The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Negative gearing

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Amid the debate over negative gearing ahead of the budget, a new study has found that low-income households are using negative gearing to get into the property market while paying no net tax after welfare benefits has climbed to 60 percent. 
A study by KPMG says the bottom fifth of households (ranked by income) have enjoyed growth in “investment income” of 8.5 percent a year over the past decade, more than four times faster than the other 80 percent, according to a report in The Australian.
This was “confirmed by the substantial increase in value of second mortgage payments being undertaken within this quintile,” the study found.
It suggested the share of households paying no net tax — after welfare payments are netted against income tax paid — has reached 60 percent, which is above most conventional estimates that put the figure nearer 50 percent. 
The report analysed Melbourne Institute and ABS households income data over the 20 years to 2015.
KPMG chief economist Brendan Rynne was cited by The Australian as saying that a further government review was needed “as it suggests that the loosening of transfer payments after the GFC were never properly tightened up again — and it is very difficult to withdraw benefits once they have been granted”.
The number of low-income households with second mortgages is estimated to have more than doubled to above 37,000 since 2006.
“While it is perhaps understandable that the poorest members of our society want to diversify and increase their incomes, this group is the least able to take on the financial risk associated with geared investment activity,” Rynne said. “It is clear from our analysis that if the bubble does burst it will not just be the better-off who will be directly affected, the poor will be too.” 
The KPMG report finds half of the income of the poorest households was derived from government transfers.
“This outcome has in part been influenced by the growth in the Australian minimum wage … to $657 a week in 2015,” the report said. 
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jonathanchancellor-7SQnKwU6yx

Rise in low-income households on welfare using negative gearing: KPMG 

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<img src="https://counter.theconversation.edu.au/content/76213/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
John Daley and Danielle Wood, The Grattan Institute
The latest data from the ATO is consistent with what we’ve seen in the past. It shows that people with high-income occupations – doctors, lawyers, and others – are more likely to use negative gearing than the nurses and teachers on whom Treasurer Scott Morrison focuses when he tries to justify retaining negative gearing. It also shows that negative gearing is typically worth four to five times more for doctors and lawyers than nurses and teachers.
The tax data shows that with falling interest rates, fewer landlords are negatively geared, and the average loss is also falling. Overall the investor property market seems to be concentrating a little, with slightly fewer landlords but more investment properties per landlord. Negative gearing has lots of problems. It costs the budget a lot of money, distorts investment decisions, increases house prices, and reduces home ownership, while doing little to increase supply.
<a href="https://www.propertyobserver.com.au/images/2017/04/image-20170413-25882-17d8qsm.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/image-20170413-25882-17d8qsm.png" alt="">
The government claims it should nevertheless be retained because it’s primarily an investment strategy for “mums and dads”. But the detailed tax data from previous years shows that about two-thirds of the benefit goes to the one-fifth of taxpayers with the highest income before the negative gearing deduction.
We will have to wait until later this month for the release of more detailed data to check that this is still true.
<a href="https://www.propertyobserver.com.au/images/2017/04/image-20170413-25888-a7fcjy.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/image-20170413-25888-a7fcjy.png" alt="">
Professor Fabrizio Carmignani, Griffith Business School
This data delivers a simple, probably not unexpected, but still concerning message: inequality in Australia is increasing.
We can see this in terms of the growing gap between the richest and the poorest suburbs, as well as an increase in dispersion across all suburbs.
For example, the data published yesterday indicates that average taxable income in the ten poorest postcodes was only 11% of the average taxable income in the ten richest postcodes. A decade ago, in 2004-05, income in the ten poorest postcodes was 21% of income in the richest postcodes.
In fact, while the average income at the top of the distribution has grown by 30% in a decade, average income at the bottom has actually declined by 33%. If we look at the overall dispersion of incomes by postcode, we can see that this has gone up by approximately 25% in ten years.
Whichever way we look at it, the conclusion is that there is more income inequality today than ten years ago.
The other interesting aspect to the data is that the richest postcodes today are more or less the same as ten years ago. Indeed, seven of the top ten postcodes in 2014-15 were already in the top ten in 2004-05. But this same trend is not observed at the bottom: none of the ten poorest postcodes today were in bottom ten in 2004-05.
And there is some bad news for Queensland in particular: the proportion of the state’s postcodes in the bottom ten has increased considerably, from three out of ten in 2004-05 to seven out of ten in the latest data. This data might be indicative of a growing poverty problem in this state.
Associate Professor Helen Hodgson, Curtin Law School
The ATO’s data clearly shows that the self-managed superannuation fund (SMSF) sector is not only continuing to grow, but is used primarily by people with the ability to make higher contributions; either high income earners or those late in their careers.
Members of self-managed superannuation funds made significantly higher contributions and have higher balances than members of Australian Prudential Regulatory Authority (APRA) regulated funds.
The data shows that on an individual basis, the median contribution to a SMSF was A$20,000. Meanwhile, members of APRA funds made median contributions of A$4,507.
Similarly, the super balances of members of SMSFs are significantly higher than APRA funds. SMSF members have median balances of A$289,483, compared to just A$32,734 for those in APRA regulated funds. The data also shows that a small proportion of people have very high balances, which is reflected in the difference between the median and mean balances in the statistics.
Two of the forthcoming changes to superannuation will limit contributions and impose a cap on balances, which should impact higher earners. Most people who made contributions in excess of A$25,000 are over 45 and earned more than A$180,000.
But the changes to the superannuation system will not take effect until July 2017, so it is too soon to know how that will impact superannuation funds. However the division between the self-managed and APRA regulated funds is clear.
This article was written by <a href="https://theconversation.com/au/team#jenni-henderson" target="_blank">Jenni Henderson</a>, The Conversation and and <a href="https://theconversation.com/au/team#josh-nicholas" target="_blank">Josh Nicholas</a>, The Conversation.
<div class="content" data-raw=""> </div>
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jchancellor-FAypfDUnLy

