<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

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;

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

Policy

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GUEST OBSERVATION
Northern Australia has vast potential for development. Just one proposed agriculture project of the many that I’m currently aware of would cover an area as big as metropolitan Brisbane, Australia’s third largest city.
Other single farms could be as large or larger than the entire <a href="https://en.wikipedia.org/wiki/Ord_River" target="_blank">Ord River scheme</a> in Western Australia, home to mainland Australia’s biggest freshwater dam at Lake Argyle, which can store roughly <a href="https://media.bom.gov.au/social/blog/39/when-dam-size-matters/" target="_blank">20 times the water in Sydney Harbour</a>.
Those are just some of the major projects on the drawing board for northern Australia, which have attracted the interest not only of Australian investors, but also investors from the US and China. Such foreign investment will be crucial to what happens over the next few decades in places such as the <a href="https://www.daff.qld.gov.au/business-trade/development/industry-development/flinders-gilbert-agricultural-zone" target="_blank">Flinders and Gilbert river catchments</a> in north Queensland.
But with vast potential also comes vast, and as yet not entirely well-understood, challenges. For instance, how do we fund the infrastructure to capture, store and distribute the water from the wet season to support agriculture all year round? And where are the most appropriate places to <a href="https://www.theaustralian.com.au/national-affairs/csiros-dam-hunt-helps-plan-for-north/story-fn59niix-1226948824851" target="_blank">build proposed new water storages</a>?
Those are some of the questions being asked again, with the federal government this week asking for public comment on its new <a href="https://northernaustralia.dpmc.gov.au/sites/default/files/papers/green_paper.pdf" target="_blank">Green Paper on Developing Northern Australia</a>. The paper is a precursor to a new national policy for our north.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/50889/area14mp/9gvrmhs8-1402536073.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/50889/width668/9gvrmhs8-1402536073.jpg" alt=""></a>
Northern Australia — particularly the Ord, Flinders and Gilbert river regions — have long been talked up as having potential for greatly increased agriculture, close to Asia. However, as the 2012 Feeding the Future paper noted, there are sensitive issues including indigenous land-use rights and environmental management. Source: <a class="source" href="https://www.dfat.gov.au/publications/feeding-the-future/feeding-the-future" target="_blank" rel="nofollow">Feeding the Future, Department of Foreign Affairs and Trade, 2012</a>, <a class="license" href="https://creativecommons.org/licenses/by/4.0/" target="_blank" rel="nofollow">CC BY</a>
Released this week by Deputy Prime Minister Warren Truss, the green paper is a good start in the process of developing a plan for the north.
The risk to successful development in the north is in underestimating both the scale of the opportunity and the scale and complexity of the challenges. Many past attempts at development have failed on both these counts.
So there is much work still to be done before being able to predict if this new push to develop northern Australia will succeed where past plans have failed.
Economies of scale
If Australia’s new national policy for developing northern Australia is to get anywhere, one of the most important issues for it to address is the huge scale of investment required to get major new projects off the ground.
We also need to define the paths to winning a significant share of high-value Asian markets.
The green paper suggests the northern economy should be diversified into areas other than mining and energy. Tourism and agriculture — and I’ll largely focus on agriculture, as it’s my area of expertise — are the two main options identified.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/50876/area14mp/cz3mkfgr-1402534545.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/50876/width237/cz3mkfgr-1402534545.jpg" alt=""></a>
The six possible policy directions to develop northern Australia covered in the new Green Paper. <a class="source" href="https://northernaustralia.dpmc.gov.au/sites/default/files/papers/green_paper.pdf" target="_blank" rel="nofollow">Green Paper on Developing Northern Australia</a>, <a class="license" href="https://creativecommons.org/licenses/by/4.0/" target="_blank" rel="nofollow">CC BY</a>
Some past failures in agriculture in the north can be attributed in transplanting agricultural technology from the south, rather than re-inventing it for the new northern environment.
Globally we have had much more research and development delivering technology into temperate agriculture rather than tropical agriculture, where we now have the greatest need in Australia and globally.
Australian research and development capability in this area is strong, and should provide a competitive advantage in developing our north, one of the few remaining areas in the world with potential for agricultural expansion.
Article continues on next page. Please click below.
<hr class="system-pagebreak">
Working with local conditions
The green paper cautiously does not attempt to pick winners in backing specific industries.
Agriculture in the north may continue to depend upon the established industries <a href="https://www.qaafi.uq.edu.au/nbra" target="_blank">such as beef</a> for some time, but new agricultural ventures will have a wide range of options, requiring careful evaluation. Agricultural and food products that can thrive in northern Australian conditions need to be identified.
The scale of investment is a big challenge. For example, establishing new farms in remote northern locations could require new roads and rail to get the products to a port or market.
As the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-06-10/coalition-launches-green-paper-nothern-australia/5512456" target="_blank">Deputy Prime Minister noted this week, water storage and distribution systems</a> may need to be constructed. But new dams aren’t cheap, meaning large-scale investments would be needed.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/50870/area14mp/jn726d7k-1402529974.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/50870/width237/jn726d7k-1402529974.jpg" alt=""></a>
Despite covering almost half of Australia’s mainland, northern Australia has a relatively small population of just over one million people, or 5% of all Australians. <a class="source" href="https://northernaustralia.dpmc.gov.au/sites/default/files/papers/green_paper.pdf" target="_blank" rel="nofollow">Green Paper on Developing Northern Australia p.3 (a higher resolution image was not available)</a>, <a class="license" href="https://creativecommons.org/licenses/by/4.0/" target="_blank" rel="nofollow">CC BY</a>
Single farms as big as the entire Ord River scheme or possibly even larger are now being considered. That has major implications for the policies that need to be developed by government to attract large-scale investment.
Businesses of this type might resort to a fly-in, fly-out workforce, following the mining industry’s example. But the social implications of fly-in, fly out farming need to be better understood.
Investing in success
Development of the north will require that governments at all levels create an investment environment that will attract the significant capital essential for new ventures in the north. That means getting the balance right between removing red tape and ensuring investment in sustainable industries.
A key to success for Australian agriculture will be in successfully targeting high-value niche markets for food products in Asia.
These Asian markets are large and — despite the niche label — are able to take all that Australia can produce of most foods, as I’ve written about <a href="https://theconversation.com/australian-trade-beats-aid-in-boosting-global-food-security-22546" target="_blank">for The Conversation before</a>. Niche markets tend to pay higher prices, but they may also be highly competitive and require sophisticated marketing and quality control.
But rather than just producing food and then exporting it for others to process further, on-farm processing in northern Australia is likely to be essential to many businesses.
We’re not talking about small, family-run farms, but big businesses, covering bigger areas and able to capture greater economies of scale.
Alongside business, Australian scientists will have a key role in delivering the appropriate new crops, new animals and new farming systems that will be necessary for agriculture to succeed in the north.
Developing more remote areas of northern Australia comes with bigger challenges than setting up new ventures in established areas like the Murray-Darling region.
But the opportunities are there. Now we need to ensure that government policy settings and business plans are well-targeted, so that developing northern Australia finally moves on from being a long-held dream to becoming a reality.
Robert Henry is director, Queensland Alliance for Agriculture and Food Innovation at University of Queensland.
Robert Henry receives funding from University of Queensland, Queensland Government, Australian Research Council and Rural Industries Research and Development Corporation.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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po-LsXgBTHBmX

