IPM Property is progressing plans for its third development in Mona Vale in Sydney's Northern Beaches, and its latest will be the biggest yet.

IPM, led by Steven Sroba and Chris Webster, has filed a State Significant Development Application to the NSW Government's Housing Delivery Authority for 82 apartments on a prime 6,122 sqm site stretching across <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and just under 800m from Mona Vale town centre.

They've had <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> draw up the plans for the three-building development which will offer a mix of 26 two-bedroom units and 56 three-beds with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a>.

According to the Design Report by PBD, the built form "responds to the site’s natural fall, solar orientation, and established vegetation, creating a layered architectural expression that balances scale, materiality, and landscape”.

<img alt="159-167 Darley Street West, Mona Vale" data-entity-type="file" data-entity-uuid="44040ed2-13c6-4f18-8326-a51467cb8532" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Mona%20vale%20pers.png?VersionId=4H1gEiyyCX2yT_fYV6kAdWaaVlCttC6P" />

The proposal aims to maximise passive design outcomes, with the site’s northern orientation supporting solar access and cross-ventilation. Building footprints have been shaped to preserve high-retention trees and accommodate an overland flow path, which runs diagonally through the rear of the site.

The development includes several sustainability initiatives, such as full electrification, EV charging provisions, and generous communal open spaces integrated across the ground and rooftop levels. As outlined in the planning documents, the buildings have been stepped in both plan and elevation to reduce bulk and provide separation to adjacent dwellings, in line with the Apartment Design Guide and local controls.

The project site falls just within the 800-metre radius covered by the NSW Government’s Low and Mid-Rise Housing Reforms, which entered their second stage in February 2025. These reforms introduce specific planning controls that significantly increase the potential for medium-density housing growth within 800 metres of the Mona Vale town centre.

<img alt="159-167 Darley Street West, Mona Vale" data-entity-type="file" data-entity-uuid="5df61e6d-0696-4c1e-81c2-8d3535228878" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_9.png?VersionId=vWjI2oCZhAkCPKv4xMEVLdVNkn.keD6_" />

IPM has been active in the local market for several years. Its recent projects include Maya on Bungan Street near the town centre, a 33-apartment development completed in late 2024, and Iluka on beachfront Golf Avenue, a boutique project of just 14 apartments. Iluka set a local record in 2021 when a full-floor, three-bedroom apartment sold off the plan for $4.775 million.

Nearby in Palm Beach, IPM is also delivering Snappermans, a collection of just five luxury apartments designed by Koichi Takada Architects, located steps from Pittwater. The developer has also recently completed Como Coogee, a 20-apartment development on Carrington Road.

Joel Robinson

First look: IPM plans third Mona Vale project

With demand for high-quality family homes in the inner west continuing to rise, young families are increasingly turning to new forms of multi-generational living.

At <a href="https://www.apartments.com.au/buildings/ashbury-terraces-ashbury-165-171-milton-street-ashbury-nsw-2193">Ashbury Terraces</a>, Nikki Pham and Danny Lai are among the growing number of residents choosing the precinct for its space, design integrity and strong sense of community.

For Nikki and Danny, purchasing a three-storey terrace was about securing a long-term home for their young family. Having spent most of their lives in the inner west, they first discovered the project while it was under construction.

“We walked past and had a look during the build and instantly felt the vibe. It had everything we were looking for,” said Nikki.

A return to green, open spaces was a major drawcard after living closer to the CBD.

“We like going for walks, and here it feels like a mini oasis while still being central to everything we need,” she said.&nbsp;

[smartcode_project:default project_id=112253 project_image_fid=354944]

Inside, the couple were immediately drawn to the craftsmanship.&nbsp;

“I love the Calacatta marble and timber detailing. If I’d designed it myself, these are exactly the fittings and fixtures I would have picked,” Nikki said. “There’s actually very little I’d change.

“We’ve found the craftsmanship has been great and I believe the beautiful arches and curves, including on our stunning staircase, are all made by hand.”

Since moving in with their seven-month-old baby in mid-August, the family has been making the most of the amenities, especially the pool.&nbsp;

“We love using the shallow area with the baby. It’s great for kids, and the sunbeds are perfect when it’s not too hot,” Danny said.

[smartcode_project:default project_id=112253 project_image_fid=354939]

The home features kitchen, living and dining areas on the ground floor with courtyard access to the pool, two bedrooms and a study on the middle level, and a master suite on the top floor. The proximity to local parks, childcare, and schools also made it an easy choice.

Nikki has noticed the project is sparking interest from the extended families of new residents.&nbsp;

“Several of our neighbour’s parents have now bought here too. It’s ideal for multi-generational living because everyone has their own space but you’re still close by.”

<h2>A growing trend in the inner west</h2>

Aras Labutis, Head of Urban Transformations at <a href="https://www.apartments.com.au/developers/coronation-property">Coronation Property</a>, said families like Nikki and Danny’s reflect a broader shift.

“Ashbury Terraces was designed for families at different life stages who want to stay connected to the inner west, including multi-generational households," Labutis said.

"Some terraces even include lifts, which make them ideal for older residents who want to remain independent while living close to children or grandchildren."

[smartcode_project:default project_id=112253 project_image_fid=354936]

Recent ABS data shows around one in five Australian households is now multigenerational, following a 22 per cent rise in the five years to 2021.

“The demand we’re seeing aligns with broader national data showing ongoing growth in multi-generational living as families look for practical, long-term solutions in well-connected suburbs.”

<h2>Milton Estate launches as the precinct’s next chapter</h2>

Following this strong response, Coronation is now registering expressions of interest for Milton Estate, the next evolution of the precinct. Strong sales and sustained interest in family-focused inner west homes have underpinned the decision to bring this next stage to market sooner than anticipated.&nbsp;

[smartcode_project:default project_id=112253 project_image_fid=358839]

The new collection continues the same design principles, quality materials, heritage sensitivity and family-focused layouts, and its launch reflects demand from both local buyers and extended families who want to remain part of the growing community at Ashbury Terraces.

<h2>A new neighbourhood taking shape</h2>

Designed by award-winning architects <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, and brought to life with landscaping by <a href="https://www.apartments.com.au/landscape-architect/360-degrees-landscape">360 Degrees</a>, Ashbury Terraces comprises 136 residences across five low-rise buildings, supported by amenities including a pool, gym and landscaped communal spaces.

For Nikki and Danny, it already feels like a place to grow for years to come.

“We’ve found great childcare nearby, and Ashbury Primary and Trinity Grammar are within easy reach. There are other excellent public and private school options too,” Nikki said.

“It’s hard to find something like this in the Inner West,” she added. “It’s certainly unique in <a href="https://www.apartments.com.au/developments/ashbury-nsw-2193">Ashbury</a>. We’ve got everything we need here and it already feels like home.”

