<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

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The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

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The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

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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A new levy on planning permit application fees will fund the Victorian government’s $62.8 million commitment to the Metropolitan Planning Authority (MPA).
The Plan Melbourne strategy was drafted by the Coalition government in October last year. Plan Melbourne’s initiatives include accelerated investment in metropolitan hubs and outer growth areas, strategies to facilitate the supply of affordable housing and transport infrastructure investment.
The Victorian government will provide $51.6 million over four years to the Metropolitan Planning Authority to implement Plan Melbourne, which has not yet been finalised.
An additional $11.2 million will be provided over four years to fund short term actions including the delivery of major urban renewal sites and a local “pocket park” fund. The government has also committed cash for a “20 minute neighbourhood” fund. The <a href="https://blogs.crikey.com.au/theurbanist/2013/12/11/the-20-minute-neighbourhood-does-it-make-sense/" target="_blank">20 minute neighbourhood strategy</a> aims to see retail, job, education and recreation precincts within 20 minutes travel time of every home, with a strong focus on non-car transport.
The spending commitment will be funded by new planning permit application fee tax for projects worth more than $1 million. The levy is forecast to raise an estimated $17.1 million per year. To be introduced on 1 July 2015, it is estimated that the levy will be charged to approximately 6% of all planning permits.
According to Minister for Planning Matthew Guy, the increased levy costs would be offset by the benefits of the new planning system.
“Developers face millions in land holding costs every week across Victoria. A fully funded MPA will reduce overall development costs over time by bringing land to market earlier,” said Guy, who claimed that the funding will help drive job creation and investment opportunities.
“Plan Melbourne supports the Coalition government’s commitment to building a stronger Victorian economy by working with development industry to create more jobs right across the State,” said Guy.
“This funding is an important boost for jobs and productivity, by helping the growth and development of significant employment hubs across the metropolitan area and driving the expansion of the central city.
“It will kick start the major employment clusters at Monash, Latrobe, Sunshine and Fishermans Bend, urban renewal a framework for expanding the central city and a metropolitan-wide open space strategy, to promote growth and investment, further increasing their attraction as great mixed use places for businesses, workers and new residents.
“These job centres are a fundamental principle of Plan Melbourne, our new plan for the city, and they mean more jobs and services in Melbourne’s middle and outer suburbs,” he said.
Planning will also begin for urban renewal areas at Cremorne and Collingwood, and along railway corridors from Huntingdale to Dandenong, Brunswick to Batman, and North Richmond to Victoria Park, according to Guy.
“Unlocking land opportunities across Victoria and expanding our central city and urban renewal areas will not only deliver more jobs, more housing and transport options, it will be a major boost for the State’s productivity and economic growth over the next 50 years,” said Guy.
The Victorian branch of the Property Council of Australia has criticised the Victorian government's new property tax despite supporting the increased infrastructure investment, with deputy executive director Asher Judah claiming that the government has an "unhealthy addiction to property taxation."
"The Property Council will vigorously oppose the introduction of a new $17.1 million tax on apartment buyers to fund the activities of the new Metropolitan Planning Authoirty," said Judah.
"While we welcome the increase in funding for the MPA, a government projecting multi-billion surpluses shouldn’t be introducing new property taxes. This action combined with the 2013 expansion of the Congestion Levy exposes a Government with an unhealthy addiction to property taxation.
"Property owners across Victoria will also be uneasy about the government’s plans for new taxes via asset value capture mechanisms (AVC). AVC already exists in the form of land tax and local council rates. Any move by the government to triple tax property value uplift will face fierce opposition from the industry.
"Over the next four years, tax revenue sourced from property will increase by over $2.3 billion. Increases in Stamp Duty, Land Tax, Fire Services Property Levy and the Car Parking Levy each reflect a growing and unhealthy addiction to property taxation."
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jrichardson-uRX5hFdKfN

Victoria’s budget: New tax for $1 million property projects to fund Plan Melbourne scheme