Giant steps needed to build up northern Australia’s potential

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We all love a hilarious headline and this week we were served up a cracker - “Australian house prices fall 1.9% in May”.
What part of this embarrassing statistic is relevant to real estate? For such data to be extrapolated thousands and thousands of suburbs’ data would need to be fed in, all of which means next to nothing given it significantly fails the relevance test. Households are simply concerned with just the one thing, namely the data pertaining to the suburb in which they own property. For those slightly interested, Sydney posted a 1.1% decline which based on approximately 670 suburbs which would then average out at a 0.00164% decline per suburb.
When it comes to house prices what consistently fails to be mentioned is that the suburbs within that crucial 15 kilometre radius of the CBD continue to outperform simply because they are not cursed by diabolical infrastructure inadequacies. With Australia moving closer and closer to a population of 24 million and a resources industry in significant decline, there will be more pressures placed on the major cities as families relocate to gain employment.
It is anyone’s guess how Sydney (which is facing an 8 million population) and Melbourne (9 million) are simply going to cope given Australia’s current population growth rate is 1.8% and growing. The reality of the argument is that there is simply not enough housing to meet the projected demand nor for that matter even a plan projecting how these major cities will cope. Given it is quite obvious now that the residents of Sydney and Melbourne prefer to live as close to their respective cities, than the onus falls majorly on the governments to develop infrastructure that can meet with this demand which just so happens to be growing at the fastest rate ever recorded before.
To get a better perspective one only has to look at this week’s gross domestic product (GDP) which for the March quarter of 2014 grew 1.1% seasonally adjusted, although it would be fair to say that the June GDP figures won’t be anything to write home about. What the GDP figures did reveal is that it does not look good for Western Australia and Queensland given both are fast-tracked into spiral declines with reduced construction and commodity price declines. Historically, what usually happen next are major unemployment headlines as businesses start scaling down operations.
It should be noted that NSW posted a 9.3% increase in private investment for the quarter together with the best home approval figures in over ten years.
<a href="https://www.rwm.com.au/files/2014/06/2-06-2014-9-56-48-AM.jpg"><img class="aligncenter size-full wp-image-11333" src="https://www.rwm.com.au/files/2014/06/2-06-2014-9-56-48-AM.jpg" alt="2-06-2014 9-56-48 AM" width="429" height="420"></a>
The onus is now definitely on the states and territories to start getting their respective infrastructure spends into overdrive, hence the massive asset sales. The only foreseeable problem with these asset sales is what they do when there is nothing left to sell? It’s no secret that no Australian state or territory is basking in a budget surplus, rather all are in significant deficit or on the borderline.
It should not have come as any great surprise that when the Australian Bureau of Statistics (ABS) released data this week it revealed that 46.4% of state and local government taxation revenue from the 2012/13 financial year came from property related taxes. The total amount collected, a record, came in at $35.931 billion leaving consumers rightly furious that infrastructure and transport have never been worse.
<a href="https://www.rwm.com.au/files/2014/06/2-06-2014-9-59-05-AM.jpg"><img class="aligncenter size-full wp-image-11335" src="https://www.rwm.com.au/files/2014/06/2-06-2014-9-59-05-AM.jpg" alt="2-06-2014 9-59-05 AM" width="633" height="286"></a>
With strong public debate about the GST being raised it should be noted that when the GST was introduced by the Howard government back in July 2000 – this was done so on the basis that the states and territories would reduce/remove these taxes. It should be noted that council rates did not come under the GST removal mandate.
So the question that keeps popping up is once the assets have been sold (and this is fast approaching) then how are the state and territory governments going to survive given all they can tax is properties and businesses (remember pay roll tax was supposed to go also)? You can’t increase the GST only to see these respective governments run amok again as they can no longer balance the books.
Therefore there is a very sound argument to look at a model in Australia where state and territory governments cease to exist and local councils are merged into super councils. It would certainly be good for employment. Work, maintenance and construction would be consistently rolled out across the nation.
Quite simply, it may never come to fruition even though the USA does not have middle-tier government and it works fine there. It would be fascinating to see what this model would look like and how it could possibly work – which should not be that hard. It would certainly remove the politician pension gravy train which is a total waste of tax payer monies. Many would argue successfully that in itself is enough reason to remove this tier of government once and for all.
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robertsimeon-hRNTwJyXkQ

Onus on governments to build infrastructure for major cities' projected population explosion