[smartcode_project_cta:default project_id=112253]

Staff Writer

Ashbury Terraces proves a perfect fit for growing families and multi-generational living

An exclusive collection of luxury Sky Homes featuring sweeping water views, each with their own private rooftop terrace and marina berth, are part of the latest release at Lewis Land’s visionary <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplanned community.&nbsp;

The Sky Homes, which sit within the Signature Collection, have been designed by&nbsp;<a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>&nbsp;and&nbsp;feature contemporary light-filled coastal interiors, accented by natural textures of timber and stone. The homes range from 282 sqm to 367sqm and offer three bedrooms, three bathrooms, multiple living zones, three car parks, large private balconies, and their own rooftop terraces. &nbsp;

[smartcode_project:default project_id=113271 project_image_fid=359204]

<a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the three double-storey Sky Homes occupying the &nbsp;upper levels of The Waterline apartment building formed part of the masterplan’s Signature Collection of &nbsp;luxury residences. &nbsp;

“The exclusive Sky Homes are more than penthouses, they are double-storey homes featuring expansive living spaces and outdoor terraces,” Mr Long said.&nbsp;

“Located on levels five and six of The Waterline, each Sky Home includes its own private marina berth with direct Broadwater access and carefully curated high-end finishes throughout.”&nbsp;

&nbsp;

[smartcode_project:default project_id=113271 project_image_fid=359206]

The launch of The Signature Collection coincides with the milestone topping out of The Waterline, the first of three residential collections being delivered in the first stage of Harbour Shores.&nbsp;

Residents will also have access to a private pool and other resident-only amenities including a large &nbsp;lagoon pool, social clubhouse, tennis court, gym, yoga and sauna facilities. &nbsp;

Prices for the Sky Homes start from $3.65 million. &nbsp;

&nbsp;

[smartcode_project:default project_id=113271 project_image_fid=290031]

The Signature Collection also features The Residences, an exclusive release of six premium waterfront villas, positioned directly on the 1.2km waterfront boardwalk.&nbsp;

The Residences offer more than 350 sqm of contemporary living with premium finishes throughout and &nbsp;dining spaces that flow seamlessly to the outdoor entertaining area on the ground floor. Each have their own private plunge pool overlooking the water, and a private marina berth.

All villas include two secure car parks and residents have access to the extensive amenities within the broader precinct. Prices start from $3.05 million. &nbsp;

[smartcode_project:default project_id=113271 project_image_fid=290030]

Harbour Shores is a resort-style community focused on lifestyle and wellness where neighbourhoods &nbsp;are connected by extensive landscaping, green spaces and pedestrian networks, including a 1.2- kilometre waterfront boardwalk.&nbsp;

Boasting a 6 Star Green Star Communities V1.1 rating, the highest level of sustainability of any project &nbsp;on the Gold Coast, Harbour Shores will deliver more than 2,000 homes over the next decade.&nbsp;

Colliers is marketing Harbour Shores, and has seen significant demand from local owner-occupiers.

[smartcode_project_cta:default project_id=113271]

Lewis Land unveils Harbour Shores’ double-storey sky homes with private marina berths

PERIFA's Rozelle Village in Sydney's Inner West is the first project to receive funding as part of the&nbsp;Minns Labor Government’s Pre-sale Finance Guarantee program, a programme aimed at fast tracking new homes across the state.

More than 225 new apartments, including 59 affordable homes, will now start construction sooner as part of the $285 million Rozelle Village revamp of the derelict former Balmain Leagues Club site on Victoria Road, which received state significant development approval last year under the Infill Affordable Housing pathway.

The mixed-use precinct also includes retail spaces, community facilities, and a public plaza.

[smartcode_project:default project_id=8142 project_image_fid=335]

The Guarantee is supporting 32 affordable homes off the plan, giving developer PERIFA confidence to secure construction finance and deliver much-needed homes in the Inner West.

This arrangement gives the developer time to lock in a community housing provider to purchase and manage the project’s affordable homes, with a guarantee the Government will buy the 32 units if the level of qualifying pre-sale requirements is not met prior to project completion expected in 2028.

Since the launch of the program in October, 31 expressions of interest have been received from developers across the state, with a third of these already invited to submit full applications.

[smartcode_project:default project_id=8142 project_image_fid=325]

In addition to the <a href="https://www.apartments.com.au/new-apartments/rozelle-village-rozelle-152-victoria-road-rozelle-nsw-2039">Rozelle Village</a> project, over $100 million worth of pre-sale commitment requests have been received and are currently under assessment. If approved, this support will unlock the construction of over 350 new homes across metropolitan Sydney and regional NSW.

Under the Pre-sale Finance Guarantee, the Government may commit to buy, off the plan, up to 50 per cent of homes in approved developments, valued at up to $2 million each. Support can range from $5 million to $50 million per project, the Guarantee then allows developers to achieve commercial construction finance.

Up to $1 billion in pre-sales over the next five years will be supported through the revolving fund, making sure more projects can move from approval to construction.

The challenge of meeting pre-sale requirements is one of the most common issues cited by stakeholders in securing finance, and has been outlined as a key hurdle for industry in the NSW Productivity and Equality Commission’s Review of housing supply challenges and policy options for New South Wales. Only developers and projects that meet strict criteria for credibility, capability, and capacity to deliver are approved and invited to participate in the program.

&nbsp;

Treasurer Daniel Mookhey said the program is a "smart use of the State's balance sheet."

“This is exactly what the $1 billion Pre-sale Finance Guarantee was designed to do - move approved projects from paper to construction," Mookhey said.

“By providing a targeted pre-sale guarantee, we’re giving the market the confidence it needs to secure finance and start construction, without the Government having to spend a dollar upfront."

Minister for Planning and Public Spaces Paul Scully said Rozelle Village is a great example of how Labor's housing reforms and initiatives are working together to deliver great results.

“The Pre-sale Finance Guarantee uses the Government’s strong credit standing to help bring to life prime housing developments, including sites like this one in Rozelle that sat dormant for years. It allows more new homes to be delivered faster, creating jobs, and easing housing pressure for families across NSW.

&nbsp;

“This project was approved under the Infill Affordable Housing Pathway to deliver 59 affordable homes and now, through the Pre-sale Finance Guarantee, we’re making sure those homes are built sooner.

“By removing planning and financial roadblocks, we’re giving developers and lenders certainty, boosting housing supply, and creating vibrant communities where people want to live which means more people in more new homes quicker.”

PERIFA Group Managing Director Fabrizio Perilli said Rozelle Village is set to become the Inner West’s most vibrant, mixed-use precinct catering to the local community and residents.

“The location provides excellent access to local employment and the critical Infrastructure that key workers rely on every day.&nbsp; Strong demand for our development is already evident, with pre-sales for market homes exceeding expectations. As the first developer to be accepted into the NSW Government Pre-Sale Finance Guarantee, we are now able to accelerate construction of these much-needed homes, while working to secure the right Community Housing Provider, ensuring long-term social impact and community benefit.”

[smartcode_project_cta:default project_id=8142]

Are more homes on the way? NSW Gov backs first project in Pre-Sale Finance Guarantee program

Fresh off completing Pienza Neutral Bay, developer <a href="https://www.apartments.com.au/developers/central-element">Central Element</a> is preparing its next move in the coveted Lower North Shore suburb.&nbsp;

Central Element (CE) has lodged plans for an eight-storey apartment building at <a href="https://www.apartments.com.au/new-apartments/54-64-barry-street-neutral-bay-nsw-2089">54–64 Barry Street</a>, a 1,659 sqm site just south of Military Road and the Neutral Bay town centre.

