One of Brisbane's last major riverfront redevelopment opportunities has taken a significant step forward, with Lendlease selected as the Queensland Government's preferred development partner for the former Visy site in South Brisbane.

The seven-hectare industrial site, positioned between South Bank and West End and 1.3 kilometres from the Brisbane CBD, will be transformed into a mixed-use precinct expected to deliver more than 4,000 new homes alongside extensive public open space and riverfront parkland.

The project is one of the largest urban renewal opportunities currently planned in Brisbane and is expected to play a key role in accommodating the city's growing population ahead of the 2032 Olympic and Paralympic Games.

Plans for the precinct include a network of riverfront promenades and boardwalks, new public plazas, parkland, amphitheatre-style gathering spaces and shared pedestrian and cycling links designed to reconnect the long-isolated site with the Brisbane River.

The Queensland Government is targeting delivery of the first homes and key public spaces before the 2032 Games, allowing the precinct to begin contributing new housing and public amenity well before the broader masterplan is complete.

The redevelopment is also expected to support more than 3,000 jobs across planning, construction and ongoing operations.

For Lendlease, the appointment adds another major urban regeneration project to its Queensland portfolio. The developer has operated in the state for more than 70 years and has delivered a number of large-scale mixed-use precincts in partnership with government.

Lendlease Development CEO Claire Johnston said the project represented one of Brisbane's most significant redevelopment opportunities.

"The transformation of the former Visy site represents a rare opportunity to reimagine one of Brisbane's most significant riverfront locations, deliver thousands of much-needed homes, and create long-term legacy," Johnston said.

"In partnership with the Queensland Government, we have the opportunity to create a new riverside destination that will help shape Brisbane's growth and how people experience the city for decades to come.

"This is exactly the type of large-scale, city-shaping development that will provide lasting benefits for Queensland, bringing together housing, jobs and world-class public spaces."

Deputy Premier and Minister for State Development, Infrastructure and Planning Jarrod Bleijie said the riverfront transformation would deliver a thriving new community precinct.

“The Crisafulli Government is delivering this golden opportunity to unlock a riverfront jewel for all Queenslanders,” Deputy Premier Bleijie said.

“This is a once-in-a-generation moment to reshape a significant slice of Brisbane and deliver lasting benefits – thousands of new homes, and public spaces for all Queenslanders to enjoy well beyond the 2032 Olympic and Paralympic Games – unlike Labor’s plan which would have delivered zero benefits and zero new homes.

“Queensland is well and truly open for business and through partnership with the private sector, we are accelerating delivery while ensuring strong housing, community and economic outcomes."

Early works on the precinct are expected to commence in April 2027.

Joel Robinson

Lendlease selected to deliver transformative South Brisbane riverfront precinct

Eddy Haddad's <a href="https://www.apartments.com.au/developers/level-33">Level 33</a> is levelling up its approved Wollongong development, as the coastal city south of Sydney continues to prove popular in the high-density development space.

Level 33, a longtime developer in the Wollongong area, has gone through the NSW Government's Housing Delivery Authority to upsize its approved two-tower development on the corner of Crown Street and Gladstone Avenue, just 100 metres from Wollongong Station.

The developer currently has approval for 252 apartments across two buildings rising to 19 storeys. It is now seeking approval for 33 and 38-storey towers that would deliver 467 apartments, including 67 affordable homes.

Designed by <a href="https://www.apartments.com.au/architects/bka-architecture">BKA Architecture</a>, the development would comprise apartments above a three-level podium with around 1,100 sqm of retail space, along with basement parking for 448 vehicles.

According to the Urban Design Report by BKA, the proposal has the capacity to "reinforce the precinct's identity by strengthening links between health, education, and transport services, while also contributing to Wollongong's ongoing evolution as a key regional centre."

Wollongong is somewhat in vogue. Between Level 33 and Urban Property Group, the two developers have several thousand apartments planned across the city.