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A few days ago, I was asked to comment on <a href="https://www.heraldsun.com.au/business/big-buyers-put-melbourne-on-global-wanted-list-of-prime-cities/story-fni0dcne-1226937873180" target="_blank">The Candy GPS Report</a> which identifies 12 future cities for real estate investment – one of which is Melbourne.
The 12 cities are as follows (from most expensive to the least):
 <img src="/images/2014/06/02/cashmore-june-2-one.jpg" alt="">
Just in case anyone is still deluded that we build the accommodation for people to live in. It correctly outlines how real estate is progressively becoming a mainstream asset class for investors.
Ultra high net worth individuals from Germany, the United States, Japan and other parts of Asia are now looking at secondary markets and second tier cities as an alternative to the somewhat bubbly established safe havens of London and New York.
It comes on the back of what is already a fraught subject in Australia; the impression that “foreigners” are purchasing our residential real estate – bidding up prices and forcing out first home buyers who simply can’t compete.
The parliamentary inquiry last week was devised to put this matter to rest, to prove it isn’t so. Although, for those in the industry who work directly with buyers and sellers, it merely confirmed what we already know.
Australia has a largely unaudited system of ‘non-resident’ investment in its real estate market.
Whilst the official figures seem to demonstrate the larger proportion of demand is increasing supply rather than inflating values.  With only eight staff to audit the thousands of applications the FIRB receives, it admits it relies on "honesty and stern speech", whilst those who work on the ground within the industry, rightly attest that there are <a href="https://www.macrobusiness.com.au/2014/05/firb-says-youre-not-racist-about-property-but/" target="_blank">loopholes</a> in the rules.
For example, corporations, friends, family members, relatives,  and solicitors are all able to purchase for those who do not quality - and from <a href="https://www.afr.com/p/business/property/the_year_of_the_chinese_developer_KtqoIDtcggT8KGAMXv8OgKhttp:/www.afr.com/p/business/property/the_year_of_the_chinese_developer_KtqoIDtcggT8KGAMXv8OgK" target="_blank">anecdotal evidence</a> alone, they seemingly do.
Importantly, it is not up to real estate agents to report their suspicions and inflame a debate which has bordered on racist against our Asian migrants.
The process must be correctly audited, and until it is, argument will continue. However, we should not let this mask the real issue surrounding our residential real estate market – that of government policy. 
As the RBA recently noted in their <a href="https://www.rba.gov.au/speeches/2014/sp-so-150514" target="_blank">“wouldn’t it be nice to have houses at affordable prices”</a> speech a few weeks ago, conditions are not only hard for first time buyers, with wages tracking below the rate of inflation whilst prices trend higher, many others are falling through the cracks altogether.
Previous reports have shown fewer younger and middle-aged people own their own home and across all age groups, fewer own outright. There has been an <a href="https://www.iut.nu/Literature/Australia/housing_supply_affordability_report_2012-13.pdf" target="_blank">increase</a> in both the number of people recorded as homeless as well as the number living in other marginal housing.
If Australians in 2011 had the housing consumption patterns they had in 2001, they would occupy an additional 284,000 dwellings. Instead, despite families having fewer children and an aging population, we’ve seen a reversal of the decade-long decline in household size, which outside of any cultural shift, clearly points towards pressures of affordability.
Now new buyers risk not only being locked out altogether, but also (as the RBA’s Lucy Ellis puts it) “where the jobs are and where the employed people live” – which remains around the central areas of our largest capital cities. As the speech demonstrates, we have not decentralised – in fact quite the reverse. 
 <img src="/images/2014/06/02/cashmore-june-2-two.jpg" alt="">
It comes down to the same old issue – housing policy.
This article continues on the next page. Please click below.
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We build for an investor market in a lopsided economy that has pinned itself to rising land values to support every other area of investment.
This is great for those who were lucky enough get in at the beginning of the lending boom, many of which now have an ample welfare pot for retirement.
Not so great for first home buyers today who are struggling to afford, well… anything at all.
The many vested interests from politicians to industrial lobbyists, to keep land prices inflated, can be evidenced in every area of real estate policy. 
From our failure to correctly audit the investment market (foreign or otherwise), to other matters such as first home buyer grants, tax breaks for investors, turning a blind eye to spruiking, a failure to enforce strong lending rules, and a continual inability to supply affordable housing in the fringe localities on what should be dirt cheap land (close to its agricultural value), enabling new buyers to purchase at no more than three times annual income.
Instead we unduly inflate prices in the outer suburbs through a process of ‘false scarcity’ produced by urban boundaries, zoning regulations, onerous development taxes and infrastructure overlays, all of which encourage speculation in vacant land, which is becoming a far more lucrative venture than building for current low yields.
This further inflates land values in the inner and middle ring localities because, as anyone familiar with classical economics knows, it’s the fringe cost of land that sets the base price for the suburbs closer in.
The report by The Candy GPS mentioned above, which promotes the potential for Australian real estate investment, mirrors other assessments with similar conclusions. 
For example, in a study by investment bank <a href="https://www.credit-suisse.com/au/" target="_blank">Credit Suisse</a> earlier this year, it correctly asserted:
“The marginal buyer of Sydney and Melbourne real estate has changed, as have the drivers of property prices.”
It points out a potential $44 billion investment into Australian residential real estate over the next seven years, mainly due to our geographical advantage in the wider Asia-Pacific region.
To put this into context, by 2025 the Asian region will account for almost half of the world’s output and also be the world’s largest consumer.
In Julia Gillard's ‘Asian Century’ speech, she asserted:
“We are now seeing the most profound rebalancing of global wealth and power in the period since the United States emerged as a major power in the world.”  
The number of Asian students studying here is at record highs.Trade flows, research and business development, education, tourism, and increased levels of migration have given us the potential to capitalise on the inflow. And as the capitals of the two states with largest recorded arrivals of Indian and Chinese migrants, Melbourne and Sydney are set to advantage.
The trouble of course, comes down to management.  The influx will push prices higher and not benefit us over the long-term (especially the next generation of priced out buyers) unless we change policy.  
If we were really smart, we would look at our system of taxation to ensure this investment in land is not only sustainable – but also advantageous to the broader economy.
To do this, we should work on a long-term sustainable plan to remove an array of bad taxes, including stamp duty which impedes housing turnover and labour mobility for owners seeking alternative employment opportunities, trapping residents in housing. As well as phasing out other policies, which focus investor demand on established real estate rather than the construction of new supply – such as negative gearing for example.  Instead we should replace them all with a broad based tax on the unimproved revenue from the locational value of land alone – not the buildings on top. 
Currently, we assess rates on the combined value of both – which means for every improvement to the capital (the man made asset on top) we place a penalty on building activities which impedes the productive capacity locked in our land market.
An effective land value charge, as well as shifting ‘bad’ taxes from productivity, would result in a number of changes.
It would encourage effective utilisation of land in both inner and outer suburban districts, stimulate construction, take some of the speculative element out of the land market, reduce prices and thereby assisting with decentralisation. And with less with ‘economic rent’ locked in the soil, over the longer term would act to increase – not decrease wages.
Combine this with an overhaul of supply policy and the accumulated wealth being brought into the country could be channelled into productive activities, rather than rampant real estate speculation.
It's unlikely that this will occur however. History attests that governments have a habit of allowing wealth to trickle up, not down – usually due to a combination of ignorance, lobbying and vested interests. Albeit, if policy fails to change through both taxation and supply, at some point prices will get too high for productivity to sustain and as recent international examples attest, the future consequences of this will be significant. 
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catherinecashmore-6LXia3pPQj