The $52 million development will involve the demolition of four detached homes across four lots to deliver 45 apartments, including eight affordable housing units to be managed by Bridge Housing. The mix will comprise six one-bedroom apartments, 24 two-beds, and 15 three-beds. The apartments will sit above three basement levels with 62 car parking spaces and 50 bicycle spaces.

<a href="https://www.apartments.com.au/architects/mhn-design-union">MHN Design Union</a> (MHNDU) has returned as architect following its work on Pienza, again shaping a mid-rise form with a clear street presence. The design features a lower four-storey podium element that responds to surrounding context, with upper levels recessed to reduce perceived bulk. Communal open space is proposed both at ground level and on the rooftop, the latter including an outdoor kitchen and swimming pool.

“The building has been designed with a lower four-storey element and with building materials commensurate with the character of the area,” Beam Planning noted in its submission to the North Sydney Council.

<img alt="Barry Street, Neutral Bay Nsw 2089" data-entity-type="file" data-entity-uuid="3a28ab3a-b8ba-4476-81cd-e4a8bb84f3a7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Barry-Street-Neutral-Bay-1327x742.png?VersionId=hlgvxszAWXIHgHtdR5HiwIKiSli2lLZV" />

Bridge Housing will manage the affordable units for a period of 15 years, as required under the Housing SEPP’s incentive provisions.

MHNDU’s design report further highlights the site's strategic location just 250 metres from key bus stops and 1.3 kilometres from North Sydney CBD, positioning it for transit-accessible housing supply. In their planning justification, the design team emphasised the site’s compatibility with emerging local character and scale.

Central Element has a solid apartment pipeline spread all over Sydney. They recently completed&nbsp;Pienza, 37 apartments just 500 metres away from the new project, and are currently building Ethos Chatswood, Ballamac House in Coogee, and Bianca on the harbour in Drummoyne.

They have plans for future projects in Mosman, Bondi Beach, Greenwich, Lavender Bay, along with a tower on the edge of Hyde Park.

First look: Central Element unveils second Neutral Bay apartment project

Budget

<html><body>
When the Budget was released this week I kept reading with great interest that the government had failed to address ‘housing affordability’. Truth be known the only thing that the Abbott government actually controls is foreign buyers and taxation such as negative gearing and capital gains tax. With regard to foreign buyers it has been well documented that with regard to this portfolio they have Failed it with a capital ‘F’.
In fairness the Federal government would respond by saying that to the contrary they have already unleashed the Australian Taxation Office (ATO) to forensically investigate all property transactions that they believe have contravened the laws. Well if it wasn’t for some bloggers and journalists who pointed this out to the Abbott government foreign buyers would be still running amok. I believe the findings will leave most property observers gobsmacked because I believe we are talking about thousands and thousands of sales.
It’s interesting to note that last week a Senate committee made 40 something recommendations pertaining to housing affordability which included calls to review negative gearing and the appointment of a federal minister for housing, to name just two. Well I have been vocal on not having a housing minister since the Abbott government came to office. More interesting was that Coalition senators immediately rejected the findings – well no surprises there.
If you look closely at the housing affordability debate it can be quickly summed up that data shows we are not building enough high density developments. I wrote about this recently – Lots of positives from discussing negative policies where the NSW government has recognised the problem stemming from municipal councils who are rejecting developments despite the Sydney population expanding at unprecedented levels. The NSW government wants to merge councils to free up more development to meet Sydney’s population explosion.
Should the NSW government be successful with its charter then the price of apartments will obviously come down as too rents. So I’m somewhat mystified why property investors are driving up apartment prices when such a major announcement is pending.
The Abbott government needs to take a very serious look at the legislation that allows foreign buyers to purchase off the plan. I believe that it would be sage for the Abbott government to place foreign buyers on – hold until the ATO has released its preliminary findings. What we are seeing today is Chinese developers out bidding the local developers simply because the off – the – plan legislation allows them to sell directly overseas to foreign buyers so these properties never even hit the Australian market. A vast number of these properties are land banked so they remain vacant which again is self-defeating and ludicrous that this can happen in this day and age.
This week we also read that there are foreign criminals trying to buy Australian real estate to wash their money by investing in real estate. Well this is nothing new as I have heard a few examples of agents who questioned some foreign buyers who expressed interest in landmark Sydney residences.
Thailand has had serious problems with the Russian mafia who have bought up significant parts of that country where the government announced a few years ago that it was cracking down hard on these transactions. This is a global problem where Australia immediately needs to take decisive action which also means tightening the many legal loopholes.
Take the recent divestment order on Villa del Mare where it was found that the Chinese purchaser did not have Australian residence. When I wrote about this <a href="/expert-insights/treasurer-joe-s-villa-del-nightmare-robert-simeon">Treasurer Joe’s Villa del Nightmare</a> on March 5 I said that the purchaser would find an Australian resident to buy the property. Well <a href="/news/australian-buyer-lola-wang-li-emerges-with-villa-del-mare-the-39-million-point-piper-firb-home">Australian buyer Lola Li emerges with Villa del Mare, the $39 million Point Piper FIRB home.</a>
The good news to come from this debate is that for the first time “the dogs are barking” and the Abbott government has to act – and act fast. Finding a viable solution to foreign buyers will prove a much harder assignment than towing back boats.
With regard to new developments, for starters there should be a selling ratio of foreign buyers to Australian residents established.
The Australian property industry has never before encountered such a debate and much of this stems from record low global cash rates. Investors are chasing returns and Sydney is one of the hottest property markets on the globe.
The Abbott government needs to send a very clear message to foreign buyers which is either buy or bye?
Mosman Market
When you look closely at the actual numbers of properties on the market you will struggle to say that the market is booming or bubbling as some prefer to say. Historically when markets are booming this coincides with record volumes being on the market which is otherwise known as a feeding frenzy. The confusing parts about our local markets are that stock levels are down 50 per cent on this time last year or thereabouts.
MOSMAN – 2088
• Number of houses on the market this time last year – 102
• Number of houses on the market last week – 57
• Number of houses on the market this week – 57
• Number of apartments on the market this time last year – 72
• Number of apartments on the market last week – 50
• Number of apartments on the market this week – 49
CREMORNE – 2090
• Number of houses on the market this time last year – 7
• Number of houses on the market last week – 3
• Number of houses on the market this week – 4
• Number of apartments on the market this time last year – 27
• Number of apartments on the market last week – 13
• Number of apartments on the market this week – 10
NEUTRAL BAY – 2089
• Number of houses on the market this time last year – 7
• Number of houses on the market last week – 3
•Number of houses on the market this week – 3
• Number of apartments on the market this time last year– 48
• Number of apartments on the market last week – 31
• Number of apartments on the market this week – 27
 Source: APM Price Finder
</body></html>

