Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest. 
&nbsp; 
The purchaser sold their long-held family home in the area before embarking on a six-month search for the right apartment. After inspecting a range of options across the Lower North Shore, the buyer returned to <a href="https://www.apartments.com.au/new-apartments/alex-willow-crows-nest-82-90-alexander-street-crows-nest-nsw-2065">Alex &amp; Willow</a>. 
&nbsp; 
The buyer profile reflects the project’s broader purchaser mix. <a>Alex &amp; Willow</a> has attracted predominantly local downsizers looking to transition from larger homes without compromising on space or quality, alongside a smaller cohort of upsizers and investors drawn to the project’s location and design credentials. 
&nbsp; 
The milestone sale comes as the project, developed by&nbsp;<a href="https://www.apartments.com.au/developers/perifa">Perifa</a>&nbsp;and delivered by <a href="https://www.apartments.com.au/builders/versatile-made-construction">Versatile Construction</a>, both part of Versatile Group, reaches 60 per cent sold.

[smartcode_project:default project_id=6680 project_image_fid=371325] 
&nbsp; 
Eddie Mansour, Managing Partner of <a href="https://www.apartments.com.au/project-marketer/ray-white-projects">Ray White Projects</a>, said the result demonstrates not only a headline price but also depth of demand. 
&nbsp; 
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.

“We’re seeing a consistent pattern of local homeowners selling family residences and reinvesting into high-quality apartments that allow them to remain within their community. Alex &amp; Willow has resonated strongly with this group because it offers genuine scale, thoughtful design and immediate proximity to the village.” 
&nbsp; 
The sale reflects a broader and consistent trend of local downsizers actively seeking high-quality, low-maintenance residences close to established village centres. Agents report that demand for this product type has remained resilient, particularly where developments offer a rare combination of scale, design quality and walkable amenity. 
&nbsp;&nbsp; 
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project. 
&nbsp; 
“The penthouse sale is a strong endorsement of the quality we have delivered, alongside our partners, and the clear demand from local downsizers for premium, boutique residences in this location,” Perilli said.&nbsp; 
&nbsp; 
“Most importantly, we’re proud to see the Alex &amp; Willow community beginning to take shape. As we move closer to completion, we’re looking forward to welcoming residents and seeing the project come to life.”&nbsp;

[smartcode_project:default project_id=6680 project_image_fid=338516] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/nettletontribe">Nettleton Tribe</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>, Alex &amp; Willow is a boutique collection of generously sized two- and three-bedroom residences in the heart of Crows Nest village.&nbsp;

Completion is slated for early 2027.

[smartcode_project_cta:default project_id=6680]

Alex & Willow, Crows Nest penthouse sells off the plan for $6.5 million

Fresh from launching the first stage of its Wollongong precinct, <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, builder-developer Urban Property Group has unveiled plans for the next phase of the masterplanned community.

Now on public exhibition through the NSW Government's Housing Delivery Authority pathway is a State Significant Development Application for a further 657 homes on the prominent gateway site opposite Beaton Park.

The proposal comprises three buildings, including two build-to-sell towers rising 25 and 30 storeys, delivering 391 apartments, alongside a 12-storey co-living building with 266 residences, making it one of the largest co-living proposals currently planned in regional New South Wales.

Of the apartments proposed in the build-to-sell towers, the majority, 310, are two-bedroom dwellings. The balance comprises 44 one-bedroom apartments and 37 three-bedroom residences. Apartment sizes range from around 50 sqm for one-bedroom homes to approximately 90 sqm for three-bedroom apartments.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="19347059-1612-41a0-9c74-b86a657237f8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%2010.02.18%E2%80%AFAM.png?VersionId=sWXnaCcA.cIC6N8YT1dg5pJ2e1V3Z6z7" />

The submission says the proposal has evolved significantly from its original Housing Delivery Authority application following extensive consultation with the State Design Review Panel and Wollongong City Council.

The final scheme has been designed to align with the emerging vision for the Flinders Street Precinct, an area identified by Council as a future high-density mixed-use neighbourhood capable of accommodating substantial housing growth close to transport, employment and community infrastructure.

According to the design report prepared by COX Architecture, the development aims to "deliver a built outcome consistent with the future character of the Wollongong CBD while responding to the site's unique constraints and opportunities."

"Our vision for the next phase of the site evolution in Wollongong is grounded in three design pillars that guide the design response: place, natural environment and celebration," COX said.

"Inspired by its surroundings and grounded in the stories of place on Wodi Wodi Country, the design proposal acknowledges the established character of its setting while creating a unique and timeless identity that sits harmoniously within it.

"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."

The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.

COX identified views towards Mount Keira and the Illawarra Escarpment as defining features of the site, while the upper levels of the towers will also capture expansive views across the city and out to the Pacific Ocean.