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The RBA left the cash rate at 2.5% for the ninth month in a row, which is good news for property owners. 
However it always surprises me how people focus on the short-term movement in interest rates when deciding if they should transact in the property market. The reality is if a 2% increase in interest rates forces a property owner into a position where they have to sell then maybe they should not buy at all.
The main requirement of investing in property is to be in a position where you can hold the property for the long-term and to buy something that grows in value.
I’ve said it time and again that the residential investment property is a long-term proposition. The property market takes around seven to 10 years to move through a full cycle; from low capital growth/high rental yield, to high growth/low yield and back again.
Despite this, many property investors choose locations and property styles with little potential to survive and thrive throughout market fluctuations. Some investors choose locations that lack the long-term underlying demand to drive capital growth, whilst others choose property styles that don’t reflect trends in the way people want to live.
In other words, the property investment decisions that look good today may not prove so attractive in five, 10 or 20 years’ time. It’s essential to understand the nature of long-term economic and demographic trends, then select assets accordingly.
Interest rates rise and fall, but in the long-term, dwindling oil reserves and rising petrol prices will be a key economic trend influencing the property market. In the coming years, rising prices at the pump will make outer suburban living and commuting less feasible and less appealing. This will curtail the urban sprawl and increase demand amongst homebuyers for property in the middle suburbs close to public transport corridors, shops and schools.
At the same time, rising property prices in the inner and middle suburbs will put homeownership beyond the reach of more Australians, or at the very least, delay it significantly. Figures from the Bureau of Statistics tell us that the proportion of households renting from private landlords in Melbourne has increased from 22.8% in 2001 to 27.2% in 2011. Sydney is trending a similar way with almost 32% of its market inhabited by tenants.
The increase in tenant demand is not unique to Australian cities. Major global cities such as London and New York have 50% or more of their property tenanted. I am not suggesting we are a London or New York just yet but we are following a similar path and there’s every reason to expect that this trend will continue.
Because many tenants want to maintain the trappings of an urban lifestyle, the trend away from homeownership will increase demand for rental properties within walking or short driving distance from trams, trains, shops, cafes and entertainment precincts. For those that can afford to buy in these areas will also be their preferred choice. This two pronged demand from home buyers and investors will further boost capital growth prospects in the inner and middle suburbs.
Delaying having children is another trend set to influence the residential market well into the future. The median age for parents is 28.9 for women and 33.1 for men and women currently have an average of 1.9 children, compared with 2.8 in 1981.
This trend has resulted in the average number of people per house almost halving over the last 100 years from 4.5 in people to 2.6. In addition single person households have jumped from 22.9% to 24.4% over the last 10 years.
The shrinking size of the family unit means that demand for low maintenance, compact dwellings will increase, whilst demand for the conventional sprawling home on a quarter-acre outer suburban block will soften.
When you look at all these trends in their entirety, it’s clear that pockets of the middle suburbs close to public transport, shops and schools will provide feasible long-term opportunities for residential property investment, particularly for investors who have been priced out of the tightly held inner suburbs.
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
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marmstrong-sd3emVLPPb

Future-focused investing

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An article in the weekend Financial Review opened with:"Macquarrie Group, a bellwether for the strength of the office leasing market, is expanding."
And this clearly accords with a recent report released by BIS Shrapnel, which confirmed the office recovery would be stronger in "service and trade exposed markets like Sydney and Melbourne, but weaker in the mining-based markets such as Perth and Brisbane".
<img src="/images/2014/05/06/lang%20may%207%20one.png" alt="">
Source: Knight Frank/Australian Financial Review.
For Melbourne, you are now seeing strong demand in and around the city fringe — mainly within Southbank and the Docklands precinct.
Developers in these areas enjoying obvious cost advantages, which are then reflected in a lower rent profile for their prospective tenants.
And this is what led the likes of ANZ and NAB to relocate to Docklands, over a decade ago.
A growing number of major corporate tenants are progressively realising they no longer need be located within the heart of Australia's CBDs.
Instead, they can pre-commit to prime-grade Offices at very competitive rentals — and have that accommodation designed and fitted out, to meet their specific needs.
And this demand appears to be flowing through to established suburban markets as well.
With most of these new developments having significant pre-commitment from major tenants … this should curb the tendency for speculative development, over the next 3 to 5 years.
And this will help safeguard against an oversupply of space, within the Sydney and Melbourne office markets.
 