ATO data shows inequality is in everything from super to the property market

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A majority of voters think real estate tax concessions should be cut or left alone, while also backing the federal government's $50 billion plan to cut company taxes than oppose it, according to a recent poll. 
Amid the housing affordability debate ahead of the May budget, the poll finds there is neither a majority for or against whether investor taxes of negative gearing and the 50 percent capital gains tax concession should be curbed.
The poll by Fairfax Media/Ipsos found 35 per cent of the people surveyed indicating tax concessions for real estate investors be reduced, while 40 percent said they should remain the same. Only 19 per cent said the concessions should be increased.
Lowering tax concessions for housing was most popular with people aged over 55, and least popular (24 percent) for people aged 18 to 24, according to the survey of 1,400 respondents over the weekend.
Labor says negative gearing should be available only for new investors to new homes only and cutting the capital gains tax (CGT) concession to 25 percent for investors who hold the asset for at least a year.
The Coalition opposes touching negative gearing but has been looking at CGT options as part of its housing affordability package for the May budget, Fairfax media reported.
The Treasury has done extensive research for the government on the issue.
But on the decision by the Fair Work Commission to cut Sunday penalty rates for retail, hospitality, pharmacy, and fast food workers, the view is more emphatic, said the survey. Almost two-thirds, or 63 percent, do not buy into the argument that more businesses will choose to open on Sundays or public holidays once the pay rates are reduced. Just 29 percent believe otherwise.
The poll also finds voters evenly divided over the government's plans to cut the company tax rate to 25 percent from from 30 percent over the next 10 years.
Despite a concerted campaign by Labor against the tax cuts, 44 percent support the 10-year plan while 39 pe cent are opposed.
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Voters still to be convinced on negative gearing policies: Fairfax/Ipsos poll