The design team has positioned the tallest buildings closer to the rail corridor, where overshadowing impacts can be better managed while establishing a landmark built form on the northern approach into the city.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="79580d5b-500c-4ebf-9629-797146a4a694" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%209.51.59%E2%80%AFAM.png?VersionId=WbTB1EKSG.KDfsfz0F3wp1QVa2oCMGR5" />

Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.

Construction recently commenced on the first stage of Keira Place, which will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, alongside activated ground-floor retail and commercial space.

Urban Co-CEO Patrick Elias said the commencement of construction marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/groundbreaking-marks-start-of-construction-at-keira-place-in-wollongong-cbd">Groundbreaking marks start of construction at Keira Place in Wollongong CBD</a>

&nbsp;

&nbsp;

&nbsp;

Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place

Finance

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GUEST OBSERVATION
"Property investing is risky – do you really want to do that?"
I am sure you will have heard this before. I know I have, and so have many of my clients.  Deep down you have this urge that you should do something about your financial future but you are constantly getting all these “expert opinions” from family or friends that have lost money, or heard about someone that has.
But you still find yourself wondering whether property investing is safe. Are they right?
The truth is all forms of investing have an risk component.  From shares, to businesses, property or even simply investing in yourself – they all come with an element of chance. You may lose your money or even worse, they might cost you more money than you originally put in!  
Personally, I would run in the opposite direction from anyone that tells you that they have a foolproof investment because there is no such thing.  However, there are provisions you can put in place to help reduce your risk exposure, and they might not be what you think.
What’s one of the top provisions I suggest to my finance clients weighing up the ‘riskiness’ of any property investment opportunity?
In case of emergency, have a buffer. 
Always factor in a buffer to your figures to lessen the impact of unexpected events you may be affected by. These may include things like being without tenants for some time or abrupt shifts with your employment.  No matter the income you earn, or debt level you have, having a buffer is vital to your portfolio’s existence.
Depending on your situation you may want to consider applying for more than you need.  Banks like to give you money when you don’t need it so much, not when you do.  You don’t pay interest on the funds you don’t spend, so if you are able to, get more than you need for your purchase so it’s there if you need it.  
On the other hand, if you’re really pushing your limits for your purchase and don’t have room to do this, it may be time to reconsider the investment opportunity.  Investing is great, but if it has the potential to put you and your family under financial strain, or dramatically affect your lifestyle in the face of unexpected events, it’s not going to be beneficial at all.
Another way of incorporating a buffer into your finance strategy is to use lenders mortgage insurance (LMI).  This insurance protects the lender, not you as a borrower, but can allow you to borrow more than you could without it.  LMI can be a contentious issue, as many mortgage brokers don’t believe in utilising it, even for more dynamic investors. In truth it is quite a complex area but using LMI, if properly considered, can be a great tool for creating buffers and thus reducing risk exposure.  
It seems counterintuitive to borrow more to reduce your risk, but if you can safely do so it really is a game changer. Of course, it is always best to discuss the pros and cons of your own situation with a broker before making this kind of decision.
Finance can be tricky but it’s not a mystery by any means.  It’s through taking a step like incorporating a buffer that you are able to start to structure your finances and your mindset around risk in a different way, easing the pressure around starting to build a property portfolio.  This not only helps you feel more comfortable taking control of your financial future, but in some cases can be very liberating for property investors.
Michelle Coleman is an award winning finance broker and managing director at <a href="https://www.wfinancial.com.au/" target="_blank">W Financial</a>.
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Weighing up the risks of buying an investment property