Australian real estate: Once again ticking boxes for foreign investors

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GUEST OBSERVATION
Until now, student debt in Australia has been relatively modest, with low repayment rates, low indexation and high repayment thresholds. This won’t be the case if the government proceeds with changes mooted in the recent budget, including higher fees and higher interest on debts. Australia will move to a student debt model similar to the US, so this is a good place to look at the effects that large levels of debt have on young graduates.
<a href="https://www.demos.org/what-cost-how-student-debt-reduces-lifetime-wealth" target="_blank">Much recent research</a> from the United States shows that student debt is having profound and negative effects, both at the individual and at the national level.
Graduates living with debt
Purdue University is a public university in South Bend, Indiana. President Mitch Daniels commissioned a large, evidence-based study of the impact of student debt on university graduates. <a href="https://www.gallup.com/strategicconsulting/168791/gallup-purdue-index-inaugural-national-report.aspx">The results</a>, based on a survey of 30,000 graduates, were recently released.
The <a href="https://www.nuvo.net/indianapolis/purdues-mitch-daniels-talks-college-costs/Content?oid=2837651#.U4KfSPmSyPY" target="_blank">findings of the study</a> are sobering, on two fronts.
First, student debts weigh heavily on students’ later wellbeing. Wellbeing was measured along five dimensions: life purpose, social engagement, community engagement, financial satisfaction and physical health. Graduates without student debt were seven times more likely to report themselves to be “thriving” along all of these dimensions than graduates (or indeed dropouts) with more than $40,000 in debt.
This finding tends to confirm the results of a <a href="https://www.sciencedirect.com/science/article/pii/S0272735813001256">major meta-analysis</a> of evidence from the United States, the United Kingdom and New Zealand. The findings suggest that higher levels of debt while a student are significant predictors of stress and secondary negative health consequences. This study also points to other evidence of serious consequences more generally. Higher levels of debt have serious long-term consequences, including mental, neurotic or psychotic disorders, depression, suicide attempts (or suicide completion), problem drinking and drug dependence.
Secondly, large debt burdens influence choices related to work, careers and lives. Graduates with higher debts are less likely to be entrepreneurial and start new businesses. This is to be expected, as student debt repayments tend to constrain the capacity to borrow for other productive purposes.
In the robust free-market economy of the US, such entrepreneurial timidity among the best and brightest is a source of real and valid concern for policy makers.
Other <a href="https://www.sciencedirect.com/science/article/pii/S0047272710001337" target="_blank">recent research</a> has shown that students with higher debts tend to pursue higher-paying careers, not pursuing “public interest” jobs in areas like teaching and community services. Over time, this means that public institutions like schools will have to pay higher wages to attract the best and brightest, indirectly shifting some of the cost of student debt back to the taxpayer in the form of higher public sector salaries.
Large student debts <a href="https://www.learnvest.com/2012/10/real-women-speak-out-how-student-loans-have-affected-me/" target="_blank">have also been shown</a> to lead to delays in home purchases and having children.
Debt ain’t free
Shifting more of the burden for higher education back on to students, and saddling them with huge debts, may seem like a good idea for policy makers, but it will have serious long-term consequences for those students and thus the wider Australian community.
In the United States, the average student graduated with around $30,000 of student debt in 2013. Currently, Australian graduates of three-year business degrees have debt of a similar level.
If the proposed changes lead to higher fees, <a href="https://theconversation.com/how-much-student-debt-will-you-be-facing-post-budget-26712" target="_blank">as most analysts expect</a>, it would be reasonable to anticipate the graduates of 2018 completing their three-year degrees with debt of around $50,000.
It would be naïve to think debts of this level won’t have far-reaching consequences for graduates’ well-being and the work and economic choices they make in their lives. These choices will have serious consequences for our economy and society.
John Rice is associate professor in strategic management at Griffith University.
John Rice works for Griffith University, a public university. His most recent previous role was Chief Researcher at the National Centre for Vocational Education Research, a ministerial company owned by the Commonwealth and State education ministers. He has received grant funding from the Australian Research Council. He is a current member of the Australian Labor Party and the National Tertiary Education Union.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
Photo courtesy of <a href="https://taxrebate.org.uk/" target="_blank" rel="nofollow" data-rapid_p="22">TaxRebate.org.uk</a> / <a href="https://creativecommons.org/licenses/by-sa/2.0/" target="_blank">Creative Commons</a>.
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jake-cSmGT7VXVf

How will rising student debt affect first home buyers?

