Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" 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/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Negative gearing

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GUEST OBSERVER
When considering changes to negative gearing, commentary about the potential to wind back negative gearing benefits on a retrospective basis is concerning.
People make medium to long term economic decisions based on the law at the time, and while some may argue the environment has changed to warrant the wind back of negative gearing benefits, doing so retrospectively and applying it to people who have already bought properties on which negative gearing benefits are claimed would be tantamount to penalising them for planning ahead and being financial responsible.
These people should not be penalised for choosing an option that would make themselves financially self-sufficient, rather than having to rely on the Government for assistance when they retire.
Shifting the goal posts by way of retrospective application is blatantly inequitable.
It could undermine the stability of the economic environment, which may have a far reaching impact on market confidence and therefore the stability of the economy.
It is akin to telling people who have been saving for years through their superannuation funds the environment has now changed and the Government will seize all superannuation benefits to balance the budget.
You simply don't tinker with people's medium to long term plans because these plans need political and economic certainty to achieve their intended outcome, which underwrites the economic future of this country.
Even if negative gearing changes are to be entertained, allowing these changes to apply retrospectively must not be an option.
Eddie Chung is tax partner, BDO and can be contacted <a href="https://www.bdo.com.au/en-au/our-people/eddie-chung" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Retrospective changes to negative gearing must not be an option: BDO's Eddie Chung

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Prime Minister Malcolm Turnbull has sought and been given advice from former Prime Minister John Howard on tax reform.
The former prime minister warned the Coalition to be careful about making any changes to negative gearing.
Mr Howard told Sky News negative gearing had been around "forever" and the Coalition should be careful about making any changes.
"There are a lot of modest-income people who accumulate some money and then negatively gear a property, particularly [those] who don't want to invest in the share market," Mr Howard said.
Mr Turnbull said he had been discussing the issue with Mr Howard.
"Look, it's very important to treat any changes to the tax system very carefully, indeed I had a long chat with John about negative gearing and other aspects of tax only yesterday, in fact — a long chat," he said.
The Prime Minister said Mr Howard had been "a great source of advice".
"The last time the abolition of negative gearing was tried by the Labor Party ... it was quickly reversed because of its negative impact on the housing and in particular the rental market," he said.
"Howard's advice [to] look at these things carefully — absolutely, that's exactly what I'm doing."
Some Coalition backbenchers worry any changes will expose the Government, given the Prime Minister's criticism of Labor's negative gearing plan.
The Government will unveil its tax package in the lead-up to the next budget.
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John Howard warns on negative gearing changes