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GUEST OBSERVATION
Having led the world in the 1990s in embracing defined contribution retirement plans, Australia now is rightly reviewing whether the design of its retirement income system is meeting the needs of Australians living in retirement.
David Murray’s interim report into Australia’s financial systems noted the particular strengths of this three-pillar system, which comprises the age pension, compulsory superannuation guarantee and voluntary private savings. With more than A$1.8 trillion of assets under management, Australia now has the fourth largest private pension pool in the world. The questions, as the Murray report identified, are around the complexity, efficiency and efficacy of the system.
The fact is Australians are not only living longer, they are seeking greater choice and control in managing their retirement arrangements and need cost-effective products that meet their income needs over many decades after stopping full-time work.
The problems with the current system, as I see it, are two-fold: One is around the lack of meaningful information given to consumers and the other is around the stated lump sum goal of most superannuation plans. Unlike the old employer-sponsored defined benefit plans, the defined contribution (DC) plans that dominate in Australia and in the US market transfer the investment and other risks from companies to employees.
My view is that putting relatively complex decisions in the hands of individuals with little or no financial expertise is problematic. While some say the answer is increased financial literacy, it is simply unrealistic to expect people to make decisions about strategies that challenge even seasoned investment professionals. To use an analogy, when we service our cars, the mechanic does not expect us to be able to understand how the fuel injection system works. Most of us just want a vehicle that gets us safely and reliably to our desired destination.
It’s the same with our retirement plans. It really makes no sense to ask individuals to make complex choices about risk exposures and asset allocation, for instance.
The second problem is the goal itself. The language around DC investment is about asset value. People are trained to see the key metric as the size of their fund pool, when what really matters to them is whether they will have sufficient income in retirement to live the lives they want to live.
If an individual’s pension savings are invested to maximise capital value at time of retirement and her personal goal is to achieve a reasonable level of retirement income, there is a clear mismatch involved.
In the view of the superannuation fund, the relevant risk is portfolio value. But the risk for the individual is uncertainty around retirement income. How do we solve this dilemma? The answer is to adopt a liability-driven investment strategy that is equivalent to how an insurer hedges an annuity contract or how pension funds hedge their liabilities for future retirement payments to members. Nearly a quarter of a century since Australia moved to compulsory super, the financial technology now exists to invest individual super contributions this way. Each fund member would still get a pot of money at retirement and would still have the same choice over their savings they have under current DC arrangements. The difference is the value of the pot would be obtained through a strategy meant to maximise the likelihood of achieving the desired income stream.
Moving to this income-focused strategy would require changes not only to the way super plans actually invest their members’ money but also to how they engage and communicate with savers.
Instead of being asked complex (and meaningless) questions about asset allocation, members would be asked three simple questions – their retirement income goal, how much they can contribute from current income and how long they plan to work. Of course, the asset allocation is important, but this only a factor for achieving success. It is not a meaningful input for the choices the consumer actually makes. Once these variables are known, the fund need only regularly communicate to the member the probability of reaching her goal. To increase that probability, the fund member has only three choices – save more, work longer or take more risk. There are no other ways.
The gap between what exists and what Australians need was highlighted by the Murray inquiry interim report, which noted that the current focus on lump sum balances in the superannuation system is evident in the absence of retirement income projections from annual statements to members.
“For many people, income projections, while difficult to calculate, would be far more useful than total accrued balances,” Murray said.
As someone who has spent much of his professional life researching this issue, I can only agree. Ultimately, what Australia needs is an approach to superannuation that uses smarter products rather than trying to make consumers smarter about finance.
Robert C. Merton is Nobel Laureate, Professor of Finance, School of Management at <a href="https://theconversation.com/institutions/massachusetts-institute-of-technology">Massachusetts Institute of Technology</a>.<img src="https://counter.theconversation.edu.au/content/29547/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Alongside his academic positions at MIT and Harvard, Professor Merton holds the post of resident scientist with global asset management firm Dimensional Fund Advisors. This article is drawn partly from his recent essay in the Harvard Business Review on the retirement planning challenge.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Superannuation: make income the outcome

