Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <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>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Policy

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Currently there is no cost associated with any FIRB application so there are limited financial resources for the Treasury department to police the current regulations.
The bulk of their activity remains in processing.
But a modest FIRB application fee would be acceptable to overseas buyers that are often subject to fees in other international property markets, according to Steve Douglas, the executive chairman of the SMATS Group that has arranged over $1 billion in lending for expatriate and foreign buyers over recent years.
"These fees could be directed to FIRB for process improvement and policing activity to ensure the current regulations are enforced," he said.
Steve Douglas says provided it remains realistic, it should not have a detrimental impact on the current buyer activity levels, especially if it is balanced by the return of the CGT 50% discount and fairness is restored to previous legislation.
The submission was made to the House of Representatives Standing Committee on Economics which is holding public hearings as part of its Inquiry into Foreign Investment in Australian residential real estate. 
"We do need to appropriately police the fairness of the FIRB regulations and protect the market from abuse and speculation," he told the parliamentary inquiry.
"A modest fee on the approximate 10,000 residential purchases would fund this and allow the FIRB to be properly resourced to investigate illegal activity – without introducing any new restrictions. 
"This would be logical, acceptable to the market and also easy to police with a simple 'Statement of Residency' at any property settlement confirming FIRB compliance and then lodging for spot checks with FIRB."
SMATS Group is an Australian tax agent that specialises in foreign investors and expatriates. 
It commenced in 1995 headquartered in Singapore with offices in Hong Kong, Malaysia, Dubai, London, New York, Perth and Sydney.
The SMATS submission suggests a modest fee would be acceptable by international standards set at:
<ul><ul>
<li>$2,000 for acquisitions under $500,000, and</li>
<li>$3,000 for acquisitions over $500,000</li>
</ul></ul>
"It is our strong opinion that the importance of foreign investors is not fully appreciated in Australia."
Douglas outlined two major misconceptions in the community when it comes to foreign investors.
The first misconception was that "foreigners are buying all the property at auction".
The second was that foreigners are driving up prices.
<ul>
<li>
Misconception: Foreigners are buying all the property at auctions.
</li>
<li>
Reality: Foreigners cannot buy established property under the FIRB Regulations, so the buyer must have held Australian Citizenship or Permanent Residency or if acquired under a Temporary Residency will need to sell the house on exit of Australia. It is more likely these are “new Australians” that have migrated and have appropriate permanent Visa status.
</li>
<li>
Misconception: Foreigners drive up prices.
</li>
<li>
Reality: Improved supply stabilises prices. In fact sometimes Foreigners have paid too much for Australian property then are willing to sell at a loss releasing lower value stock into the market.
</li>
</ul>
Source: SMATS Group's submission to the Inquiry into Foreign Investment in Australian residential real estate.
Douglas said the general community does not fully appreciate that the main driving force in property price increases was Australia’s growing population.
"It is our opinion that Australia’s strong population growth during the period of the global financial crisis between July 2007 and March 2010 was a key contributing factor to Australia’s economic resilience as it created compulsory consumption spending for new arrivals when domestic consumption fell away with economic uncertainty during the GFC."
He suggested that the current population growth now back near or above 400,000 per annum since December 2012 created a demand driven property market and with the absence of adequate supply of housing stock, must inevitably lead to a lift in prices.
In 2012-13 the FIRB approved 11,668 applications for residential property, and increase of 19.45% over the previous year; however the value of these applications actually decreased from $19.7 billion to $17.16 billion.
Douglas said it was a general misconception that foreigners push prices up. 
Where in reality it is more likely that they actually keep prices down for the vast majority of Australian’s as the newly constructed dwellings of foreign investors provide important rental accommodation and expansion of projects and estates that may otherwise not attract sufficient pre-sales to permit financing to begin and allow many larger scale projects to move from concept to reality."
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jchancellor-FAypfDUnLy

FIRB application fee would help fund compliance: SMATS Group

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Second-round submissions to an inquiry into the banking system have challenged findings that the system is competitive and called for a review of mortgage broking practices to ensure consumers are getting quality advice on home loans.
The Financial System Inquiry released its interim report in July, calling for further input on a range of questions, including whether bank ownership of mortgage brokers was restricting competition.
Second round submissions were published on Friday.
The Mortgage and Finance Association of Australia challenged the report’s finding that the banking sector was “competitive, albeit concentrated”, noting that the financial crisis and government intervention had restricted competition.
However, the MFAA said there was no evidence that bank ownership of mortgage broking groups was limiting competition or discouraging brokers from acting in the consumers’ interest.
The MFAA argued that the National Consumer Credit Protection Act, 2009 required brokers to disclose commissions and lender panels and ensure clients were not disadvantaged by any conflicts of interest.
Suncorp disagreed, arguing that bank ownership of mortgage brokers was distorting the way in which mortgage brokers directed borrowers to lenders.
“Of great concern is the fact that customers view brokers as independent but the major banks have growing influence over these channels which they now predominantly own, and coupled with generous incentive schemes, are able to direct business to their products,” Suncorp said in its submission.
Consumer group Choice called for a review of how mortgage broking regulations were working for consumers including an assessment of the impact of mortgage brokers’ remuneration and institutional arrangements on the services they offered. It also called for an investigation into whether more extensive rules about the quality of mortgage broker recommendations and disclosures were required.
Choice said conflicts of interest reduced the quality of mortgage brokers’ recommendations and service for consumers. 
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zfielding-GvX3Uq9KTa

