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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The Federal Treasurer Joe Hockey has shrugged off the Reserve Bank call for a review of the negative gearing-capital gains tax regime.
"More policemen negatively gear than specialised tax accountants, management consultants or university lecturers," Mr Hockey told 2UE radio.
"This is a way for people on medium incomes, or even lower incomes, to be able to get into the property market in a way that they may not be able to."
The bank joined the debate over how negative gearing and the 50% capital gains tax discount are making housing less affordable.
"The bank believes there is a case for reviewing negative gearing but not in isolation," the RBA said in its submission to a House of Representative's parliamentary inquiry into home ownership.
Limiting negative gearing to new houses or a certain number of investment properties are among the changes Labor is reportedly considering.
The treasurers comments stem from analysis showng the vast majority of property investors taking advantage of negative gearing are “mum and dads” earning less than $80,000 a year, countering the long-held view that the property investment measure was a tax lurk for the rich.
Australian Taxation Office data shows that of the 1.266 million Australians who declared that the rental on their investment properties didn’t meet the interest repayment in 2011-12, 883,325 earned less than $80,000.
More than 70 per cent of people who accessed negative-gearing benefits only owned one investment property. 
About 60,000 clerical staff earning less than $80,000 benefited from negative gearing, as did 54,000 teachers, 46,000 sales staff and 35,590 nurses and midwives, the data showed as reported by The Australian. 
Nick Proud, the executive ­director of the Residential Development Council, which provided the statistics suggested investors incentivised by negative gearing would reduce the future reliance on the pension.
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Policemen negatively gear property: Treasurer Joe Hockey

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Mortgage Choice chief executive John Flavell warns getting rid of negative gearing would make housing less affordable.
This was because there would be less investment in new housing stock and investors faced with a winding back of tax concessions would put rents up to cover their losses.  
"I'm with the government in terms of ruling it out," he said.
"I'm looking at affordability of housing across the board, for renters as well as owner-occupiers." 
John Flavell says negative gearing played an important role in the property market.
"The tax benefits associated with negative gearing helps to make property investment more attractive to some Australians, and given that the success and strength of the housing market is critical to the ongoing health of the Australian economy, it doesn’t make sense to consider removing any initiatives that help this market."
"Instead of placing the emphasis on negative gearing and the impact it has on the property market, we should be placing the emphasis on first home buyers and what initiatives/incentives we can introduce to help them.  
"It would be great to see first home owners receiving similar tax concessions as investors - as we believe this would encourage a lot more first buyers into the market. 
"If we want to improve housing affordability and help more first home buyers into the market, we have to pull on the right levers.
"Housing affordability is a function of property prices, income levels, the cost of and access to credit as well as supply of rental accommodation.
"To have a positive impact on affordability, drive up the instances of home ownership and reduce rental burden, all of these levers need to be considered and used.”
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Mortgage Choice says retaining negative gearing makes sense 

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GUEST OBSERVATION
In recent weeks, there have been signs sentiment may be changing around the contentious policy of negative gearing.
There are well-rehearsed arguments on both sides. Critics argue that the deduction of property losses from other sources of income (such as wages) is a tax shelter that imposes an unfair burden on other taxpayers. Defenders of the policy suggest that it is used by prudent savers to “get ahead”, and by high income individuals to lower unduly high tax burdens that blunt work incentives.
However, these arguments are tax policy concerns since taxpayers can negatively gear other financial investments such as shares. There are housing policy specific issues that instead warrant a focus on housing; three deserve particular attention.
The first is a familiar refrain. Given a fixed supply of land, negative gearing advantages property investors who are better able to out-bid other land users. Part of the tax break gets shifted into higher land and housing prices; some other users of land – first home buyers, for example – are “crowded-out”.
But a second reason, related to so-called tax “clientele effects” has been rarely mentioned. It is a more nuanced influence, yet it is important to an understanding of the supply side effects of reform in this area.