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GUEST OBSERVER
There is much confusion about the effects of Labor’s tax proposals with respect to investors in rental housing. They propose to grandfather existing arrangements. But investors in the future can only negatively gear newly constructed housing, while the policy recommends the capital gains discount fall from 50% to 25%.
Claims by Prime Minister Malcolm Turnbull that house prices will collapse appear to be contradicted by his assistant treasurer Kelly O'Dwyer who claims that housing costs will soar. These puzzling assertions arise due to a failure to distinguish between the market in rental housing, where housing is leased, and the market in which investors and owner occupiers buy and sell housing. Critically these two markets are interrelated.
To see why, consider the first round effects of Labor’s proposals when we put the grandfathering arrangements to one side (for the moment). Some existing investors will sell up when leases come up for renewal. There are now more tenants seeking rental housing opportunities than there is supply to meet their demand. Rents will begin to rise.
But the houses which investors quit add to the properties available for sale; there are now more houses available for purchase than there are buyers. House prices will begin to fall.
These market signals trigger a second round of effects. Some tenants will elect to buy rather than rent. After all renting has become more expensive and home ownership has become cheaper. These second round effects help to put a floor under falls in house prices, and help cap rent rises.
By considering the inter-relationships between the two markets we can understand how the government has issued apparently contradictory statements. Rents will rise and so the housing costs of tenants will increase. But there will be falls in house prices (or more likely a slower growth in prices); while existing owners take a hit, first home buyers housing costs are lower and attainment of home ownership becomes more affordable.
The second round effects mean that impacts are likely to be muted. This is made even more likely by a grandfathering proposal that should prevent a stampede by existing investors seeking to relinquish their property investments.
A disappointing aspect of the debate so far has been its neglect of the longer term structural consequences of Labor’s suggested reforms. Our current arrangements encourage high tax bracket investors to take on debt in the “chase” for capital gains. Capital gains are leniently taxed as compared to ordinary sources of income, such as earnings and rents.
Only 50% of capital gains are added to assessable incomes. This is particularly attractive to high tax bracket investors. Moreover, they are taxed on realisation rather than as they accrue. The shrewd investor realises the gains when assessable income from other sources declines; for example, following retirement when the investor’s marginal tax rate commonly falls.
There are not enough high tax bracket investors willing and able to invest in all our private rental housing stock. They tend to cluster in those segments of the market where healthy capital growth is expected, but rental yields are lower. Low tax bracket investors tend to cluster in segments where capital growth is expected to be subdued. Typically these are areas with lower house prices. To ensure adequate returns rental yields have to be higher in these low house price segments.
We therefore get a distorted investment pattern that disadvantages the supply of affordable rental housing.
Labor’s proposals will curb these distortionary effects by reducing the capital gains discount. They will also reduce the tax incentives to leverage investments. Rising indebtedness is a threat to the resilience and stability of our housing market.
Many believe that repayment and investment risks carried by heavily indebted home buyers played a central role in precipitating the global financial crisis. Tax concessions that favour taking on debt exacerbate those risks. If Labor’s proposals succeed in attracting attention to these and other structural problems that plague Australian housing markets, they will have a much wider significance.
 
Gavin Wood is professor of housing, RMIT University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/gavin-wood-113723" target="_blank">here</a>.
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Will Australian house prices collapse if negative gearing changes?