Banking system uncompetitive and mortgage broking review needed: Senate inquiry submissions

catherinecashmore-6LXia3pPQj

"Our distrust is very expensive": We can't have a trustworthy financial market without an honest property system

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GUEST OBSERVATION
Australian politicians are keen property owners. <a href="/expert-insights/investing/the-propertied-federal-politicians-pollies-and-their-300-million-property-portfolio">Data compiled by Lindsay David, Deakin University’s Philip Soos and Paul Egan</a> from the parliamentary register of members’ interests shows the 226 members of federal parliament (both houses) have an ownership stake in some 563 properties. While these properties may be jointly owned with a spouse, this is an average of 2.5 properties per member.
In 2013, the 76 members of the Senate had 202 property holdings and the 150 members of the House of Representatives had 361 property holdings.
Top of the leader board is National Party Senator Barry O’Sullivan with a portfolio of 50 properties. David Gillespie follows with 18 and Palmer United Party Senator Clive Palmer has a seemingly conservative 13, although the total value of Palmer’s properties is unknown (see table below).
<img src="/images/2014/08/06/Table2-1.png"> 
Compiled by Lindsay David, Philip Soos and Paul Egan.
The estimated total value of these properties is said to be around A$298 million. This was calculated by multiplying the 563 properties by the median dwelling price of $530,000, as of July 2014. If these properties are located in major cities or other high-value areas the property holding could be substantially higher.
Property, democracy and fairness
Major Australian cities have been feeling the housing affordability squeeze for some time now. Owning multiple investment properties does nothing to ease the upward pressure on real estate prices or to increase first home buyer opportunities. Ensuring housing equality – for example, by providing adequate housing for all social groups – is becoming an increasingly complex task in Australian cities.
When the philosopher <a href="https://plato.stanford.edu/entries/rawls/" target="_blank">John Rawls</a> coined the phrase the “property-owning democracy” he was interested in how property might be used to satisfy the principles of justice as fairness. Rawls could hardly have known the illuminating irony he might cast on the property holdings of politicians.
Should we be alert, perhaps even alarmed, at the real estate investment practices of the guardians of Australian democracy? Well, maybe. Some 94% of the members of federal parliament owned real estate in 2013. More than 50% own investment or commercial property. By comparison, ABS data show less than 20% of the general population owned a property other than the one they lived in in 2012. But it’s politicians that set the taxation and housing policies that attempt to address our housing concerns.
Policy push
Senator Xenophon is currently <a href="https://nickxenophon.com.au/media/releases/show/home-affordability-a-super-idea/?Stage=stage" target="_blank">seeking</a> changes to the Superannuation Act that would allow funds to be released to purchase a first home. This would not put downward pressure on first home buyer housing stock. In fact, it could diversify the investment pool and lead to upward pressure.
According to the register, Independent Senator for South Australia Nick Xenophon has a portfolio of eight investment properties.
A spokesperson for Senator Xenophon said the register was outdated, but confirmed the Senator owns four investment units and his super fund also owns a property (under management). The correct figure is expected to be reflected in the next register of Senator’s interests.
Addressing housing disparity
Australia’s democratic process is predicated on notions of impartiality and transparency. The parliamentary register of members’ interests is an important citizenry “watch dog” mechanism. It is a mechanism that should be employed to monitor the property holdings of Australian politicians and then deployed to call their actions to account.
It is important to note that the research doesn’t show a causal link between property holdings and decisions of politicians. But it would be imprudent to assume prima facie that the property holdings of Australian politicians do not play a role in their political thinking, especially as this thinking relates to housing, taxation or even superannuation policy.
What is needed is a broader discussion about housing disparity that fully acknowledges and accounts for these vested interests and tools of political influence. This should include the politics and interests of the politicians themselves.
The naïve assumption that housing wealth will trickle down through a property-owning democracy have been shattered by the realities of 21st century Australian cities. The question which remains is whether our democratic processes can be reorganised to address these now clearly evident housing disparities. A discussion about the real estate ideologies that underwrite the investment agendas of Australian politicians seems like a fitting starting point.
Dallas Rogers is research fellow at the Urban Research Centre, <a href="https://theconversation.com/institutions/university-of-western-sydney">University of Western Sydney</a>.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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drogers-JvoVgMGDGm

Our $300 million propertied federal pollies: How should they influence housing policy?