robertsimeon-hRNTwJyXkQ

Do we tell foreign buyers to buy or bye? Robert Simeon

<html><body>
Speculation that the federal government might lift the age at which people can access their superannuation savings to 70 years should not concern people who have invested in property through a self-managed superannuation fund, a technical expert has said.
Federal Treasurer Joe Hockey last week gave strong indications that the age of eligibility for the government pension is likely to be lifted to 70 years over time while access to other government benefits for older people will also be restricted.
The statements have fuelled fears that the so-called preservation age at which people can access superannuation savings will also be raised.
But SMSF Professionals Association of Australia director technical and professional standards Graeme Colley told Property Observer that an increase to the preservation age for superannuation might advantage people who hold property in their fund.
“It might be an advantage because the longer they hold a property, the greater the likelihood of capital gains,” Colley said.
Many people who own investment property through an SMSF are forced to sell when one of the members retires if the property does not generate sufficient cash flow to pay a pension from the fund.
Colley said an increase to the preservation age for superannuation would probably be accompanied by an increase to the age at which people can make personal and voluntary contributions to their funds.
As the rules stand now, all working people can receive superannuation guarantee payments from employers into their funds, regardless of age. However, while people aged under 65 can also make voluntary or personal contributions to their funds, those aged between 65 and 75 years must meet a work test to be able to do so.
People aged over 75 are unable to make any personal or voluntary payments into their funds.
SMSFs that have borrowed to invest, particularly those that have negatively geared property, often need to sell if members can no longer contribute to the fund to make up the shortfall in cash flow.
Giving older people who were no longer working the ability to make personal contributions to superannuation would allow them to hold their property in the fund for longer, providing the advantage of holding the asset in the low-tax superannuation environment.
“The longer it is, the better it is,” Colley said.
He added there was a risk for government that lifting the superannuation preservation age beyond the planned graduated increase to age 60 by 2024 and aligning it with the age pension age could backfire and put unintended pressure on other parts of the social security system. 
Amounts accumulating in superannuation are excluded from the assets tests that determine whether people qualify for social security payments.
Older people currently moving from the workforce to the age pension, topped up with superannuation benefits, could be forced to rely on other social security payments such as the Newstart Allowance if they were unable to find work but were too young to access their superannuation or the age pension, Colley said. 
</body></html>

zfielding-GvX3Uq9KTa

Rise in pension age should not worry SMSF investors

<html><body>
The First Home Saver Account scheme was one of the Rudd government initiatives axed in the Abbott government’s first federal budget.
Under the scheme, First Home Saver Accounts were given concessional tax rates and government co-contributions. Despite offering a concessional tax rate of 15% on interest earned in the accounts and awarding 17% co-contributions on the first $6,000 deposited by savers each year, the scheme failed to attract many savers preparing to purchase their first home.
The scheme’s low take up has been attributed to poor marketing and the regulations attached to the accounts. In order to qualify for the benefits, savers needed to deposit a minimum of $1,000 a year over four years before they could withdraw any money in the account. If the money was not used for a payment on a saver’s first home, it was added to their superannuation account.
Any new accounts created after 13 May will be ineligible for tax concessions or co-contributions. Existing accounts will not receive any co-contributions after 1 July 2014. National tax director of professional services firm BDO Lance Cunningham says that the government has begun winding down the scheme.
“It’s basically been abolished but with a phase out, so that from budget night you won’t be able to open any more new accounts. But for existing accounts, the co-contribution will cease from 1 July 2014.”
Savers who hold existing accounts will be able to receive co-contributions for deposits made in the 2013-14 financial year up until July.
“Be careful, it’s only a budget announcement,” says Cunningham. “But it seems to be fairly clear that if you make contributions before July this year, the co-contributions will be honoured.
“If you haven’t reached the co-contribution cap, which I think is about $6000, you might consider depositing more money in the next month to receive your co-contribution.”
Although co-contributions will end on July 1 this year, tax concessions will continue for another year.
“The tax concessions will still be available up until July 2015,” says Cunningham. “They will still be treated as First Home Saver Accounts, but the concession ceases after that date. After July 2015, they will be treated as any other account.”
Savers who have held their existing accounts for less than the four year period will have to wait until 1 July 2015 to withdraw their savings.
Steven Gunzburg is a 26 year old account manager who holds a First Home Saver Account. He says that though he understands why the scheme is being scrapped, it provided good incentives to save.
"I was contributing the maximum amount, which increased over the past 3 or 4 years, every year." 
"Mainly it was a fantastic way to incentivise people to think about saving from a much earlier age. There’s no way in the world that it’s going to make the vast majority of my deposit, but it helps you get into the right mindset."
Gunzburg opened his account when he was 18 or 19, after his mother explained the benefits of the scheme.
"My mum actually found out about it, explained it to us and I begrudgingly put quite a reasonable amount of my money into the account," he says. But Gunzburg says that the scheme had its downsides.
"Part of the problem with the scheme was that it was so complex and convoluted, it was incredibly hard to understand when and how you could access your money."
When the scheme was announced in 2008, the Rudd government predicted that 750,000 First Home Saver Accounts would be opened over the next four years. However, as of December last year, only 46,000 accounts had opened.
Late last year, <a href="/expert-insights/calls-for-urgent-revision-of-first-home-saver-account-scheme">comparison website RateCity called for changes to the scheme</a>. Chief executive Alex Parsons said that at the time, none of the “big four” banks offered the accounts.
</body></html>

jrichardson-uRX5hFdKfN

First Home Saver Accounts scrapped: What now?