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chrislang-EQKojcgJPV

Demand for office space on the improve

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Over the next 40 years, Australians aged over 65 will make up over 25% of the population, according to the Treasury’s 2010 Intergenerational Report.
With baby boomers set to drive demand for retirement housing, specialist property developer Halcyon has launched two new Queensland developments aimed at the over 50s market.
Halcyon engaged Brisbane based design firm DC8Studio to help tailor Halcyon Glades at Caboolture and Vision by Halcyon at Hope Island to the needs of the retirees.
<img src="/images/2014/05/06/Riccardo%20Rizzali%20DC8Studio.jpg" alt="">
According to DC8Studio director Riccardo Rizzalli (pictured above), Halcyon’s target market are retirees who are looking to maintain an active lifestyle.
 “The people who come to live in Halcyon communities are forward thinking in their approach to retirement living,” he said.
“That is to say, they are very active people, who are looking forward to a happy and healthy life post working.
“There is a term that is used often, that these baby boomers aren't retiring they are ‘retreading’.
“This is really a beginning of a new journey for home owners and this was strongly reflected in our design brief.”
A report released in April by housing company Lifestyle Communities showed that although half of those surveyed were reliant on the sale of their family home to sustain their current lifestyle, there was a lack of suitable stock to facilitate post-retirement downsizing.
Halcyon joint managing director Bevan Geissmann said that maintaining a high quality of life post retirement was an important focus for the company.
“The downsizing process involves freeing up capital for retirees to spend on recreational pursuits or general living expenses,” said Geissmann.
“But today’s baby boomers have high expectations of their retirement lifestyle, so location and design of the home are both vitally important.
“As a developer of over 50s communities our focus weighs heavily on these aspects.
“It’s why we invest a lot of time into researching market trends, finding the right sites, developing masterplans and creating homes that respond to the needs of modern seniors.”
Glades at Caboolture (pictured below) is the company’s most affordable development to date. The 178 home community will include a variety of recreational facilities, including a swimming pool and gymnasium, a cinema, library, bowling green, tennis court and recreation centre. Prices range from $335,000 to $467,500.
<img src="/images/2014/05/06/Halcyon%20Galdes%20street%20scape.jpg" alt="">
At the opposite end of the price spectrum, Vision by Halcyon (pictured below) is being marketed as a luxury development, with 88 homes, a 52 berth marina and a lifestyle and aquatic precinct. Homes at Vision are priced from $559,000 with the most expensive property available at $1.25 million.
<img src="/images/2014/05/06/halcyon-may-6-breakout.jpg" alt="">
More on Halcyon: 
<a href="/expert-insights/building/gold-coasts-60-million-vision-by-halcyon-targeting-over-50-downsizers">Gold Coast's $60 million Vision by Halcyon targeting over-50 downsizers</a>
 
 
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Halcyon launches two new developments for over 50s market