Level 33 is currently delivering Easterly Wollongong, one of its most boutique projects to date with just 21 high-end apartments, as well as Atchison &amp; Kenny, a 329-apartment development due for completion later this year.

The developer plans to redevelop the 13,088 sqm WIN Grand megasite into <a href="https://www.apartments.com.au/new-apartments/crown-square-216-238-keira-street-wollongong-nsw-2500">Crown Square</a>, a new $500 million precinct with nearly 600 apartments. It also has more than 900 apartments planned for the former Bunnings Warehouse site at the intersection of Gipps and Flinders streets.

Urban Property Group is also playing a major role in the city's transformation. Its five-tower Keira Place precinct will deliver more than 800 homes, and it has recently lodged plans for a further 300 apartments near Wollongong Station.

First look: Level 33 upsizes Wollongong apartment towers

Just a week after filing plans for the final stage of its major Keira Place masterplan, <a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has unveiled another significant housing proposal in Wollongong, this time targeting a prominent site opposite North Wollongong Station.

The developer has lodged a State Significant Development Application for a 38-storey mixed-use tower at <a href="https://www.apartments.com.au/new-apartments/4-4a-flinders-street-north-wollongong-nsw-2500">4-4A Flinders Street</a>, around one kilometre north of the <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place precinct</a> currently taking shape on the edge of the CBD.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="2b6428f1-6405-4038-8476-897de440e90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium.png?VersionId=QLqEvK0OuCEwRC47oHNftrw2B1YqaHF8" />

Designed by Studio.SC, the proposal comprises a 38-storey mixed-use development containing 303 apartments, including 45 affordable housing units, alongside 174 co-living residences. The scheme also includes ground-floor retail space, extensive landscaping and public domain improvements.

Studio.SC noted in the proposal it "outlines a vision for a landmark transit-oriented mixed-use development centred around North Wollongong Station, designed to support the city’s future growth while responding to the NSW Government’s housing and planning reforms."

The architecture firm said the proposal responds to the opportunities and constraints shaping future growth within the 400-metre catchment of the station and represents "a coordinated and future-focused approach to urban intensification, contributing to the long-term evolution of North Wollongong as a connected, walkable and high-density station precinct."

The site occupies a strategic corner bounded by Flinders Street, Station Street, Stafford Street and the Princes Highway, directly opposite North Wollongong Station.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="7863adad-1f71-4022-b850-f44b252738fd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium%20a.png?VersionId=WsU7av0g8_8R2tGHWxgHeFSlhu7yeY1V" />

The proposal follows Urban Property Group's recent submission for the second and final stage of Keira Place, which would deliver a further three buildings comprising 657 homes opposite Beaton Park. It builds on the first stage, which features 150 apartments across two towers and recently commenced construction.

Urban Property Group CEO Patrick Elias said breaking ground on the first stage marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/urban-property-group-unveils-trio-of-towers-for-next-stage-of-new-wollongong-precinct-keira-place">Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place</a>

First look: Urban Property Group plans next major Wollongong tower

<a href="https://www.apartments.com.au/developers/arada">Arada</a> has wasted little time expanding its ambitions in Campsie, lodging plans for a second major project in the rapidly transforming town centre just months after unveiling its three-tower One Campsie proposal on Beamish Street.

The UAE-backed developer has now taken aim at one of the suburb’s most strategically positioned sites, filing a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/10-north-parade-campsie-nsw-2194">33-storey mixed-use tower</a> at 10 London Street and 43 North Parade, directly opposite the future Campsie Metro Station. The proposal is currently on public exhibition and represents another significant vote of confidence in Campsie's emergence as one of Sydney’s key transit-oriented growth centres.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the development would deliver 156 apartments above a podium containing retail and commercial space, creating a new residential and commercial gateway to the town centre. The scheme also includes a four-level above-ground parking podium and a dedicated residential amenity floor featuring wellness and recreation facilities. At least 10 per cent of the apartments would be allocated as affordable housing for a period of 10 years.

