<a href="https://www.apartments.com.au/developers/jwland-development">JWLand</a>’s De Burgh, the final residential release within the Northbourne Village precinct in Lyneham, is nearing completion just as the Federal Government’s Home Guarantee Scheme prepares for its most significant expansion to date.&nbsp;

From October 2025, the scheme will allow first home buyers to enter the market with just a five per cent deposit and no lenders mortgage insurance (LMI), removing some of the most common barriers to ownership.

With <a href="https://www.apartments.com.au/new-apartments/de-burgh-at-northbourne-village-40-de-burgh-street-lyneham-act-2602">De Burgh</a> on track for residents to move in by late spring 2025, the timing creates a strong opportunity for first home buyers seeking brand-new apartments in Canberra’s sought-after Inner North.&nbsp;

[smartcode_project:default project_id=139989 project_image_fid=212888]

The project delivers 350 residences across two buildings, with layouts ranging from compact studios through to one, two, and three-bedroom apartments.

JWLand has tailored the development for long-term liveability, integrating natural light, privacy and outdoor space into each home. Ground-floor residences feature private courtyards, while upper levels benefit from generous balconies.

Kitchens are fitted with Fisher &amp; Paykel appliances, and all apartments include ducted reverse-cycle air conditioning with smartphone app control for lighting and climate.&nbsp;

Shared resident facilities include a rooftop garden, gym, lounge and parcel lockers, alongside landscaped green space within the precinct.

[smartcode_project:default project_id=139989 project_image_fid=267376]

For buyers, the expanded Home Guarantee Scheme removes income caps and introduces unlimited places, making it more accessible than ever. With most De Burgh apartments priced under $1 million, they fall well within the updated eligibility thresholds.

The policy changes provide first home buyers with greater certainty and a smoother path to finance. Combined with the quality and location of De Burgh, the expanded scheme is expected to draw a new wave of buyers to Canberra’s Inner North.

Residents will benefit from the project’s central setting, just 600 metres from the light rail and three kilometres from Canberra’s CBD. The precinct is bordered by the <a href="https://www.apartments.com.au/developments/lyneham-act-2602">Lyneham</a> wetlands and sits within easy reach of cafes, restaurants, schools and the ANU.

With completion scheduled for late 2025, De Burgh is set to be among the first major apartment projects to meet the expanded scheme head-on, offering first-time buyers a realistic pathway to ownership in one of Canberra’s most connected neighbourhoods.

[smartcode_project_cta:default project_id=139989]

Joel Robinson

JWLand’s De Burgh aligns with expanded Homebuyer Scheme, opening doors for first home buyers in Canberra’s Inner North

A subtropical pair of residential towers are in planning for a key South Brisbane site neighbouring the iconic Expo ’88 Skyneedle, with new documents revealing a vertically layered vision designed to respond to the precinct’s evolving high-density character.

The proposal has been lodged by&nbsp;Darveniza Group, which is also is behind the 400-apartment Station Quarter precinct in Alderley.

Darveniza Group, led by Jane Darveniza, the Brisbane-based investor and Queensland rich-lister and widow of the late property magnate Bojan Darveniza, is seeking approval for a mixed-use project encompassing 204 apartments, ground-level retail, food and drink tenancies, and office space across two architecturally integrated towers at 37–39 Manning Street.

Occupying an 1,822 sqm site, the proposed towers would rise above a sculptural podium base, with a recessed landscaped centre, rooftop communal areas, and a total of 220 car parks and 256 bicycle bays. The apartment mix spans one- to five-bedroom dwellings, with a design emphasis on generous balconies, cross-ventilation, and climate-responsive materials.

<img alt="First look: Twin towers proposed for Manning Street site beside Skyneedle" data-entity-type="file" data-entity-uuid="42c1f501-2afd-440b-af49-67c257123ea7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Manning%20podium.png?VersionId=KFlksfWzmDRD.VIYxd_1q3VAel.nN3TH" />

“The development is conceived as two slender twin buildings that meet at a lushly landscaped central recess,” the Finegrain design report states. “The façade is highly articulated with the plan form stepping back and forth to reduce visual bulk and maximise internal occupants’ access to natural light and air”.

A hallmark of the proposal is its integration of greenery, both visually and functionally. Around 77 per cent of the site’s green plot ratio is delivered through vertical planting spines, a green podium wall, and rooftop amenity. Ground-level deep planting and landscaped communal zones aim to create a shaded, walkable interface along Manning Street.

“The stepped plan form introduces variation in balcony setbacks and enclosed apartment areas, enriching both the façade expression and the resident experience,” the design team notes. “At ground and podium levels, this stepping also enhances permeability, maximising pedestrian view lines to the neighbouring Skyneedle and reinforcing a strong sense of local identity”.

<img alt="First look: Twin towers proposed for Manning Street site beside Skyneedle" data-entity-type="file" data-entity-uuid="b3f26dfc-6b93-465c-9ffb-0a2530372a23" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Manning%20site.png?VersionId=JflvKdqDxcaHTFbb9HL5TwoiRgeQ2LqA" />

The site directly adjoins the heritage-listed Skyneedle at 35 Manning Street, an enduring legacy of World Expo ’88. The accompanying heritage impact report by Pendergast Architects contends that the proposal has been carefully conceived to protect the cultural significance and landmark visibility of the structure.

“The design provides setbacks, tower separation and podium articulation to maintain the visibility and landmark role of the adjoining Skyneedle,” the report states. “The significance of the Skyneedle lies principally in its landmark visibility and cultural symbolism, rather than in detailed fabric or architectural setting”.

The proposal sits within the Kurilpa Sustainable Growth Precinct, under Brisbane’s TLPI 02/2023, where revised planning controls support high-density, mixed-use development integrated with subtropical design and increased public realm contributions.

Finegrain’s design reflects this intent, drawing cues from the site's adjacency to Musgrave Park, the subtropical landscape of South Brisbane, and cultural landmarks such as QPAC and South Bank.

Twin green towers proposed for Manning Street, South Brisbane site beside Skyneedle

A first-of-its-kind culinary precinct is coming to <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a>, inspired by global street-food flavours and best-in-class restaurants and entertainment.