The Australian private rental housing stock is relatively large by international standards and mostly held by “mum and dad” investors. There are not enough high tax bracket investors willing and able to hold all the housing in this tenure. Lower tax bracket investors must be enticed into the market. These investors are often retirees looking for secure, regular flows of income, and are attracted to those segments of the market where rental yields are relatively high.
On the other hand, the appeal of property investment to the high tax bracket investor is that they can negatively gear the asset’s acquisition, yet an important part of the returns (capital gains) are lightly taxed compared to other types of investment income. The consequence is that high tax bracket investors crowd into segments of the market offering high capital growth but low rental yields. Low tax bracket investors concentrate in segments offering high rental yields but lower capital growth.
The removal of negative gearing is then likely to have supply side impacts that are not as straightforward as has been suggested in some of the media commentary. To be sure some high tax bracket investors will withdraw and as price pressures ease and rental markets tighten, rental yields will rise.
But those higher rental yields will prompt some growth in the number of low tax bracket investors, and especially so in today’s low interest rate environment. As low tax bracket investors face tighter borrowing constraints, the overall supply side impact will be negative. But it will not be the collapse in supply that some fear.
The third reason for change with respect to negative gearing and housing is perhaps the most important in the current context. The share of investment property loans in total debt has tripled from one-tenth to three-tenths in a little over two decades. Investors now take up a higher share of the value of new loans than do first home buyers.
According to the Australian Bureau of Statistics, investment housing accounted for 40% of the total value of housing finance commitments in April 2015. Of the dwellings that secured housing finance commitments within the owner occupation sector, only 15% was attributable to first home buyers. The presence of housing investors on such a large scale is a potential source of instability, especially if highly geared.
In their seminal research, the late Professor John Quigley and his colleague Karl Case note that when markets slump home owner behaviour differs from that of other investors.
They can “consume” the housing they have bought – by enjoying the surroundings and the comforts of home – and provided mortgage payments are met, they are invariably willing to “sit out” the slump. This can be an important source of stability in housing markets.
But property investors have not bought a dwelling to live in it. When prices slump some if not many will cut their losses and seek a safe haven for their capital elsewhere, especially if they are highly geared. Our research finds that negatively geared investors are more likely to terminate rental leases than equity-oriented investors. The former are also prone to churn in and out of rental investments as they refinance to preserve tax shelter benefits.
When large numbers of indebted investors come to bank on continued house price gains, and low interest rates, the resilience of housing markets is undermined. Phasing out negative gearing should be a priority for a housing policy fit for the 21st century.
Rachel Ong is Principal Research Fellow, Bankwest Curtin Economics Centre at Curtin University. She can be contacted <a href="https://business.curtin.edu.au/research/centres-institutions/bankwest-curtin-economics-centre/staff.cfm/Rachel.Ong" target="_blank">here</a>. 
Gavin Wood is Professor of Housing at RMIT University. He can be contacted <a href="https://www1.rmit.edu.au/staff/wood_gavin" target="_blank">here</a>.
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The real reasons negative gearing on housing should be phased out

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As someone who works analysing housing markets every day it is good to see that housing policy is back on the agenda especially considering that we currently don’t have a Federal Housing Minister.  The lack of a Housing Minister at the Federal level is intriguing when you look at some of the statistics relative to the housing market.
According to CoreLogic RP Data the total value of residential property at the end of May 2015 was $5.9 trillion.  To put this in perspective, gross domestic product (GDP) for Australian was recorded at $1.587 trillion over the 12 months to March 2015. 
The Australian Bureau of Statistics’ housing finance data showed that as at April 2015 there was $1.392 trillion in outstanding mortgage debt to Australian banks, building societies and credit unions.  Meanwhile, the share market garners plenty of attention, as at April 2015 the market capitalisation of listed domestic equities was $1.693 trillion.  Based on this data it would be fair to say that housing is Australia’s largest and arguably most important asset class. 
Even the value of Superannuation clocks in at a much lower $2 trillion, nearly three times smaller than the overall value of housing.