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Over the past week or so there’s been no shortage of comment on the federal budget. It’s sure to be an ongoing discussion and I would like to look at a few less publicised topics that went under the radar.
The first concerns the search for a new Secretary for the NSW Department of Planning and Environment and whoever this person might end up being, it’s a position we should all be interested in.
Currently the state government’s planning reforms are treading water, and progress which is vital to the development industry is in the hands of the new look cabinet and in particular with the new Planning Minister Pru Goward. Labelled as the biggest shake-up of planning in more than 30 years, the planning overhaul has been in limbo since November 2013.
Under the previous Planning Minister Brad Hazzard, plans remained deadlocked including the key aim of a new fast-tracked development pathway. However there are community and industry concerns about the planning reforms and so the new Secretary and Ms Goward will face a few hurdles.
This newly created position was one of the first steps taken by the Minister and brings together the functions of planning, environment, heritage and local government and as noted in the recruitment advertising calls for candidates able to shape the future of planning and the environment in the state. For many years planning delays and red tape have been seen as holding back the development industry. While according to Meriton’s boss Harry Triguboff, affordability has also been impacted making it harder for first time buyers and inflating prices.
There are many reasons why this role will be keenly watched after applications close on 8 June.
Building Products On The Up
On a related but somewhat different path, only one day after the federal budget was announced a statement from CSR announced a full year net profit of $72.0 million, up a very impressive 143% with a statutory net profit of $88.1 million.
CSR noted that building products earnings increased by 20% with growth across most businesses, and that building approvals for both detached and multi-residential housing continue to grow strongly.  According to CSR this trend is expected to lead to increased demand over the next few years as multi-residential projects near completion and in another positive sign for the industry CSR also notes a solid pipeline of transactions currently under negotiation.
In February, Boral Limited also announced another healthy result with a 73% increase in net profit for the six months ended 31 December 2013. The Building Products division’s significant turnaround was in part due to the tailwind of improving housing construction demand in New South Wales and Western Australia.
The results from CSR and Boral do indicate that a move to see stronger development activity is now starting to take hold. The trend is further underlined by the ASX Materials Index which has increased by 8.34% in the last 12 months, while the related Industries Index has also increased by 9.45% over 12 months.
These figures are important as they point to how successfully we are moving from the resources construction boom. While the Resources Index rose 8.16% over the last 12 months the three-year trend is down 9.11%.
Planning Needs to Get in to Step
The pending appointment of a new planning and environment supremo for NSW and the need for new planning laws to be sorted out, may appear to be some distance from either of the boardrooms of CSR or Boral. However these two news items are linked because they point to the continued transformation of the national economy.
And while I have avoided direct comment on the federal budget, its strong infrastructure focus will no doubt impact CSR, Boral and similar companies and our future new department secretary as well. In a wider context new residential developments will soon come into the picture as planning rules for NSW are re-visited and as the construction sector benefits from strong infrastructure spending.
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pchittenden-eLqUUC8TWW

The property topics that have flown under the radar

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I was asked this week if I could remember the last time we saw such a hostile response to a federal budget. I responded ‘no’ – as it would have been well before we had access to the internet.
When the world moved into the online space, the internet always appeared with a capital I, which has been replaced with a lower case 'i'. So what happened to the capital “I” one might ask? Well the “I” became you – the consumer, where through this very process (for better or worse) this online revolution has changed how we do business in the modern age.
When one looks at the problems facing the budget, it’s quite clear that Australia has a massive productivity problem. Wages have flat lined which has seen living standards rise just 2.6% over the last five years. The modern day terminology is “on hold”, which is exactly what the Reserve Bank of Australia is doing with the cash rate given our labour market is, best case scenario, neutral and employment growth won’t exceed population growth.
When you’re paying (an estimated) $1 billion just in interest each month, it’s time for any responsible government to say ‘enough is enough’. Just like our neighbours across the ditch did in recent years when they too had to re-calibrate their economy and today, are predicting a $370.5 million surplus with 4% growth.
Unfortunately in Australia’s modern day political arena, there is no room for compromise given the central influence is to play populist politics, not policy. We see differing opinions on how Australia will create a sustainable budget that successfully negotiates a path into the future. If Australia was to continue on the current path without significant change, the present budget would be seen as a soft – touch.
<img src="/images/2014/05/27/simeon%20may%2027%20one.png" alt="">
Source: <a href="https://www.treasury.gov.au/PublicationsAndMedia/Speeches/2014/Fiscal_sustainability" target="_blank">Department of the Treasury</a>
For arguments sake, this is the <a href="https://www.businessspectator.com.au/article/2014/5/22/politics/budget-graph-brought-stunned-silence-coalition" target="_blank" title="budget graph that brought a ‘stunned silence’ to the Coalition">budget graph that brought a ‘stunned silence’ to the Coalition</a> where Secretary of Treasury described it as “the most alarming single piece of information” he had seen about Australia’s future economic prospects, adding that it created a “stunned silence” when he presented it to both the state treasurers and cabinet. Again the significant point to be drawn from this graph is that with our declining terms of trade and an ageing population, our productivity needs a complete ‘about–turn’.
I wouldn’t hold your breath on that because, when one looks at <a href="https://www.ami.org.au/imis15/News_2013_May/Default/Australia_s_Top_100_Brands_2013__/News_2013_May/Australias_Top_100_Brands_2013.aspx?hkey=7621e19d-3bb4-4c3a-b08c-af2b0a18073d" target="_blank" title="Australia’s Top 20 Brands">Australia’s top 20 brands</a> not one is directly involved in technology. On the other hand when one looks at <a href="https://www.brandz100.com/site/reports/global/2014/report/download-report.pdf" target="_blank" title="2014 BrandZ Top 100">2014 BrandZ Top 100 </a>(this is a PDF file so takes a little while to download but well worth the read) we get a pretty good idea of how bad we are performing on a global stage.
Following three years at the top, Google has bumped Apple from the number one position when, in 2014, Google’s brand shot up 40% in a year to US$158.84 billion (A$171.86 billion). All up The BrandZ Top 100 Most Valuable Global Brands 2014 added $310 billion to reach $2.9 trillion in brand value. Prior to the BrandZ Global 2014 results, the Top 100 had increased an average of about 6%, $125 billion annually, since the global financial crisis of 2008 and 2009. This year, led by apparel, with a 29% overall increase, all categories rose in brand value. And 10 of 14 categories experienced double-digit growth, indicating that brands across the economy have moved beyond recovery into a period of new growth. In the meantime, Australia sits in a mental void trying to work out what to do following the mining downturn.
<blockquote>
The rise of China as a superpower could see it control as much as half the world’s financial assets by 2030.
</blockquote>
For those who recently raised concerns about China’s attraction to Australian property, Secretary of Treasury, Martin Parkinson, told a forum this week in Hong Kong that China’s foreign exchange reserves now approach $4 trillion. Today, China now accounts for around 11% of both world trade and global GDP but only accounts for 3% of gross holdings of overseas assets and liabilities. He went on to say that this figure, which includes foreign exchange reserves, could triple to $16 trillion. The rise of China as a superpower could see it control as much as half the world’s financial assets by 2030.
Puts the Australian budget into a different perspective, especially when you read how China is preparing for its ageing population – <a href="https://www.economist.com/news/china/21600160-pensions-crisis-looms-china-looks-raising-retirement-age-paying-grey" target="_blank" title="Paying for the grey.">paying for the grey.</a> Although Australia is a long way off telling families they have a limit of just one child.
For the second time in 2014 Mosman houses for sale managed to stay above the 100 mark which either tells us more people are selling or houses are not selling as fast. It will be interesting to see in coming weeks, what the correct reason is, although we should note that clearance rates have dropped significantly. Sceptics no doubt, will attribute that to the federal budget!
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Australia has one almighty brand problem