The proposal occupies a 1,631 sqm site bounded by London Street, North Parade and Dispensary Lane, immediately adjoining the future Metro station precinct and just metres from Beamish Street’s retail and dining strip. According to the Urban Design Report, the project seeks to deliver "a great place that prioritises human-scaled experience and provides spatial improvements to the area."

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="175a8324-015b-4856-abe3-ce6f23199fa7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium%20campsie.png?VersionId=742UGwXFhFBX4GEl6wX4PYIWREAgn6il" />

Woods Bagot describes the tower as a key marker within Campsie's next phase of growth.

"Located directly opposite the new Campsie Metro Station on North Parade, 10 London Street is a thoughtfully composed 33-storey mixed-use tower that contributes to the ongoing transformation of the town centre," the Architectural Design Report states. The report says the project is intended to provide "high-quality homes within a vibrant, connected urban environment, while helping define Campsie's future skyline."

A strong emphasis has been placed on the public realm. The ground floor incorporates over 500 sqm of retail space and active frontages along both London Street and North Parade, while the podium is wrapped by extensive landscaped planting intended to soften the building's scale and strengthen the pedestrian experience. The development would also widen surrounding footpaths and improve connections between the Metro station and the broader town centre.

Above the podium, residents would have access to more than 1,400 sqm of communal amenities, including a pool, gym and landscaped recreation spaces. A distinctive green-wall treatment extending across four podium levels forms a major architectural feature, helping differentiate the project within the emerging high-density precinct.

The tower's design is closely tied to the broader Campsie Town Centre Master Plan and the arrival of Sydney Metro. The Urban Design Report notes the proposal "directly supports the Campsie Town Centre Master Plan by delivering new homes in a location explicitly identified for growth, improved accessibility, and high-quality urban renewal." It adds that the project contributes to the master plan's vision for a strengthened town centre supported by thousands of new homes around the future Metro station.

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="bfd17654-253e-489a-bade-6278d63db412" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/base%20campsie.png?VersionId=3roJPMQGs36dazpkhvpvbDDP73Ld.Ica" />

The application follows Arada's recently lodged One Campsie project at 124–142 Beamish Street and 16–18 Ninth Avenue, where the developer is seeking approval for 346 apartments across three towers rising 24, 32 and 39 storeys. Together, the two proposals would cement Arada as one of the most influential developers shaping Campsie's future urban form.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-arada-files-for-trio-of-apartment-towers-in-campsie-town-centre">First Look: Arada files for trio of apartment towers in Campsie town centre</a>

Arada entered the Australian market in 2024 and has rapidly assembled a significant development pipeline across Sydney. Alongside its Campsie holdings, the developer is soon to launch <a href="https://www.apartments.com.au/new-apartments/wattle-green-2-fishburn-crescent-castle-hill-nsw-2154">Wattle Green</a> in Castle Hill, and has expanded its local operations following its acquisition of construction firm Roberts &amp; Co.

Located around 14 kilometres south-west of the Sydney CBD, the site sits at the centre of one of Sydney's fastest-changing middle-ring precincts. The Metro conversion of Campsie Station, combined with Canterbury-Bankstown Council's master planning framework, is driving significant residential intensification around Beamish Street and North Parade, with thousands of new homes expected over coming decades.

First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans

For the first time in a long time, Australia's inflation story is starting to look more like a landing than a fight.

The latest Consumer Price Index figures from the Australian Bureau of Statistics showed annual inflation eased to four per cent in May, down from 4.2 per cent in April. On the surface, that might not seem like a major move. Inflation remains above the Reserve Bank's target range and some categories continue to record stubborn price growth.

But the significance of this result lies less in where inflation sits today and more in what it means for where interest rates are likely heading next.

The biggest takeaway is that inflation continues to move in the right direction.

Markets had been bracing for another sticky result after a period where progress appeared to stall. Instead, headline inflation came in softer than expected, helped by falling fuel prices and easing transport costs. Annual transport inflation halved from 6.6 per cent in April to 3.3 per cent in May, while automotive fuel prices fell 11.9 per cent during the month following lower oil prices and the impact of reduced fuel excise measures.