Given the importance of shelter and the runaway growth currently being experienced in Sydney and, to a lesser degree, Melbourne home values, it is no wonder that housing is becoming a politically very sensitive topic.  In particular negative gearing has become a topic of plenty of debate over the past few weeks. 
While the current Government have ruled out changes to negative gearing, both the Labor and Green parties are highlighting potential changes to their policies.
Negative gearing allows owners of investment properties to offset their expenses (losses) against their taxable income and as a result it can reduce their taxable income.  While this most certainly makes investment attractive the suggestion that negative gearing alone drives up the cost of housing is somewhat debatable.
<img class="aligncenter size-full wp-image-4979" src="https://blog.corelogic.com.au/wp-content/uploads/2015/06/Chart-12.jpg" alt="Chart 1" width="500" height="180">
The above chart shows the total value of net rent claimed by individual taxpayers by financial year up to 2012-13.  Net rent is gross rent minus applicable deductions such as rental interest, depreciation and costs such as capital works.  What you will immediately note is that prior to 1999-00 the net profit or loss made from rent was fairly negligible. 
The Federal Government made changes to capital gains tax in September 1999 and this has seemingly helped to make negative gearing much more attractive than it was previously.  In September 1999 the Federal Government made changes which offered investors a 50% discount on capital gains tax when they sold their property if they held their investment for at least 12 months. 
As the first chart shows, since thes 1999-00 financial year net rental losses have spiked.  This would seem to suggest that the 50% discount to capital gains tax has conspired to make negative gearing of residential property a much more attractive investment option.
<img class="aligncenter size-full wp-image-4980" src="https://blog.corelogic.com.au/wp-content/uploads/2015/06/Chart-22.jpg" alt="Chart 2" width="500" height="110">
If we take a look at the most recent financial year’s taxation data available there are some interesting statistics about negative gearing and who is claiming the benefit. In terms of the number of individuals claiming net rent, 68.9% of claimants had a taxable income of less than $80,000. 
While more taxpayers with a taxable income of less than $80,000 claim net rent losses, only 13.1% of all individuals with a taxable income below $80,000. 
On the other hand, more than a quarter (25.8%) of all taxpayers with an income of more than $80,000 claimed net rent.  In terms of the value of these losses, individuals earning less than $80,000 claimed rental losses of $2.781 billion or an average of $2,050 per claimant.  Individuals earning more than $80,000 claimed $2.613 billion in rental losses at an average of $4,276 per claimant. 
More people on incomes below $80,000 claim rental income but that is largely due to the fact that 81% of taxpayers had a taxable income of less than $80,000.  Conversely, a greater proportion of total higher income earners own rental properties and the typical losses claimed from these properties are much larger than those with taxable incomes below $80,000.
<img class="aligncenter size-full wp-image-4981" src="https://blog.corelogic.com.au/wp-content/uploads/2015/06/Chart-32.jpg" alt="Chart 3" width="500" height="182">
In my opinion negative gearing is essentially a way in which the Government outsources social housing to the private sector or at least this should be how it works.  If we take a look at dwelling approvals data you can see that very few new approvals have been granted to the public sector over the past three decades. 
Typically more than 90% of all dwelling approvals over any month are granted to the privates sector with very few being approved and ultimately constructed by the public sector.  Ultimately the private sector takes on the role of construction of homes and it appears private citizens are incentivised to provide rental accommodation via the provision of negative gearing. 
If negative gearing were removed no doubt housing would still be an attractive investment for some who are seeking to be positively geared however, you may find that fewer people are attracted to housing as an investment option because of the absence of the tax deductions which negative gearing provides.
The data shows that a greater number of people on lower taxable incomes claim rental losses than those on higher incomes however, as a proportion of total taxpayers a greater proportion of high income earners claim rental losses and the value of these losses is greater for higher income earners.  The longer term net rental losses chart indicates that negative gearing alone didn’t really result in a high level on net rental losses however, when the capital gains tax discount was halved that seemingly made negative gearing much more attractive and the losses began to add up.