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By now it should be overwhelmingly clear - the government has no interest in housing affordability and they will not take any measure to lower land values. If the budget didn’t paint the picture, no doubt the forthcoming Senate inquiry into housing will.
‘The age of entitlement’ is not over – it has been protected at the expense of ‘the age of opportunity’.
The current administration has surgically set about reducing living standards of the poor, making cuts to heath, education, and employing harsh means testing measures which will fall most heavily on the old, young, unemployed  and a broad sector of low to middle income families with dependant children.  
They have done this to studiously protect the interests of the wealthy, refusing to lay a finger on the licensed resource monopolies, the mineral wealth of which increased more than $55 billion in 2012-13 alone.
Clawing back just a fraction of the tax exemptions granted on capital gains, or placing a levy per ton of exported minerals, would not only have gone a long way to covering the budget short fall, but would also have lifted the burden from the poorest onto the richest.  But in a political system where major parties sell themselves to the highest bidder (which as current ICAC investigations suggest happen to be property developers and large land holders), their failure to do so should come as no surprise.
It walks hand-in-hand with the diabolical decision by “Australia's premier real estate industry education and training provider”, AREC, to employ an <a href="/news/the-wolf-of-wall-street-jordan-belforts-upcoming-arec-2014-attendance-a-huge-backward-step">ex convict</a> who defrauded clients out of more than $200 million to educate real estate agents at the biggest industry training event of the year.  Despite <a href="/news/wolf-of-wall-streets-gold-coast-arec-2014-attendance-continues-to-provoke-debate">protests from various participants</a>, the event has <a href="https://www.rebonline.com.au/breaking-news/7652-arec-expected-to-sell-out" target="_blank">sold out</a> and clearly not prickled the conscience of the other speakers who are happy to stand alongside ‘The Wolf of Wall Street’, Jordan Belfort.
The above measures, along with Tony Abbott’s desire to be knighted the ‘infrastructure Prime Minister’ will drive investment into housing – albeit, of the speculative kind.
Infrastructure intensifies the use and demand for residential land as the population grows and no doubt, we need more of it. However, it also has the effect of rising land values, which taken alone, should be a ‘good’ thing for our country (or at least it would be, <a href="/expert-insights/investing/who-is-really-benefiting-from-the-property-cycle-and-at-what-cost">if those gains truly benefitted the community</a>).
Instead those gains will be pocketed, leaving the government to scrape future funding from elsewhere.
Land cannot be reproduced because it cannot be moved; it’s fixed in supply, dependent on the employment sectors and community facilities that surround it.
All of the above raises cost of accommodation yet does little to address the needs of future generations, who, if they’re not lucky enough to inherit the goods, must take on an ever greater proportion of private debt to join in.
This widens the wealth gap between the land owning rich and income poor as the government leans back and lectures welfare recipients that “the world doesn’t owe them a living”.
The government has it within their power to move toward an economy that rewards productivity, reduces unwanted speculation, increases wages, encourages timely construction and the effective utilisation of land, promotes decentralisation into regional areas, keeps the cost of shelter affordable for young buyers, lowers rents for tenants, and levels the playing field between non-owners and owners.
Yet they won’t because their agenda is to protect their own private interests and that of the wealthy, above that of the community.
This means land will only developed for profit, timed to capture the upward wave of a cycle, rather than developed to meet the immediate needs of the home buyer and does little to deter <a href="/expert-insights/building/residential-developers-landbanking-denial">the wasteful process of land banking</a>.
The government, however, is not interested in genuine reform. Instead, they favour laws that give certain classes of people artificial advantages over others whilst having the conceited arrogance to advise it’s all in the ‘national interest’.
What does this mean for the property investor?  Well for the time being, the system will fall in their favour.  Interest rates will remain low, they will not rise, and the government will not intervene.
Over the long-term however, we will not escape the consequences of the government’s actions. Wage growth only increased 2.6% in the past year, a rate below the consumer price index and the weakest since records began. We are in effect going backwards, not forwards – and the economy will suffer as a result.
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The government's protection of the wealthy is bad news for the average property investor