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GUEST OBSERVATION
It is not difficult to establish the case for the importance of financial advice.
With an ageing population, increasing longevity, higher expectations of post retirement living standards, the complexity of financial products and services, more scams and spruikers, financial illiteracy and money stress… getting quality financial advice has never been more important. Indeed, wealth management is seen as a key area of future growth for the economy.
Given this, one has to wonder how financial planning in Australia finds itself mired in regulatory uncertainty and persistent distrust by the community. This is fuelled by high profile failures such as Storm Financial, Commonwealth Financial Planning and Opes Prime.
These failures led (under the previous Labor government) to the Future of Financial Advice (FoFA) reforms which aim to improve the trust and confidence in financial advice while improving availability, accessibility and affordability.
<a href="https://theconversation.com/resist-efforts-to-water-down-fofa-to-protect-all-australians-26822">Central elements of this</a> included the banning of conflicted remuneration, a duty for advisers to act in the best interests of clients, an obligation to renew ongoing fee agreements with clients, and further powers to the regulator (ASIC).
A long path to change
The Abbott government has since moved on pre-election views that the laws were too restrictive and would unreasonably increase the cost (and therefore limit access to) advice.
After <a href="https://theconversation.com/sinodinos-stands-aside-during-corruption-inquiry-24571">the replacement</a> of the relevant minister, Arthur Sinodinos, a <a href="https://theconversation.com/call-for-commonwealth-bank-asic-to-face-royal-commission-28509">Senate inquiry</a>, <a href="https://theconversation.com/the-governments-financial-advice-regulations-are-in-the-senates-firing-line-29116">a move to regulate rather than legislate</a>, Labor’s disallowance motion and finally a <a href="https://theconversation.com/fofa-deal-encourages-government-to-humour-palmer-29237">government deal with the minor parties</a> in the Senate to vote down said motion, this is still not finalised.
The government now has a further 90 days to produce the revised regulations. And do not forget the ongoing <a href="https://theconversation.com/infographic-the-financial-system-inquiry-at-a-glance-29210">Financial System Inquiry (FSI)</a> and the newly established Parliamentary Joint Committee <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/Financial_Adviser_Qualifications">Inquiry into proposals to lift professional, ethical and education standards</a> in the financial services industry.
It appears however that the best interest duty, the ban on conflicted remuneration (including on general advice) and increased transparency will also be maintained. And a register of financial advisers will be created.
So, what does all this mean? Will the amended FoFA deliver on the stated aims?
First, it must be noted that there are many planners in Australia that have been and will continue to provide outstanding service to assist all manner of clients in all manner of situations. This is often lost in this debate and we would be well served to learn from how they operate.
Second, the inherent conflict in FoFA must also be acknowledged. The difficulty of achieving both an increase in quality and an increase in access/affordability is almost impossible through a political process. FoFA was always going to be a difficult balancing act.
This article continues on the next page. Please click below.
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FoFA will not fix the trust problem
Third, the limited scope of FoFA means it will not in and of itself deliver quality advice and consumer trust. Critical issues not dealt with include the financial capability of consumers, the training requirements (both entry level and ongoing) for financial planners and remedies for aggrieved clients.
The management of vertically integrated business models, the different forms of advice (product advice vs personal advice), codes of professional/ethical conduct for advisers, and the role of the regulator are also not addressed.
Finally, when considering these issues the fragmented nature of the industry becomes apparent.
On one hand a financial planner may sign up to an enforceable code of conduct, have tertiary and professional qualifications in financial planning, undertake ongoing professional education, have professional indemnity insurance and experience gained within a professional practice environment. Another planner may meet ASIC requirements to give advice with only a few weeks of training, no adherence to a code of conduct and no related experience. FoFA does not deal with these issues.
So who wins and losses from the Senate deal? No one that matters - FoFA is a step in the right direction but the details of the regulations have not been produced. The key elements of FoFA appear to remain, yet it still ignores key issues, and the regulatory uncertainty remains.
Ironically, some sections of the industry have enhanced professional standards by addressing many of these issues without the long running political and regulatory intervention. This is a lesson for all.
The government might consider an alternative approach that partners with the industry to develop and foster professional behaviour, culture and standards. A more facilitative approach would pick up where FoFA fails to deliver and build upon the great work done in some sections of the industry already. If the revised FoFA, the new PJC Inquiry and the FSI start to support and cooperate in this regard, the future for Australians may be brighter.
Mark Brimble is discipline head of finance and financial planning at Griffith University.
Mark Brimble receives funding from the Financial Planning Education Council research grants scheme. He is chair of the Financial Planning Education Council, co-chair of the Financial Planning Academics Forum and a member of CPA Australia, FINSIA and FPA Australia.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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mbrimble-cbecKJ9y78