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GUEST OBSERVATION
Independent Australian Senator Nick Xenophon is planning a legislative <a href="https://nickxenophon.com.au/media/releases/show/home-affordability-a-super-idea/?Stage=stage" target="_blank">push</a> for first home buyers to be able to access their superannuation savings to pay for a house deposit, mirroring a similar policy in Canada.
As with Australia and Canada, home ownership in New Zealand continues to be seen as a birthright and there is concern about home affordability as house prices, in the main centres at least, continue to rise.
When New Zealand’s workplace-based retirement savings scheme - KiwiSaver - was launched in 2007 the government included several incentives to make the scheme more attractive. One of these was the ability to withdraw contributions to enable the KiwiSaver member to purchase his or her first home.
The government also offers a first home deposit subsidy of NZ$1,000 per year of KiwiSaver membership, with a minimum of three years and a maximum of five years. Both benefits were in response to concerns that the deduction of KiwiSaver contributions from a young person’s pay packet would restrict their ability to get on the home ownership ladder.
How it works
Withdrawing savings for a first home becomes an option after three years or more of KiwiSaver membership. The member’s own contributions can be withdrawn, along with those of their employer. However, the government’s contributions, comprising a NZ$1,000 kickstart for new members and a member tax credit of up to $521.43 per annum, cannot be withdrawn.
The availability of the deposit subsidy is more restricted, with limits on income and the maximum purchase price of the property. Both benefits are only available for the purchase of a first home, with very limited exceptions, and never for an investment property.
These incentives were important in making the controversial scheme more palatable to the public. However, research has shown these incentives are less important to KiwiSaver members than the other government incentives. (Although this is likely to reflect the fact that many members will have already purchased their first home).
Incentives aren’t helping affordability
The benefits for first home buyers do little to assist with home affordability, which relates to the ongoing cost of home ownership. The latest <a href="https://www.massey.ac.nz/massey/learning/colleges/college-business/school-of-economics-and-finance/research/mureau.cfm">report</a> from Massey University’s Real Estate Analysis Unit found home affordability across New Zealand had deteriorated by 7.6% over the year to May 2014.
The benefits are also likely to have limited impact on house prices overall, particularly given the purchase price restrictions associated with the deposit subsidy. Certainly no restraining impact has been indicated, with house prices continuing to rise and ongoing concerns of a housing bubble in New Zealand.
While the benefits could also potentially help push prices up by increasing demand from first home buyers, there is no evidence this has occurred. The purchase price restrictions associated with the deposit subsidy will help curb any potential inflationary impact on house prices. The persistent increase in house prices, particularly in Auckland, continues to be driven primarily by immigration and speculation.
However, KiwiSaver’s first home benefits do assist New Zealanders into their first home by helping them meet the minimum deposit levels required to be able to obtain a loan, something made more difficult with the introduction of loan-to-value ratio (LVR) limits by the Reserve Bank of New Zealand in October 2013. (This has meant that 90% of a bank’s new home loans require a deposit of 20% or more).
The most recent figures available pre-date the LVR changes, but show that more than 10,000 New Zealanders withdrew savings of more than NZ$120 million from their KiwiSaver accounts to assist with their first home purchase in the year to March 2013. In addition, nearly 5,000 subsidies worth more than NZ$15 million were provided in the year to May 2013.
While it’s likely some KiwiSaver members have simply taken advantage of the availability of these benefits, for many young people they will have been vital to helping them achieve their goal of home ownership.
It could be argued that allowing withdrawals from KiwiSaver accounts defeats the purpose of retirement savings. While we know that the earlier you start saving the better, the reality is losing three to five years’ worth of contributions at a relatively young age will not be a disaster – and the retention of the government contributions means the member does not go back to square one as a result of the withdrawal.
Helping young people to help in retirement
While the lifetime benefits of renting versus home ownership continue to be debated, the <a href="https://media.nzherald.co.nz/webcontent/document/pdf/201333/RetExpBudget_Report_Aug2013.pdf">New Zealand Retirement Expenditure Guidelines</a> identified the financial benefits for retirees who own their own unencumbered home, compared to those who are renting. This suggests assisting young people to make their first home purchase will provide benefits for them in the long-term, and improve their retirement prospects.
Another reason to support home ownership is that it provides more secure accommodation for families, compared to renting. Fundamental changes to the property rental market in New Zealand would be needed to change this.
However, there is a large difference between a 25-year old withdrawing three years of contributions and a 50-year old withdrawing 10 years of contributions –the latter will be significantly disadvantaged in terms of retirement income. To counter this it would be sensible to restrict the withdrawal amount or the age at which withdrawals can be made from the scheme.
While the ability to use KiwiSaver savings to achieve a greater level of home ownership has been a successful policy in New Zealand, there is a strong case for introducing some limits to protect its underlying focus on retirement.<img src="https://counter.theconversation.edu.au/content/29950/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Claire Matthews is director of academic programmes at <a href="https://www.massey.ac.nz/massey/home.cfm" target="_blank">Massey University</a>.
Claire Matthews has received funding from Finsia. She is affiliated with the Fin-Ed Centre, NZCU Baywide and the New Zealand Association of Credit Unions.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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cmatthews-j6ptUweXhR

New Zealand's experience shows that tapping super is unlikely to improve affordability