While petrol prices don't solve Australia's affordability challenges, they are one of the most visible and immediate costs for consumers. Falling fuel costs feed through the economy quickly, helping ease pressure on household budgets and business operating expenses.

The ABS data also showed headline inflation is now sitting at its lowest annual level in several months, reinforcing the broader trend that price growth is gradually moderating.

That trend is important because it aligns with what many economists and lenders have been saying for the last month.

Prior to this week's inflation data, ANZ, NAB and Commonwealth Bank had all shifted their forecasts, now believing the Reserve Bank had likely reached the peak of the interest rate cycle. Following the May inflation release, ANZ reaffirmed that view.

In its latest economic update, ANZ said it expects quarterly trimmed mean inflation to come in at 3.7 per cent for the June quarter, slightly below the Reserve Bank's forecast of 3.8 per cent. Importantly, the bank said that outcome, when combined with slowing economic activity, "supports our view that the cash rate has peaked".

The Reserve Bank has spent the better part of three years attempting to bring inflation under control through higher interest rates. If Australia's major banks are correct and rates have now peaked, the conversation shifts from how much higher rates could go to when they might begin coming down.

Westpac's caution comes from underlying inflation. The trimmed mean, the measure most closely watched by the Reserve Bank, increased from 3.4 per cent to 3.6 per cent annually. Housing inflation remains elevated at 6.5 per cent, reflecting ongoing increases in rents, electricity costs and new dwelling construction.

Electricity prices remain particularly problematic, rising 21.1 per cent over the past year following the removal of government rebates.

Housing construction costs are also showing signs of renewed pressure. ANZ noted new dwelling costs rose 0.9 per cent in May and are now running at an annualised pace of 8.6 per cent over the past three months. Builders continue to face higher labour, fuel and material costs, a reminder that inflationary pressures have not completely disappeared.

Housing affordability has deteriorated largely because of higher interest rates rather than higher property prices alone. Even modest reductions in mortgage rates would improve borrowing capacity, increase buyer confidence and reduce repayment pressure on existing homeowners.

While August is far from a certainty, the latest inflation result has strengthened the view that the next move in rates is more likely to be down than up. For borrowers, buyers and the development sector, that alone represents a significant shift from the conversation that dominated much of the past two years.