FoFA a step in the right direction, but ignores key issues

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The Australian Bureau of Statistics (ABS) released housing finance data for May 2014 recently, with the data showing owner occupier housing finance commitments flat over the month.
The data also showed that the total value of housing finance commitments was -0.8% lower over the month.  Although this may be concerning, the number of housing finance commitments remain high and even if we have reached the summit, the RBA would probably be happy were commitments to remain at these current levels.
<img class="aligncenter size-full wp-image-3485" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Chart-12.jpg" alt="Chart 1" width="500" height="181">
Over the month of May there were 52,092 owner occupier housing finance commitments, 17,463 of which were refinances and 34,630 which were non-refinances or new loans.
Refinance commitments were 2.1% higher over the month and are 10.1% higher year-on-year. New loan commitments were -1.0% lower in May and are only 2.0% higher over the month. 
Refinance commitments are at their highest level since April 2008 while new loan commitments are -2.5% lower than their recent peak in November 2013. Although owner occupier housing finance commitments are higher over the year they do seem to be at or very close to a peak.
<img class="aligncenter size-full wp-image-3486" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Chart-22.jpg" alt="Chart 2" width="500" height="184">
In May, there was $27.5 billion worth of housing finance commitments which was slightly lower than the all-time peak of $27.7 billion the previous month. 
Over the month, owner occupier refinance commitments were up 0.8%, owner occupier new loans were -1.4% lower and investment finance commitments were -0.9% lower. 
Despite weaker results over the month, year on year there have been some significant increases with owner occupier refinances 17.7% higher, owner occupier new loans 8.3% higher and investment loans up 23.8%.  Again the rate of increase has definitely slowed of late potentially pointing to a peak.
<img class="aligncenter size-full wp-image-3487" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Chart-33.jpg" alt="Chart 3" width="500" height="182">
Looking at how much housing lending each component is attracting, the data shows that in May 2014, 42.9% of lending was to owner occupiers for new loans, 18.0% was for refinances by owner occupiers and 39.1% is for investment purposes. 
As a proportion of total lending in May, owner occupier non-refinance commitments are at their lowest level on record while refinances are at their highest level since July 2013 and investment lending remains at around its highest level since late 2003.
The pick-up in investment and refinance lending has caused the proportional fall in owner occupier non-refinance lending.  If we exclude lending for refinances, 52.4% of lending over the month was for owner occupiers while 47.6% was for investors. This was equal to the second highest level of lending for investment purposes, behind the 49.0% of all loans to investors in October 2003.
<img class="aligncenter size-full wp-image-3489" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Housing-investors-by-state.jpg" alt="Housing investors by state" width="500" height="185">
Lending finance data released by the ABS on Monday for May 2014 revealed that investor activity is significantly higher in New South Wales than in all other states. Nevertheless, New South Wales (29.9%), Victoria (22.5%), Queensland (7.8%) and South Australia (2.1%) have each recorded a year-on-year rise in investment lending. 
Investment housing finance commitments account for an historic high 46.9% of all housing finance commitments in New South Wales and elsewhere the proportions are recorded at: Victoria (39.1%), Queensland (34.4%), South Australia (31.5%), Western Australia (31.0%), Tasmania (13.8%), Northern Territory (40.2%) and the Australia Capital Territory (33.9%). 
The data shows that although investment levels are generally rising, it is much more exacerbated in New South Wales and Victoria which are of course proxies for rising investment in Sydney and Melbourne.
<img class="aligncenter size-full wp-image-3488" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Chart-42.jpg" alt="Chart 4" width="500" height="184">
Interestingly when we track the annual change in the value of housing finance commitments, excluding refinances to reflect home sales we can see that it correlates closely with the annual change in combined capital city home values. 
The recent slower rate of growth in capital city home values is happening in concert with a slowdown in the growth in housing finance commitments.
<img class="aligncenter size-full wp-image-3490" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Chart-52.jpg" alt="Chart 5" width="500" height="181">
The housing finance data also shows that first home buyers continue to play only a minor role in the housing market. 
In May, the number of owner occupier first home buyer commitments was up 17.1% over the month however, as a proportion of total owner occupier lending activity it remains quite low at just 12.6%.
<img class="aligncenter size-full wp-image-3491" src="https://blog.rpdata.com/wp-content/uploads/2014/07/Chart-63.jpg" alt="Chart 6" width="500" height="187">
Across the individual states, the level of activity by first home buyers remains very low in the three largest states (New South Wales, Victoria and Queensland).  Elsewhere the percentage of owner occupier housing finance commitments for first home buyers is lower now than at the same time last year except in Tasmania and the Northern Territory.
Looking ahead, the RP Data Mortgage Index (RMI) indicates a slowing of demand for mortgages in June.  With value growth seemingly having peaked and transaction volumes lower than they were late in 2013 we anticipate that demand for housing finance is likely to remain at fairly similar levels to those current over the coming months.  The real test from here will be throughout the spring selling season when housing demand typically escalates.
With affordability factors anticipated to slow the rate of value growth we may also see slightly lower levels of mortgage demand.  As we have noted plenty of times previously, rental yields are generally low which suggests that most investors are seeking capital growth.  This is further highlighted by the high levels of investment activity in New South Wales and Victoria with Sydney and Melbourne having recorded the greatest increases in home values across the capital cities over the past year. 
The test will be once the value growth in the market abates what then happens with all these investor owned properties?  Do they wait it out for the next growth phase or do they exit the market and move to a more liquid asset class? 
Only time will tell but it is certainly something which lenders and regulators should be considering with such a high level of investment lending currently taking place.
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ckusher-ujnxiKuFQs