<html><body>
Whilst there has been so much commentary this week on the Federal Budget, I thought we could talk about a different type of Budget - one that’s just as important to property developers as the Budget is to the politicians.
Budgeting well for your building or construction works is crucial to the success (or not) of your development. 
Property developing can throw many different challenges at you but one thing I have learnt in this industry is there is always a solution to a problem. The trick is to understand what possible problems may arise and preparing yourself for them. This comes with experience but sometimes things don’t always go to plan and as a project manager it’s our responsibility to make sure a development is completed as efficiently as possible.
When pricing a development and running feasibilities, it is important to understand that your building estimate is an organic creature. By this I mean the building estimate you start with will nearly always be different to the one you end with.  It will evolve throughout the process as you obtain more and more details.  Once you have all the fine details, the building estimate can be finalised and a fixed price builder’s contract issued. 
When architecturally designing our villas, we follow this process:
<ol>
<li>Once the site has been secured, a Concept and Yield Plan is designed – this shows the number of units we can get onto a site and the size of each, but not much more detail.</li>
<li>After we are happy with the Concept Plan and we’ve received a Detailed Contour Survey and Geotech Report, then we progress to the more detailed Development Application (DA) plans. These include enough information to satisfy council requirements.</li>
<li>When the DA Consent is received, we finalise Construction Certificate (CC) plans – these include more detail, including engineering detail for the stormwater drainage and slab design.</li>
</ol>
Before a Concept Plan is available, the starting point in assessing the development potential is our construction estimate.  This is based on similar projects that we have recently completed and includes any allowances for differences in the sites.
The builder is asked to run their first quote based on the Concept Plan.  This is still a ‘loose’ estimate as there is not enough detail on the Concept Plan for the builder to give a finite cost.  The build estimate we have at this stage will tell us whether we are tracking within budget.  If not, we can make the necessary changes required, perhaps reducing the size of the units working with both our builder and architect to design the right dwellings for our project to be successful.
Once the Concept Plan is approved, the architect will proceed to full DA plans.  Using the information received on the Contour Survey and soil test results, there is much more detail added to the plans.  Our builder will then price the DA plans and we will review the costs against our initial estimates and make sure they are within our range for the project to be successful. At this stage we still do not have the final build cost but we will be getting closer to the expected outcome.  Once approved by our client, the DA plans are finalised and the DA is lodged with council.
During the DA process, council may request some changes to the plans, so it is important to understand we are still ‘evolving’ at this stage. Then once approved, we need to review the Conditions of the DA Consent before we have more detail to finalise the build costs.
Next we move to preparation of the CC plans.  Engineers will be briefed and a stormwater drainage and engineered slab design or footings for the foundations will be produced. More detail is added to the CC plans, finalising levels and double checking schedules. 
Before we lodge the CC plans with our private certifier we will have our builder issue a third costing. It is this costing that will give us the final build costs...well almost.  We still need to have the CC approved and ensure there are no further revisions to the plans required.  
After we have the CC stamped plans, our builder will issue their final tender and the building contract. This will be a fixed price contract; however, there may still be a few items that will be ‘provisional’. They are usually some site works, removal of fill and retaining walls.  The builder may mark these items as provisional as they won’t know until works proceed exactly what the cost is. For instance, if rock is hit during the site cut, this will increase the site costs. If the site cut differs slightly to the plans, this may impact on the height of retaining walls.  So these ‘provisional’ items will be charged at actual cost whether it is lower or higher.
So you can see how the build budget must evolve through the development process and until your development is completed, you really won’t know the exact cost.  It’s important you allow a contingency amount for any variations that may arise along the way. 
As a developer, you will embark on a challenging journey from start to finish and the development budget is a very important part of your work. If you don’t have experience, then consider using the help of an experienced project manager to guide you along the way.
And always take the time to have builder’s estimates updated at each stage of your development planning process to avoid any nasty surprises. 
Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.
</body></html>

jochivers-wq5Bp59R5a

Building a better Budget: Jo Chivers

<html><body>
GUEST OBSERVER
As expected, a range of housing policy measures were introduced in the Budget, including but not limited to:
-National Affordable Housing Agreement providing $1.3 billion of funding per annum to the States to help meet supply targets;
-A $1 billion National Housing Infrastructure Facility;
-A new suburb for Melbourne, with 6,000 homes to be unlocked 10km from the CBD at Maribyrnong (which is not an easy thing to say late at night);
-Managed Investment Trusts to invest in affordable housing, with a 60 per cent capital gains tax discount to invest in this sector;
-Extension of homelessness funding to the States;
-Encouraging downsizing by allowing a non-concessional contribution to made into superannuation for the over 65s up to $300,000;
-First home buyers will be allowed to save for a deposit by salary sacrificing into their superannuation account, though contributions will be capped at just $30,000 per person, and $15,000 per year;
-A Foreign Investment Levy of at least $5,000 on all future foreign investors who fail to either occupy or lease their property for at least six months each year; and
-A reinstated requirement that prevents developers from selling more than 50 per cent of new developments to foreign investors.
There were other measures too, including increasing APRA's powers to control the non-ADI sector, zoning reform, and land release.
Each of these points deserves detailed market analysis in its own right, but today I'll just take a look at the least well understood new policy, which I believe will be significant. 
Negative gearing sideswiped
Instead of quarantining negative gearing deductions to new dwellings as proposed by the Australian Labor Party (ALP), the Treasurer has targeted the following areas of deductions prospectively:
Travel expenses will now be disallowed for investment properties, which is mildly annoying for landlords with plans for investment properties at Port Douglas - there is no longer an incentive for politicians to buy an investment home in their favourite holiday destinations! - but broadly a sensible move which improves the integrity of negative gearing legislation. 
More pertinently, for investment properties bought after 7.30pm yesterday, the Government will also limit previously generous plant and equipment depreciation deductions to only those expenses directly incurred by investors.
<a href="https://www.propertyobserver.com.au/images/2017/05/14/NG.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/14/NG.jpg" alt="">
What this means
Firstly this is a cruel impact for the Quantity Surveyor industry, hundreds or perhaps thousands of whom will wake up today only to discover they have very little to do. These businesses will need to pivot immediately towards new and commercial properties, though competition here will be fierce.
As for investors, going forward landlords purchasing established property will only be able to claim plant and equipment depreciation deductions on assets they have purchased themselves, while buyers of newly constructed dwellings will still be able to make a depreciation claim on plant and equipment. 
Landlords will still be able to claim deductions on the construction component (Division 43, for the building's structure) of the dwelling over 40 years for properties built after September 1987.
The ruling is evidently designed to restrict 'double-dipping' whereby multiple claimants received deductions on the residual value of the existing assets, such as air conditioning, heaters, carpets, televisions, dishwashers, alarm systems, hot water systems, and so on. 
In practical terms, about half of deductions would typically have been claimed for plant and equipment items on established property in the first year of claim, though this really depends upon the age and type of dwelling in question.  
Copied below are just a few examples of Sydney properties bought about a decade ago. As you can see with plant depreciation disallowed on established properties the difference to deductions in the early years of ownership would have been quite substantial, though there is no impact of landlords already in the market.
<a href="https://www.propertyobserver.com.au/images/2017/05/14/DEDUCT2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/14/DEDUCT2.jpg" alt="">
Data compiled by MCG Quantity Surveyors showed that their average claim for depreciation deductions was $9,138, up to half of which was typically for plant and equipment deductions. 
For new individual Mum-and Dad investors - which is most of the landlord market - this is a fairly significant change to tax legislation. 
Market impacts
As always investors will try to find a way around the rules, such as by purchasing chattels off-contract, though presumably the tax office would scope out such a move through an ATO Interpretative Decision (ID) if the practice became widespread.
Overall, it may become more tax-efficient to purchase older style properties in order to renovate them, though for properties built before 1987 the building works component would already be fully depreciated over 40 years. 
Somewhat ironically these changes will may create a divide between the perceived value of new and established properties in the eyes of investors, effectively creating a 'second-hand market' (which is what the Treasurer previously accused the ALP of doing with its own negative gearing proposals). 
Some domestic investors may be inclined to steer clear of new properties for this reason, in turn hurting building approvals and dwelling starts, at least while the dust settles.  
Ultimately what these changes will mean is that rental returns on established property in the lowest-yielding cities of Sydney and Melbourne will have to increase in aggregate, either through higher rents or through lower prices (or, most likely, a combination of the two).
I'll take a look at the wider impact of the Budget next up. 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
</body></html>