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In the current low interest rate climate, many first home buyers may be confused about the best option for their first home loan.
Choosing your home loan means striking a balance between your varying priorities. Are you after low fees? Or are you more interested in being able to capitalise on interest rate cuts? Maybe you’re happy to pay a bit extra now for protection against future rate hikes.
To help you with the daunting task of choosing your first home loan, Property Observer has four key tips:
<ol>
<li>
THINK LONG TERM Be prepared for your life circumstances to change over the course of your mortgage. You may be employed full time with a steady income, but there are lots of things that can affect your ability to make repayments further down the line. Babies, break ups and getting the boot at work can all make a serious dent in your financial plans. Think realistically about your life five or 10 years down the track, because you are about to make one of the biggest financial commitments of your life. 
</li>
<li>
FINANCE FIRST Before you’ve found your dream home, work on finding your dream mortgage. Speak to a mortgage broker prior to purchasing a home and look into securing a home loan pre-approval – while it isn’t a total guarantee that you will be able to finance your house, it’s as close as you’ll get. Getting pre-approval can help real estate agents take you seriously and give you an idea of your budgetary constraints. 
</li>
<li>
VARIABLE OR FIXED? With interest rates at a record lows, fixed rates have definite benefits. A fixed rate mortgage will lock your interest rate in and protect you from future rates hikes for a set period, usually three years. Fixed rates are also generally at competitive levels at the moment. However, there are many other factors beyond interest rates will determine what the best loan is for you. You may benefit from low monthly fees, a flexible loan arrangement or discounts for bundling your accounts with a single lender. Don't be afraid to shop around. A good mortgage broker will help you decide what is best for you. Once you’ve decided on a loan, it’s wise to revisit your loan with your broker on a yearly basis to see if it’s still the best arrangement for you. 
</li>
<li>
KNOW YOURSELF Choosing the best home loan is all about full disclosure and being honest with yourself about your finances. Many lenders offer loan repayment calculators that will help you determine how much you can afford to pay each month. While frugality generally pays, you may find that you just can't live comfortably without a certain level of extra spending money each month, so leave yourself a little room to move if you can. And remember, your financial decisions will determine what loans you have access to, especially now that your credit history includes more detailed information including when you pay your bills. </li>
</ol>
Shopping for your first home is an exciting time, and it's hard to reserve quite the same amount of enthusiasm for mortgage shopping. But taking the time to choose the right home loan can save you a lot of time and a lot of money down the track.
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First home buyers: four tips for choosing a home loan

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GUEST OBSERVATION
So you’ve made it to the crucial stage of selling your home: the inspection.
Think of the open house as a first date with your prospective buyer, you only get one chance to make a lasting impression.
While it is common knowledge to de-clutter and clean every nook and cranny in the house, what is the key to making your home stand out so that it has the best chance to sell for a great price quickly?
It’s important to remember that a well-presented home gives buyers the impression that the property is well maintained and therefore, chances of encountering hidden problems post-sale are minimal.
You are permanently on show
Although you will not be letting people into your home all day, every day, there is a good chance you will have people driving by to look at the home and assessing the street appeal from the minute the property hits the market.
In some cases, this is a way that properties are shortlisted. If a potential home buyer likes photos of your home, they might go ahead and do some research on the street appeal and what other houses in the street are like before they attend an inspection.
You always have a chance to make an impression before the buyer contacts an agent, so here are some “housekeeping habits” to get into in order to maximise your chances of drive-by buyers wanting to see more:
<ol>
<li>Make sure your front gardens and lawns are well kept and maintained; 
</li>
<li>Remove all junk mail and newspapers from the letterbox and yard as they arrive; 
</li>
<li>Park the cars in the garage, if possible; 
</li>
<li>Avoid having rubbish out for collection on the kerbside, and; 
</li>
<li>Each night before sunset, turn on all outdoor lights.</li>
</ol>
Set the mood
You might not know what the potential home buyer is thinking, but you can do your best by making them feel positive and by creating a welcoming and comfortable atmosphere in your home.
A great way to set the mood is to think about the senses; what the prospective buyer will experience when inspecting your home.
For instance, you can open all windows at least an hour before an inspection to chase away any “house smells”. You can also try placing a cinnamon stick in a cup of water in the microwave for two minutes, or plugins, candles and oils to add a subtle fragrance in your house.
To add to the mood you can play some non-offensive music in the background, keeping in mind that everyone has different tastes.
And do remember to adjust room temperature accordingly, making sure that it is comfortable for visitors walking in and out of the house.
All trimmings great and small
Whether you already accessorise or not, it’s the little things that help create a great impression.
For example, sprucing up cushion covers, putting your newest towels in the bathroom and clearing your paperwork off your desk [no matter how neat it is] go a long way in creating a large but lasting impact of the house and its owners.
Other tips and ideas include:
<ol>
<li>Buy fresh flowers, even if it is simply a centerpiece for the dining or coffee table. 
</li>
<li>Straighten and align photographs and art on walls. 
</li>
<li>Turn off all electronic devices such as computers and televisions. 
</li>
<li>Leave toilet seats down. 
</li>
<li>Leave all internal lights and lamps on during inspection.</li>
</ol>
A home that is a fresh, cared for, low-maintenance property is a something most people are very attracted to so the day your home goes to market should be the best it has ever looked.
Inspection time is the moment to make your home shine and stand out from the competition and where you aim to gain the maximum price in the shortest time period.
Naomi Findlay is the award winning founder of the <a href="https://www.instituteofhomestaging.com.au/" target="_blank">International Institute of Home Staging</a> (IIHS) and <a href="https://www.silkstaging.com.au/" target="_blank">SILK Home Staging &amp; Styling</a>. She is also the author of a bestselling book, 'Ignite Your Property Mojo'.
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jake-cSmGT7VXVf