Deicorp’s emerging mid-city precinct, <a href="https://www.apartments.com.au/new-apartments/melrose-central-melrose-park-33-hope-street-melrose-park-nsw-2114">Melrose Central</a>, will become the go-to precinct within the wider Melrose Park community, and at its heart, a first-of-its-kind culinary precinct that brings the buzz of Asia’s most iconic food streets to life.

Spanning more than 4,700 sqm, Melrose Central street food precinct is inspired by the energy and vibrant flavours of street-food neighbourhoods from Hong Kong and Tokyo to Seoul and Singapore.

This new destination will be over three times the size of existing offerings like Burwood Chinatown or Westfield Chatswood’s Hawker Lane, positioning Melrose Central as a must-visit dining hub for all of Sydney.

[smartcode_project:default project_id=134220 project_image_fid=289878]

Designed by Anthony Ho of Basalt Studio, this street food concept blurs the lines between culinary theatre, art, and entertainment, offering an immersive experience. Neon-lit laneways thread between open kitchens and live grill stations, while murals, interactive displays, and light installations will bring the precinct to life, trading until late, a first for the area.

“We’ve imagined our street food concept as a graduated evolution of everything people love about Burwood Chinatown, East Village and Regent Place, elevated by the immersive artistry creating a city-style dining offer,” said Bilinda Turner, Head of Retail at Deicorp.

“By curating the very best tenants from across Australia, we’re creating a fit-for-purpose town centre for 2025 and beyond. It’s something that people truly haven’t seen before."

[smartcode_project:default project_id=134220 project_image_fid=352610]

Melrose Central is far more than a food precinct. Spanning 30,000 sqm across four levels, the shopping centre will be home to approximately 100 retailers, providing a total lifestyle offering from morning until late evening.

Fresh food offerings span a brand new Coles Supermarket, Local Grocer, Korean Supermarket, Bakery and boutique fresh food, as well as a Dan Murphy's, while health needs are covered from a pharmacy, medical centre and allied health. Fitness and wellbeing take centre stage from a dedicated wellbeing hub that includes pilates, recovery, Infrared saunas and a gym, to name a few.

Variety stores will feature throughout, as well as personal care offerings from nail salons to hairdressers, as well as a dedicated early-learning centre on level 1.

[smartcode_project:default project_id=134220 project_image_fid=289888]

Situated above the retail precinct will be 495 Turner Studio-designed apartments that open onto 6,000 sqm of lush podium gardens and rooftop terraces.

Located just six kilometres east of Parramatta’s CBD and 15km from Sydney CBD, Melrose Central forms the retail and lifestyle heart of Melrose Park, an urban-renewal precinct that is set to deliver more than 11,000 homes, 22,000 new residents, and 50,000 sqm of park and open space.

A dedicated stop on Parramatta Light Rail Stage 2 will arrive at the precinct’s Hope Street entrance, and the forthcoming Parramatta Gateway Bridge will link directly to Sydney Olympic Park and Wentworth Point.&nbsp;

Supported by a 10-minute drive, this growing catchment of 200,000 people, which is projected to grow to 279,000 by 2026, and an average household income above the Greater Sydney average, Melrose Central embodies Deicorp’s vision for transport-oriented, community-focused placemaking.&nbsp;

Melrose Central street food precinct and the wider Melrose Central retail town centre are both slated to open in mid-2026.

[smartcode_project_cta:default project_id=134220]

Melrose Central: First-of-its-kind culinary precinct coming to Sydney’s West

<a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> has unveiled the fifth and final stage of its $1 billion Norwest community, The Orchards.

The final stage, <a href="https://www.apartments.com.au/new-apartments/zeste-at-the-orchards-norwest-104-fairway-drive-norwest-nsw-2153">Zeste</a>, will deliver 209 apartments across two distinctive buildings, Essence and Eden. The 135 apartments in Essence will be the first to be released to the market, which will bring to an end the decade-long vision to create a&nbsp;neighbourhood defined by design excellence, sustainability, and community engagement.

&nbsp;

&nbsp;

&nbsp;

[smartcode_project:default project_id=150510 project_image_fid=351878]

David Lee, Sales Manager at Sekisui House Australia said, Zeste's oversized living spaces and diverse apartment mix, which includes the introduction of&nbsp;Breezeway Sky Homes for the first time, deliver a unique lifestyle offering.

Early purchasers will benefit from exclusive VIP pricing as well as the choice of one premium upgrade, which Lee says is a "thank you" for their commitment to the project.

[smartcode_project:default project_id=150510 project_image_fid=351876]

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, Zeste embodies Sekisui House’s global design philosophy of creating harmony between people, homes and nature. Principal Ben Pomroy explained that Zeste is about living within the landscape.

“With two large courtyards, the lagoon pool precinct for the wider community and a central courtyard with pavilion exclusively for Zeste residents, the architecture frames an experience of living in a park," Pomroy said.

“Over 50 per cent of the site is landscaped, ensuring a deep connection to nature at every stage of daily life. The buildings are designed as a collection of smaller, finer-grain forms, with over 85% of apartments enjoying dual aspects.

“The focus on natural ventilation, generous layouts and communal interaction creates a residential environment that is both sustainable and socially connected.”

&nbsp;

[smartcode_project:default project_id=150510 project_image_fid=351886]

Natalie Shalala, a member of Rothelowman’s interiors team said they reimagined the former site’s Orchard homestead with a contemporary twist. &nbsp;

“The design draws on the nostalgia of the past orchard – timber floors, the warmth of a fireplace, the rituals of the homestead and reinvents them for modern apartment living,"&nbsp;Shalala said.

“We have created two tonal palettes, one with pale honey undertones and another with a soft blush inspired by nectar. A highlight feature is the cathedral glass light box, a bespoke design element that re-interprets the classic lantern. It is both beautiful and functional, tying kitchen and bathroom spaces together in a way that feels entirely unique."

Shalala said the&nbsp;day-to-day liveability has been carefully considered, with abundant storage solutions, butler’s pantries, bike storage and joinery designed to simplify routines and enhance comfort.