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GUEST OBSERVER
The Australian tax debate has placed negative gearing under scrutiny. Most of the debate lurches between retentionists, who back negative gearing as a necessary subsidy to support affordable housing, versus abolitionists, who see it as a market-distorting extravagance that delivers an unfair advantage to the wealthy.
But what if there was a middle option between retention and abolition that made it work better?
Negative gearing allows investors to claim a tax concession against their personal income for losses incurred on a rental investment property. It is estimated to be worth around A$8 billion a year in tax concessions.
There is a somewhat obscure technical argument in favour of negative gearing for equalising concessions for property investment losses with similar concessions for other investment classes. But most participants in the debate about negative gearing treat it as a subsidy for investment in housing supply.
The abolitionist argument hinges on two main issues. First, it distorts investment by encouraging deliberate loss-making in property investment. Second, as a form of subsidy, it adds inflationary pressure to housing markets that favour already wealthy investors over home buyers. And the federal government pays for it in tax revenue forgone.
Retentionists, however, argue that abolishing negative gearing would lead to an adverse supply shock in the rental housing sector. That would result in housing shortages, higher rents, and worsening affordability for low-income households.
Labor has taken a moderate abolitionist stance. It proposes to restrict negative gearing to new housing, though with the concession continuing for loss-making landlords who already receive it.
The Coalition government has not yet stated its position on negative gearing. However, there appears to be a strong retentionist stream within government policy statements. The government is also being assailed by property sector lobby groups advocating retention.
<h2>We’re flying blind on policy reform</h2>
There may be another perspective that sits between abolition and retention. A sensible reformist view might be encouraged by the federal government’s preparedness to, in effect, subsidise private market housing by $8 billion per year.
But such a view might also lament the extraordinarily ineffective targeting, outrageously poor transparency about who receives the subsidy, and egregious lack of accountability for supply outcomes.
These concerns emphasise the gross information gaps about the landlords who receive the subsidy and the rental houses that incur the concession. We generally know which landlords receive negative gearing, their occupational status and their income levels. We don’t which properties in the rental market are negatively geared, nor the social status of their tenants.
Thus there is no transparent connection between the landlords receiving the subsidy, the dwellings that are negatively geared and the status of the tenants who live in them. This means there is no direct empirical way to verify whether negative gearing benefits low-income tenants.
The federal government seems willing to forgo $8 billion in tax revenue to subsidise rental housing supply. Surely, then, it ought to ensure this concession assists the neediest tenants in the most pressured parts of the housing market and make landlords transparently accountable for this.
Labor’s partial abolition proposal takes a minimal step towards transparency by limiting negative gearing to new properties.
<h2>Let’s talk about the alternatives</h2>
A reformist approach would seek better value for the government’s A$8 billion-a-year investment, in terms of improved affordability for tenant households. How might this work?
The key requirements would be to ensure transparency about which dwellings are negatively geared and the socioeconomic status of their tenants. There are various ways to achieve this.
One model would be to tie the negative gearing subsidy to specified tenant groups. In this case, only if landlords let properties to target tenants, such as those on Newstart, sole parent or aged pension, would they receive the subsidy. This could be done by requiring tenant social security numbers to be reported with landlord tax returns to enable verification.
This approach could be extended by capping the value of weekly rents on properties to which negative gearing could apply. Locational targeting could focus the subsidy to areas with high market rents and poor affordability.
The transition to such a model could be phased in by starting with minimal transparency and accountability requirements and ramping up to more specific requirements. Additional compliance costs would raise the cost of investing in housing. But, it would weed out the investors who are seeking pure profit and encourage those with a social perspective.
A second model that extends transparency and accountability could involve converting negative gearing to a formal low-income housing tax credit <a href="https://theconversation.com/americas-rental-affordability-crisis-is-about-to-go-from-bad-to-worse-48143">as operates in the US</a>. Such a model provides a tax credit for investors in affordable housing that is certified as managed by a legitimate social housing provider. This could be the fillip that Australia’s small community and non-profit social housing sector needs.
A third model might be to channel negative gearing to a dedicated financial investment vehicle drawing on private investment for affordable housing that is built for or let to low-income tenants. There has been a long-standing debate in Australian housing policy circles about the need for long-term institutional investment in affordable housing.
A finance vehicle that offered a return on capital to investors supported by a tax concession could underpin new affordable housing supply. Other countries have used housing bonds in this way to attract additional investment in affordable housing.
Another model could use a reverse auction approach, with landlords competing to supply housing of certain specifications to tenants of a particular income category in return for set levels of tax credit. This would operate in a similar way to the government’s carbon abatement plan, which involves a reverse auction for renewable energy projects. Though this might raise transaction costs, it might encourage helpful institutional consolidation in the private rental sector.
A fifth approach might be for the government to provide the A$8 billion as vouchers to low-income tenants for use in renting housing of a set standard or location. Landlords would then cash these vouchers in as tax concessions. The US operates a subsidy model of this type known as “Section 8”.
A final option would be to simply take the $8 billion-a-year subsidy represented by negative gearing and build desperately needed public housing. Such an approach guarantees transparency and accountability and could directly build around 20,000 dwellings a year, or more with leveraged private finance.
No doubt the current subsidy could be remixed in multiple other ways to improve effectiveness, transparency and accountability in how it procures affordable housing. The examples offered above show that we could be having a much more positive debate about negative gearing than just abolition or retention.
 
Jago Dodson is professor of Urban Policy and director, Centre for Urban Research, RMIT University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/jago-dodson-2359" target="_blank">here</a>.
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Negative gearing: scrap or preserve?