While scrapping negative gearing would likely provide a saving to the Budget bottom line, I believe it is unlikely to result in the substantial improvement in housing affordability that many are hoping for.  Arguably removing the capital gains discount which was introduced after negative gearing is a good first step to addressing the problems and then Government can revisit negative gearing.
The housing market has many moving parts that result in relatively expensive housing prices here in Australia.  While the removal of negative gearing may help improve the Budget bottom line it is unlikely to be the silver bullet which improves housing affordability. 
Zoning restrictions on developable land which drive up the cost of housing, the tax-free nature of the family home, stamp duty, the mass-centralisation of our population and shortage of jobs away from the major capital cities all conspire to make housing less affordable. 
Any discussion about improving housing affordability shouldn’t solely focus on just one of the issues such as negative gearing rather it needs to look at all of the factors which contribute to high housing costs.
Cameron Kusher is RP Data’s senior research analyst. Follow Cameron on Twitter <a href="https://twitter.com/cmkusher" target="_blank">here</a>. 
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ckusher-ujnxiKuFQs

CGT 50% discount spiked negative attractiveness as investment option: Cameron Kusher

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The Australian property debate has never been as interesting, given we are on the precipice of change – and the politicians don’t like it, either. 
Take the negative gearing debate, which has been quite fast and furious of late. The catalyst for the first time was that both major parties had to declare what their positions were, and was there a slight chance of reform? Previously, when any policy topics were discussed they were usually framed with the standard “no comment”. The major difference today is that the electorate demands a more exacting policy position from the major parties. This is good debate.
This week, myself and many other property commentators were left with egg on our respective faces when the 2012/13 Australian Taxation Office figures identified that tax breaks claimed for rental properties fell from $13.8 billion in 2011/12 to $12.0 billion.
 This reduction was attributed to the fall in interest rates, although I am not so sure that was a major contributing factor. On 1 July 2012, the cash rate was 3.50% and by 30 June 2013 it had fallen to 2.75%, although we do know that the property investor surge really started to accelerate after June 30, 2013. And since then the cash rate has now fallen 0.50%, so on that basis for 2013/14 we can expect a further reduction in negative gearing tax breaks? I’m not so sure, but it’s a very weak argument, citing low interest rates, given we currently find ourselves with an historically low cash rate.
The conversation that really needs stepping up is housing affordability and finding the right balance, which for starters means building significantly more residential properties. 
Cue the NSW Government's <a href="https://strategies.planning.nsw.gov.au/Portals/0/Documents/1_Draft_Metro_Intro.pdf" target="_blank">Vision for Sydney 2031</a> which tackles how Sydney’s bulging population growth needs to be better managed, and that simply means re-zoning existing properties and replacing them with high-rise developments. 
The only problem is convincing the respective councils to adopt these policies, which is a major stumbling block given most councils within the Sydney CBD are against such developments – which explains why the NSW government wants to merge councils to break this deadlock.
For example, the plan is for Mosman council to approve approximately 6,000 new developments over the next 16 years, which works out at about 400 new properties each year. Depending on whether your local council has a strong transport infrastructure such as a train line, this could be much higher. Councils have been crying poor for years so it remains quite dumbfounding why they would resist an additional 400 new rate payers per annum in Mosman, for instance. It does not cost them anything as the developer is wearing the costs, however historically councillors are concerned about re-election, and being pro-development is not a good look in a community.
For those very reasons it makes sense why the councils should be amalgamated given Sydney’s population is well ahead of earlier predictions. It is a very hard debate to balance given the NSW government is the sole arbitrator on this decision and its Vision for Sydney 2031 clearly demonstrates how paramount new developments are, as well as the benefits courtesy of land tax and stamp duty.
If we use the Mosman example, all new developments these days are a mixture of retail on the ground floor then a few floors of commercial then residential above. The reason for this combination is that where possible there needs to be a formula that encourages a 24 hour activity to drive small businesses in the community. The commercial and retail keep the hive of activity going during the day and the residential occupants take over after work.