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Nick Xenophon (along with other groups, such as the <a href="https://reia.asn.au/wp-content/uploads/2014/08/Super_Homes.pdf">REIA</a>), is advocating a policy that will be responsible for making housing affordability worse. 
He is using the Canadian "Home Buyer Plan" as an example to promote a similar idea in Australia. That is - allowing first home buyers to raid their <a href="https://en.wikipedia.org/wiki/Superannuation_in_Australia" target="_blank">superannuation</a> account – sold under the pretext of ‘helping them get onto the property ladder’. 
The theory goes that to progress up this mythological ladder, buyers must bet their income and in this case, future savings, on a speculative process that translates into higher house prices, without thought for the next generation of required ‘property ladder’ participants, who will no doubt fall dependant on similar schemes, to keep the tide rising.
The procedure in Canada allows eligible buyers to withdraw up to C$25,000 tax-free from their <a href="https://en.wikipedia.org/wiki/Registered_Retirement_Savings_Plan">retirement fund</a>, on the condition that they pay it back over a 15-year period.
If they fail to do this, the amount withdrawn will be taxed as per the income earner's tax bracket. Currently, 35% of Canadians fall into this category however, according to the <a href="https://www.cra-arc.gc.ca/menu-eng">CRA</a>, roughly one out of two – that is, 47% – contributed less than the required repayment amount over the 2011 tax year. 
These means, while the government picks up the added income revenue windfall, buyers, buoyed on by a rent seeking culture that fools the public into believing such policies are designed to be ‘helpful’, overstretch their budget and in weak economic conditions are left to carry the can.
In short - you borrow money from yourself at 0% interest and in doing so; lose 15 years of compounding 'tax free' interest with average returns in the order of 7%. 
It’s notable that many low to middle-income individuals have inadequate funds to draw upon, therefore even assuming the scheme were to be effective, it’s limited in the difference it can make.
But the real ‘nub’ of the issue, which Nick Xenophon has failed to acknowledge, is that the Canadian Home Buyer Plan was never intended to aid affordability. 
It was <a href="https://annualreport.crea.ca/2012/advocacy.php">promoted by the real estate industry</a> as a temporary measure, following the recession in the late 1980s, to stimulate land values and benefit the FIRE sector, along with it's economic offshoots - renovations, furniture, appliances, moving costs, tax revenue to government and so forth.
The FIRE sector has lobbied to keep in place ever since and also pushed for the threshold to be raised.
This is because most Western economies have constructed their tax and supply policies to reward real estate speculation over and above productive enterprise.
The process is assisted and abetted by a banking industry that seeks to lend against land as collateral, favouring the extraction of economic rent, over and above extending loans for the purpose of productive enterprise 
<img src="/images/2014/08/06/cashmore%20aug%206%20one.png" alt="">
Canadian residential real estate tripled from an estimated C$1.3 Trillion in 2000, to <a href="https://in.reuters.com/article/2014/06/19/canada-economy-debt-idINL2N0P00FG20140619" target="_blank">C$3.8 trillion in 2014</a>, however, only C$550 billion of this was for renovation projects or new home building - the rest was pure inflation.
By the end of 2011, the Home Buyer plan had been used <a href="https://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/why-the-home-buyers-plan-should-be-wound-down/article8211010/">2.6 million times</a>, with total withdrawals adding up to around $27.9-billion – that’s $27.9 billion of additional credit, feeding into existing house prices.
Between 2005 and 2011, Canadian house prices rose 58%, while average income for 25-34 year olds, increased by just 6%.
The <a href="https://www.rbc.com/economics/economic-reports/pdf/canadian-housing/house-november2013.pdf" target="_blank">Royal Bank of Canada</a> reports that detached housing now requires more than 80% of the median household income for mortgage payments in some of the country’s major cities.
Household debt to disposable income in Canada is currently 163.2%, up from 129% at the peak of the boom in 2006 and sitting only a few degrees lower than the recorded level in Australia. 
SIZE OF HOUSEHOLD DEBT COMPARED WITH ANNUAL INCOME in Australia, Canada, France and Italy. (ABS)   <img src="/images/2014/08/06/cashmore%20aug%206%20two.png" alt="">
Mainstream economists like to focus on government debt as a barometer of the heath of the economy. However, high and rising levels of private debt, as a consequence of such policies, <a href="https://www.propertyobserver.com.au/https://www.amazon.com/The-Next-Economic-Disaster-Coming/dp/0812247043">constrain demand</a> and eventually exceed the income and economic activity they helped create.
Nick Xenophon cites the <a href="https://www.demographia.com/dhi.pdf" target="_blank">Demographica Housing Affordability Report</a> in his press release, however it’s clear he has not read it. 
If he had, he would know that like Australia, Canada's largest major markets are also rated as “severely unaffordable” – and by studying the ‘affordable markets’ such as <a href="https://www.macrobusiness.com.au/2014/04/australian-property-through-foreign-eyes/">Texas</a>, or areas of <a href="https://www.bizjournals.com/pittsburgh/news/2014/07/28/pittsburgh-recovers-from-recession-better-than">Pittsburgh</a> for example, Mr Xenophon would have a better understanding why these states avoided the harsh consequence of the GFC, and continue to generate healthy levels of economic growth. 
Significantly, both cities have land tax and liberal supply policies that deter speculation – helping to keep real estate affordable, while investment is channelled into other areas of the local economy.
While, Australia rewards speculation, allowing the geo-rent (the unearned gains) from rising land values to capitalise into the land price, year upon year, taxing income earners, instead of resource rents, which by design, distorts economic activity, housing supply policy, and subverts social justice.
<img src="/images/2014/08/11/cashmore%20aug%2011%20one.png" alt="">
(90% of taxation revenue has distortionary effects, pushing up prices 23% higher than need be, while economic rents from land and natural resources have no such deadweight loss.)
Never, throughout the course of history, has such a policy been sustainable. 
At some point the productive capacity of the economy can no longer support the boom and the consequences, particularly for first home buyers, can be particularly severe, as <a href="https://www.worldeconomicsassociation.org/files/Bubble_Economics_Egan_Soos.pdf" target="_blank">Australia’s history of land induced financial crises reveal</a>.
However, when you appreciate how <a href="https://blog.australiaboomtobust.com/2014/08/propertied-federal-political-class/" target="_blank">lucrative</a> and wide spread this activity can be, it is very easy to see how policy fails us, and it’s additionally easy to see why a country with a plentiful supply of land like Australia, submits its younger generation to a life time worth of debt slavery, just to get onto the ‘property ladder’.
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Not a super idea: Raiding superannuation accounts will make affordability worse