pwargent-M4siyDbqQY

Budget takes sideswipe at negative gearing: Pete Wargent

<html><body>
GUEST OBSERVATION
In public, the government is crab-walking away from its commitment to a budget surplus, saying since the bushfires that other things have become more important.
Asked directly on Tuesday whether he was prepared to sacrifice this year’s projected surplus to help the bushfire recovery effort, Treasurer Josh Frydenberg said:
Our focus is on delivering the services and support to people in need. That’s what we’ve been doing.
But less-publicly, and little noticed in the pre-Christmas release of the mid-year economic and fiscal outlook, the government has quietly buried long-standing targets for restraining spending.
Jettisoning these targets provides it with more wriggle room to increase spending to respond to things such as the bushfires and to boost the economy should it need to in 2020 and beyond.
Under the Charter of Budget Honesty Act 1998 every government must release a fiscal strategy statement alongside the Budget.
The statement is a list of the government’s budget targets. One long-standing target is “to achieve surpluses on average over the economic cycle”. Others relate to spending, tax collections, and public debt.
They are not binding but they provide a useful guide to the government’s thinking.
A looser straitjacket
Revisions to these targets can signal changes to the government’s approach.
In the pre-Christmas Mid-Year Economic and Fiscal Outlook (MYEFO), the government significantly scaled back its targets – both in number and ambition.
For example, the budget repair strategy it adopted in 2014 committed it to “deliver budget surpluses building to at least 1% of GDP by 2023-24”.
The strategy has been reproduced in every budget since then, although in 2017 the 2023-24 deadline was extended to “as soon as possible”.
In December’s MYEFO more wriggle room was added, with the surpluses of at least 1% of GDP to be reached only “when economic circumstances permit”.
<hr>
Spot the difference
<a href="https://images.theconversation.com/files/311051/original/file-20200121-187130-1h42ojy.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/311051/original/file-20200121-187130-1h42ojy.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a href="https://budget.gov.au/2019-20/content/bp1/download/bp1_bs3.pdf">2019 Budget</a> <a href="https://images.theconversation.com/files/311072/original/file-20200121-117917-jev67o.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/311072/original/file-20200121-117917-jev67o.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a href="https://budget.gov.au/2019-20/content/myefo/download/MYEFO_2019-20.pdf">2019 MYEFO</a>
<hr>
Another component of the original repair strategy was that “new spending initiatives will be more than offset by reductions in spending elsewhere in the budget”.
In other words: if the government wanted to announce a new spending policy, it had to find savings elsewhere to cover the cost.
Targets missing
This target does not appear in MYEFO. A softer replacement says the government intends to “pursue budget savings to make room for spending priorities”.
This relaxing of the purse strings is already evident: the new spending measures in MYEFO on aged-care home packages, bringing forward infrastructure spending, and drought assistance are significant costs that were not paid for by spending reductions elsewhere.
Nor has the government provided any indication that its bushfire relief measures will be funded through savings.
<hr>
Gone: the commitment to cut the government’s share of the economy over time
<a href="https://images.theconversation.com/files/311074/original/file-20200121-117962-1swvsvs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/311074/original/file-20200121-117962-1swvsvs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a href="https://budget.gov.au/2019-20/content/bp1/download/bp1_bs3.pdf">2019 Budget</a>
<hr>
The budget repair strategy also required improvements in the budget position due to favourable economic circumstances to be “banked to the bottom line”. That target has now been removed all together.
The medium-term (10-year) fiscal strategy has also been amended to remove some of the more ambitious spending-control targets.
One was to reduce the government’s share of the economy over time.
That target has now gone, even though shrinking government spending as a share of the economy is crucial to the budget projections of growing surpluses and declining net debt over the decade.
The obvious question is – why?
The government is making big spending easier
The government might argue that it no longer needs a budget repair strategy because it expects to a deliver a surplus this year.
But its strategy was always more ambitious than a single surplus.
It wanted to reach continuing surpluses of 1% of GDP. Surplus forecasts of between 0.2% and 0.4% of GDP over the next four years indicate it is still well short of achieving them.
More likely is that it recognises that some of its targets were going to be difficult to meet.
It has already failed on <a href="https://theconversation.com/more-mirage-than-good-management-myefo-fails-to-hit-its-own-targets-108830" target="_blank">a number of occasions</a> to offset new spending with savings. Around <a href="https://theconversation.com/5-things-myefo-tells-us-about-the-economy-and-the-nations-finances-128843" target="_blank">half</a> of this year’s upside from stronger-than-expected commodity prices and employment growth was used to fund tax cuts and extra spending rather than banked to the budget bottom line.
As the <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Budget_Office/Publications/Research_reports/Medium-term_budget_projections" target="_blank">Parliamentary Budget Office</a> has pointed out, it becomes even harder to hold down spending as the budget improves.
This is all the truer amid the need for bushfire reconstruction.
It’s better to shift goal posts than repeatedly fail to score
Another possible explanation is that the government is clearing the way for fiscal stimulus. To date it has relied on the efforts of the Reserve Bank and state governments to boost lacklustre economic growth.
Reserve Bank governor Phil Lowe, <a href="https://theconversation.com/we-asked-13-economists-how-to-fix-things-all-back-the-rba-governor-over-the-treasurer-126283" target="_blank">along with many economists</a>, has argued that it should do more.
In taking off its self-imposed spending straitjacket, it is giving itself room to heed the governor’s call.
<a href="https://theconversation.com/profiles/danielle-wood-147710" target="_blank">Danielle Wood</a>, Program Director, Budget Policy and Institutional Reform, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a>; <a href="https://theconversation.com/profiles/nathan-blane-934089" target="_blank">Nathan Blane</a>, Analyst, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a>, and <a href="https://theconversation.com/profiles/shelby-so-934091" target="_blank">Shelby So</a>, Researcher, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/new-year-new-strategy-unheralded-change-to-budget-targets-creates-space-for-stimulus-129690" target="_blank">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

New year, new strategy? Change to budget targets creates space for stimulus

<html><body>
The NSW Government have shortlisted Multiplex and John Holland for the construction of the new Sydney Football Stadium following a blowout with Lendlease last month.
Lendlease was axed for the reconstruction of the stadium shortly after The Australian revealed that Lendlease was chasing tens of millions of dollars more to finish the project when it told the government it was unable to lower the cost.
However Lendlease will continue to oversee stage one demolition work at Allianz Stadium, which is on track for completion by the end of the year.
Minister for Sport John Sidoti said that the delivery of the new Sydney Football Stadium remains on time and on budget.
Both organisations have been invited to participate in a competitive tender process to deliver stage two of the project.
John Sidoti said, “The winning bidder will be announced later this year, following the receipt of stage two planning approval and completion of the tender evaluation.”
“We know that if we want to continue attracting global events we need our stadiums to be the best in the world but the NSW public expects us to negotiate the best price." 
“The NSW Government’s plan delivers the experience fans deserve. The refurbished Stadium Australia will move 46,000 seats up to 25 metres closer to the action to create more atmosphere,” Mr Sidoti said.
</body></html>

NSW Government shortlist Mutiplex and John Holland after Lendlease stadium construction reversal