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The Aussie Home Loans founder John Symond, in an interview with Ross Greenwood on 2GB's Money News, has lashed out at the mooted changes to negative gearing.
Ross Greenwood suggested that he was surprised by the Labor's strategy of only allowing negative gearing on new homes, which was met accord from John Symond.
"Ross, can you imagine?"
"Let's say they introduce that legislation - only new housing - the day you exchange contracts on a new home, it immediately becomes an old home and guess what, it will drop by at least 20 percent in value, and who's going to walk in to that one?"
Greenwood stated that house prices seem to be resilient around the country with investors not shying away from the property markets at the moment.
"The markets have had a bit of a kick up in the last few weeks, but who knows the real reason," Symond said.
In response to Ross suggesting any big tax changes will change the mood and the direction the money flows, John offered an alternative view.
"Conversely I think a lot of people think I better get in now before any changes come in because they probably won't be retrospective I probably better buy a property now."
"Certainly if the government introduced anything that was perceived to be significantly adversed it would prick the balloon of the housing market and that's for sure," he said.
John said his concern is if they scare away the mums and dads from their negative gearing on their housing.
"The average Australian understands housing and they try and build up a nest egg for future years, and they'll run a mile," he said.
"Everyone will be too scared."
"Imagine what that will do to the real estate market."
"Five trillion dollars in asset value for Australian's as a buffer for the future and a government could be so dumb to blow that up."
He said that we already have a shortage of housing in most capital cities.
"Imagine you being a developer, I'd run 100 miles per hour."
Ross Greenwood said that we need to encourage people to build houses with the population projections.
The population is expected to reach 35 million people between 2050 and 2060, with Sydney and Melbourne to have eight million people each and Brisbane and the Gold Coast to have four million.
John said it will have the opposite impact.
"They are really playing with dynamite here and I hope to goodness they don't come up with some crazy idea and totally destabilise the one industry Australia is relying on."
"They can totally blow it up and I'm amazed that they're even talking about it," he said.
Symonds said he hadn't been speaking to many politicians however thinks they are all clutching as straws.
"They got frightened off with the GST and now they're looking at tinkering with super, they're tinkering with negative gearing and these are areas that impacts the vast majority of working mums and dads or retirees."
"I just think they're desperate."
"Unfortunately the tax system has been busted for decades and it hasn't been addressed."
He suggested that every time they have a look at a particular area they get scared.
"I think we're in no different position than we've been in for the last 20 years with a flawed tax system that just doesn't work."
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jrobinson-rf4aSBido9

Expect values to drop 20 percent under Labor negative gearing: Aussie John Symond

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In proposing reforms to negative gearing structures, any government should take a long-term view and classify ‘new’ stock as any property up to 10 years old and not pull the rug from under the feet of investors abruptly because of economic implications, according to property research and investment firm Aviate Group. 
“Those looking to abolish negative gearing, as well as those whom support this, need to perhaps be reminded as to what it is that investors bring to the table. Not just in terms of providing rental stock to areas that may really need it, but also for the economy at large,” said Aviate managing director Neil Smoli.
Investors’ focus on wealth creation through property stimulates the economy, creates jobs and fosters a more self-sufficient population which has the knock-on effect of alleviating the burden of social housing and dependence on aged care facilities by an ageing population, added Smoli.
“Investors make a strong and undeniable contribution to housing options by way of rental stock. This provides direct housing options for those that do not have the means or have not yet sought the right advice that would allow them to enter the property market.”
There also hasn’t been near enough debate, or thought, says Smoli, of the definition of ‘new’ property stock when it comes to the proposed reforms, which are being weighted not just by the Opposition, but also by the Nationals, albeit under a varied model.
 “Applying negative gearing reforms that apply to all newly built properties in terms of their physical construction and occupation could have a knock-on effect whereby investors may ‘short-sell’ or ‘flip’ these properties in order to maximise their financial benefits,” he said.
“If it is to be successful, any well considered policy surrounding negative gearing should also take into account how long a property is, or has been, held by an investor.
“There has to be some kind of incentive for investors to take the universally respected view that property investment is most optimal when a long term view is held, rather than a short term hold to turn a quick profit by selling when a market is at its cyclical peak.”
In addition to rewarding investors that hold onto their new properties for longer, Smoli says, there should also be a period of at least a year before any successful changes to negative gearing policy are implemented.
A property should be viewed as ‘new’ when it is up to 10 years old to minimise any potential fallout or exodus from the marketplace. 
“It typically takes five to six years for an investment property to become neutral, that is, for the rent received to balance the interest payable. This is influenced by the interest rate of the day, the net rental income received after costs such as management fees, letting fees, body corporate fees and outgoings are taken into account, the investor’s marginal tax rate as well as depreciation allowances,” he said.
“A timeline of this duration for the investor to be able to use negative gearing seems logical and fair.”
Additionally, whatever changes are implemented in the context of property and associated negative gearing, the same should apply to shares and the equities market to ensure all asset classes are on an even playing field. 
Stamp duty: another opportunity for reform
In addition to possible negative gearing policy reform, Smoli also believes there are other opportunities for reform that could create a fairer balance for the property industry’s many stakeholders, particularly as the rampant transactional activity of recent years has softened in recent months.
At the top of the list is stamp duty, according to him.
“Most industry professionals seem to be in agreement that stamp duty should be phased out without delay. However in the absence of its complete abolition, the market should at least be able to rely on some national consistency when it comes to the application of this tax,” Smoli said.
“Let’s not forget we were promised an end to stamp duty when the GST was introduced. It’s clear that state governments are addicted to the revenue, but the economic benefits of abolishing stamp duty in terms of transactional activity, not to mention the fact it would relieve a significant burden for first home buyers, warrants genuine consideration at the Federal level.
“Failing this, perhaps it is time to look at more effective stamp duty models and, more importantly, introduce some national consistency as to how the tax is applied,” Smoli said.
He pointed to the implementation of a sliding scale, whereby the stamp duty payable depends on the phase in the construction cycle that the dwelling is at when the purchase is made, could be considered as the basis for a national model. 
“A fairer system, which has been used in some states including Victoria and South Australia, could be based on the principle that the earlier in the construction phase a dwelling is, the less stamp duty should be payable by the purchaser on that property,” Smoli said..
“In this way, those who purchase a property off-the-plan or early in the construction phase are rewarded for that early purchase, creating heightened demand for new supply and supporting the broader market.
“It makes sense to lessen the burden on buyers of off-the-plan properties, as these buyers are directly contributing to demand for new housing construction.
“A nationally consistent approach to stamp duty would also make it easier for investors to purchase properties outside their own state, fuelling demand on a broader scale. 
“Like the conversation happening around negative gearing at the moment, so should the industry seek to elevate the issue of stamp duty. Until its abolition comes to fruition, and the promise of many years ago is finally upheld, the more alternatives we consider as an industry the better,” he said.
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prateek24-ezbwHMbNAk