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Senator Nick Xenophon's proposed legislative changes to allow first home buyers to access their superannuation funds for a deposit on their first homes have seen many different reactions from property experts.
“With more and more Australians finding it difficult to break into home ownership, adopting the Canadian scheme would make a difference to many thousands of Australians each year,” said Xenophon.
The Canadian scheme allows first home buyers to extract C$25,000 for the purchase of their first home, which must be repaid into the fund within 15 years.
The scheme has been supported by some industry groups and businesses and derided by others.
Property Observer took the question to the experts: Should first home buyers be allowed to access their superannuation to fund the deposit on their first home?
Catherine Cashmore: market analyst <img src="/images/authors/fullbody/Catherine-Cashmore.png" alt="" align="right">
Nick Xenophon, along with other groups, such as the REIA, is advocating a policy that will be responsible for making housing affordability worse.   The procedure in Canada allows eligible buyers to withdraw up to C$25,000 tax-free from their retirement fund, on the condition that they pay it back over a 15-year period.   
If they fail to do this, the amount withdrawn will be taxed as per the income earner's tax bracket. Currently, 35 per cent of Canadians fall into this category. However, according to the CRA, roughly one out of two (47%) contributed less than the required repayment amount over the 2011 tax year.    The Government picks up the added income revenue windfall.
Buyers, buoyed by a rent seeking culture that fools the public into believing such policies are designed to be ‘helpful’, over stretch their budget and are left to carry the can in weak economic conditions.   In short - you borrow money from yourself at 0% interest and in doing so lose 15 years of compounding 'tax free' interest with average returns in the order of 7%.    
Many low to middle-income individuals have inadequate funds to draw upon. So even assuming the scheme were to be effective, the difference it can make to those that need the help is limited.   
But the real ‘nub’ of the issue, which Nick Xenophon has failed to acknowledge, is that the Canadian Home Buyer Plan was never intended to aid affordability.    It was promoted by the real estate industry following the 1990s recession to stimulate land values and benefit the FIRE (finance, insurance, real estate) sector, along with its economic offshoots - renovations, furniture and appliances, moving costs, tax revenue to government and so forth. The FIRE sector has lobbied to keep in place ever since and also pushed for the threshold to be raised.
Craig MacKenzie: RP Data executive general manager commercial, with research analyst Cameron Kusher<img src="/images/2014/08/06/CraigMackenzie.jpg" width="150" height="225" style="float: right;">
Pros:
<ul>
<li>Buyers need genuine savings given the price of housing in cities Sydney and Melbourne and the cost of renting saving deposit is extremely difficult, accessing superannuation would make it easier</li>
<li>Genworth reports that 1 in 4 first home buyers need assistance from their parents to enter the market, by accessing superannuation they remove the burden from the parents</li>
<li>In some instances tapping superannuation would mean that the purchaser doesn’t have to pay LMI on their purchase which would reduce the cost of purchase</li>
<li>The retirement savings pool is one of the largest in the world unlocking a portion of it would enable first home buyers to access one of the most basic human need, shelter</li>
<li>Superannuation is about forced saving for retirement, a home for owner occupation is a long-term investment so the horizons are aligned.</li>
<li>Ultimately the position is neutral with the Canadian scheme seeing the amount withdrawn from Canadian Registered Retirement Savings Plan’s (RRSPs) repaid over 15 years.</li>
</ul>
Cons:
<ul>
<li>Accessing Superannuation doesn’t address the key reason why FHB can’t purchase a home, that is that it is too expensive in many areas particularly those areas close to city centres and around major working nodes. </li>
<li>By accessing Super to purchase a home it would potentially increase home values further, much like the First Home Owners Grant has</li>
<li>Utilising Superannuation would allow FHB to buy in a location they otherwise couldn’t afford to, is this really a good policy given buyers should by in a location which is aligned with their current means to repay a mortgage.</li>
<li>The Canadian scheme doesn’t appear to have any penalty or interest associated with withdrawing that money.  The amount is paid back over 15 years however, that is 15 years over which that money could have compounded if invested elsewhere.</li>
</ul>
It should be noted that Canadian RRSPs are somewhat different from Superannuation as they are set up by individuals and in most instances employers don’t contribute to the plan.  It is about saving for retirement however, there are no compulsory contributions from the employer rather an RRSP is set up by the employee to save for retirement.
 
Turn over page for more responses, from Philip Soos, Helen Hodgson and Peter Bushby.
 