&nbsp;

[smartcode_project:default project_id=150510 project_image_fid=352090]

Apartments in Zeste start from $715,000 for one-bedrooms and extend through to expansive three-bedroom Sky Homes priced from $2.25 million. Floorplans range from 59 sqm to 144sqm.

The mix in Essence comprises 41 one-bedroom, seven one-bedroom + Max space, 39 two-bedroom, 40 two-bedroom Breezeway Sky Homes (24 of which include additional Max spaces), and eight three-bedroom residences.&nbsp;

Max spaces are integrated into select residences, offering a flexible room that can be tailored to individual needs, ideal as a home office, children’s play area, or additional storage.

[smartcode_project:default project_id=150510 project_image_fid=351881]

Zeste continues Sekisui House Australia’s partnership with Altogether Group, providing sustainable water, power and data services to residents. Passive design strategies include cross-ventilation, deep landscaping and water features that encourage evaporative cooling, aligning with The Orchards long-term environmental goals.&nbsp;

Construction is set to commence on the Zeste buildings in early 2026, with completion anticipated in late 2027 to early 2028.&nbsp;

More than 850 apartments have been sold across the masterplan, contributing to The Orchards community of 1,300 apartments when complete.

[smartcode_project_cta:default project_id=150510]

Sekisui House Australia launches Zeste, the final stage of its $1 billion Norwest masterplan

A significant addition to the Bella Vista Station Precinct is in the pipeline, with <a href="https://www.apartments.com.au/developers/landen-property">Landen</a> formally lodging a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/40-memorial-avenue-bella-vista-40-memorial-avenue-nsw-2153">new apartment community on Memorial Avenue</a>.

Positioned beside the Elizabeth Macarthur Creek corridor, the project is among the first major transit-oriented residential proposals within the Metro precinct.

The masterplan, designed by&nbsp;<a href="https://www.apartments.com.au/architects/turner-studio">Turner Architects</a>,&nbsp;outlines a four-stage delivery, comprising four buildings between four and fifteen storeys, and includes a mix of one-, two-, and three-bedroom apartments, alongside a limited selection of four-bedroom penthouses and terraces.

The project places a strong emphasis on housing diversity and liveability, with apartment sizes ranging from 50 to 180 sqm. The first stage will deliver 213 dwellings, followed by 231 in the second stage. Construction is expected to commence in 2026, pending approvals.

<img alt="Bella Vista Apartments" data-entity-type="file" data-entity-uuid="bb3d84b1-d2df-4e26-915a-31b27faf9b1a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/View02_01-scaled.jpg?VersionId=Gb0AUtZ3VXsLxrqUaw_AwT_vcBwQ_FJu" />

As the first transit-oriented development (TOD) in the precinct, Landen’s Bella Vista community has been designed to align closely with the surrounding Metro infrastructure. The proposal integrates new pedestrian and cycling paths, a new bridge over Elizabeth Macarthur Creek, and direct access to Bella Vista Metro Station.

Lush communal amenities are also central to the design. 'The Grove' and the 'Garden Link' will create landscaped community areas that reflect the area's agricultural heritage and provide direct access to the creekside.&nbsp;

The ‘Garden Patio’ is conceived as a multi-use indoor-outdoor facility offering a gym, study nooks, and communal lounge spaces.&nbsp;Rooftop terraces across the buildings will offer views to the Blue Mountains and Parramatta skyline.

<img alt="Bella Vista Apartments" data-entity-type="file" data-entity-uuid="778da409-d5cf-4e7d-9ba9-0c36990bf0b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/landen-bella-property-image.jpg?VersionId=ukPpmVcHF71xRc7U3MUT5rtGwOsntMMz" />

Landen’s Head of Property, Shane Harding, said the proposal highlights the developer’s precinct-scale ambition.

“As the first TOD proposal in Bella Vista, it highlights Landen’s ability to pioneer precinct-scale projects, integrate housing with infrastructure, and deliver outcomes that align with government priorities,” Harding told the Daily Telegraph.

The project arrives at a time of rapid growth in Western Sydney, with Bella Vista alone forecast to more than double in population by 2046. The development’s location, between the Bella Vista and Kellyville Metro stations, positions it as a connected lifestyle hub for families, professionals and downsizers seeking access to transport, schools, and employment centres.

Pending approval, the development is slated for completion in 2028.