Negative gearing changes need long-term approach: Aviate Group MD

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Residential property investment is going to be a political football during 2016, right up to the election and then beyond.
Just which way the investment herd heads will unfold but property markets don't like uncertainty.
As our politicians dwell on how to tax property investors, many will pause their decision making.
Yes some might rush in ahead of any change, but more likely there could be a flight of capital away from rental housing at the very time when the early 2016 sharemarket turmoil was likely to attract investment towards property.
We have a scenario where both the Turnbull Government and Shorten opposition work have mooted significant changes that will reduce tax benefits arising from property investment.
Both major parties seem intent to end the longstanding negative gearing arrangements that have been in place since the Hawke/Keating Government days.
The opposition has also signalled it intends changing the capital gains tax benefits that have been their since the Howard-Costello government, ie halving from 50 per cent to 25 per cent the capital gains tax deduction for investors who sell a property after holding it for at least 12 months.
The Turnbull government is pursuing negative gearers after tentative plans for an increased GST were virtually ditched as too hard.
Then Bill Shorten announced that a Labor government, if elected, would change the rules so that only new homes purchased after July 1, 2017, could be negatively geared.
Existing investors would supposedly not be affected by the grandfathered tax change, but that ignores the disappearance of the potential investor buyer pool into new housing and leaving just owner occupiers to compete for the established home rental offering. 
While the Turnbull government has rejected Labor's policy to restrict negative gearing to new properties, it seemingly plans to target high-end and professional investors by either capping the number of properties that can be geared or limiting the annual tax deductions of which can be claimed.
Earlier this month the Property Council of Australia released data on the number of negatively geared voters in the most marginal seats and threatened a campaign in Labor and Liberal marginal seats should negative gearing be touched.
Their data indicated over 430,000 Australians who negative gear an investment property live in marginal seats held by the Government and the Opposition.
The 10 most marginal Coalition seats have an average of 8,181 investment property owners and the 10 most marginal Labor seats have an average of 8,357 property owners. 
Federal Liberal Craig Laundy in Barton has over 11,000 with a stake in the outcome. Opposition treasury spokeperson Chris Bowen has 7400 negative gearers in his Sydney electorate.
“Mums and dads see owning an investment property as a way of securing their long term prosperity," said Property Council chief executive Ken Morrison.
“To play with negative gearing is to play with the financial futures of 430,000 people who live in the most marginal seats."
This article was first published in the Saturday Daily Telegraph.
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Property investment becomes a political football