NSW investment housing finance commitments at an historic high

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Dear Margaret,
I have a mortgage of $420,000 and my home is worth $750,000.
Is my equity $330,000 and would the bank theoretically allow me to borrow this amount and buy an investment property to rent?
Does your wage dictate the amount the bank will lend for the investment loan, or does it just lend you the $330,000 if you indicate that the rent would cover the loan?
Thanks, 
PC
Margaret's answer on the next page. Please click below. 
<hr class="system-pagebreak">
Hi PC, 
The bank allows you to borrow up to 80% of the entire value of your property without lender’s mortgage insurance (LMI) applying, or up to 95% (depending upon the lender) of the value with LMI. 
LMI is an insurance policy to protect the bank in the event that you default and a forced sale does not provide enough proceeds to cover your outstanding debt. While it’s a policy for the bank, you pay the premium which, depending on the loan amount and how close to 95% you get, can run to thousands and thousands of dollars.
In your case, your total property is worth $750,000 and so, at 80% of that total value, you can borrow $600,000 all up. As you only owe $420,000, this means that you still have $180,000 of potentially available borrowings. Now remember that this potentially available borrowing is on the existing property – once you find a property to buy and add it to the mix, you can borrow up to 80% against that property, too! So that means that whatever you have left as potential available borrowings on your current home will cover the 20% deposit. 
Given that you have $180,000, technically it’s enough to cover the 20% deposit on $900,000 of additional property. As you will have stamp duties and costs in there too, you can probably expect to easily be able to secure a further $800,000 of property with the current equity you have in your own home, and cover all costs too.
I say ‘potentially available borrowing’ as equity is not the only criteria for borrowing. 
You also need to be able to demonstrate the ability to service a debt. Your income, plus any rent from the property you want to buy, will be considered and a formula used to determine if you can afford to meet your daily living expenses plus the cost of your total borrowings.  
Most lender’s will accept the total amount of PAYG income you earn, self-employed income, as long as you can prove it over two years, and 80% of the actual or projected rent return. Some lenders will consider things like family allowance payments and child support, some investment income and other income – each lender is different.  
In considering your total liabilities, banks will take into account current payments on all loans and credit cards, commitment to child support if any, and the future repayments on the new loan being applied for. Usually, they will add a margin to the new loan repayment just to be sure you can Afford any unforeseen interest rate rises.
Regards,
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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mlomas-KC9MUPZ6Ca

How much can I borrow against my home to buy an investment property? Ask Margaret

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GUEST OBSERVATION
At the current frequency of financial system inquiries (Campbell 1982, Wallis 1997, Murray 2014) there will not be another until 2030. That makes this week’s interim report from David Murray all the more critical.
By far the biggest problem with Australia’s financial system is the retirement savings system. Its fundamentally flawed structure is damaging the welfare of millions of Australian households.
There are three closely related problems. First, Australia’s retirement system forces households to make complex decisions that most households are not well placed to make.
Households in Australia have more freedom in managing their retirement savings than in any other developed country. That freedom would be terrific if it was matched by a world-leading level of financial literacy, but it is not. So the putative freedom is really more a burden to the majority of households who cannot navigate a complicated system without help from advisers.
The second problem is the poor quality of financial advice provided to households. The certification required to be employed as a financial adviser is an RG146. A person of average ability takes a few weeks to meet the RG146 requirements. That is, with a few weeks' training almost anyone can be employed in a financial advisory group and advise households on their lifetime savings.
The knowledge hurdle for financial adviser certification is not low because the requisite knowledge is small. It is low because of political pressure not to make it too high. In the 1980s and 1990s the life insurance sales sector morphed into the financial advice sector. Financial advice deals with much more complicated questions than insurance but the sector was able to resist regulation that would force its members to be properly trained.
Lobbyists have won
To this day the financial advisory firms have successfully resisted attempts to raise the bar on the expertise required by their employees to provide financial advice. Because most financial advisers are so poorly trained they cannot provide quality advice solutions to the problems of their clients. Most financial advisory firms simply have a set of cookie-cutter solutions for clients and the financial adviser’s job is to decide which cookie cutter goes with which client.
The third problem is by the far the most important. Most financial advisers have a substantial conflict of interest – the interests of their employer are at odds with the interests of their clients.
To make the point imagine the following situation. Your doctor is an employee of the Acme Drug Company. Acme has a suite of drugs covering many but not all medical conditions. For some conditions the Acme drug is the best, but for many conditions there are better drugs.
You pay for medical advice by the hour, but your doctor is paid by Acme. Your doctor can prescribe whichever drug she chooses, but her compensation depends on the volume of Acme drugs she prescribes, not other drugs.
Even though the medical profession has a well-deserved reputation for putting patients first, drug companies are not allowed to own medical practices. It is obvious that vertical integration in the medical system, where drug companies employed doctors, would corrupt the system. Sadly, this is exactly the situation we have in the retirement savings sector in Australia.
Conflicts remain
Over 80% of financial advisers work for firms that are either directly owned by, or very closely affiliated with, firms that provide a suite of financial management products. When a household goes to a financial advisory firm they will most likely be talking to a financial adviser who works for a firm that is vertically integrated with a provider of financial products. The financial adviser may or may not be free to select whichever financial products he chooses for the client’s solution, but he will only be compensated for recommending his own product provider (investment management firm).
This obvious conflict of interest is leading to dreadful outcomes in Australia. Households are being put into retail funds when they would be better off in industry funds. They are being put into very high-fee investment products when low-fee products would deliver the same expected returns before fees. They are being encouraged to borrow money to invest, to be underdiversified, to make the wrong decisions all around.
The financial system inquiry should address each of these three problems. First, it should recommend the federal government implement a long-term program of public education about fundamental ideas in retirement savings: save while you are young, don’t put all your eggs in one basket, and get a second opinion from an adviser who is certified as independent.
Second, it should insist on a proper level of training for all financial advisers.
Third, it should insist that financial advisers cannot be affiliated with financial product providers in any way – using the medical sector as its template.
The missing institution
There is another retirement savings problem that is of first order importance but unrelated to financial advice. Elderly households need a way of releasing the equity in their homes without the uncertainty that they will lose control of their residence.
The largest form of saving that most Australian households undertake over their lifetimes is that they buy homes that appreciate in value. The equity that Australian households have in residential real estate (value minus debt) is about A$2.8 trillion. That is nearly twice the A$1.6 trillion that Australian households have in retirement savings. Yet, there is no direct connection between these great pools of value.
There is a missing institution in the Australian financial system. What is needed is a financial organisation that will allow Australian households to borrow against their homes without any fear of losing control of the home and at an interest rate close to government treasury rates.
There are reverse mortgage products in the market. But those products are too expensive and poorly structured for most households. Releasing the equity in the homes of retirees is essential for solving the fiscal problems of the ageing of the Australian population.
Sam Wylie is principal fellow at <a href="https://mbs.edu/Pages/Default.aspx" target="_blank" style="line-height: 1.3em;">Melbourne Business School</a><img src="https://counter.theconversation.edu.au/content/28725/count.gif" alt="The Conversation" width="1" height="1" style="font-size: 12px; line-height: 1.3em;">.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Three financial system flaws David Murray can’t ignore