The inflation result the property market was waiting for

2017 Budget

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The 2017 Federal Budget is expected to provide a shot in the arm for Australia’s $80 billion civil construction market, offsetting further declines in resources-related work, according to forecaster BIS Oxford Economics (BIS).
The total measured work done in the sector would fall to $79.5 billion through 2016/17, down 16 percent on the previous year and 41 percent off the 2012/13 peak of $135 billion, BIS said at the launch of its civil construction report, Engineering Construction in Australia 2017 – 2031. 
However, public sector-funded engineering construction to set to rise to more than $35 billion by 2018/19, almost 30 percent above its 2015/16 level, BIS said based on an analysis of current government spending programmes.
The government plans to spend $75 billion on development and upgrade of infrastructure, which includes a potential buy-out of the Snowy Hydro scheme from the states. Also included is a $20 billion rail line upgrade.
The surge in public sector-funded construction would offset further falls expected in privately funded engineering construction – particularly in the LNG-heavy oil and gas segment – keeping total engineering construction activity in the $75-80 billion per annum range.
“The boom in public infrastructure construction is exciting news as it helps drive a sizeable upswing in non-resources civil construction activity,” BIS senior manager of Infrastructure and Mining Adrian Hart said.
While state and territory governments provide the principal funding for infrastructure investment, the federal government plays an increasingly vital role in supporting state infrastructure programmes and funding nation-building infrastructure.
“This is evident in the sizeable investment plans presented in the 2017/18 Budget, including the ‘off Budget’ commitments to Inland Rail, the construction of Sydney’s second airport, and the ongoing rollout of the NBN,” Hart said.
The increasing use of ‘off Budget’ vehicles by the Federal Government for funding and delivering major infrastructure assets under-reports the true impact of Federal Government infrastructure spending in the Budget – particularly the reported National Partnership Payments to the State and Territory Governments which includes the $75 billion Infrastructure Investment Program (IIP) and Infrastructure Growth Package, he said.
“On first blush, the outlook for Federal infrastructure contributions to the States to 2020/21 is on a declining trend after 2017/18, with lower levels of funding for 2015/16 and 2016/17 compared to the previous Budget,” Hart said.
"However, Federal funding is now higher in the out-years compared to last year, and this does not take into account the sizeable equity contributions required to construct Inland Rail and the Western Sydney Airport, and complete the rollout of the NBN." 
Longer term risks remain to public infrastructure investment
However, there may be risks to longer term public infrastructure funding if the economy turn out weaker than expected by the federal government through the next four years, cautioned BIS.
“The economic forecasts presented in the 2017/18 Federal Budget are certainly rosier than ours,” said Dr Sarah Hunter, head of Australia Macroeconomics, BIS Oxford Economics. 
“Our main concerns are around the projected growth rate of household income and expenditure, which determine income tax and GST revenues. As these account for almost two thirds of total revenues, any miss on these projections will keep the budget in deficit beyond FY 2020/21. Without other spending cuts or tax rises, our forecasts suggest the budget will remain in deficit until at least the mid-2020s.”
In any case, BIS forecasts a downturn in public sector-funded engineering construction work in the early 2020s as a major program of road works, as well as the rollout of the NBN, winds down across the country.
“It will be hard for State and Federal governments to sustain these higher levels of public infrastructure investment in the long term,” said Hart. “Governments must continue to implement sensible tax and expenditure reforms to ensure sustainable funding for infrastructure, as well as maintaining a long term pipeline of productive projects, if a sharper downturn in publicly funded work is to be avoided.”
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jonathanchancellor-7SQnKwU6yx

Federal Budget to drive 30 percent rise in public infrastructure construction: BIS

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Investors in residential property, particularly strata units, will be hit hard after the budget announcements, according to quantity surveyors Leary &amp; Partners.
The budget has stripped investors buying second-hand residential properties of a major tax deduction, said quantity surveyor and tax law expert Kaylene Arkcoll. 
Pre-budget there was much speculation about limits on negative gearing, but the government unexpectedly announced it was restricting depreciation claims by investors.
"Purchasers of second-hand residential investment units have lost their ability to claim depreciation on plant and equipment which is part of the property at the time of purchase,” said Arkcoll, saying it was one of the standard forms of residential investment deduction.
The government will limit plant and equipment depreciation deductions to outlays actually incurred by investors. There is no lead-time with these changes and apply to all contracts after Budget night.
The change is forecast to save $260 million dollars over the next four years.
Depreciation claims on investment properties is a powerful driver for most investors, said Arkcoll. 
For second-hand residential properties, the budget blocks this avenue of investment joy for everyone except investors who carry out renovations or replacements. 
"Older building stock may now be less desirable,” said Arkcoll. 
Under new rules coming into effect from July 1, depreciation deductions for plant and equipment items such as washing machines and ceiling fans will only be allowed if the investor actually bought them. It is described as an “integrity measure" and is intended to address concerns that items are being claimed as tax write-offs by successive investors in excess of their actual value.
The changes will apply to any items purchased after budget night, May 9, but existing investments will be grandfathered.
Details of the policy are still limited but Arkcoll said that it appears that:
- The intent of the policy is to restrict depreciation claims to items purchased and installed in the property by the claiming taxpayer. 
- Depreciation deductions will remain available for items that are part of a new property purchased from a developer, although this is not explicitly stated in the budget papers. 
- Subsequent purchasers of the property will no longer be able to claim depreciation based on the second-hand value of the plant and equipment.  
- Taxpayers already depreciating plant and equipment can continue to claim deductions in the current manner.
"The removal of depreciation claims will have a double impact on strata property owners", she said.
"They will lose both the claim for depreciable items inside their unit and depreciation of their share of common plant and equipment. This will mean a reduction in annual tax deductions that in the early years of ownership range from approximately $3,000 for a simple unit to over $40,000 for an upmarket unit in a high-rise development."
She said that till more details are available, i.e. when the draft legislation is released, it would be difficult to fully assess the ramifications of the budget announcement. 
"The elephant in the room remains the government's ability to pass such a substantial change through a volatile senate,” Arkcoll said.
"Thankfully, there has been no change to the 2.5 percent Division 43 construction allowance which applies to most properties constructed in the past thirty years.”
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Investors to be hit hard by budget depreciation rules: Leary & Partners 