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The headlines around the negative gearing policy uncertainty failed to unnerve Sydney's nascent 2016 auction property revival.
The auction success rate sat well above 70 percent for the third successive weekend as earlybird sellers secured strong buyer interest.
When it came to affordability, there were however just the four reported sales at $500,000 or less across Sydney.
A $488,000 sale of a two bedroom fibro at Bradbury was the cheapest result.
"It sold to an investor," Richardson &amp; Wrench Campbelltown agent Michelle Balabka said.
The biggest weekend sale under the hammer was $3.68 million at Curl Curl.
The five bedroom Curl Curl offering had a $3.5 million to $3.85 million price guide (above).
There was also a $3,675,000 South Coogee six bedroom house sale.
"The Sydney market is back in full swing," the auctioneer Damien Cooley said after the result.
There were private treaty sales of an $8 million plus harbourfront in Northbridge and a $6 million sale in Cammeray.
The weekend had 539 homes scheduled to go under the hammer, which was well up on the 336 auctioned last weekend, CoreLogic RP Data noted but below the same weekend last year.
With 80 auctions the inner west the was busiest district followed by the east, the south and the upper north shore all with 70 or more.
Manly, Mosman and Randwick were the busiest weekend auction suburbs.
The lower auction numbers are securing higher clearance rates with the fewer choices increasing competition for available properties, agents suggest.
There is confidence in Sydney eastern suburbs property, says Bob Guth at BradfieldCleary, following a perfect 10 out of 10 at the agency's first auctions of the year.
Bob Guth suggested the "very best time" to market Eastern Suburbs real estate was February when there is less competition.
After the federal opposition's policy was unveiled last weekend - restricting negative gearing to new properties and reducing capital gains discounts available to investors - the Prime Minister Malcolm Turnbull warned " this should put concern into the minds of every single house owner".
Home owners would see the value of the family home "smashed" under Labor's "very blunt, very crude" negative gearing policy, Malcolm Turnbull warned.
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Negative gearing policy debate fails to unnerve the market

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Proposed changes to negative gearing would drive up rental prices and hurt Australian renters, REIV president Geoff White said on Wednesday, joining the industry debate over the impact of the move if implemented.
Commenting on an announcement by the Federal ALP in recent days, White said a policy proposal by the Federal Opposition to limit negative gearing to newly constructed houses had not been fully considered.
He said it would be a “double hit” as fewer investment properties became available – driving up rental prices – and a crisis of affordable rental properties would quickly become apparent. Further to this, the government would need to fill the void by providing state-subsidised and built housing.
“The proposal lacks insight, in that it will not only affect the property sector but renters nationally,” said White.
“Already we are seeing a relatively low vacancy rate – that is, the level of available rental housing – at around two per cent in some areas of Melbourne, particularly areas further from the CBD, where families are looking for a rental property they can afford.
“If investors withdrew from the established home market in this vital property belt, it would cause a significant shortage in rental supply and impact heavily on the government of the day.
“More importantly, it will ‘hit’ those who most need help in the housing market.”
He added that Melbourne has experienced a significant population boom in recent years, and available housing is critical to fuel the state’s economy.
“With more than 100,000 new residents moving to the state in the past 12 months – and interstate migration at its highest in 40 years – an ongoing, high level of available housing is essential to meet this demand.”
He added that with about half a million rental properties statewide, much is at stake in tinkering with negative gearing. 
“A small percentage shift in the number of available rental properties in the state would, quite clearly, impact and undermine the lives of tens of thousands of Victorians,” he said.
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Negative gearing changes will hit those who need help: REIV