Open house inspections: Applying the finishing touches

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The Melbourne education entrepreneur Shesh Ghale has snappily sold Tomasetti House in Melbourne’s CBD for $16.2 million.
The eight-storey building at 277-279 Flinders Lane was bought in 2007 for $12.2 million and used in part for his headquarters. 
The marketing was through <a href="https://commercialpropertysearch.savills.com.au/7572/Sale/Melbourne/277-279-Flinders-Lane" target="_blank">Savills agents Clinton Baxter and Nick Peden</a> who advise it was bought by local private investor who outbid two offshore mainland Chinese buyers.
Set on 643 square metres of land, it is currently 93% leased.
The property will deliver a 7.1% yield fully leased with a fully let net rental of $1,156,870 per annum.
The eight-level Tomasetti House building, with 3,818 square metres of office and retail area, was briefly listed in 2011 with $15 million hopes.
Ghale is the co-founder of the Melbourne Institute of Technology which is undertaking the refurbishment of the 1920s Argus Building on the corner of Elizabeth and La Trobe streets into a 3,000 student campus.
His plans for a $450 million hotel-and-­apartment twin tower complex overlooking ­Melbourne’s Flagstaff Gardens near the Queen Victoria Market is yet to secure approval.
The application is for two towers of 50 and 30 storeys with a 210-room hotel and 609 apartments at the corner of William and Franklin streets with plans for 279 public car parking spaces for market visitors and a 372-space public bike hub with showers, gym and pool.
The development architect is Elenberg Fraser.
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jchancellor-FAypfDUnLy