Landen plans 444-apartment community in Bella Vista Metro zone

Debt

<html><body>
GUEST OBSERVATION
 
After two decades equating budget surpluses with good economic management, it might seem convenient that the federal government has <a href="https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/speeches/speech-australian-chamber-commerce-and-industry-canberra">changed its fiscal strategy</a> just before the budget to focus on jobs over keeping the deficit in check.
But it’s the right move. The world has changed in ways that make government spending more necessary and government debt more sustainable than ever.
Debt talk still dominates <a href="https://www.afr.com/policy/economy/budget-must-chart-course-to-eliminate-debt-and-deficit-20200929-p5605q">newspaper headlines</a> and many of Treasurer Josh Frydenberg’s <a href="https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/transcripts/interview-karl-stefanovic-today-show-1">media appearances</a>. But it shouldn’t. Here’s why.
We are in the middle of a major economic shock
The COVID-19 recession is the biggest economic shock since the Great Depression. GDP <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/latest-release">fell 6.3%</a> in the year to June, the worst annual result since 1929.
The federal government should use its balance sheet to spread the costs of such a large shock over time. The alternative would be to leave those who lost their jobs or businesses in poverty.
The government’s emergency response saved businesses and jobs from going under in the short term. Now, as we emerge from the crisis into the recovery phase, large-scale stimulus is needed to boost demand and create new jobs.
Debt has never been cheaper
It has never been cheaper for governments to borrow. As the next chart shows, the interest rate on 10-year Australian Government Bonds is less than 1%. If inflation stays above 1%, as the Reserve Bank and Treasury expect, the “real” interest rate the federal government pays on the bond will be negative. That is, it will effectively be paid to borrow.
<hr>
<img src="https://images.theconversation.com/files/361517/original/file-20201005-20-1oqmgxs.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Yields on 10 Year Australian Government Bonds."> Author provided
<hr>
These very low interest costs change the dynamics of managing debt we accrue now. Investments that boost future growth – including spending to reduce unemployment and close the output gap – will pay for themselves.
This is the fiscal “free lunch” spoken about by the former chief economist of the International Monetary Fund, <a href="https://www.aeaweb.org/articles?id=10.1257/aer.109.4.1197">Olivier Blanchard</a>, and the deputy governor of the Reserve Bank of Australia, <a href="https://www.rba.gov.au/speeches/2020/sp-dg-2020-09-22">Guy Debelle</a>.
Extra stimulus won’t spook financial markets
To get the unemployment rate below 5% by the end of 2022, the <a href="https://theconversation.com/now-well-need-100-120-billion-why-the-budget-has-to-spend-big-to-avoid-scarring-145489">Grattan Institute</a> estimates a further A$100 billion to A$120 billion of fiscal stimulus is needed on top of what governments have already announced.
This is unlikely to cause financial markets to break a sweat. Even if gross debt was to nudge 50% of GDP in the next few years, it would still be far below that of most other developed nations before the COVID crisis. At the end of 2018-19, the gross public debt in the UK was 85% of GDP, in the US 103%, and in Japan more than 200%. All have borrowed substantially more since then at very low rates.
There’s also no risk that significant government spending will cause wages or inflation to rise dramatically. In fact, Australia has the opposite problem. Wages were stagnant before the crisis and are forecast to remain so for years. Inflation has been persistently below the Reserve Bank’s inflation target and is forecast to remain so for years.
We can manage debt without austerity
Frydenberg has signalled that, as employment recovers, the government’s fiscal strategy will shift to stabilising and then reducing debt as a share of GDP. Although his stated threshold of “well under 6% unemployment” is <a href="https://theconversation.com/frydenberg-is-setting-his-budget-ambition-dangerously-low-146855">not ambitious enough</a>, the idea makes sense.
The good news is that with interest rates on government borrowing so low, debt as a share of GDP can be reduced without pursuing austerity in the form of deficit reduction.
The interest rate is one of three factors that affect the size of debt relative to GDP. The other two are the budget balance (the incremental contribution to debt) and nominal GDP growth, which depends on economic activity and inflation.
Even if interest rates were a little higher than now (say, 1.5%), the government can reduce debt relative to GDP even while continuing to run large deficits, provided that nominal GDP growth returns to a moderate level (say, 4.5%, as it was before the pandemic).
The next chart shows that under these circumstances the government can run deficits of up to $50 billion and still reduce debt as a share of GDP.
<hr>
<a href="https://images.theconversation.com/files/361518/original/file-20201005-24-r8s4ta.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/361518/original/file-20201005-24-r8s4ta.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Gross debt-to-GDP projections based on different budget deficit scenarios."></a> Author provided
<hr>
Different rates of GDP growth would change this story, as the next chart shows. With an even higher nominal growth rate, debt would shrink even faster relative to GDP. In a scenario of prolonged low growth, debt would increase relative to GDP a little, but remain very modest.
<hr>
<img src="https://images.theconversation.com/files/361519/original/file-20201005-14-1f2z9na.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Gross debt-to-GDP projections based on different GDP growth scenarios"> Author provided
<hr>
The government can do things to boost nominal growth in areas such as tax reform, education and skills, workforce participation, energy and climate policy, and land-use planning. The Reserve Bank should also do more by boosting inflation, which would support nominal growth.
Don’t scrimp on stimulus
There are many <a href="https://insidestory.org.au/the-biggest-bang-for-the-stimulus-buck/">urgent and valuable priorities</a> for government spending right now, such as permanently raising JobSeeker, boosting child-care support and building more social housing.
More debt might impose a small cost over a very long time. But the cost of insufficient stimulus and a prolonged recession would be vastly bigger.
The choice is simple. We should not let debt panic distract us from making it.<img src="https://counter.theconversation.com/content/147369/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/danielle-wood-147710">Danielle Wood</a>, Chief executive officer, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/tom-crowley-1041697">Tom Crowley</a>, Associate, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/dont-worry-about-the-debt-we-need-more-stimulus-to-avoid-a-prolonged-recession-147369">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