 
<hr class="system-pagebreak">
 
Philip Soos: economist, author and Deakin University PhD candidate<img src="/images/2014/08/06/soos-profile.jpg" width="150" height="180" style="float: right;">
<div>I staunchly oppose the suggested policy advocated by Senator Nick Xenophon, which allows potential first home buyers to access their superannuation to finance a deposit. Simply put, it acts likely a privately-financed First Home Owners Grant/Boost, which has the intended effect of distorting (and increasing) housing prices.</div>
<div> </div>
<div>One of the most popular interventions in the housing market has been the use of federal government homeowner cash grants, in one form or another. They are implemented on the pretext of helping Australians realise the so-called dream of home ownership. This is false, however, as housing prices outpace the amount of the FHOG/B by a considerable multiple due to the additional leverage bank credit enables.</div>
<div> </div>
<div>Put another way, the FHOG/B is rendered null and void, as it is simply capitalised into higher prices from the moment of its availability. The FHOG has the effect of pulling forward demand for housing into the present, with first home buyers stampeding into the housing market.</div>
<div> </div>
<div>The pretext for superannuation is to help retirees, but in reality is designed as a pork barrel for the financial sector, which creams off approximately $19 billion in fees annually. Bankers already benefit from regulations allowing homeowners facing foreclosure to raid their super.</div>
<div> </div>
<div>Xenophon’s policy makes it doubly worse – another gift to bankers through higher housing prices, larger loan portfolios, and rising net interest income. This senator owns eight properties; it is clear he advocates this policy out of self-interest, not out of any concern for first home owners. It is designed to increase home prices, not home ownership.</div>
<div> </div>
<div>
Helen Hodgson: associate professor, Department of Taxation at Curtin Business School, Curtin University <img src="/images/2014/08/06/Helen.Hodgson.png" width="150" height="167" style="float: right;">
</div>
<div> </div>
<div>Secure housing is important to wellbeing in retirement, but as the superannuation guarantee increases to 12% first home buyers hoping to enter the market will find it increasingly difficult to save a deposit. There are three major hurdles to the proposal to allow access to superannuation: 1. Increased demand increases house prices in the relevant price range: as Saul Eslake notes, first homebuyer grants end up in the pockets of vendors. Stamp Duty concessions have been scaled back with some states limiting them to new construction to stimulate housing supply. A similar strategy here could limit house price rises due to increased first home buyer activity. 2. Superannuation is a tax preferred investment, and allowing superannuation withdrawals would exploit this tax advantage. The accumulated superannuation balance is higher than other investments, and a salary sacrifice strategy could take advantage of this. This could be counteracted by taxing withdrawals at the marginal tax rate, less the tax paid by the fund. 3. The funds must be used to acquire and continue to use the property as a residence. There should be a requirement that if the person moves out of the property the funds must be repaid, coupled with compliance measures.</div>
<div> </div>
<div>This article continues on the next page with thoughts from Peter Bushby and Terry Ryder. </div>
<div><hr class="system-pagebreak"></div>
<div> </div>
<div> </div>
<div>
Peter Bushby, Real Estate Institute of Australia president <img src="/images/2014/08/06/bushby-profile.png" width="150" height="200" style="float: right;">
</div>
<div> </div>
<div>It's been part of our (the REIA's) policy for many years now that it should be considered as a possibility, as long as it's packaged correctly, and as long as it doesn't harm, or have a negative effect on superannuation funds, and [first home buyers] would be paying it back in the longer term. We certainly believe it would be a tool to assist first home buyers., It would actually allow a lot of people to take advantage of and enjoy the benefits of home ownership that they can't quite get at the moment. They might be able to get the money at the end of the day, but if they got it earlier, it could be far more valuable to them, rather than renting and paying off someone else's mortgage. We believe that it is a viable option. Of course you'll get a negative reaction from the super funds and so on, but we believe that as long as it's operated properly, it could be very valuable. There are a couple of schemes that operate well around the world. We've identified Canadian and Singaporean schemes that could be translated, though obviously it would work differently here. But the Canadian scheme in particular could be useful to look at. It's about looking at the elements of it that would work best in our market without damaging existing super funds.</div>
<div> </div>
<div>Terry Ryder, founder of hotspotting.com.au <img src="/images/authors/fullbody/Terry-Ryder.png" width="135" height="186" style="float: right;"></div>
<div>
<div> </div>
<div>Nick Xenophon is suggesting a solution to a problem that does not exist. And, in the process, weakening the solution to a problem that does exist.</div>
<div> </div>
<div>Xenophon's proposal is based on the premise that we have an affordability problem in Australia. All the evidence suggests that we do not.</div>
<div> </div>
<div>Before we start implementing solutions, we need to properly understand the "problem". It is assumed that, because first-home buyers are apparently less active than before, there can be only one explanation - that they cannot afford to buy. The evidence suggests another reason: that young adults are not interested in buying. They have other priorities. Their parents were married with kids and a mortgage before the age of 30, and today's generation doesn't want that. </div>
<div> </div>
<div>So we don't need Xenophon's solution which, while addressing a non-existent problem, would weaken the solution to a very real existing problem. And that is the rapidly ageing population and the need for people to fund their retirement - for which superannuation is critical. Superannuation funds should be sacrosanct.</div>
</div>
  