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GUEST OBSERVER
With so much debate about housing affordability it was always going to be the case that the 2017 budget included key policies aimed at improving the affordability of housing and addressing some of the systemic issues that have pushed housing prices out of reach for many Australians.
At face value, the budget measures present a good attempt at improving housing supply while softening some of the incentives stoking housing demand.  From a housing perspective, key elements of the budget can be divided into polices that influence supply or demand.
From a supply perspective, the government has announcedIncentives for downsizers – proceeds from the sale of the family home can be contributed to superannuation, capped at $300k.
The National Affordable Housing Agreement which currently exists between the states and federal government will be maintained, but the rules of how the $1.3 billion is used will be tightened to ensure states deliver adequate new public housing supply and reform the urban planning framework.
Federally owned land that is available for development will become more transparent via an online register.  Additionally, surplus land holdings will be offered up for residential development with a high profile parcel of land in Melbourne’s Maribyrnong offered as the first example.
A new City Deal has been announced for Western Sydney that will help to support strong population growth via a coordinated funding approach with state and local governments.
The budget has outlined a national $70 billion spend on transport infrastructure through to 2021 (a $50b increase from the last budget). Investment in better transport has the dual benefit of creating jobs and improving productivity as well as linking regions with affordable housing to employment nodes and social precincts. 
Funding for community housing has seen a substantial boost with the establishment of the National Housing Finance and Investment Corporation – a bond aggregator designed to source funds for lending to community housing organisations at lower interest rates on longer terms.
From a demand perspective there have been several policy announcements aimed at reducing housing demand from key areas.
First home buyers have been given a leg up to assist with saving for a deposit via a new First home super savers scheme whereby they can salary sacrifice their income directly into the same account as their superannuation capped at $15k per annum and a total of $30k total.
Investment demand will see some further dampening via changes to what expenses can be claimed. Investors can no longer include travel associated with their investment property and they cant claim depreciation on ‘plant and equipment’ such as the dishwasher, oven and hot water system.  Outside of these changes, negative gearing the capital gains tax concession remains untouched.
Foreign buyer demand could be dampened as well, with the budget announcing a new $5000 levy on foreign owned properties that left vacant for at least six months over a year as well as ensuring foreign buyers are exempt from any capital gains tax concessions. Additionally, developers can’t sell more than half of a development to foreign buyers.
FIRST HOME BUYERS
First home super savers scheme will help prospective first time buyers to save for a deposit, utilising a salary sacrifice arrangement directly into their super fund which will attract the same tax concessions as superannuation donations (15 percent tax rate). 
Savers can add an additional $15,000 per year or $30,000 in total.There was some risk that a demand side policy aimed at first home buyers could further fuel price growth by adding to demand, however this scheme is likely to improve demand gradually and incentive a savings strategy which is a positive outcome for first home buyers and the housing market. 
Question marks remain around how much it will help potential first home buyers in markets like Sydney and Melbourne where the market is moving swiftly but it should assist first home buyers elsewhere.
INCENTIVISING DOWNSIZERS
Home owners aged 65+ can now make non-concessional contributions up to $300,000 into superannuation from the sale of their principal place of residence which has been owned for at least ten years.  These contributions will be outside of the existing caps.This budget policy is aimed at freeing up established housing supply into the market and encouraging long term home owners who are seeking to downsize, while also having the dual effect of allowing retirees to free up equity held in their home.
The policy should add a further incentive for downsizers, however it’s also important that these long term home owners have an appropriate downsizing option to move to. Downsizers will often prefer to stay within their local neighbourhood.