We need more stimulus to avoid a prolonged recession

<html><body>
GUEST OBSERVATION
 
Overwhelmingly, the 50 leading Australian economists surveyed by the Economic Society of Australia and The Conversation ahead of Thursday’s <a href="https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/update-economic-and-fiscal-outlook">economic statement</a> want the government to keep spending to support the economy — even if it means a substantial increase in debt.
The question is the third asked in the <a href="https://theconversation.com/au/topics/esa-conversation-national-economic-poll-87063">Economic Society-Conversation monthly poll</a>, which builds on a series of polls conducted by the society since 2015.
The economists polled were selected for their preeminence in the fields of microeconomics, macroeconomics, economic modelling and public policy. Among them are former and current government advisers and a former and current member of the Reserve Bank board.
Each was asked whether they agreed, disagreed, or strongly agreed or strongly disagreed with this proposition:
Governments should provide ongoing fiscal support to boost aggregate demand during the economic crisis and recovery, even if it means a substantial increase in public debt.
Only three of the 50 economists polled disagreed with the proposition, none of them “strongly”.
It is one of the starkest results in the survey’s five-year history.
<img src="https://images.theconversation.com/files/348556/original/file-20200721-17-1h8kcyj.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="50 economists respond: Govs should provide ongoing fiscal support to boost aggregate demand during the economic crisis and recovery, even if it means a substantial increase in public debt. Strongly agree: 66%, Agree: 22%, Uncertain: 6%, Disagree: 6%">The Conversation, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a>
Of the 50 economists polled, 44 supported the proposition, 33 of them “strongly”.
Of the remaining six, three were uncertain, and provided well-argued accounts of their reasoning which are published in full along the responses of each of the other participants at the bottom of of this article.
Debt now, concern later
Rachel Ong of Curtin University said the amount of public debt that has accumulated during the COVID-19 crisis was at a historical high and had to be repaid at some point. But she said governments had to be careful about removing support until the economy was clearly on a trajectory of recovery.
Nigel Stapledon of the University of NSW said while some level of on-going support was needed, at some point the cost would be larger than the benefit. Some sectors, including universities, will have to permanently adjust to lower incomes.
The economists who strongly agreed said that if not enough support was provided or if it was withdrawn too early, the resulting recession would itself make the debt that had been run up less sustainable (Fabrizio Carmignani, Griffith Business).
Financial markets are keen to lend
Beth Webster of Swinburne University argued the only real limit to government spending was high and damaging inflation.
If the government was worried about debt, it could finance its spending in other ways, by borrowing from the Reserve Bank (which could itself create money and “monetise” the debt).
Sue Richardson from the University of Adelaide agreed, using a technical term to argue that the was economy was “so far inside its production possibility frontier” (producing so much less than it was capable of) and inflation was so dormant, that there was a case for creating money.
Saul Eslake said that wasn’t necessary. Even with the hundreds of billions committed, financial markets appeared to be comfortable with the debt and keen to lend.
Debt is how we do things
Reserve Bank board member Ian Harper said the Commonwealth could borrow for 30 years at about 1%. “Can we expect the economy to grow faster than 1% per annum in nominal terms over a 30-year horizon?” he asked rhetorically. “I would have thought that’s a shoo-in,” he answered. If so, then the debt would be easily serviced.
Consulting economist Rana Roy pointed out that public debt was “not an anomaly”. It was an enduring and defining feature of the modern economy, providing an enduring and defining asset class, sovereign bonds, which were in high demand.
Of the three economists who opposed the proposition, Tony Makin of Griffith supported “supply side” measures such as <a href="https://theconversation.com/bowing-out-gracefully-how-theyll-wind-down-and-better-target-jobkeeper-143011">JobKeeper</a> that would keep firms in business but opposed “demand side” measures to boost consumer spending, saying they would ultimately prove counterproductive.
Escalating public debt would induce capital inflow, drive up the dollar and make Australian businesses less competitive. Although interest rates are at present low, they would increase when the debt had to be refinanced.
Doubts for differing reasons
Paul Fritjers of the London School of Economics said he would normally support running up government debt for the sake of the economy, but could not support it being run up to support an economy the government itself had run down.
The government should wean the population off of its “irrational fears” and letting “normal economic life return”.
Although strongly argued, these views were more weakly held than those of the majority.
<img src="https://images.theconversation.com/files/348557/original/file-20200721-23-a3clr6.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Previous responses weighted by confidence: Strongly agree: 70.4%, Agree: 21.7%, Uncertain: 3.5%, Disagree: 4.4%">The Conversation, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a>
Participants were asked to rate the confidence with which they held their opinions on a scale of 1 to 10.
When adjusted for these ratings, the proportion prepared to countenance a substantial increase in public debt climbed from 88% to 92.1%.
The proportion opposing it fell from 6% to 4.6%.
Tommorrow’s <a href="https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/update-economic-and-fiscal-outlook">economic statement</a> will be the last budget and economic update before the budget itself on <a href="https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/2020-21-budget-announcement">October 6</a>.<img src="https://counter.theconversation.com/content/143089/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/peter-martin-682709">Peter Martin</a>, Visiting Fellow, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/should-the-government-keep-running-up-debt-to-get-us-out-of-the-crisis-overwhelmingly-economists-say-yes-143089">original article</a>.
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Should the government keep running up debt? Economists say yes

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New figures released from the ABS show new home lending plunged in the month of April by $935.5 million.
In the same month, Australians wiped a record $1.55 billion off debt accruing interest on their credit cards – the highest drop on record.
HOUSING 
The ABS lending indicator statistics released today show that new lending dropped by 4.80 per cent, month-on-month, with the total value of new lending down by $935.5 million compared to March 2020, according to the seasonally adjusted data. Of this, a $720.9 million drop was from new owner-occupier loans. 
Refinancing, however, picked up pace – the number of external refinances increased by 11.20 per cent in the month of April, and 26.96 per cent, year-on-year, according to the seasonally adjusted figures.
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td rowspan="2" nowrap>
Value of new loans
</td>
<td>
% change 
</td>
<td>
% change 
</td>
</tr>
<tr>
<td>
Mar 2020 – Apr 2020
</td>
<td>
Apr 2019 – Apr 2020
</td>
</tr>
<tr>
<td nowrap>
Total housing
</td>
<td nowrap>
-4.80%
</td>
<td valign="bottom" nowrap>
11.24%
</td>
</tr>
<tr>
<td nowrap>
Owner occupiers
</td>
<td nowrap>
-5.00%
</td>
<td nowrap>
14.75%
</td>
</tr>
<tr>
<td nowrap>
Investors
</td>
<td nowrap>
-4.23%
</td>
<td nowrap>
2.38%
</td>
</tr>
</tbody></table>
Notes: Seasonally adjusted figures. Figures exclude refinancing.
Source: ABS lending indicator statistics for April 2020, released 10 June 2020.
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td rowspan="2">
Number of owner-occupier loans
</td>
<td>
% change 
</td>
<td>
% change 
</td>
</tr>
<tr>
<td>
Mar 2020 – Apr 2020
</td>
<td>
Apr 2019 – Apr 2020
</td>
</tr>
<tr>
<td nowrap>
First home buyers
</td>
<td nowrap>
-3.75%
</td>
<td nowrap>
15.56%
</td>
</tr>
<tr>
<td nowrap>
Refinancers
</td>
<td nowrap>
11.20%
</td>
<td nowrap>
26.96%
</td>
</tr>
</tbody></table>
Notes: Based on the number of new loans to owner occupiers using seasonally adjusted figures.
Source: ABS lending indicator statistics for April 2020, released 10 June 2020.
CREDIT CARDS
Statistics released yesterday from the RBA show that outstanding debt accruing interest dropped by $1.55 billion or 5.76 per cent. The highest monthly drop on record. 
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<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="bottom" nowrap>
TOTAL
</td>
<td>
Apr-20
</td>
<td>
Mar 2020 vs Apr 2020
</td>
<td>
Apr 19 vs Apr 2020
</td>
</tr>
<tr>
<td valign="bottom" nowrap>
Number of accounts
</td>
<td valign="bottom" nowrap>
13.50 million
</td>
<td valign="bottom" nowrap>
-136,817
-1.00%
</td>
<td valign="bottom" nowrap>
-1.09 million
-7.48%
</td>
</tr>
<tr>
<td valign="bottom" nowrap>
Total balances accruing interest
</td>
<td valign="bottom" nowrap>
$25.43 billion
</td>
<td valign="bottom" nowrap>
-$1.55 billion
-5.76%
</td>
<td valign="bottom" nowrap>
-$4.10 billion
-13.87%
</td>
</tr>
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<td valign="bottom" nowrap>
Total value of purchases
</td>
<td valign="bottom" nowrap>
$14.72 billion
</td>
<td valign="bottom" nowrap>
-$6.43 billion
-30.42%
</td>
<td valign="bottom" nowrap>
-$7.22 billion
-32.92%
</td>
</tr>
<tr>
<td valign="bottom" nowrap>
Total value of cash advance
</td>
<td valign="bottom" nowrap>
$307.44 million
</td>
<td valign="bottom" nowrap>
-$199.54 million
-39.36%
</td>
<td valign="bottom" nowrap>
-$287.76 million
-48.35%
</td>
</tr>
</tbody></table>
</div>
Notes: excludes commercial cards, using original data from the RBA. Data released 9 June 2020. 
RateCity.com.au research director, Sally Tindall, said a lot of Australians spent their lockdown refinancing their mortgages and getting on top of their debt.
“Australians spent the month of April getting their finances in order, scaling back spending and knocking down their debt, with the biggest monthly drop in debt accruing interest on record,” she said.  
“The early access to superannuation program is likely to be a factor in this record busting drop, giving some Australians an opportunity to wipe clean their credit cards that was, in their mind, too good to refuse.
“Refinance activity has also taken off during lockdown. We expect this to continue to gain pace with many homeowners looking to sure up their finances. 
“In relation to mortgages, today’s drop is likely to be the beginning of a long road ahead for the home lending market.  
“In April alone, nearly one billion dollars of new lending was ripped out of the property market, as the country went into lockdown; the biggest monthly drop in new lending since October 2015, in dollar terms,” she said.
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Aussies hunker down on debt in lockdown