<html><body>
EXPERT OBSERVER
The Australian economy grew by just 0.4% in the March quarter. It was a pick up from 0.2% in the December quarter, but over the year the four quarters taken together amounted to only 1.8%.
It’s the first time Australia’s annual economic growth rate has had a “1” in front of it since 2013, and the lowest annual growth rate since the global financial crisis.
<h2>Economic growth begins with ‘1’</h2>
1.8% is a big step down from the decade average of 2.6% displayed by Treasurer Josh Frydenberg on a chart prepared by his office, and below most estimates of the potential growth rate of the economy.
<hr>
Real GDP growth
<a href="https://images.theconversation.com/files/278058/original/file-20190605-40731-1tfy7tz.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278058/original/file-20190605-40731-1tfy7tz.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
And most of the 1.8% was the result of population growth.
GDP per capita fell marginally in the March quarter after slipping by 0.1% and 0.2% in the previous two quarters.
<h2>Growth per person is weak</h2>
It means GDP per capita has fallen for three consecutive quarters – the first time that has happened in almost four decades, since the early 1980s recession.
Over the year to March, GDP per person grew just 0.1%, a result that suggests living standards barely grew.
But actual living standards grew by more. The Bureau of Statistics says the best guide is “real net national disposable income per capita,” a measure that takes better account of prices paid and income received.
It grew by a more impressive 1% and 0.5% in the December and March quarters on the back of sharply higher commodity prices, suggesting that, for the moment at least, living standards are not going backwards.
<h2>Household spending growth is weak</h2>
Household spending climbed only 1.7% over the year, barely more than population growth. The treasurer’s graph shows it was and well below recent average growth of 2.7%.
Household consumption growth accounted for just 0.1 points of the 0.4 points of economic growth over the quarter, which is well down on its usual substantial contribution as it is the largest component of output - around 60%.
<hr>
Growth in household consumption
<a href="https://images.theconversation.com/files/278059/original/file-20190605-40731-1txzoz5.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278059/original/file-20190605-40731-1txzoz5.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
Consumption of discretionary items such as restaurant meals and entertainment, fell while consumption of essentials such as electricity, health services and rent, continued to climb.
The treasurer’s chart showed that most of the items on which we cut spending were discretionary.
<hr>
Growth in consumption by category
<a href="https://images.theconversation.com/files/278102/original/file-20190605-40723-1gbqj8d.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278102/original/file-20190605-40723-1gbqj8d.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> March quarter. Commonwealth Treasury
<hr>
<h2>Home building is falling</h2>
Low wages growth and falling housing prices are factors dampening consumption growth. The downturn in the housing market is also weighing on output growth through falling construction. In the March quarter it declined 2.5%, and was 3.1% lower over the year, a far cry from 10% plus annual growth rates achieved as recently as three years ago.
<hr>
Growth in dwelling investment
<a href="https://images.theconversation.com/files/278081/original/file-20190605-40731-jaxr75.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278081/original/file-20190605-40731-jaxr75.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
<h2>Government spending has surged</h2>
By itself the government sector was responsible for half of the economic growth in the quarter, contributing 0.2 of the 0.4 percentage points.
Government spending surged more than 5% over year reflecting growth in spending on the National Disability Insurance Scheme and infrastructure.
<hr>
Growth in new public final demand
<a href="https://images.theconversation.com/files/278083/original/file-20190605-40758-y551n1.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278083/original/file-20190605-40758-y551n1.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
<h2>Exports supported growth</h2>
Net exports contributed another 0.2 points to the 0.4 points of economic growth, with exports of rural goods, ores and minerals and services increasing.
Imports fell slightly, reflecting a weak economy.
Australia’s terms of trade – the ratio of export to import prices – jumped 3.1% as supply disruptions – including a dam burst in Brazil – boosted the spot price of iron ore.
<h2>Investment has flatlined</h2>
Although business investment was 1.3% lower over the year, it climbed 0.3% and 0.6% in the December and March quarters, suggesting that the worst of the slide might be over.
Treasurer Frydenberg said it was a tale of two sectors - investment in mining fell 1.8% over the quarter and was down 10.6% over the year as part of the transition from the investment in new facilities to production.
More encouragingly, non-mining investment grew by 2% in the quarter, reflecting commercial construction.
<hr>
Growth in new business investment
<a href="https://images.theconversation.com/files/278100/original/file-20190605-40715-dnkuex.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278100/original/file-20190605-40715-dnkuex.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
<h2>Inflation is weak</h2>
Inflation is determined by productivity-adjusted wages (unit labour costs) and import prices.
Unit labour cost growth moderated to be up just 0.3% in the quarter. Labour productivity (GDP per hour) declined 0.5% in the quarter to be down 1% over the year.
Import prices fell slightly, although given the recent depreciation in the Australian dollar means they are likely to increase in the near term. For the moment it adds up to little inflationary pressure.
<h2>Households are less optimistic</h2>
Consumers’ expectations, as measured by the Westpac-Melbourne Institute Consumer Sentiment Expectations Index, have softened slightly this year, but remain well above the lows reached during the global financial crisis and early 1990s recession.
The index is made up of answers to questions about expectations for family finances over the next 12 months, economic conditions over the next 12 months, and economic conditions over the next five years.
They are presented on a scale where 100 means expectations of improving conditions balance those of worsening conditions and greater than 100 means optimistic responses outweigh the pessimistic.
<hr>
Westpac Melbourne Institute Consumer Sentiment Expectations Index
<a href="https://images.theconversation.com/files/278616/original/file-20190610-52753-1jdb9gq.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278616/original/file-20190610-52753-1jdb9gq.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Trend, 100 means positive expectations balance negative expectations. Melbourne Institute
<hr>
<h2>Further ahead, the signs aren’t good</h2>
Subdued economic growth may well continue for some time. This is suggested by the Westpac Melbourne Institute Leading Index for April which points to below-trend growth for the next 3 to 9 months.
The index combines a selection of economic variables whose movements typically point to movements in gross domestic product, including the S&amp;P/ASX 200 stock index, dwelling approvals, US industrial production, the Reserve Bank Commodity Prices Index, aggregate monthly hours worked, the consumer sentiment expectations index the Westpac-Melbourne Institute Unemployment Expectations Index, and a financial market yield spread.
<hr>
Westpac Melbourne Institute Leading Index
<a href="https://images.theconversation.com/files/278098/original/file-20190605-40731-1r4yvtt.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278098/original/file-20190605-40731-1r4yvtt.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Percentage deviation from trend growth, smoothed. Melbourne Institute
<hr>
This week’s Reserve Bank rate cut and those that follow will provide some support. The important question is how much will be needed.
More sluggish world growth due to increased trade tensions is likely to weigh on export growth in the near term. The depreciation in the Australian dollar, however, will provide a buffer.
A positive aspect for the consumption outlook is that there are tentative signs that the pace in decline in house prices is moderating, although what will happen is highly uncertain.
Overall, consumption growth is likely to continue to be soft, with at best only modest improvements in the near term. The downturn in residential construction clearly has further to run, with dwelling approvals in April down 24% on a year ago.
The government sector will have to continue to be an important source of growth in the near term. Whether non-mining investment growth will maintain its recent momentum is uncertain, as subdued consumption growth and the downturn in residential construction might dampen firms’ demand.
A problem faced by the Reserve Bank is that inflation has now undershot its target for so long that may be feeding into inflation expectations, making achieving the target more difficult.
Given the relative health of its budget, and Australia’s infrastructure needs, the government itself is in a position to step up and do more to boost the economy.
Look further ahead, the national accounts make clear that the government will have address Australia’s lacklustre productivity growth. It has been given a lot to work through.<img src="https://counter.theconversation.com/content/118273/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/tim-robinson-138270" target="_blank">Tim Robinson</a>, Senior Research Fellow (Macroeconomics), Melbourne Institute, <a href="http://theconversation.com/institutions/university-of-melbourne-722" target="_blank">University of Melbourne</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/expect-weak-economic-growth-for-quite-some-time-what-wednesdays-national-accounts-tell-us-118273" target="_blank">original article</a>.
</body></html>