So if Mosman requires 400 new developments each year and each new development averages out at approximately 25 apartments then Mosman, to meet these guidelines, will need to be building approximately 16 such developments for the next 16 years.
Well you can already start seeing the Not In My Backyard protests gathering momentum, although there is very little that can be done, given this is the NSW Government mandate, and they just so happen to be the sole decision maker on this topic for conversation.
What makes this even more intriguing is whether or not the Federal government will amend the foreign ownership purchasing off-the-plan rules?
When the NSW government succeeds with this massive infrastructure drive the costs of apartments will start to decline given the markets will be faced with an over-supply which then delivers more affordable housing with lower rents for tenants.
A great plan in theory, but will it succeed?
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robertsimeon-hRNTwJyXkQ

Lots of positives from discussing negative policies: Robert Simeon

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Negative gearing property investors now total 1,967,260 across Australia, according to the ATO latest data.
That's up from the 1,895,775 in the previous tax year, 2011-12.
There were 1,811,175 investors claiming rental income in the 2010-11 year.
The ATO has a investor rental video series on <a href="https://www.ato.gov.au/General/Property/Residential-rental-properties/" target="_blank">working out your tax correctly</a>.
The statistics for the 2012–13 income year were sourced from 2013 individual income tax returns processed by 31 October 2014. The statistics are not necessarily complete.
This data is not representative of the total number of properties.
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Nearly two milllion negative gearing investors across Australia: ATO

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Record low interest rates have shown up in new statistics from the Australian Taxation Office, in a sizable drop in negative gearing tax claims by property investors.
Claim for rental properties fell from around $13.8 billion to $12 billion between the 2011-12 and 2012-13 financial years.
The latest statistics for 2012-13 show that 1.26 million people deducted losses made on investments (including mortgage interest) from their overall income, from the 12.7 million lodged individual tax returns.
<div class="cq-article-content-paras section">
The overall cost of negatively-geared rental properties has fallen by $2.4 billion, or 31 per cent, in 2012-13, due to record low interest rates and higher rents.
The Tax Office's latest statistics shows 1.9 million landlords.
The value of rent returned was up 8.6 per cent to $36 billion but the value of interest claimed was down 6.7 per cent to $22 billion.
While the number of landlords with negatively-geared properties increased by almost 60,000, their tax deductions fell 13 per cent.
</div>
<div class="cq-article-content-paras section">
​The highest number of property investors claiming tax deductions had a taxable income - after tax deductions - of between $37,000 to $80,000 a year.
</div>
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Low interest rates cuts negative gearing ATO investor claims in 2012-13

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Negative gearing is safe for the short-term and definitely gone for the long-term simply because we are witnessing housing dynamics that have never been seen before. 
Both federal and state governments know that it’s imperative to drive Australia’s population at rates never seen before because this drives revenue.
Federally, the Abbott government is struggling to get over the mining boom demise, especially when it relates to debt and deficit.
This week I read a comment by Craig James: “Over the last 65 years the federal budget has been in deficit 71% of the time with the average deficit 0.9% of GDP."
Now back to the housing dynamics which is win, win, win for the NSW government and woe, woe, woe for the federal government. Last week <a href="https://www.rwm.com.au/2015/04/17/hold-whats-going/" target="_blank" title=" Hold – on, what’s going on here">I wrote</a>: “Secondly the big property market mover in Sydney especially is the rezoning of high density residential land into new developments. Previously this was a domain dominated by Australian developers who now can’t compete with the Asian developers. Given that it’s legal to buy new off the plan, these developments are then resold exclusively in Asia.”
The NSW government is only too well aware that the booming real estate markets are its “rivers of gold” – these revenues are vital to ensure a budget surplus is maintained and more particularly as the government is about to embark on the greatest infrastructure spend in NSW history.