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Wayne Byres, chairman of the Australian Prudential Regulation Authority (APRA), has said financial stability risks from very cheap debt overload and high-cost housing were still present in the economy.
Amid signs of a property recovery in the Melbourne and Sydney property markets, Byres said the market was at an "interesting juncture".
"The downward adjustment in prices has occurred in an orderly fashion and been positive for stability," he said in a speech in Melbourne.
"However, it is worth remembering that the original risks we were concerned about in 2014 - high prices, high debt, low interest rates and subdued income growth - have not gone away, and in some cases increased."
He noted the downward adjustment in prices has occurred in an orderly fashion and been positive for stability.
"It would be unhelpful if recent (and prospective) interest rate reductions led to a resurgence in speculative activity," he said. 
Byres said he did not want banks to cut their credit standards as a way to fire up loan growth.
"When it comes to the supply of credit, it would therefore be unwise for lending standards to be allowed to erode again as a means of generating lending growth. And on the demand side, it would be unhelpful if recent (and prospective) interest rate reductions led to a resurgence in speculative activity," he said.
"Financial stability doesn’t happen by chance," he noted.
Earlier this month, CoreLogic reported Melbourne house prices rose 1.3 per cent in August, while Sydney prices rose 1.5 per cent. National housing prices were up 0.8 per cent in the same month, the first increase since October 2017.
Byres' speech also noted the squeeze on bank profits.
It arose from low interest rates as lenders offset the decline in their lending rates through their deposit portfolios.
Byres said smaller banks, which have a higher reliance on deposit funding, could feel the hit on their profits "more forcefully" than large banks.
He indicated it could affect competition in the market.
"All four Australian major banks enjoy AA credit ratings, and ready access to funding; very few European banks (without explicit government support) enjoy similar ratings
"In 2018, a decade after the crisis, the four Australian majors were ranked in the top 35 banks in the world by market capitalisation.
"Europe, despite a much larger banking system and population, only had four banks in the top 35.
"The return on equity (RoE) of the Australian major banks has certainly declined but has not fallen below 10 per cent, even during the GFC, and is now in the order of 12 per cent; for large global European banks, RoE was negative at the height of the crisis, and has struggled to get much above 5 per cent since then."
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APRA's Wayne Byres warns of high debt and rising property prices

