can quickly put the box in a cupboard. </li>
<li>Ensure the entrance and walkways are clear </li>
<li>Throw out broken and damaged items </li>
<li>Dispose of unnecessary paperwork </li>
<li>Store bulky furniture and sporting equipment offsite</li>
</ul>
Make your home look new
Make minor repairs and clean your house. You’ll be surprised how much these improvements will lift your home.
<ul>
<li>Patch any holes in the walls </li>
<li>Replace cracked flooring and old light bulbs. </li>
<li>Shine the floors </li>
<li>Replace your bathroom towels and soap </li>
<li>Wash your windows and doors</li>
</ul>
Clean your cupboards
Rearrange the inside of your cupboards. Buyers are often interested to know how you use the cupboard space and will look inside.
If everything is tidy, they will trust that you look after the house.
You also want to communicate that the house has enough storage space that they can live comfortably – so make sure that your cupboards are not filled to the brim.
Renovate wisely                                                                                                                           
Home improvements can be very expensive. Focus on value-for-money improvements which will generate a higher selling price. While major renovations may make your home more saleable, you may not recover the costs when you sell. Remember you want to maximise your profit!
Cosmetic improvements such as touching up paintwork or planting flowers in your front yard are usually good value for money. When choosing paint colours, try to be objective. You may love your bright orange kitchen but there’s a fair chance that most buyers won’t. Consider painting your walls in neutral colours in a matt finish.
Impress the senses
For many, buying a home is an emotional choice. For that reason, a home that feels comfortable is likely to sell for more. Consider:
<ul>
<li>Putting out vases of fresh flowers 
</li>
<li>Heating the house in winter 
</li>
<li>Leaving several windows open in the summer 
</li>
<li>Ensuring that your house has a pleasant aroma 
</li>
<li>Leaving lights on in dark areas 
</li>
<li>Opening curtains and blinds 
</li>
<li>However much you love your dog, potential owners may not. Keep pets outside or away from your home during inspections.
</li>
</ul>
When you feel that your property is ready, walk around your home and ask yourself if it feels welcoming. Does your house look like nobody lives there? If so, you’re ready!
James Paynter is director of <a href="https://www.hodges.com.au/hodgesbentleigh" target="_blank">Hodges Real Estate in Bentleigh</a>.
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Standing out in your street – preparing your home for sale

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In 2007, as the WA's extraordinary property boom reached its peak, then Treasurer Eric Ripper lifted the stamp duty threshold for first home buyers to $500,000.
As the median house price jumped, housing affordability became more difficult and the entry costs to first home buyers in particular became a real impediment. Chief among those costs was several thousand dollars in stamp duty, given that first time buyers were then typically purchasing dwellings at around $300,000.
That policy move by the Carpenter government to effectively abolish stamp duty for the majority of first home buyers has proved over intervening years to be a tremendous success. They have flourished in WA, helped along by low interest rates, the first home buyers grant, plenty of jobs and a robust state economy. In recent years first time buyers often reached more than 30% of the overall market, dwarfing the experience on the east coast.
First home buyer activity in particular has been very strong but is now trending downwards at a worrying rate. Changing policy settings at this time would be very unhelpful and a false economy.
Governments tend to underestimate the importance of first home buyers to the property market and economy in general. Not only do first home buyers take stock out of the market, they facilitate the property seller to trade-up, generating additional revenue from stamp duty as well as other business activity.
The new-home building markets also benefit as economic activity is increased through growth in supply chain business. WA ought not make the same mistake as NSW, which axed the first home buyer duty concession, or Victoria where first home buyer grants were greatly reduced. The clear evidence from these states is that first home buyer activity subsequently collapsed and has not recovered.
While REIWA understands the need for government to fund services and supply infrastructure, my concern is for the overall health and sustainability of the WA housing market at a precarious time. Current REIWA data supported by Landgate figures indicates a market downturn is likely for the second half of 2014.
Evidence from the March quarter shows a drop in sales numbers of around 6% compared to the same quarter in 2013. Listings for sale have risen to the highest level since December 2012 and rental listings are at a seven year high, with the vacancy rate now over 4% for the first time since 2010. Investors are scarce and first home buyers are dropping away. It’s time to recognise that stamp duty on property as a means to raise revenue is clumsy, inefficient and outdated.
Typical stamp duty on a median priced home in Perth is now $20,000. Bracket creep alone has pushed this up by $4,280 over the last five years.
REIWA calls on the government to have a serious look at broadening the land tax base to all property owners with the view to abolishing stamp duty altogether.
The benefit to government is steady, predictable revenue income based on land ownership, rather than unpredictable and volatile revenue income based on sales activity. The benefit to property owners is the simplicity of a modest, annual land tax as opposed to ‘bill shock’, when hit with a huge stamp duty tax in the tens of thousands when they transact.
In some cases stamp duty is so prohibitive to potential buyers that they stay put, jamming the market and not allowing established homes to flow into the first home buyer pool. A broad-based land tax was proposed by the Henry Tax Review and has merit. It has since been adopted by the ACT, which will phase it in over 20 years so it does not disrupt the market and will effectively be revenue neutral.
It’s time for a mature discussion around this proposal with the aim of creating a long-term plan for a better system of property taxes. One that’s not at the mercy of an anxious treasurer every financial year.
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dairey-MVZf5ZguQC