In order to balance the books and remain the most prosperous state/territory in Australia the NSW government is focussed on two revenue streams – stamp duty and land tax. To make this happen NSW will see a development explosion of apartment developments with the NSW government’s blessing. It knows only too well that Asian developers are all over Sydney developments given they have enormous offshore markets to capitalise on. The business model is quite simple – the government will drive infrastructure predominately from the sale of the wires and poles and the developers will follow Pied Piper-style.
For this to happen the NSW government needs to change the mentality of local councils whom for generations have been anti-development and protective of the suburbs cultural and environmental heritage. So what the NSW government is now doing is trying to entice councils to merge so that it will then be easier to abandon the community mentality and embark on massive highrise developments. It’s all about the revenues from the developers and the ongoing stamp duty and land tax trails.
Now this may be fine for the NSW government which has just been re-elected for another four year term but it spells disaster for the federal government given the concentration is on investors who no doubt will want to remain deeply immersed in negative gearing. It also means that rents will fall although we must not forget that in the background we will see a massive population drive.
Naturally there will be a massive movement from those who were previously employed in the mining sector who will then migrate into the building and construction sector.
By all reports Sydney and surrounding areas are now on the cusp of a massive construction/real estate boom which I might point out is totally different to a property boom. This is a property investor’s boom which is completely different to the household boom which is exactly what we have been witnessing of late. The majority of the investors will come from offshore combined with Australian resident investors who will be all over the high density rezoning that we are currently witnessing.
Now many will be massively against this massive construction boom – although as I see it in the short term there is not much that can be done so we simply have to go with the flow.
In the meantime watch with interest what happens to the local council mergers especially with regard to high density rezoning – which is coming to a suburb near you. If the local councils stymy and delay new construction the government is then likely to step in in typical ‘Big Brother’ style. All I can say is watch these developments with interest given the wheels of motion have started.
Back to the negative gearing debate which I do find somewhat comical given the federal government has advised that there are no intended changes on the horizon. Well that is fair and reasonable given they are working from the 2011/12 tax figures. We all know it’s the 2012/13, 2013/14 and 2014/15 where the property investor boom took off so for some strange reason there has been a delay releasing the 2012/13 and 2013/14 negative gearing results...
Makes one ponder just why that is or possibly just a coincidence? I’m with the former.
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Is negative gearing the sacred cow or sacrificial lamb? Robert Simeon

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The federal Treasurer Joe Hockey has slammed efforts to curb negative gearing, claiming it would drive up rents and deter property investment.
Hockey's comments followed Shadow Treasurer Chris Bowen raising the possibility of changes to negative gearing to help raise revenue and increase housing affordability.
Bowen did not suggest abolishing negative gearing, and went so far to say no major party ever would, but told the National Press Club it would be "irresponsible to rule out going to the next election with changes to, for example, negative gearing".
Bowen said that any proposed changes should not affect existing investors and would need to be taken to an election before being implemented.
"Our principle would be that people who've invested in good faith with existing rules shouldn't be disadvantaged and anything we do should not take away from new housing stock, which is very important for housing affordability," Bowen <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2015-04-23/labor-treasury-spokesman-chris-bowen-looks-at-negative-gearing/6414558" target="_blank">told 7.30 host Leigh Sales on Wednesday night</a>, as reported by the ABC.
"And I also I think said to you that I didn't envisage either side of politics abolishing negative gearing in its entirety.
"But of course when everything is being examined in a tough fiscal situation, any responsible opposition would be considering a range of measures. But we'll be upfront about anything we do before the next election."
Hockey, who is soliciting suggestions through the tax white paper process, claimed changes to the existing tax law had many negatives.
"If you change negative gearing then there are significant flow-on consequences from people that rent homes and that needs to be properly considered," Hockey said.
"A lot of Australians have invested their hard earned money in real estate, and in doing so, they have offset the losses of that real estate against their primary income, in order to give themselves and their children some financial security.
"At the same time, there is a very strong argument that if you were to abolish negative gearing, you would see a significant increase in rents."