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<h1>
<a href="https://theconversation.com/profiles/mark-mcgovern-168" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.16px;">Mark McGovern</a>, <a href="http://theconversation.com/institutions/queensland-university-of-technology-847" target="_blank">Queensland University of Technology</a>
</h1>
The Queensland state government is <a href="https://www.qtc.com.au/annual-reports/annual-report-2016-17/" target="_blank">paying a higher interest rate</a> than most Queenslanders are on their mortgages. To make matters worse, debt is <a href="https://www.researchgate.net/publication/265852954_Subprime_agriculture_and_Australia" target="_blank">becoming problematic in rural areas</a> with incomes and asset values down, and debts, unemployment and underemployment up.
Without improved state government debt arrangements, and policies to alleviate stressed industries and communities, Queenslanders’ income and wealth will suffer.
A destructive dynamic is at work in government, rural and urban debts. As debt servicing bites, consumption falls, stressing businesses and their employees. Public and private interest payments crowd out jobs and business investment.
The interest rate on Queensland government debt is currently 5.2% per annum, compared to <a href="https://www.canstar.com.au/compare/home-loans/?amount=350000&amp;profile=Buying+Next+Home+350k&amp;purpose=Buying+Next+Home&amp;repayment_type=P%2BI&amp;state=NSW&amp;Loan+Type=Variable&amp;provider_link=Yes%2C+only+show+results+with+links" target="_blank">mortgage rates</a> between 3% and 4%.
Interest rates fluctuate markedly from year to year. Today the <a href="https://www.rba.gov.au/statistics/cash-rate/" target="_blank">Reserve Bank of Australia cash rate is 1.5% pa</a> yet the Queensland government in 2013-14 was paying the same 5.2% pa when the RBA cash rate was 3% pa. Failure to capture lower market rates is evident in the state’s finances.
<h2>Government debt</h2>
The Queensland government sells bonds to cover its borrowing. For example, it could sell a ten-year bond for A$1,000 (the face value) that pays out 5% pa every six months. The Queensland Treasury makes interest payments every six months and pays back the A$1,000 after ten years.
However, bonds are traded in markets and can be bought and sold for more or less than the face value. If interest rates in the wider economy are lower than what the bond pays or if perceived risks are low, a bond may trade for more than the face value, say A$1,100.
Looking at <a href="https://www.qtc.com.au/annual-reports/annual-report-2016-17/" target="_blank">Queensland Treasury Corporation data</a> we can see that total debts held by the State of Queensland had a face value of A$89.2 billion but a market value for A$98.5 billion at the end of June 2017. This was A$9.3 billion more than face value.
Also evident is that total debt peaked in 2014-15, but <a href="https://www.sunshinecoastdaily.com.au/news/leaders-trip-over-debt-campaign-unfolds/3253743/" target="_blank">no one seems to have noticed</a>.
<iframe style="border: none;" src="https://datawrapper.dwcdn.net/10id6/3/" frameborder="0" width="100%" height="400"></iframe>
Examining the breakdown between Queensland departments such as Treasury and the government-owned corporations that supply electricity, water and the like, the rise in Queensland general government debt was relatively smooth between 2007 and 2015. Changes in government had no significant effects on the trend in general government debt.
This rise appears driven by a <a href="https://s3.budget.qld.gov.au/budget/papers/2/4-Revenue.pdf" target="_blank">shortfall in government revenue</a>, poor policies and the global financial crisis. A lack of critical information about government debt compounded these problems.
As discussed by the <a href="https://publications.qld.gov.au/dataset/rural-debt-and-drought-taskforce-report/resource/fea23ad0-e069-4484-91ce-d1d762decc48" target="_blank">rural debt and drought taskforce</a>, relatively small rural debts also appear to be manageable. Much bigger challenges lie in the big cities because of the sheer size and the recentness of much debt.
<h2>Refinancing Queensland?</h2>
Relatively small steps can have big effects in the current situation.
The first step for the new government is to provide better transparency about the state of government debt with Treasury publishing better analysis and fuller accounts. This will help lead to more sustainable state finances, and to tackle problems in both rural and urban areas.
Although large Queensland government debts appear relatively manageable, this is providing that net government revenues can be maintained.
There are several potential policy initiatives but we only have space to consider one. Suppose the Queensland government set a target of transitioning to raise one-third of its funds from directly selling non-transferable bonds (that can’t be bought or sold) to Queenslanders. This was a regular practice before financial liberalisation in the 1980s. If done again well, it could be a win-win outcome.
Much like a term deposit, Queenslanders could buy five-year bonds with an interest rate of, say, 3% pa. This would reward Queensland savers with better returns than they could get in a savings account and keep money within the state. It would have saved the government the significant sum of A$620 million if used for a third of government bonds in 2016-17.
<img src="https://counter.theconversation.com/content/87586/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Interest payments should be one focus for the incoming government as it works with insight to improve its management of debts and their effects. Gains from some fresh thinking could be considerable.
<a href="https://theconversation.com/profiles/mark-mcgovern-168" target="_blank">Mark McGovern</a>, Visiting Fellow, QUT Business School, Economics and Finance, <a href="http://theconversation.com/institutions/queensland-university-of-technology-847" target="_blank">Queensland University of Technology</a>
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/the-queensland-government-is-paying-more-for-its-debt-than-the-average-mortgage-holder-87586" target="_blank">original article</a>.
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The Queensland government is paying more for its debt than the average mortgage holder

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<img src="https://counter.theconversation.edu.au/content/75857/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The current debate about housing muddles two separate issues: the affordability of housing, and the risk in the banking system of any significant fall in house prices. Clearly, they are both important issues and the link between them is the potential for a lot of home owners to overreach in their finances, to not be able to repay their loans, and so to bring down their banks.
When you look at the data (in three charts) on mortgage stress, the systemic risk of people not being able to repay their home loans appears small. Data from the Australian Prudential Regulation Authority (APRA) reveals the average balance on housing loans has barely trended upwards over the last five years (see our first chart below).
This was during a period when house prices have risen quite strongly. In effect, this means that, on average, people have more equity in their houses to stand behind their borrowings.
This is not just true for the average but also if you look at investor loans or for low documentation (loc-doc) loans (these are aimed at those who cannot provide the usual required paperwork, for example self-employed people). The same trends emerge. It’s not clear from this that people are taking on excessive risk – and certainly not recently.
<a href="https://www.propertyobserver.com.au/images/2017/04/10/v1.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/2017/04/10/v1.jpg" width="600" height="432">
Source: ABS6416.0 and APRA Quarterly ADI Property Exposures
Even for new loans you get the same basic picture. The chart below shows the loan to valuation ratios for new loans. What is clear is that for most new loans people are borrowing between 60% and 80% of the value of their houses.
The proportion of people who have very high exposure to a fall in house prices – those with loan to valuation ratios above 90% – has been declining over time. Once again, the basic picture is one of prudent households, rather than a community of people gambling on house price rises.
<a href="https://www.propertyobserver.com.au/images/2017/04/10/v2.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/2017/04/10/v2.jpg" width="600" height="432">
Source: APRA Quarterly ADI Property Exposures
A lot of the confusion about housing arises because people make inappropriate comparisons. One common mistake is to compare the amount of housing debt with national income. This is highly misleading.
A more correct comparison is between your income and the amount of your income needed to service your loan. At a national level, this means we should look at the size of national income and the amount of income needed to service the debt (not the amount of debt).
An alternative that the Reserve Bank uses is to compare the amount of debt people have with the amount of assets they hold. As we can see in the chart below, the value of household liabilities has been increasing but the total value of assets held by households appears to have been rising faster. Again, there is no clear case that the household sector has borrowed excessively.
<a href="https://www.propertyobserver.com.au/images/2017/04/10/v3.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/2017/04/10/v3.jpg" width="600" height="432">
Source: Reserve Bank of Australia
None of this is to deny that house prices can fall, or that some people are finding it very hard to buy somewhere to live in Sydney. Houses are much cheaper in other parts of Australia and property prices have even been falling recently in some regions.
Rodney Maddock is a Vice Chancellor's Fellow at Victoria University and Adjunct Professor of Economics, Monash University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/rodney-maddock-107543" target="_blank">here</a>.
 