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<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
GUEST OBSERVER
Much of the current tax debate is mangled by poor analysis and misconceptions. Let’s consider three topics: “bracket creep”; corporate tax rates; and negative gearing.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
The fact that inflation, more precisely wages growth, pushes individuals into higher marginal tax brackets has been advanced as the rationale for a variety of tax proposals. But the unacknowledged elephant in the room is the simple, rational, response to bracket creep – index the tax scales.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
That is, if inflation was 5% over the past year and the 37% marginal tax rate previously started at an income threshold of $80,000, that threshold would be increased to $84,000 (that is, an increase of 5%).
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
It is legislatively and administratively simple. A low inflation environment makes this the ideal time to implement such a beneficial change which can counter profligacy of future governments, should high inflation return and induce higher tax revenues from bracket creep.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
That one is simple. The real issues in the corporate tax rate debate, where many advocate lowering the rate, are more subtle – and missed by most of those advocates. Under our dividend imputation tax system, company tax payments are offset by lower investor tax payments when earnings are paid out as franked dividends to Australian investors. For such investors, lowering the company tax rate has (subject to a few caveats) no effect on their after tax returns from investment.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
Who would benefit? Foreign-owned companies for one, for which the after-tax returns from Australian operations are increased (assuming they haven’t structured affairs to avoid tax anyway). That might induce more of them to establish or expand operations in Australia – although it should be stressed that our corporate tax rate, while above that of some Asian neighbours, is below that of a number of advanced countries. So arguments that our corporate tax rate is “uncompetitive” do not obviously cut the mustard.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
Other beneficiaries would include private Australian companies owned by wealthy individuals on (hopefully) high marginal tax rates. For them, there are significant tax benefits from retaining earnings in the company rather than paying franked dividends.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
Doing so avoids the extra tax payable at the personal level (after allowing for franking credits) due to their marginal tax rate exceeding the company rate. Instead retention of earnings (and franking credits) generates capital gains which may eventually be taxed at the concessional capital gains tax rate. So lowering the company tax rate would benefit these wealthy individuals (and does nothing for small private companies struggling to make a taxable profit).
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
A third set of beneficiaries might be Australian companies – but the source of any such presumed benefit is subtle. A benefit would arise if the cost of equity capital was reduced through a lower company tax rate.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
As explained above, there is unlikely to be any such effect from a change in the required rate of return of Australian investors. Foreign investors might lower their required rates of return, but that is, at least, debatable.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
Of course, one doesn’t need to lower the company tax rate to achieve this – a rebate of tax on dividends paid to foreign investors would achieve the same outcome. And the political resistance that would undoubtedly occur in response to such a proposal should indicate that relying on this argument for reducing company tax is untenable. And remember, our company tax rate is in the middle of the pack for advanced economies.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
Finally, negative gearing. There is nothing wrong with negative gearing itself (although fraught with risk due to leverage). The problem is that there are undesirable tax benefits associated with it, arising from claiming current tax deductions for interest paid on financing an investment on which tax on returns will be deferred and at a concessional rate.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
The solution? Removing concessional capital gains tax (or at least returning to full taxation of real capital gains) is part of the solution. But it is only part – because deferring tax payments until realisation of the asset sale implies a lower effective tax rate.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
It would not be feasible to tax capital gains as they accrue, given the adverse cash flow consequences for investors. However, we could use a variant of the tax treatment of companies with carry forward tax losses, which are compounded up at the government bond rate to keep their real value until usable.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
Quarantining currently deductible interest costs on negative gearing to offsetting income earned on the investment, plus carry forward of additional unused interest costs is one way to go. When the investment is eventually sold, or when income exceeds interest expense, those accumulated unused costs could be claimed for tax purposes.
<h4><a href="https://theconversation.cmail20.com/t/r-l-vkiihjl-qitldhiii-yh/" target="_blank"></a></h4>
This is not administratively complex, would be fairer for other taxpayers who ultimately pay for the concessions, and might reduce incentives for excessively leveraged investments.
Kevin Davis is research director of Australian Centre for Financial Studies and professor of Finance at Melbourne and Monash Universities, Australian Centre for Financial Studies and author for The Conversation.
He can be contacted <a href="https://theconversation.com/profiles/kevin-davis-3497" target="_blank">here</a>.
 
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