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The federal government and opposition are at loggerheads over when Australians should be allowed to access their superannuation.
Following the government’s decision to <a href="https://www.smartcompany.com.au/growth/41788-fast-lane-getting-ready-to-work-until-i-m-70">raise the age at which retired Australians will be able to receive the age pension</a>, Treasurer Joe Hockey said on Monday changes to the super preservation age is “on [his] mind and on Tony Abbott’s mind”.
However, Opposition Leader Bill Shorten has vowed to vote against any changes to the superannuation preservation age, <a href="https://www.afr.com/p/national/labor_vows_to_block_rise_in_superannuation_aQkZWm68JPXCzck0rZpZqL">reports Fairfax</a>.
“Where does Joe Hockey get off saying to Australians, nine million Australians with superannuation, ‘I am going to make you wait until you get your money’,” said Shorten.
“First of all he wants pensioners to pay more, secondly he wants people to work until 70. But on superannuation, it’s not even the government’s money,” he said.
Under current arrangements, Australians born before June 30, 1960 can dip into their super savings at the age of 55, while those born between July 1, 1960 and June 30, 1964 can gain access between the ages of 56 and 59. The preservation age for Australians born after July 1, 1964 is 60.
As <a href="https://www.smartcompany.com.au/legal/politics/41533-are-you-ready-to-work-until-you-re-70-hockey-flags-plans-to-raise-retirement-age">previously reported by SmartCompany</a>, the government wants to lift the pension age to 70 from 2035. The previous Labor government legislated to life the pension age from 65 to 67 by 2023.
While the government has said there will be “no adverse changes” to superannuation in its first term, Fairfaxreports it will take any proposed changes to the next federal election, scheduled for 2016.
“I think it’s something that we need to have a proper process to discuss with all the affected stakeholders,” said Hockey.
“We’re thinking about how we’re going to make sure that the quality of life for Australians into the future is sustainable,” he said.
Martin Parkinson, the outgoing Treasury secretary, backed up the government in his post-budget speech on Tuesday, telling the audience at an Australian Business Economists event that a change in the preservation age is “inevitable”.
While Parkinson did not specify the age at which he thinks retirees should gain access to their savings, he called for a more “sensible” debate on superannuation.
Michael Davison, senior policy adviser at CPA Australia, told SmartCompany while CPA Australia sees “merit in ensuring that the preservation age remains aligned to the pension age”, it is important there are provisions for people to access their super sooner “if their personal circumstances make waiting impossible”.
“But before we start ruling options in or out, we also think it is vital to articulate a long-term vision for our retirement savings policy which clearly spells out its purpose and goals and ensure, as compulsory super matures, that the age pension shifts back from supplementing retirement savings to being a genuine safety net,” said Davison.
“That means developing a retirement income stream culture that encourages income streams and discourages lump sums. We do accumulation well, we don’t do decumulation well at all,” he said.
The Australian Institute for Superannuation Trustees has previously backed calls by the National Commission of Audit to tie the preservation age to the pension age, but warned the government against making “piecemeal changes” to retirement income policies.
“When it comes to fair and sustainable retirement policy, we need to think about all the policy levers that can be adjusted, not just one or two,” said chief executive Tom Garcia.
Garcia said many Australians are forced out of work early and do not get to choose when they retire.
“Policies are meant to improve people’s lives so any changes affecting access or eligibility to the age pension or superannuation shouldn’t be about punishing disadvantages and vulnerable Australians,” he said.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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Political battlelines drawn over when retired workers should be allowed to access their super

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GUEST OBSERVATION
Prime Minister Tony Abbott has hailed the <a href="https://www.theguardian.com/world/2014/apr/07/tony-abbott-free-trade-deal-shared-values-japan-australia" target="_blank" style="line-height: 1.3em;">“shared values”</a> that enabled Australia’s free trade deal with Japan and now heads to China for crucial trade talks.
But the Australian mainstream sees itself as fundamentally separate from our Asian neighbours across most economic and cultural dimensions.
This mindset is challenging enough in trade and person-to-person ties. Transport infrastructure and city planning just don’t feature sensibly in discussion between Australia and its developed Asian neighbours.
Abbott has invited the Koreans to invest in yet more roads, but we have continuously spurned a long-held Japanese interest in Australian high speed rail opportunities.
Two problematic and emblematic cultural preconceptions hold Australia back from fully engaging with our region in the field of urban planning and infrastructure.
The first is the idea that Asia is “too different” to be relevant to our experience. The second is the even more problematic idea that we have nothing to learn from Asia (while they should presumably listen intently to us).
This intellectual blockage is possibly caused by an Australian infrastructure inferiority complex arising from decades of lost opportunities - rather than some weakness of planning policy or cities in developed Asia.
It also originates from insufficient distinction between developing Asia and developed Asia (incorporating Japan, Korea, Hong Kong, Taiwan and Singapore).
Let’s be real here - Australian cities are planned appallingly and have some of the most unsustainable living patterns and transport outcomes of all the world’s developed cities.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/45890/width668/29fkmghq-1396996230.jpg" alt="">
Photo: Nagoya, which has similar population to Sydney or Melbourne, has an efficient metro system and an emphasis on rail travel. Chris Hale, March 2014
Places like Melbourne have done okay recently with downtown urban design and renewal. But at a broader scale, we have failed to develop mass transit systems capable of meeting commuter demands.
This hurts our cities and it hurts our trade opportunities in the infrastructure, planning and city design sphere.
Sydney has recently decided on a light rail corridor where a metro was needed. Melbourne struggles to launch any coherent response to rampant ridership growth on trams and trains.
Brisbane remains in cloud cuckoo land with its bus obsession - when only strategic rail-based interventions can shape its future growth.
Australian cities have spent the past 30 years riding the complacency of a car culture based on local vehicle manufacturing.
Major road projects formed the core of cynical pork barrel politics, draining the vast bulk of our infrastructure dollar.
Australians need to take a serious look at what major Asian cities - such as Tokyo - have achieved in infrastructure and urban policy over recent decades.
Tokyo coped with a massive influx of internal Japanese economic migrants during the second half of the 20th century. It did so through radical investment in metro rail, combined with judicious attention to zoning, parklands and community assets, which has led to the dominance of rail as majority mode of travel.
Other cities such as Singapore and Hong Kong have heavily oriented city planning to rail, with new metro stations opening yearly to bring distinct benefits of convenience and livability.
Japan’s high speed rail has also played a core role in that country’s economic and scientific development. Recently the Chinese have invested in a great and growing system of fast inter-city connections.
By contrast, successive Australian governments at all levels have turned their backs on transit as a tool for policy, economic development, and urban structure.
Infrastructure Australia was clearly due for an overhaul, but as a country we can’t afford a replacement that exists only to rubber stamp destructive road pork.
Tony Abbott has said he wants to be the ‘infrastructure prime-minister’ but his reported obsession with the virtues of the private vehicle over public transport can only be understood as an outdated and defeatist ideology.
This thought process has no place in influencing contemporary infrastructure policy.
We should look carefully at the emphasis Asia has placed on high-speed inter-city rail. These systems are now the backbone of advanced economies around the world, while only Americans and Australians remain unconvinced.
By censoring our discussion, we miss out on a fuller appreciation of 21st century infrastructure thinking and urbanism. Some great planning ideas and examples are available right on our doorstep.
Perhaps its time for a little less lecturing, and a little more learning.
Chris Hale is lecturer, Department of Infrastructure Engineering at University of Melbourne.
Chris Hale receives funding from the Carlton Connect Initiative of the University of Melbourne. This also includes funding from: City of Moreland, City of Darebin, and City of Yarra, Grimshaw architects, and MGS architects. Over many years, Chris has been the recipient of meaningful in-kind support from the MTR Corporation of Hong Kong - in the form of data availability, strategic briefings, and access to senior staff time.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
Photo courtesy of Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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Time for Australia to consider Asian lessons on city infrastructure