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The World’s 100 Largest Banks list from SNL Financial has seen, unsurprisingly, four places taken up by Australia.
The big four saw just one retain its same ranking from last year, while the other three fell modestly. This was based on data compiled last month.
<img src="https://www.snl.com/articles/24243151.gif" alt="SNL Image">
Source: SNJL Financial National Australia Bank (NAB) retained its spot as the 40th biggest bank. Commonwealth Bank ranked 44, two places below its previous listing. ANZ and Westpac attained places 45 and 46 respectively, both two places lower than last year. China dominates the top 10 of the list, with both the top spot (Industrial &amp; Commercial Bank of China Ltd) and three other entrants. The Bank of China is a new top 10 entrant, previously scoring 11th. In the total list, China has 15 places, the United States has 11 and Japan has eight on the list. Some banks’ assets globally have fallen as they shrink their balance sheets to become better capitalised, while others declined in assets.
<img src="https://www.snl.com/articles/24272123.gif" alt="SNL Image">
Source: SNL Financial
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jduke-EHk3XBmHkn

Where Australia's big four rank of world's top 100 banks

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RE/MAX WA director Geoff Baldwin has criticised new bank changes to lending criteria for Survey Strata house and land contracts, saying that they will end up driving prices upwards and may kill off many current projects.
Explaining that the new changes require developers of survey strata projects to complete a project before funds are paid over by purchasers, resulting in higher holding costs, Baldwin notes that this results in additional stamp duty to the buyer and a higher purchase price.
“Whereas strata titled projects are required to be totally completed before the deal is settled, survey strata developments allow settlement on the land content and then graduated payments until completion, much the same as a conventional house and land package,” Baldwin explained.
“As an example, we are currently mid-way through selling a villa development in Perth’s southern suburbs with most of the purchasers having committed to graduated payments and the entire pricing structured around that model so all parties are now faced with the problems resulting from these sudden changes.”
The banks have made the changes due to fears that developers who do not complete a project will leave land isolated from a road or without services, which would in turn negatively affect them.
Baldwin, however, says that there are other solutions to this issue.
“One solution would be for the developer to demonstrate their capacity to complete the project without the benefit of graduated settlements ensuring that no buyer was at risk and that the bank’s funds were secure,” he said.
He also noted that a developer could be required to hold funds as a security bond for lenders.
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Bank changes to lending criteria will lead to higher property prices: Geoff Baldwin