Another barrier is that by cashing in their equity, some downsizers may no longer be eligible for a pension, which is means tested (the PPR is excluded from the assets test).
The other major barrier is stamp duty payments which will continue to add a disincentive to downsizing.
TWEAKS TO NEGATIVE GEARING POLICY
Investors can no longer claim travel expenses as part of their investment expenses. 
Additionally, investors can only claim deductions related to plant and equipment expenses that they have incurred directly rather than claiming expenses incurred by previous owners.
Removing travel to an investment property as a claimable expense will impact those investors with properties in regional areas or in locations that are distant from where the investor lives. 
Regional areas may be disadvantaged by this new policy, however the impact on investment demand is likely to be minimal. This is likely a response to a perception that some investors are claiming travel expenses that may be more related to personal usage rather than legitimate expenses related to their investment.
The changes to plant and equipment deductions could be more material, as it effects an investor’s ability to depreciate things such as appliances &amp; utilities (oven/dishwasher/hot water system etc) if these items were purchased by the previous owner. There could be the potential that this policy encourages investors to renovate established homes rather than purchase recently built product where they won’t be able to realise the depreciation benefits of recently installed appliances.
The 2014-15 taxation statistics show that $3.013 billion in capital works deductions were claimed. We also know that investors overwhelmingly prefer to buy established rather than new stock so this could have a significant impact on the attractiveness of second-hand investment properties and may contribute to an overall slowing in investor demand. From a rental market perspective it may provide better outcomes with owners more prepared to invest in upgrading their properties for the depreciation benefits.
FOREIGN BUYERS
Foreign owners who keep their property vacant for at least six months a year will face a levy of at least $5,000 per annum. 
Developers will be restricted in the proportion of stock that can be sold to foreign buyers.  Going forward, projects can’t have more than 50 percent of stock sold to foreign buyers.
Capital gains tax rules will be strengthened to ensure the risk of foreign buyers avoiding capital gains tax is reduced. Foreign or temporary residents will no longer be able to claim the main residence capital gains tax exemption.This $5,000 vacancy levy is aimed at ensuring foreign investors are actually contributing to housing supply and not simply offshoring their capital with no intention to occupy or lease the dwelling. The additional levy isn’t likely to act as a major disincentive to foreign investment, however the policy could be difficult to monitor and enforce.
The second part of foreign investment policy is more significant and will impact on those developers who sell a large proportion of their stock via roadshows through Asia and other regions or who rely on foreign marketing networks to sell their stock. 
Attracting domestic demand to some high-rise unit projects that have been designed specifically for foreign buyers may not have market appeal domestically.  New unit approvals have already fallen dramatically and these changes may compress new approvals further as developers struggle to achieve the required number of presales to commence construction.
Tightening the taxation rules on foreign owned property is a logical move, ensuring foreign owners pay the full rate of capital gain tax without the concession that would normally apply to Australian residents who have held their property for at least 12 months.
SOCIAL / COMMUNITY HOUSING
A new bond aggregator model will be set up via a newly established National Housing Finance and Investment Corporation with the objective being to provide finance for the community housing sector at lower interest rates over long lending terms.This policy is likely to be based on existing frameworks in the UK and Switzerland. 
The aim here is to source funding for community housing from the bond market rather than through more expensive lending arrangements via the banking sector.  
Funds would be lent to community housing providers at lower interest rates and over longer terms in an effort to support more housing options under affordable rental or purchase arrangements. 
This initiative is likely to be welcomed by community housing providers and should go a long way towards improving the amount of social housing being developed.
RE-JIGGING THE NATIONAL AFFORDABLE HOUSING AGREEMENT