Bank of America Merrill Lynch economist Saul Eslake rubbished a defence by Ken Morrison of Property Council of Australia - <a href="/expert-insights/finance/lower-paid-workers-are-the-primary-beneficiaries-of-negative-gearing-pcas-ken-morrison">published yesterday on Property Observer </a>- which claimed that 80% of people who owned investment properties that negative gear were on salaries of $80,000 or less.
Eslake said that income average was the figure reached after deductions from negative gearing.
He said 250,000 of the 1.3 million people who negatively gear claim annual incomes of less than $20,000.
{mijopolls 107}
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Ending negative gearing would see rents rise: Joe Hockey

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GUEST OBSERVATION
The Property Council of Australia refutes claims made today that average Australian workers are not the main beneficiaries of negative gearing.
The latest available data from the Australian Taxation Office is indisputable and it shows that some of Australia’s most valued, but lower paid workers are the primary beneficiaries of negative gearing.
This includes the 42,000 nurses, midwives and aged care workers, 62,000 teachers and child carers, 12,300 emergency service workers and 83,000 clerical staff, who all earned around or under $80,000 p.a. and negatively geared a property in the 2012 Financial Year.
It is misleading to claim that these people only earn under $80,000 per annum because they substantially reduce their gross taxable income.
A detailed analysis of the ATO Tax Statistics shows, for example, that 8,885 registered nurses, 3,120 primary school teachers, 2,880 secondary school teachers, 3,350 education aides, and 2,945 child care workers all declared a net rental loss and had a taxable income of between $6,001 and $37,000 per annum.
Selected key professions from ATO Taxation Statistics 2011-12
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="395">
Occupation[i][i]
(Taxable income less than $80,000 p.a.)
</td>
<td valign="top" width="213">
No. declaring a net rental loss
</td>
</tr>
<tr>
<td valign="top" width="395">
Emergency services workers
</td>
<td valign="top" width="213">
12,315
</td>
</tr>
<tr>
<td valign="top" width="395">
Teachers and child carers
</td>
<td valign="top" width="213">
61,500
</td>
</tr>
<tr>
<td valign="top" width="395">
Nurses, midwives and aged care workers
</td>
<td valign="top" width="213">
41,980
</td>
</tr>
<tr>
<td valign="top" width="395">
Cleaners and housekeepers
</td>
<td valign="top" width="213">
6,940
</td>
</tr>
<tr>
<td valign="top" width="395">
Clerical staff
</td>
<td valign="top" width="213">
83,280
</td>
</tr>
<tr>
<td valign="top" width="395">
Hospitality trades
</td>
<td valign="top" width="213">
21,555
</td>
</tr>
<tr>
<td valign="top" width="395">
Hairdressers
</td>
<td valign="top" width="213">
1,645
</td>
</tr>
<tr>
<td valign="top" width="395">
Sales assistants
</td>
<td valign="top" width="213">
46,450
</td>
</tr>
<tr>
<td valign="top" width="395">
Transport workers (truck, bus, rail and delivery drivers)
</td>
<td valign="top" width="213">
15,525
</td>
</tr>
<tr>
<td valign="top" width="395">
Tradies (carpenters, plumbers, garners, electricians, motor mechanics)
</td>
<td valign="top" width="213">
34,395
</td>
</tr>
</tbody></table>
The data clearly shows that negative gearing is something middle Australia uses to help build their household wealth, build for their future, and provide security for their families.
Negative gearing provides an opportunity for average working Australians to save to get ahead.
Demonising negative gearing, or disregarding its substantial benefits - in terms of household and retirement savings, stimulating housing supply and rental affordability - willfully disadvantages some of the hardest working, lowest paid people in the country.
Negative gearing is predominantly used by young people and 91% of people who declare a net rental loss own only one or two properties.
These people aren’t the rich and famous, nor are they property barons, but they do deserve a fair go and that’s why negative gearing must remain.
Ken Morrison is the chief executive of the Property Council of Australia.
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