Mebourne property developer Shesh Ghale sells Tomasetti House

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The practice by unethical real estate agents to – ‘quote them low and watch it go’ could very well finally be a thing of the past – well in Queensland anyway (for starters). Governments from all political persuasions have struggled for decades to establish a best practice platform for the real estate industry.
Queensland is close to implementing the new legislation although they are struggling at the last hurdles given they are seeking that agents are not permitted to provide any price guides. The reforms have now been altered to permit agents providing a price guide on the internet.
This just keeps getting dumber and dumber given this whole process could be fixed so easily – all that’s required is for the vendors to publish their reserve price to all parties making inquiries. The prospective purchasers then make up their own minds as to what they believe the property is worth based on the published reserve price – a clean and transparent selling process.
I have always argued (successfully) that the difference between a good real estate agent and an average one is about 10% of the sale price. The difference by not quoting the agents price guide is that this figure is generally skewed to the attraction price as against the selling price which is exactly what should be the case in this day and age.
If a buyer wants to pursue a property at the vendor’s reserve price then all well and good. If on the other hand they construe that the expectations are too high then let the property run a reverse course – which is interesting as this then goes back to the respective agent’s negotiating skills. I’m not exactly sure what parts of this the agents don’t get as reserve price quoting will reward the agents with superior negotiating skills – which is exactly what vendors should be looking for.
There is a great role for public auctions in the real estate industry, just the system requires critiquing because rogue agents will always struggle with the truth. Watch this debate get very heated in coming weeks and months although rest assured there will be major changes across the board to the Australian property auction system.
Another fascinating week that had the “experts” (whatever they are) calling the end of the biggest Sydney property boom in a decade – what a load of rubbish!
To add some weight to these idiotic statements there are approximately 637 (and growing) suburbs that make-up Sydney. Yet in typical lackadaisical reporting fashion we read “dwelling values across Australia’s capital cities have recorded declines” – so they take the weighted averages over 637 suburbs in the case of Sydney to get an accurate positioning? Anyone applying this methodology is simply delusional as this in no way accurately defines real estate market trends – until such time as it is suburb by suburb this collective data is as useful as an ashtray on a motor bike.
<a href="https://www.rwm.com.au/files/2014/05/30-04-2014-1-59-49-PM.jpg"><img class="aligncenter size-full wp-image-8520" src="https://www.rwm.com.au/files/2014/05/30-04-2014-1-59-49-PM.jpg" alt="30-04-2014 1-59-49 PM" width="647" height="342"></a>
Source: Digital Finance Analytics
<a href="https://www.rwm.com.au/files/2014/05/30-04-2014-1-58-58-PM.jpg"><img class="aligncenter size-full wp-image-8521" src="https://www.rwm.com.au/files/2014/05/30-04-2014-1-58-58-PM.jpg" alt="30-04-2014 1-58-58 PM" width="664" height="361"></a>
Source: Digital Finance Analytics
The latest monthly banking statistics from APRA identify consistent lending to the end of March 2014. In February owner-occupied and investment loans were $1.231 billion and in March they came in at $1.236 billion. The ‘Big Four’ increased their market share from 84.3% to 84.4% which will have many suggesting that should there be a correction they will be in all sorts of bother.
What I would like to see is a graph showing where their respective loans were as we should remember during the global financial crisis (GFC) Mosman was tipped as having the highest delinquency rate in Australia where it was later proved it had the lowest.
As they say, be careful about calling yourself an expert. An ex is a has–been and a spurt is a drip under pressure. For some, it’s human nature to predict/promote themselves as some type of modern day Nostradamus who quite remarkably possess this innate ability to read the future.
Recently we read that in America, Dr Marc Faber is predicting that this year we will witness a 1987-type stock market crash although this time it will be much more severe. For those who have no idea what exactly happened here it is <a href="https://www.federalreserve.gov/pubs/feds/2007/200713/200713pap.pdf" target="_blank" title="Black Monday – 1987.">Black Monday – 1987.</a>
Given what transpired recently in the GFC, I would think that the vast majority are erring on the side of caution – which history has conclusively shown to be the smartest path.
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robertsimeon-hRNTwJyXkQ

Is the public auction system going – going – gone?

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It’s that time of year again when tens of thousands of investors from around the globe descend on Omaha, Nebraska, to hear billionaire Warren Buffett dole out his investment wisdom.
Along with Buffett’s <a href="https://www.smartcompany.com.au/leadership/35872-five-pearls-of-wisdom-from-warren-buffett-s-2014-letter-to-berkshire-hathaway-shareholders" target="_blank">annual letter to shareholders</a>, the annual shareholders’ meeting for Buffett’s investment group Berkshire Hathaway is one of the biggest events on the investment calendar, with the “Oracle of Omaha” always generous in his comments and advice.
Buffett is also not shy on speaking on issues that are important to him and in the lead up this year’s meeting <a href="https://online.wsj.com/news/articles/SB10001424052702303948104579536184228959734" target="_blank">caused a stir when he took aim at the Omaha hotel industry for “price gouging” his visiting shareholders</a>. He even went one step further and suggested his fellow investors could save a few bucks by booking accommodation through online startup Airbnb.
This year, more than 30,000 shareholders were <a href="https://dealbook.nytimes.com/2014/05/03/live-blog-berkshire-hathaways-2014-shareholder-meeting/?_php=true&amp;_type=blogs&amp;_r=0" target="_blank">keen to hear</a> Buffett speak about Berkshire’s first-quarter earnings, in which net income was down, and the investment guru’s decision to abstain from voting against Coca-Cola’s controversial executive compensation plan.
Here’s five pieces of wisdom from this year’s meeting.
<ol>
<li>
On playing nice around the board table Buffett said there is a need for board directors to be diplomatic, and that trying to force change amounts to rude corporate behaviour. “I’ve voted for compensation plans in various places that are far from what I would have designed myself. That is the way boards work. You keep belching at the dinner table, you’ll be eating in the kitchen.” 
</li>
<li>
On the nature of corporate boards “The nature of boards is that they are part business and part social and people behave sometimes with their business brain and sometimes with their social brain”. 
</li>
<li>
On climate change “I don’t think in making a decision on Berkshire and other companies that climate change should be a factor in the decision-making. A lot of people are over-climbing that they know the impact. We are agnostic. It’s not there isn’t global warming because there is, but those that say they know its impact are talking out of their hats”. 
</li>
<li>
On managing Berkshire’s culture “Managers, when they work, are joining a business that is unlike anything else. It’s a huge corporate asset and we want to maintain that message well beyond my lifetime.” 
</li>
<li>
On concerns about Berkshire Hathaway’s growing cash stockpiles “We are finding things to do that tend to sop up the cash. We will always have around $20 billion around Berkshire; we will never be dependent on the kindness of strangers, which didn’t work well for Blanche DuBois. We cannot depend on anybody else to keep our own strength and maintain our operations.”
</li>
</ol>
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
Picture courtesy of Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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ekeating-PWvazjYE25