Currently, states are funded with $1.3 billion each year which is to be used by them to support affordable housing initiatives.  Under the new budget policy, the funding will remain the same, however the rules will be tightened to ensure states meet agreed housing supply targets and work towards reforming town planning. This is one of the most legitimate ways the federal government can establish an affordable housing framework in conjunction with the states. 
The funding is substantial, but in the past there is the perception the funds have not been well spent with little visible benefits to public housing additions and improved housing affordability.
The new policy, may promote proper usage of the federal funding and ensure town planning reforms improve strategic land usage and land release. Firm targets around the amount of new supply and town planning reform will need to be set in transparent and achievable terms for this policy to be successful.
FACILITATING LAND RELEASE
An online Commonwealth Land Registry will be created which provides details on government owned sites that can be made available for residential development. 
Releasing suitable surplus Commonwealth land starting with 127 hectares of Defence land in Maribyrnong (Melbourne), which could support up to 6,000 new homes.
A new ‘City Deal’ for Western Sydney aimed at improving the town planning regime across 9 council areas of Western Sydney.Providing more transparency around federal government land holdings that are available, and in fact, promoted as developable for residential housing will be a welcome improvement in urban planning.  It shows the federal government is serious about offloading surplus land and ensuring it used for the highest and best use. The announcement of the Maribyrnong land release is significant, considering its proximity to Melbourne’s CBD and potential for a significant uplift in housing supply in a strategic location. 
‘City Deals’ have previously been signed in Townsville and Launceston with an aim to provide a long term commitment between the three levels of government to deliver strategic outcomes (new infrastructure, more jobs and facilitate growth) for the residents of the area. The City Deal funding announced for Western Sydney should provide a long term strategy for managing the high rate of projected population growth across this region of Sydney.
INFRASTRUCUTRE INVESTMENT
The budget has outlined a national $70 billion spend on transport infrastructure through to 2021 (a $50b increase from the last budget).
Significant spends include:
<ul>
<li>$5.3b to build the first stage of the Western Sydney ‘Badgerys Creek’ Airport.</li>
<li>$8.4b to build the Inland Rail project.</li>
<li>$75 billion for road and rail funding over 10 years</li>
<li>$10 billion for a National Rail Program aimed at improving urban and regional rail over a 10 year period.</li>
<li>$1 billion for infrastructure spending for Victoria, including $500m for regional rail, $30m for airport rail link planning and a further $20.2 million for Murray Basin rail.</li>
<li>$844m for Queensland Bruce Highway upgrades.</li>
<li>$700m for WA’s Metronet rail project</li>
<li>$2.9b for the Western Sydney Infrastructure Plan</li>
</ul>
Additionally, $1b a National Housing Infrastructure Facility over 5 years to support local governments through a range of options to finance critical infrastructure.   Overall, spending on infrastructure is stimulatory to the economy, having the dual effect of creating jobs and improving productivity. 
Many areas where housing and land is more affordable are poorly connected by efficient transport linkages, and the higher budgeted spend on transport infrastructure will go a long way towards linking these areas with more efficient transport and making these outer fringe areas more desirable to home buyers.
In addition to the budget policy announcement around housing and housing affordability, there have also been important announcements around the banking sector.
New legislation will expand APRA’s remit to include non ADI’s. This is likely to be an effort to get some risk minimisation and regulation around the non-banking / shadow banking sector which has become more active since APRA stepped up their regulatory changes aimed at slowing investment demand.
These changes could make it harder for investors, foreign buyers and businesses, who are being turned away from the major banks, to fund their property purchases.
Additionally the budget announces a 6 basis point levy on funding of banks with at least $100m in liabilities (Big 4 plus Macquarie) which is budgeted to raise $1.5 billion per year over the next four years for the federal gov.  Labour has already announced they would support this policy.  The likelihood is that this additional cost could push mortgage rates slightly higher as banks look to recoup the costs.
TIM LAWLESS heads up the CoreLogic RP Data research and analytics team and can be contacted<a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank"> here.</a>
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2017 Budget

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