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Bankwest has said it will not take into account negative gearing benefits when determining loan eligibility serviceability.
It means investors will not be able to secure as much in any loan application. It also could apply to existing loans.
It follows on from last week’s announcement when the Commonwealth Bank subsidiary said it was not accepting new applications for refinancing of investment properties.
BankWest has confirmed it will remove the tax advantages of negative gearing when determining whether or not applicants are eligible for investor loans, said a report in The Real Estate Conversation. 
The move would mean investors can borrow less from the lender. Also, as another consequence Bankwest would likely be writing fewer investment loans.
The Commonwealth Bank is expected to announce similar moves.
There was speculation in the media that both BankWest and the Commonwealth Bank were close to the 10 per cent growth cap for investor loans set by the Australian Prudential Regulation Authority. 
The report cited an Australian Financial Review article quoting Mark Chapman, a director of tax accountants H&amp;R Block, that the rule change would affect existing borrowers.
"The impact of Bankwest's decision on new borrowers is not too bad – they can just borrow through another bank," he said. “But for existing BankWest borrowers, the change is retrospective.”
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Bankwest will ignore negative gearing tax benefits when calculating investor loans

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<img src="https://counter.theconversation.edu.au/content/62630/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Negative gearing was one of the federal election campaign’s fiercest battlegrounds.
While the Labor opposition claimed that the major beneficiaries of the tax policy were almost all in the very highest earnings bracket, the Coalition attacked any proposed changes, saying they would “smash” house prices and unfairly punish “mum and dad investors”.
The fact is, negative gearing can have surprising outcomes.
Using game theory, senior lecturer in mathematics Stephen Woodcock constructed four scenarios that demonstrate exactly who benefits from negative gearing.
You can watch a video explaining it <a href="https://www.youtube.com/watch?v=x2PTCQ2j1mQ" target="_blank">here</a>.
<h2>What happened</h2>
The game maximised the desirability of occupying the best house they could afford, whether this was by buying or renting.
The ultimate outcome was that richer players used negative gearing to keep purchasing multiple houses – forcing others to buy progressively inferior houses and/or rent from others. Some missed out completely and were forced to rent.
At the end of the game, one buyer owned all the houses, with all other players forced to rent from them.
And interestingly, in this game, negative gearing increased prices.
<h2>What does the future hold?</h2>
“It is easy to see how curious (and less than ideal) ownership patterns can arise when tax policies incentivise speculation in the property market. What is less clear is what can, or should, be done now,” says Dr Woodcock.
Dr Woodcock points out that both Sydney and Melbourne rank in the world’s five least affordable cities to buy a house. Despite record low interest rates, first home buyers are at the lowest level in years. First home owner grants have done little to help this and, arguably, have only served to increase prices further.
Instantly scrapping negative gearing would almost certainly cause a huge drop in prices, which would be manifestly unfair to people who made investment choices assuming that tax advantage would be available.
Labor’s proposed restriction of the benefit to newly built properties onlywould provide some relief. It has been argued, though, that this would encourage speculation in certain areas.
“A tax policy which avoids incentivising curious outcomes for society, yet retains basic fairness for existing investors would require subtle measures and crossbench support. Albeit by the narrowest of margins, the Coalition’s retention of power might mean that any such reforms are several years away.”
Interestingly, it was noted earlier this year that federal politicians – from both major parties – averaged more than two investment properties each.
Charis Palmer is deputy business editor, The Conversation and can be contacted <a href="https://theconversation.com/au/team#charis-palmer" target="_blank">here</a>.
Georgina Hall is editor, The Conversation and can be contacted <a href="https://theconversation.com/au/team#georgina-hall" target="_blank">here</a>.
Helen Westerman is business and economy editor, The Conversation.
Jenni Henderson is assistant editor, Business and Economy, The Conversation and can be contacted <a href="https://theconversation.com/au/team#jenni-henderson" target="_blank">here</a>.
Wes Mountain is deputy multimedia editor, The Conversation and can be contacted <a href="https://theconversation.com/au/team#wes-mountain" target="_blank">here</a>.
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Property 101: The curious incentives and consequences of negative gearing