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jrichardson-uRX5hFdKfN

Exclusive: The experts on super access for first home buyers

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GUEST OBSERVATION
“With more and more Australians finding it difficult to break into home ownership, adopting the Canadian scheme would make a difference to thousands of Australians each year,” <a href="https://www.mortgagebusiness.com.au/breaking-news/7542-xenophon-to-introduce-fhb-changes">Senator Xenaphon said</a>.
“As HomeStart Finance said this week, there’s something strange about being able to access your super fund if you are about to default on your housing loan, but you can’t access it to put a deposit on a home in the first place,” he said.
Australia is in the midst of a <a href="https://housingstressed.org.au/get-the-facts/">chronic housing affordability crisis</a>. Housing price inflation has outstripped both rents and household incomes for over a decade, leading to a residential property market considered unaffordable both historically and internationally. Yet, instead of helping to resolve the crisis, Australia’s political class is apparently determined to maintain world-beating prices with poorly but purposefully designed policies to <a href="https://www.publicresearchinstitute.org/reportfiles/Economic/KeenTheGreatResidentialHousingDebateFinal.pdf">maximise prices</a>.
The public should ask “Are the property holdings of our federal politicians negatively influencing policy and causing them to ignore evidence?” The parliamentary register of members’ interests may help to answer this question, allowing for a summary report of real estate holdings for each Australian federal politician (which may be jointly owned with their spouse).
It is evident that politicians are heavily invested in the property game, with the 226 members in both houses of parliament with an ownership stake in a total of 563 properties – an average of 2.5 properties per member, conservatively estimated at around $300 million (563 multiplied by the median dwelling price of $530,000 as of <a href="https://www.macrobusiness.com.au/wp-content/uploads/2014/08/RP-Data-Rismark-Home-Value-Index-1-August-2014-FINALMK.pdf">July 2014</a>).
The real total is probably higher considering well-off politicians are likely to purchase real estate in prime suburban and coastal areas above the median (and not all property holdings are residential such as farmland and commercial properties). Property investment is popular across the political spectrum and is a common thread binding the normally divided and bickering politicians together.
<img src="/images/2014/08/06/Table1-1.png" alt="">
 
Australia’s federal political class own an enormous property portfolio, with only 13 of the 226 members (6 per cent) not holding any real estate. In the Senate, 76 members own a total of 202 properties – 2.7 properties per Senator – estimated to be worth around $107 million.
Further, 91 per cent of all Senators own real estate (57 per cent investment/commercial property/vacant land, 41 per cent owner-occupied and 2 per cent recreational), 75 per cent have a mortgage, and the top ten control a colossal 95 properties.
Senator Xenophon maintains an impressive portfolio of eight investment properties, along with Senator Barry O’Sullivan from the National Party who owns an incredible fifty properties (see Table 2). The high concentration of landed gentry in the Senate acts as a vested interest to pass policies which inflates housing (land) prices.
<img src="/images/2014/08/06/Figure1-1.png" alt="">
<img src="/images/2014/08/06/Figure2-1.png" alt="">
The 150 members in the House of Representatives also have substantial property interests. In total, they own 361 properties – 2.41 properties per member – estimated to be worth around $191 million. 
Moreover, 95 per cent of all Representatives own real estate (54 per cent investment/commercial property/vacant land, 43 per cent owner-occupied and 3 per cent recreational), 86 per cent have a mortgage, and the top ten own an astonishing 92 properties. Double-digit property holdings are maintained by David Gillespie (NP, 18 properties), Clive Palmer (PUP, 13 properties), Natasha Griggs (CLP, 12 properties) and Karen Andrews (LIB, 10 properties) (see Table 2).
<img src="/images/2014/08/06/Table2-1.png" alt="">
The trends in the data suggest a sizeable majority of federal politicians have a vested interest in maintaining high housing prices, particularly since most have mortgages over their own investments. A fall in housing prices may cause many politicians to fall into negative equity, providing a strong incentive for politicians to enact legislation which has helped fuel a <a href="https://www.australiaboomtobust.com/">housing bubble</a>, enriching owners.
When the top twenty members of the landed gentry in federal parliament own 191 properties, it is difficult to believe that politicians will address the real causes of housing unaffordability, despite the recommendations from <a href="https://www.propertyoz.com.au/library/A%20good%20house%20is%20hard%20to%20find%20report%20JUNE%202008.pdf">government reports</a>.
If federal senators like Xenophon are <a href="https://www.worldeconomicsassociation.org/books">looking for solutions</a>, the focus should be on negative gearing, capital gains tax concessions and exemptions, liberalised SMSF and foreign property investment, first home owner grants and boosts, deregulated bank lending, land-banking, town planning, local infrastructure and development levies and the absence of a uniform land value tax.
The property-rich Senate and House of Representatives cannot be trusted to act in good faith on matters concerning real estate. Aversion to evidence-based housing policy has a long and tortured history, owing to federal politicians’ interest in maintaining the value of their collective real estate bounty, and also fearing a voter backlash following any substantive reforms that reduces prices, let alone the corrosive lobbying (legalised bribery) by the <a href="https://en.wikipedia.org/wiki/FIRE_economy">FIRE sector</a>.
Politicians regularly demonstrate flagrant ignorance of policies which lead to more affordable housing, having consistently implemented flawed reforms that actually increase prices. Negligence and indifference has become par for the political course, suggesting the direction of housing policy must be freed from the vested interests of an unrepresentative parliament.
 