Land tax for all should replace stamp duty for some

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As a mother of two beautiful boys, my focus is to teach my sons the value of setting themselves up for the future early.
I only really leant that I was totally responsible to support myself after reading the book Rich Dad, Poor Dad by Robert Kiyosaki when I was pregnant with my first son 13 years ago.
The book opened my eyes to lots of things, but my two main insights were; the more time we have to build our investments, the more money we should have when we are ready for retirement. And, that we need to educate ourselves financially and not just handover our money and trust others to invest it for us. We are responsible for building our own wealth.
So off I rushed to build our investment portfolio and along the way I also created a business developing property for others. I found that I loved my new business; it was flexible to accommodate my baby and I was doing something that I loved: Property.
As my son grew older and our second son was born, my investments started to really show the benefits of holding property over the long term. Rental returns slowly increased and capital growth created equity. Then I started to develop and add value to my regional investment which lead to my understanding of compounding equity creation through development.
I try to talk about property investing as much as possible with the kids, sometimes they come with me to the development sites and I try to explain in simple terms about basic economics. “We are building houses here...if you borrow money to build or invest you’ll get some help from the government to help you pay the loan costs.  You will get paid rent and this will be a source of income for you...” I tell my twelve year old who has starting to understand. We set up a term deposit for him that we call his ‘first property deposit’. Slowly I plan to build on his knowledge of economics and how he can make money by being entrepreneurial.
Kids are pretty smart with money so engage them and encourage it. I try not to say ‘we can’t afford it’ and rather ‘how can we afford it'? Let them come up with ideas to make money. To nurture the genius in your child is a great gift.
As Robert says “Don’t just protect your child from the future; prepare them for it”.
I don’t want my kids to have to deal with the tyranny of compounding bad debt as well as the compounding interest on that debt. We must educate our children and teach them the difference between bad and good debt. 
The world is full of teachers and they are not all in the classrooms. Our kids need to learn early how to make money, invest and manage their finances. Experience and making mistakes along the way is the best way to learn. As parents we can help our kids think differently to the way we did when we were young.
Happy Mother’s Day for Sunday to all the mums out there.
<a href="https://www.propertybloom.com.au/" target="_blank">www.propertybloom.com.au</a>
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jochivers-wq5Bp59R5a

We need to teach our kids the importance of investing wisely: A Mother’s Day message

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With the federal budget looming, retail sales have slowed down, up just 0.1% for March, driven mainly by household goods and food.
Figures published yesterday by the Australian Bureau of Statistics show <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/8501.0Main%20Features1Mar%202014?opendocument&amp;tabname=Summary&amp;prodno=8501.0&amp;issue=Mar%202014&amp;num=&amp;view=">overall sales</a> are down by 0.2% from February, despite a 1% growth for household goods, a 0.5% growth for food, and a 1% growth for cafes, restaurants, and takeaways.
Department stores are down by 0.6% and clothing, footwear and personal accessory spending is down by 0.2%.
However, ANZ senior economist Felicity Emmett told SmartCompany while shrinking consumer confidence is a response to General Motors quitting Australia by 2017 and the uncertain future of Qantas, she expects to see spending rise further.
“I think the outlook is quite good for consumer spending. House prices are rising at a solid rate and that will help to support consumer spending going forward,” says Emmett.
National Retail Association chief executive Trevor Evans says while the <a href="https://www.smartcompany.com.au/legal/politics/41743-budget-2014-national-commission-of-audit-sharpens-axe-as-government-moves-to-ditch-tax-returns-for-1-4-million-australians">federal budget may help consumer confidence if the government is seen as reining in debt</a>, an overly harsh response risks destroying growth.
“We think it’ll be good for consumer confidence, economic growth and retail status if the government can be seen to be getting the budget problem under control,” Evans says.
“We’re worried if the budget response is too harsh, it might have the impact of shocking households and destroying the momentum,” he says.
But Evans sees the Australian expansion of Swedish furniture and home wares chain IKEA and US home wares giant Williams-Sonoma as an international vote of confidence in the retail sector.
IKEA plans to open four more stores by 2016 and launch an online store across 44 countries over the next two years. IKEA Australia currently has no online store.
Pottery Barn partner company Williams-Somona plans to launch eight more Australian stores over the next year.
“The Australian economy is clearly doing better and preforming better and there are many countries in the developed world with a waiting brief on Australia and [who] would be willing to take charge to enter the market here is conditions are right,” says Evans.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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