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GUEST OBSERVER
While the weekend’s election was tight, if nothing else, it’s clear that Labor needs to rethink some of their policies if they’re to win a majority government in the future. 
After a bruising loss in the 2013 federal election, when Kevin Rudd fell to Tony Abbott in a landslide defeat, the Labor party has made up significant ground on the Liberals – the weekend’s election is clear proof of this.
However, it would seem that Labor’s ability to regain support isn’t necessarily because the Australian voter base is highly attracted to its policies, but rather has come from the party’s so called “mediscare” campaign. 
This was evident in the final weeks of the election campaign, when Labor strategically switched its focus from promoting its own policies to a sustained attack on the Liberal party over claims that it wanted to privatise Medicare – a claim that the Liberal’s unequivocally denied. 
The tactic clearly worked, though, and as soon as the polls closed, Labor was immediately espousing that it had won the campaign, if not the election.
Nevertheless, if Labor wants to form a majority government in future elections it will have to seriously rethink some of their policies, because they’ve failed to convince many middle-class voters of their plan for Australia’s future. Even though they’ve already won more seats than the 2013 election, Labor’s primary vote is currently the second lowest on record.
Labor’s approach to negative gearing is a prime example of a policy they need to rethink.
Being one of the party’s key policies, and one that is distinctly at odds with the Liberal party, it’s clear Labor’s stance on the matter hasn’t been accepted by ordinary Australians.
If Labor hasn’t already got the message, then maybe the results from a recent survey will show exactly how out of touch their negative gearing policy is with the Australian public.                 
The Real Estate Institute of WA conducted a survey in the weeks leading up to the election.
Asked if negative gearing should be restricted to only newly-built properties, just 3 percent of respondents answered, yes.
That is a resounding rejection of Labor’s negative gearing policy, which if implemented will cause major disruption to Australia’s housing markets.
With more than 9 million houses in Australia owned by owner-occupiers and investors, this is a significant portion of the voter base that will be effected.
These voters would be very hesitant to back a Labor party with their current negative gearing policy for fear they’d see the value of their properties decline.
That’s not even taking into account the huge number of renters that would be negatively affected as well.
Given this, Labor will have to seriously rethink their stance on negative gearing, and other policies, if they’re to have any chance of forming a majority government in future elections.
Damian Collins is the founder and managing director of Momentum Wealth and can be contacted <a href="https://www.momentumwealth.com.au/damian-collins/" target="_blank">here</a>.
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Labor policy rethink needed to win majority government: Damian Collins

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Abolishing the current negative gearing and capital gains rules could have a drastic impact on the property market, possibly flooding the market with property as investors transition to different financing models according to Sam Comer, senior manager of Tax Advisory for Crowe Horwath, part of Findex.
She said for property investors their election decision could largely be steered by the impact any new policy will have on their investments and retirement planning. 
"With property usually being purchased with much higher leverage than shares, a change in the ruling would have the most drastic impact on the property market, which has always been a strong backbone of the Australian economy and investment main stake for mums and dads investors.," she said.
 ‘If we are seeing the negative gearing ruling changed, I anticipate a strong shift toward SMSF [self managed super fund] investing, taking the already strong trend to a massive migration. I don’t thing the full flow-on effect a new ruling would have has even been contemplated.
 For those voters out there unsure of the potential impact their vote would have on their investment strategy, <a href="https://www.ratecity.com.au/" target="_blank">RateCity.com.au</a> has released an Election Calculator.
 According to statistics from <a href="https://www.ratecity.com.au/election-2016" target="_blank">RateCity’s Election Calculator</a>, in NSW  5 percent of people under 80k, 12.3 percent(of total) plan to neg gear,  34.6 percent between 80-180k, 20.4 percent plan to neg gear, and 10.3 percent over 180k, 6.6 plan to neg gear.   While in Victoria, 62.2 percent under 80k, 11.2 percent neg gear, 35.2 percent between 80 and 180, 18.8 percent to neg gear, 7.6 percent over 180k, 5.1 percent to neg gear, and in Queensland, 56.1 percent under 80k, 7.2 to neg gear, 35.3 percent between 80-180, 16.7 percent to neg gear, and 8.6 percent over 180, 5 percent to neg gear.   
According to the data, RateCity claim Labor should be further ahead than it currently is depicted at in news polls.
Business owner and interest home buyer Michael said he was very surprised by the result – he has always been an avid Liberal voter, but discovered that Labor might be more beneficial for him from a financial perspective. 
"I have voted Liberal all my life and hadn't thought much about how the way I voted impacted me financially. This is certainly something worth taking into consideration."
<a href="/images/2016/07/01/newspollcompare%201.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/01/newspollcompare%201.jpg" alt="">
 