<a href="https://www.australiaboomtobust.com/buy-now" target="_blank" title="Australia: Boom to Bust. Buy Now">Click Here</a> to purchase a copy of the book ‘Australia: Boom to Bust’ from your preferred book retailer. 
<a href="https://www.worldeconomicsassociation.org/books" target="_blank" title="Bubble Economics">Click Here</a> for a copy of Bubble Economics by Philip Soos and Paul Egan.
Lindsay David is a co-founder of clean technology company GreenRigCo and a former strategy &amp; business development consultant. Lindsay holds an MBA from IMD Business School.
Philip Soos is an economist and post graduate candidate at Deakin University. He has recently co-authored <a href="https://www.worldeconomicsassociation.org/files/Bubble_Economics_Egan_Soos.pdf" target="_blank">Bubble Economics: Australian Land Speculation 1830-2013 </a>with Paul D Egan.
Paul D. Egan was previously employed as a supervisor and policy officer at the state government level.
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The propertied federal politicians: Pollies and their $300 million property portfolio

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GUEST OBSERVATION
The draft proposal to allow first home buyers to access up to $25,000 from their superannuation to buy their first home is absolutely ridiculous.
The whole concept of superannuation itself is to provide compulsory savings for people who are working, so they have a fund tofall back on when they retire.
At some stage in the future, Australia will not have a pension. Superannuation is a forced saving scheme, so people who are working now become self-funded retirees.
If first home buyers are able to access their superannuation in the first stage of their working lives - and most of them are under 30 years of age - they'll be taking a large lump sum of money that will take away massive growth from the early stages of their fund's growth.
What's appears to be a little problem now will turn into a catastrophic event when it's time to retire. It will just create another push on affordability, from a different angle.
If the policy goes through and it sees a big take up, we could see house prices go up, through greedy developers.
When there was the full switch over to first home owner grants for only new properties, you saw prices increase overnight for new house and land packages. One day they were $310,000, and the next day they were $330,000.
Superannuation is a very heavily governed industry. So I'm sure the take-up will not be as big, initially, as ASIC oversees the superannuation industry and it will be heavily regulated. But if it does take off, you will definitely see the sharks out there taking advantage and putting prices up.
Rather than dipping into their funds, and trying to outstretch themselves, first home buyers should rethink where they want to buy. If you can't afford to buy in an area, you shouldn't be trying to live there. If you can't afford to save a deposit for a home after paying rent, that also says you probably can't afford to live there.
Instead of taking money out of their super, first home buyers should think about changing their spending behaviours.
As a society, we have people to mow our lawns, we buy a coffee each day, we have our clothes dry cleaned, we're having our cars washed. We even have our dogs washed! 20 years ago, that never happened. It's about getting back to basics.
Every week, when you get paid, you should be putting some money aside. Some say, "that money simply isn't there". If that's the case, you're probably living in an area out of your budget. You should be able to save some money, even if it means you can't live in the most desirable part of Sydney or Melbourne. People are certainly living beyond their means.
You might need to live in the outer suburbs. Sydney is the worst location for affordability, even in the outer suburbs - so it might mean you need to consider moving to Melbourne. On the outskirts of Melbourne, there are plenty of new houses available for $300,000.
When I bought my first property, it was a little one bedder, and certainly not ideal. I saved by bum off to get a deposit together. And there wasn't a first home owners grant either. Homes are a lot more expensive today, but incomes are also a lot higher.
Of course, some industry organisations will support the proposal. Everyone has an agenda. Everyone wants to see a "good" property market. The developers want to sell properties. The real estate agents have to sell properties. They're obviously going to support it. The building associations obviously support it as well.
In reality, first home buyers need to rethink how they save for their first property.
TODD HUNTER is buyer’s agent, director and location researcher for Sydney-based <a href="https://www.wheregroup.com.au/" target="_blank">wHeregroup</a>.
He reached a personal investment portfolio of 50 properties in 2006 and has also started building an SMSF portfolio.
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thunter-umjjMzoT8b

Allowing first home buyers access to their super isn't the answer

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The Housing Industry Association has said that it’s time to allow young buyers access to their superannuation savings to assist with a deposit in getting into a new home, saying that it would also assist them in retirement.
HIA executive director, industry policy and media, Graham Wolfe, said that superannuation contributions are a form of forced savings to assist in retirement.
“Owning a home delivers the same result, but with the added benefits arising from home ownership throughout their working lives,” said Wolfe.
“Many young people are busy working, renting, repaying their education costs and in many instances, raising a family,” he said.
“Saving for a deposit at the same time is a significant challenge.”
He noted that enabling access to a portion of their superannuation will allow many first home buyers to accumulate a deposit, redirect their rental payments to their own financial security and allow home ownership sooner.
“Accessing superannuation for a home deposit would provide temporary access to their personal savings. Provided it was repaid to their superannuation accounts over a period of time, similar to university HECS repayments, their retirement savings would be assured,” he said.
“HIA urges all stakeholders to support measures aimed at improving access to home ownership for first home buyers, including assistance in breaching the deposit gap.”
Allowing first home buyers access to their superannuation is something that has been previously encouraged by the Real Estate Institute of Australia for some years, including <a href="/news/reia-urges-government-to-allow-fhbs-to-dip-into-superannuation-for-a-home">in their submission to the last government budget</a>.
It would follow <a href="/news/act/australia-could-learn-from-new-zealands-first-home-buyers-super-scheme-reia">New Zealand</a> and <a href="/expert-insights/investing/reia-lobbies-for-canadian-style-first-home-buyer-scheme">Canada</a>, who currently allow this.
However, last time Property Observer<a href="/news/exclusive-should-australia-follow-canadas-home-buyer-plan-the-experts-have-their-say"> surveyed our panel of experts about whether following Canada’s first home buyer schemes would work</a> for Australian first time buyers, most said that there are other fundamental issues that should be addressed before allowing them to tap into their superannuation.
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