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GUEST OBSERVATION
The great Australian dream to own a house has long been underwritten by the great Australian housing subsidy. Whether you are a <a href="https://www.housing.nsw.gov.au/Living+in+Public+Housing/" target="_blank">public</a> or <a href="https://www.communityhousing.org.au/" target="_blank">social</a> housing tenant, a private renter or a homeowner, chances are your house was subsidised through a <a href="https://www.housing.nsw.gov.au/Living+in+Public+Housing/Rent+and+Other+Charges/" target="_blank">rental subsidy</a>, <a href="https://www.firsthome.gov.au/" target="_blank">housing grant</a> or <a href="https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Investments,-including-rental-properties/Rental-properties-2012-13/?page=16" target="_blank">taxation credit</a>. On budget night there will be housing winners and losers, but it’s worth remembering we all live in subsidised housing.
Public housing subsidies
<a href="https://www.ncoa.gov.au/" target="_blank">The National Commission of Audit</a> urged the Commonwealth to limit its involvement in public and social housing by providing rent assistance to income support recipients.
If treasurer Joe Hockey followed through with these recommendations public housing tenants would have to pay market rent for their housing after receiving rent assistance. This would undermine the central purpose of public housing as a form of affordable housing tenure that provides very low-income people with housing at below market rates, often as a percentage of their income.
Providing rent assistance to people to contribute to market rate rental properties would be bad news for housing equity. The frail and elderly, those with carer responsibilities or complex medical needs, or very low-income Australians in public or social housing would be hit hardest.
Private housing subsidies
Private housing subsidies are like chocolate, we know that we should use them in moderation but we just cannot cut back. We often pretend they are not subsidies at all. AMP’s <a href="https://m.afr.com/p/national/big_talk_small_acts_on_bn_budget_AkRrPW2xaygUjpIodRK8IK" target="_blank">chief economist</a> Shane Oliver says “changes to negative gearing or the CGT exemption on the family home would be seen as ‘unAustralian’”.
<a href="https://grattan.edu.au/" target="_blank">Grattan Institute</a> data suggests that more than 90% of private housing subsidies go to property owners over private renters (see figure below). This includes the roughly A$30 billion capital gains tax benefit for owner-occupiers and the A$7 billion negative gearing benefit for landlords each year.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/48230/width668/rycjyqqy-1399860931.jpg" alt="">
Report: Renovating Housing Policy Grattan Institute
Often taxation concessions – the <a href="https://www.dss.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme" target="_blank">National Rental Affordability Scheme</a> (NRAS) excluded – do not generate new housing stock. They all, with the addition of the first homebuyers grant, drive up property prices. This is good for homeowners and developers. It is bad for first homebuyers and private renters. The removal of housing subsidies that operate below or offset market rents would be catastrophic for the most disadvantaged people in Australian cities.
While the Commission of Audit was largely <a href="https://www.smh.com.au/federal-politics/political-opinion/tax-the-flaw-at-the-heart-of-the-national-commission-of-audit-20140501-zr2oy" target="_blank">silent</a> on private housing taxation subsidies, under its recommendations <a href="https://tunswblog.blogspot.com.au/2014/05/what-commission-of-audit-says-about" target="_blank">NRAS would go too</a>. NRAS was designed to encourage private investors to provide affordable rental housing. Associate Professor <a href="https://theconversation.com/rental-affordability-scheme-fears-are-misplaced-24338" target="_blank">Michael Darcy</a> argues:
"NRAS is also a tax benefit, but it provides a fixed rebate of around A$10,000 a year for ten years. Investors can claim the rebate so long as a property is rented through an approved non-profit housing manager at 20% below the market rate. Potential tenants are means tested. In this way NRAS sought to keep investors in the affordable sector for the longer term."
Post-budget affordable housing?
The forecast is grim for housing affordability in many Australian cities. According to <a href="/expert-insights/buying/sydney-now-has-170-suburbs-with-1-million-median-house-price-apm">Australian Property Monitors</a>, of Sydney’s approximately 600 suburbs 170 now have A$1 million median house prices. This constitutes an increase of about 47 suburbs in six months.
In Melbourne “<a href="/expert-insights/buying/investors-up-first-home-buyers-down-in-the-melbourne-market">the numbers of first home buyers have shrunk to record lows</a> ” as more first home buyers remain in rental accommodation or live with family members.
There is scope for innovation with public, non-government and private sector housing models and taxation policy. The National Rental Affordability Scheme is certainly not perfect, but at least it provides additional housing stock that operates below market rates.
As the details of the budget come in, the great Australian housing subsidies will be revealed. But Hockey has indicated he will take most of the <a href="https://www.smh.com.au/federal-politics/political-opinion/tax-the-flaw-at-the-heart-of-the-national-commission-of-audit-20140501-zr2oy" target="_blank">tax reforms to the next election</a>. Any move toward greater housing equity would require a significant recalibration of public and private housing subsidies and taxation reforms.
When housing subsidies are revealed on budget night, remember, we will always need housing options that operate outside the market for the poorest and most disadvantaged Australians.
Dallas Rogers is Research Fellow - Urban Research Centre at University of Western Sydney.<a href="https://theconversation.com/institutions/university-of-western-sydney"></a>
Dallas Rogers does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
Photo courtesy of Steve Davidson/Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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