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Negative gearing battleground underpins election decision for voters

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
In the current housing tax debate a number of studies have come out arguing that while prices will fall (by varying amounts) rents will not be affected. That rents will be unaffected is surprising and (in my view) wrong.
Outside of the heat of an election, the Henry Tax Review’s comprehensive review of the tax system argued for lower taxes on savings, a proposition that most economists would regard as unexceptional. (There is now a (small) school of thought arguing for higher taxes on savings but this author for one does not subscribe to that.)
Specifically, the Henry Review recommended the marginal tax rates on interest and rental income should be 40 percent lower; for example, the 35 percent and 45 percent income tax rates on labour income would be lowered to 21 percent and 27 percent. For property investors these rates would also apply to capital gains and net losses, thereby reducing the value of negative gearing.
For ‘ungeared’ investors (those who do not take on debt), the effective tax rate would be lower while for highly geared investors the effective tax rate would be higher, leading to less incentive to leverage (making the Reserve Bank of Australia happy). Overall, the effective tax rate for the “average” investor would be higher.
Now the Henry Review acknowledged that its proposed changes would, by lifting the user cost of capital of investors, lift rents. It therefore explicitly said that its proposed changes would need to be accompanied by measures to both lower the cost of housing by removing supply constraints, and to lift levels of rental assistance for households in the private rental market. In short, it did not see the increases in rents as immaterial.
If the increase in user cost of capital (on investors who are ‘geared’ by borrowing money to invest) with the Labor proposal is higher (roughly double), on what basis could rents not rise? It is not evident to me.
The key component of the user cost of capital, and the one which varies the most over time, is interest rates. When interest rates rise or fall, we expect prices to fall, or rise. But interest rates also change rents, since rent = user cost × value of house.
And what we also see is that a rise in interest rates causes the rent-price ratio (that is, the ratio of home prices to annual rent, also referred to as the rental yield) to rise, while a drop in interest rates will see it fall.
To illustrate, consider Melbourne for the period 1991-2014 when interest rates have fallen significantly and the rent-price ratio has followed suit. This has seen prices increase significantly (4.9 percent pa in real terms), and faster than the rise in costs (3.2 percent). In inner areas where there is a significant location premium (over living at the urban fringe), the rise in prices has been fastest (5.8 percent) as the value of that location premium has been bid up.
That is, most of the change in the rent-price ratio has come from rising prices. On the other hand, in the outer areas, where there is no location premium and the value of a house is the structure plus the cost of land, prices (3.4 percent pa) have moved in line with costs (3.2 percent pa) but rents have risen much more slowly (1.4 percent). That is, rents explain the decline in rent-price ratios.
So, while the assumption of most commentators is that price movements do the work in changing rent-price ratios, and that is so over the short term, over a longer time span, rents do some of the adjustment.
Changes in interest rates are uncontroversial. But the same principles apply to changes in tax if they change the cost of capital, which is why the Henry Review expected rents to rise.
In the case of the Labor’s negative gearing changes, the waters are muddied for some by its proposed exemption on new housing. A couple of points here. Firstly, ABS figures are quoted to suggest that investors’ purchases are 93% established housing, and only 7% new housing. This significantly understates the role of investors.
The NAB residential property survey has domestic investor purchases of new housing at about 20-30% - that is, domestic investors are already a significant component of the new market (adding to supply!).
Secondly, Henry also expected a change in the mix of landlords to consolidate from one with a large number of small landlords, to one with a smaller number of large landlords. More marginal investors – middle income/low wealth investors – will be the first to vacate the field as their entry point is typically cheaper, old stock not premium new stock.
High income/low wealth investors will have the option of new dwellings. High income/high wealth individuals will benefit from the higher rents and lower prices on established dwellings.
That is, the ownership of the dwelling stock (and tax benefit!) will shift to the top end of income earners. But it is not clear that the special treatment of new housing will add materially, if at all, to supply of new dwellings.
In short, the law of unintended consequences will apply. Logic says that rents will rise, and with the 30 percent renting in the private market skewed to low income earners, that means housing affordability will have declined for these people.
Nigel Stapledon is Andrew Roberts fellow and director Real Estate Research and Teaching Centre for Applied Economic Research, UNSW Australia and an author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/nigel-stapledon-269708" target="_blank">here</a>.
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Why rents will rise under Labor’s negative gearing proposal