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Credit provider GE Money has been slapped with a $1.5 million fine by the Federal Court for forcing customers to consent to receiving invitations to increase their credit card limits.
The court found GE Capital Finance Australia, which trades as GE Money, was in breach of <a href="https://www.smartcompany.com.au/finance/24771-commbank-cops-a-serve-for-credit-limit-increase-approach-to-customers-ahead-of-new-laws" target="_blank">laws that ban credit providers from making unsolicited credit limit increase offers</a> to customers.
The credit company told more than 700,000 of its credit card customers they had to consent to receiving such invitations in order to activate their credit card or apply for or obtain an increased credit limit, when it did not require such consent.
The conduct took place between January 5 and May 27, 2012, shortly before the government’s prohibition on unsolicited invitations.
Justice Peter Jacobson slammed the creditor’s conduct as “a systematic and deliberate attempt to mislead cardholders” and said GE Money’s motivation was to avoid projected losses of up to $6 million as a result of the tightening regulations.
In imposing a penalty of $1.5 million, the court said: “What was involved was an attempt to obtain consents in an unlawful manner, and the adoption of a cynical approach by seeking to make the cardholders’ choices less straightforward.”
GE Capital was ordered to pay the Australian Securities and Investment Commission another $50,000 for costs and to advise 210,000 affected cardholders what the decision meant via email or letter and by publishing a notice on its website.
GE Capital admitted it had broken the law during proceedings.
A spokesperson for the company told SmartCompany GE Capital had been working with ASIC for some time on the matter and had already sent the note to customers.
“We have also been working with the regulator and government and will continue to do so,” said the spokesperson.
Sally Scott, partner at Hall &amp; Wilcox, told SmartCompany it was common for credit card holders to receive regular invitations to increase their credit limits prior to the new laws, which commenced on July 1, 2012.
Since that time, Scott says before sending out invitations for credit limit increases, credit card companies have been required to obtain consent from card holders to send out invitations.
“It appears that GE Capital sought to short cut this requirement by telling consumers that they needed to consent in order to activate their card,” says Scott.
“In fact, GE Capital did not require such consent for cards to be activated. For this reason, the court determined that the statement was misleading.”
Scott says for businesses it’s not just a matter of checking that their advertising is not misleading, they need to consider every aspect of their business and what representations they make, whether to consumers or other businesses.
“In a week where we have seen misleading conduct cases in relation to <a href="https://www.smartcompany.com.au/legal/42613-accc-cracks-down-on-spreets-daily-deals-site-for-alleged-false-claims" target="_blank">an online buying site</a> and <a href="https://www.smartcompany.com.au/legal/42636-accc-takes-electrodry-to-court-over-fake-online-review-claims" target="_blank">online testimonials/reviews</a>, this case provides yet another example of the far reach of misleading conduct law,” says Scott.
“The golden rule is that you can’t mislead in business.”
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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krobb-aCrRNnPq6D

GE Money fined $1.5 million for forcing customers to consent to credit increase invitations

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A new report shows that home insurance companies are more profitable than banks in Australia.
The Fire Services Levy Monitor Allan Fells has called for greater competition in the industry.
“Insurance companies in Australia are more profitable than banks and this suggests an absence of effective competition. One of the things that would help drive effective competition is for consumers to be better informed,” said Fells.
Fells found that insurance consumers don’t have easy access to their coverage level, with no information about their risk assessment from insurance companies.
He called for a number of measures to improve transparency in the industry, including requirements that insurance companies:
<ul>
<li>Explain premium price changes when policies are up for renewal.</li>
<li>Provide more accessible information about what consumers are covered for under a policy and what they are not covered for.</li>
<li>Explain how they assess an individual’s risks like bushfire, flood and burglary – eg low, medium, high, very high risk.</li>
<li>Clearly indicate any statutory charges (eg stamp duty, GST, fire services levy), detailing them separately to the basic premium cost in the quote or invoice.</li>
<li>Explain what additional charges might be incurred as a result of choosing to pay insurance in instalments.</li>
</ul>
Source: The Office of the Fire Services Levy Monitor
According to Fells, Australia’s home insurance industry also need mandatory short form Product Disclosure Statements.
“Information about what is covered in the policy is often buried in a Product Disclosure Statement that are typically over 50 pages long,” said Fells.
“Other financial services products are subject to requirements to provide a more consumer-friendly, short-form Product Disclosure Statement.”
The Consumer Action Law Centre say the new report exposes “high profits, poor product and price disclosure and a severe lack of competition”.
Gerard Brody, chief executive of the Consumer Action Law Centre, says many people are paying too much for their home insurance due to industry practices, with the insurance industry promoting a false image of market competition by offering many brands.
“While there are many insurance brands in the marketplace, most consumers would not be aware that many brands are dominated by key insurers. The report finds that just three insurers—Suncorp Group, Insurance Australia Group, and QBE—had over 70% of the Victorian residential insurance in market in 2012-13,” says Brody.
He says consumers face difficulties comparing products due to complex and lengthy disclosure forms and unfair contract terms.
“For competition to be effective, we need simple products which can be easily compared with other policies. Comparing product disclosure statements is time consuming, difficult and, frankly, beyond the capabilities of many people,” says Brody.
"Policy terms and exclusions also need to be fair. We’ve seen a caravan insurance policy which said the owner wasn’t covered if the caravan was being towed. This type of ridiculous term can be hidden away in a policy document which is why it’s so important to understand your policy,” he says.
“But if consumers have to go through each contract with a fine tooth comb looking for hidden terms, they’re just going to tune out.”
The Consumer Action Law Centre receives a distribution of over-collected fire services levies, as agreed between the Fire Services Levy Monitor and insurers.
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