Five gems from Warren Buffett’s annual shareholders’ meeting

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GUEST OBSERVATION
Prime Minister Tony Abbott has suggested that <a href="https://www.couriermail.com.au/news/opinion/opinion-any-budget-pain-will-be-australias-gain-in-the-longterm/story-fnihsr9v-1226898755245">“You can’t fix the economy unless you fix the budget</a>“.
If we are to believe the over-the-top Commission of Audit report it will take far more than this to bring the budget to surplus by 2023. But few seriously think many of the recommendations will be implemented.
While it is correct to say that lower debt would allow more government revenue to fund worthwhile projects to improve economic outcomes, it is not clear why lower (or zero) deficits or debt necessarily implies the economy will perform better.
A balanced budget may be a very valuable, but not essential, condition for good economic management. There are even fellow economists who argue (in my view wrongly) that increasing deficits and debt are necessary at the moment to increase current economic growth and reduce unemployment.
How Australia’s economy is faring
A good way to judge how Australia’s economy is faring is to compare key indicators such as inflation, unemployment rate and GDP growth compared to other industrialised countries, especially those who make up the <a href="https://www.oecd.org/about/membersandpartners/list-oecd-member-countries.htm">OECD</a>. I’ve chosen OECD countries comparable to Australia: the United States, United Kingdom, Germany and Japan, as well as the OECD average.
Inflation: By almost all the standard economic indicators the Australian economy is doing better than most other industrialised countries – even though our inflation rate is somewhat higher, we have an enviably high rate of growth and low rate of unemployment compared to other OECD countries.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47507/width668/ynjv5tcr-1398912827.jpg" alt="">
Inflation: Australia compared to OECD
Australia is a very rich country by world standards and the economy does a pretty good job of developing wealth and opportunities for most people. These comparatively glowing figures, however, mask the fact that there are those who do not fare so well in the market economy.
Welfare and unemployment: Despite being one of the richest countries in the world, 20% of Australian households rely almost entirely on welfare payments. Those of working age receiving benefits, rather than being in work, make up over 16% of the labour force.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47508/area14mp/6dj3x44s-1398912828.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47508/width668/6dj3x44s-1398912828.jpg" alt=""></a>
 Unemployment: Australia compared to OECD countries
In addition many are underemployed, working fewer hours than they want to. By changing the way we measure joblessness we could easily double the official estimates of unemployment.
As Ken Henry <a href="https://theconversation.com/why-rising-youth-unemployment-demands-our-urgent-attention-25990">pointed out recently in The Conversation</a>, youth unemployment is a particular concern. The rate among 15-19 year olds is currently over 16%, and is 9% among 20-24 year olds.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47506/area14mp/sdwncqpb-1398912827.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47506/width668/sdwncqpb-1398912827.jpg" alt=""></a>
Youth Unemployment: Australia compared to OECD countries
Productivity: Also, recent concerns have been expressed about Australia’s <a href="https://theconversation.com/why-we-should-approach-claims-of-a-productivity-crisis-with-caution-26000">levels of productivity</a>. In other words, we need to make better use of the resources already employed as well as do better by putting unemployed resources to work. This becomes particularly important given the ageing of the population.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47512/area14mp/kqwqbg56-1398912836.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47512/width668/kqwqbg56-1398912836.jpg" alt=""></a>
OECD Labour Productivity
Debt: While there has been a lot of public concern expressed about reducing Australia’s debt levels, Australia’s debt-to-GDP ratio - a key indicator of how well a country can pay back its debt without incurring more debt - is significantly lower than the OECD average and also much lower than countries such as Japan. In fact, Australia’s position <a href="https://media.smh.com.au/news/federal-politics/joe-hockey-grilled-by-british-presenter-5373145">is the envy of other countries</a> in the OECD.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/47510/width668/kyz8gwkp-1398912830.jpg" alt="">