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The Australian Financial Review says Labor's budget forecasts have been undermined by revelations that the Parliamentary Budget Office believes the impact of negative gearing and capital gains tax changes are uncertain enough to make revenue forecasts of low reliability.
Its correspondent Laura Tingle writes Labor is heavily relying on its negative gearing/capital gains tax package to shore up its medium term budget position by raising over $37 billion over the next decade.
The Parliamentary Budget Office was actually asked by the Coalition to model a negative gearing and capital gains policy similar to Labor's policy.
The PBO estimated the policy submitted by the Coalition would raise around $6 billion a year by 2026-27, about $800 million less than Labor's published figures, but with a similar trajectory of increasing revenue from 2019-20 onwards.
Around $2.5 billion of this annual revenue would come from capital gains tax and around $3.5 billion from the negative gearing measures.
Tingle writes it was the first time there has been a reliable breakdown of the split in anticipated revenue collections between the two tax measures, albeit with PBO reflection on the uncertainty over the likely revenues.
"The costing is considered to be of low reliability due to uncertainty surrounding behavioural responses, broader economic impacts and assumptions surrounding the growth in the components of net investment income and capital gains", the costings document says.
"This response does not account for the potential broader macroeconomic implications of this proposal. In addition, the reliability of the costing decreases the further into the future the estimates are projected", PBO says.
An internal briefing for the government noted capital gains tax is seven times more volatile than total tax revenue and 2.5 times more volatile than company tax revenue.
This year's budget papers noted that "forecasting CGT is very difficult".
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Doubts on revenues from Labor's negative gearing and capital gains policy: AFR report

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A survey by the Urban Development Institute of Australia has found that the Federal Opposition's proposed changes to the negative gearing would prompt many residential property developers to shed staff and then build fewer homes.
The UDIA Property Industry Forecast Survey of 200 property industry business leaders found more than 50% of respondents said it was likely they would reduce their number of employees as well as the production of new dwellings.
“We are seven weeks into the election campaign and are yet to see any substantive evidence on the impacts of changes to negative gearing,” the UDIA national president, Michael Corcoran said.
“The people that know the impacts are the industry and they have said definitively that there is too much at risk to change.”
The UDIA had previously welcomed the Turnbull Government's announcement that there will be no changes to negative gearing and capital gains tax.
UDIA modelling, validated independently by MacroPlan Dimasi, suggested that a median investment house under current NG &amp; CGT arrangements still delivers between $43,897 to $71,699 net revenue to the Federal Budget bottom line.
"Changes to the status of Negative Gearing and CGT will hurt middle and low income Australian renters enormously.
"Changes to the status will spike rental prices, cause falls in the value of the family home and reduce supply of needed rental housing which is derived from both established and new housing stocks. Additionally, many first home buyers, who see building a new home as their path to home ownership, will be outbid for their new home by investors who have been forced in to this one segment " said UDIA President Michael Corcoran.
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