Expect weak economic growth for quite some time. What the national accounts tell us

<html><body>
EXPERT OBSERVATION
While the budget speech referenced housing a few times, in the sense that falling housing prices represent a downside risk to budget forecasts, there was in fact very little in the budget directly focussed on the housing sector. With the performance of the housing and household sector so critical to the Government achieving their forecasts and planned surplus, there is certainly an argument that more could have been provided in the budget to support these sectors.
<ul>
<li>The Government expects wages to rise only modestly, with growth forecast to rise from 2.1% to 2.5% in 2018/19 before ticking higher to 2.75% in 2019/20, supported by lower unemployment and jobs growth of around 2% per annum. Based on these forecasts, and their potential to undershoot as they have over previous years, we can’t rely on a material improvement in household incomes to boost spending and stave off a higher rate of saving.</li>
<li>On the positive side, household income and consumption should find some support from personal income tax cuts for low to middle income workers (those earning $126,000 or less) and cost of living relief to pensioners. With income growth slow additional cash in people’s pockets each week is positive and could be moderately stimulatory from a consumer expenditure perspective. For example, those that earn between $48,001 and $90,000 will gain an additional $1,080 over a year.</li>
<li>The Treasurer reiterated that housing affordability was a key priority for the Government, but it looks like the Government is content to see housing affordability improve ‘organically’ via lower housing prices that could act as a contagion to weaker household consumption and a sharper than expected fall in residential construction. While this may seems a bit passive, it’s clear that housing affordability has improved substantially since the last budget due to lower housing values in the most expensive cities as well as the lowest mortgage rates since the 1960s and a subtle rise in incomes. </li>
</ul>
Arguably, the state and local governments have more ability to tackle housing affordability than the federal government, with factors such as stamp duty payments, allocation of the first home buyers grant, land release, development charges and town planning all falling outside of the federal government arena. 
Perhaps the most substantial area of the budget related to housing is a reiteration of the strong infrastructure spend and the City Deals, which will provide stimulus for specific regions of the country and help to cushion the downturn in residential construction. 
Infrastructure spending is up 25% on last year, with a record level $100 billion spend over the next ten years. While the allocation of this spend is short on detail (likely to be trickle fed to the market via election announcements), it seems much will be dedicated to improving transport infrastructure in an effort to ease congestion and better manage population growth. Major projects included funding of $2 billion for the fast rail between Melbourne and Geelong, a quadrupling of the urban congestion fund to $4 billion and detailed assessments for additional fast rail corridors. These additional fast rail corridors are: Sydney to Wollongong, Sydney to Parkes, Melbourne to Albury/Wodonga, Melbourne to Traralgon and Brisbane to the Gold Coast. Sticking with a public transport theme, the Budget committed $500 million from the Urban Congestion Fund to provide better park and ride facilities.
The City Deals are nothing new, however the budget reaffirms commitment of $5.7 billion of funding delivered in Townsville, Launceston, Western Sydney, Darwin, Hobart, Geelong and Adelaide, as well as the announcement of a recent deal for South East Queensland. The Government has also announced a roll out of regional deals for Barkley NT, Hinkler Qld and Albury Wodonga NSW/Vic.
No doubt the strong infrastructure spend and investment in improving the key areas of Australia’s cities will be stimulatory for housing markets that benefit from the improvements. Tackling congestion and improving access to essential amenities should indirectly support housing affordability by making the most affordable regions of the cities more accessible and liveable. Questions remain as to whether $100 billion is actually enough to tackle the infrastructure deficit however, expenditure up materially which is encouraging.
Overall, the Budget didn’t really focus on housing however, some of the associated issues such as household incomes and infrastructure investment are being addressed which is positive to see.
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>
</body></html>

tlawless-5VLUrbAk9s

What does the budget mean for Australia’s housing sector? CoreLogic's Tim Lawless

<html><body>
GUEST OBSERVATION
The budget just before an election seems to have a special quality: the transport infrastructure will surely be more plentiful than usual, and carefully chosen to shore up the electoral bulwarks. But don’t get too excited: this year the rhetoric may be big, but the scale of the numbers is nothing unusual. What is different is the pattern of spending over the budget’s four-year forward estimates.
The budget estimates a transport spend of A$7.4 billion for the coming year, 2019-20, and $33 billion over the forward estimates period. The 2019-20 expenditure estimate amounts to 0.37% of GDP – comparable to what we’ve seen in recent years. In fact, governments have spent between 0.26% and 0.53% of GDP under Treasurers Morrison, Hockey and Swan, and Treasurer Frydenberg is no different.
What’s particularly interesting about this budget, though, is that the treasurer is chancing his arm on the medium term.
<a href="https://images.theconversation.com/files/267093/original/file-20190402-177175-1h08ig9.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/267093/original/file-20190402-177175-1h08ig9.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Usually treasurers leave themselves some wriggle room in the outyears. They can always spend more if the cash is available, and invariably they do. Plus, it gets easier to estimate what will be spent as the time of spending draws closer.
Of course, these days much of the promised spending is further into the future than the forward estimates. The government is touting a $100 billion, ten-year <a href="https://buildingourfuture.gov.au/assets/documents/10_Year_Infrastructure_Pipeline.pdf" target="_blank">Infrastructure Investment Pipeline</a>. There’s money all over the country.
Where does the money go?
Victoria gets particularly big-ticket items in this budget, totalling $6.2 billion, and somewhat more of it within the next four years than other states. In New South Wales, the longer-term package totals $7.3 billion, including $3.5 billion for the Western Sydney north-south rail link as well as a $1.6 billion upgrade to the M1 Pacific Motorway extension to Raymond Terrace.
But if you look at what’s happening within the next four years, a notable larger item is a road safety package, totalling $400 million over four years. The longer-term goal is for this package to cost $2.2 billion.
Some of the other longer-term spending is squarely focused on rural and regional areas. This includes a billion to improve the Princes Highway in NSW, Victoria and SA.
If it all comes to pass, there’s something here for everyone.<img src="https://counter.theconversation.com/content/114597/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Marion Terrill, Transport and Cities Program Director, Grattan Institute
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/total-transport-spending-is-about-par-for-the-course-but-the-pattern-is-unusual-114597" target="_blank">original article</a>.
</body></html>

Budget

Editor's Picks

Have something to contribute?

The latest real estate & off the plan properties & news, delivered to your inbox.

Developments

New apartments

New townhouses

News

The latest real estate & off the plan properties & news, delivered to your inbox.

Budget

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

The latest real estate & off the plan properties & news, delivered to your inbox.

Developments

New apartments

New townhouses

News

The latest real estate & off the plan properties & news, delivered to your inbox.