OECD Govt Debt
<h2>How the budget is faring</h2>
The structural deficit: So, it can be demonstrated that Australia’s economy is strong. However, there is concern that Australia, on its current trajectory, is heading for (or well on the way) to an unsustainable structural deficit. This is where the budget may most influence economic growth, as it impedes the ability of a government to plan future spending.
It is generally accepted that the actual government budget will (and should) fluctuate between deficit and surplus during, respectively, downswings and upswings in the economy. While there is a lot of public attention on whether the year-on-year budget balance is in deficit or surplus, and by how much, the structural balance is the more important concept. The structural balance is basically the budget deficit or surplus after accounting for cyclical movements in the economy - the balance when conditions are normal or average.
We have heard much in recent budgets about Australia’s structural deficit, backed by <a href="https://www.aph.gov.au/~/media/05%20About%20Parliament/54%20Parliamentary%20Depts/548%20Parliamentary%20Budget%20Office/Parliamentary%20Budget%20Office%20Stuctural%20Budget%20Balance.pdf">several reports</a> indicating the structural budget balance is in pretty poor shape.
As I have <a href="https://theconversation.com/pbo-and-treasury-reports-confirm-it-the-deficit-is-unsustainable-14559">pointed out previously</a> in The Conversation this structural imbalance is a result of irresponsible spending policies of successive governments, both Coalition and ALP but particularly by the Rudd/Gillard governments. New spending initiatives, such as the Gonsky funding changes and the NDIS, have been brought in without plans to raise the revenue to pay for them, and often, without due analysis.
And bad luck for Tony Abbott that he is left with unfunded big budget items in the future to deal with, as a legacy of the former government. The only way to reduce the deficit is through reduced expenditure and/or increased revenue. As each idea of how this can be done is <a href="https://theconversation.com/abbott-on-back-foot-over-tax-levy-parental-leave-26043">shot down</a> on a daily basis, the Coalition government is realising what a difficult thing this is to sell. The hostile reaction to the Commission of Audit report at least might mean some of the unpopular decisions in the May budget are, by comparison, greeted with relief
How to “fix” the budget
There is, however, more to government policy than balancing the budget. Policy should be made in the context of a long-term vision for the economy. This includes getting everyone who wants to into work, providing the public infrastructure needed to increase productivity, the right mix of private and government provision of health and education, and reform of the regulatory environment.
The continuous economic growth that the Australian economy has achieved, even during times when other countries’ economies experienced recessions, are largely due to the economic reform process carried out during the Hawke/Keating and Howard terms in government. Economists credit the increased productivity levels of the second half of the 1990s and early 2000s as resulting from microeconomic reform and the adoption of new technology.
For policy to facilitate reform in the economy it needs to address impediments to growth in the current tax system and in government programs – it is not only the quantity (size of the deficit) but the quality (of taxation and spending) which is important.
Among the obvious things that need to be addressed are – education participation, infrastructure spending, industrial relations, a greater role for markets, and reducing work and investment disincentives inherent in our benefits and taxes.
While short term measures such as expenditure cuts and debt levies may have an impact on the size of the deficit, they cannot “fix” the economy. The economy is not in disarray, and long-term budget deficit and debt issues require well thought-out policy on the structure of taxation and expenditure.
Phil Lewis is professor of economics at University of Canberra.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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