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jchancellor-FAypfDUnLy

Mortgage stress isn't as bad as you might think: Rodney Maddock

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The real estate franchise business LJ Hooker is facing a December debt refinancing requirement, according to the Australian Financial Review's Street Talk column.
It comes after shelving plans for a $400 million float earlier this year.
The Street Talk column suggested the franchise business has around $60 million in obligations with a refinance due at the end of 2016.
A spokeswoman advised the company founded in 1928 by the legendary Sir Leslie Hooker was reviewing "a variety of capital management options to deliver its growth plans." 
It was in July last year that Janusz Hooker, the grandson of Sir Leslie, cemented his control of the business as a number of well-known shareholders sold out.
Among them were its former chairman Greg Paramor, former Leighton chief Wal King, developer and yachtsman Syd Fisher and RAMS founder, John Kinghorn.
In October, last year there was a pre-initial public offering cash call of around $20 million. 
There was also talk of a joint venture with Barry Plant.
Street Talk advised today there were whispers about Janusz Hooker and whether he will relocate to Singapore.
LJH advised Property Observer there were major factual issues with the story, including the claim that it owed any debt this year.
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LJ Hooker reviewing capital management options

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<img src="https://counter.theconversation.edu.au/content/64367/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A new study shows two million Australians are experiencing high financial stress which prevents them from coping in difficult situations, for example, in paying unexpected expenses such as a big mobile phone bill or the fridge breaking down.
Adults face these sorts of scenarios frequently. When they arise, people usually turn to savings, a credit card, or a friend or family member to help out.
Our report, Financial Resilience in Australia, funded by the National Australia Bank, quantifies the amount of Australians: experiencing problems paying debts; meeting the costs of living; and accessing appropriate, affordable and acceptable financial products and services.
It also shows some Australians have trouble accessing social support in times of crisis and may have low levels of financial knowledge.
Our research measured financial resilience by the four key resources that support it: personal economic resources (such as savings), financial products and services (such as insurance), financial knowledge and behaviour (including financial literacy), and social capital (having social support in times of crisis, including friends and families).
Many Australians simply don’t have the resources to bounce back. For example, around:
<ul>
<li>One in two adults have limited to no savings</li>
<li>One in two only have a “basic understanding” of financial products and services</li>
<li>One in ten have unmet need for credit and/or insurance</li>
<li>One in five have limited or no social connections</li>
<li>One in 30 stated they needed but did not have access to any form of government or community support.</li>
</ul>
This has implications for the short and long-term impact on individuals and their families.
<h2>Who is most at risk?</h2>
Our research found secure housing, steady income, education, being employed and good mental health are strongly associated with financial resilience.
On average, financial resilience is significantly lower among people who are homeless, living in social housing, are short-term renters or live in student accommodation.
Financial resilience increases with the level of education and, unsurprisingly, people with very low personal incomes fare poorly.
Employment status is a key marker. People who are unemployed, underemployed, not in the labour force and those who only work odd jobs are more likely than their full-time employed counterparts to have lower levels of financial resilience.
People with a serious mental illness are significantly more likely to be in severe or high financial stress, are less likely to be financially secure and fare worse on each of the individual resource groups than people without mental illness.
The gender split in financial resilience is fairly even overall. However, the four components of financial resilience are influenced by gender. Women have lower general levels of economic resources than men, but men have lower levels of social capital than women.
People who were born overseas in a non-English speaking country have lower levels of resilience than those who were born in Australia. Finally, the influence of age on financial resilience varies and is often affected by other factors.
One in four study participants reported difficulties accessing financial services. The barriers are varied, but include cost, trust, poor and inadequate services, and (for a few) language, disability and discrimination.
This underscores the importance of making financial information, products and services more user-friendly and accessible. This will ensure these resources are available and accessible to everyone who needs and wants them in society.
The factors influencing financial security are not surprising. People who own their own homes, have a university-level education and have a personal yearly income of more than A$100,000, for example, have higher levels of financial resilience. However, only 35.7% of Australians are financially secure.
The prevailing attitude around financial problems is that individuals are solely responsible for their situation. Our research challenges this ideas as it shows multiple aspects to financial resilience, some out of the individual’s control.
The below shows how interlocked the different components of financial resilience are and when pieces of the puzzle are removed, the most vulnerable people are at risk.
<a href="/images/2016/08/29/image-20160826-11150-bc398a.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/29/image-20160826-11150-bc398a.jpg" alt="" width="754" height="407">
<h4>
The jigsaw of financial resilience. The Centre for Social Impact, Author provided
</h4>
At the moment social sector leaders are lobbying the government to scrap proposed budget cuts that will reduce the amount of certain welfare payments. Our research shows these same people have the least resilience to bounce back if they were to lose some financial support.
This is an example of how the government needs to play a more active role in understanding financial resilience and where support is needed. By understanding the often interrelated elements of financial resilience, tipping points and who is most at risk, prevention and intervention can be better tailored.
Rebecca Reeve is senior research fellow, Centre for Social Impact, UNSW Australia and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/rebecca-reeve-97205" target="_blank">here</a>.
Kirsty Muir is professor of Social Policy / Research Director, Centre for Social Impact, UNSW Australia and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/kristy-muir-158422" target="_blank">here</a>.
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Two million Aussies are experiencing high financial stress

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This is a question faced by many developers as they find themselves inevitably stepping up to larger projects and the consequential demand on their equity resources. The answers are complex and can vary depending on many variables but let’s take a look at what each option offers
Firstly, lets be clear on the differences between debt and equity. Debt comes in many forms but essentially, it comprises funds that are lent at a proscribed interest rate which in a project scenario are usually but not always, capitalized as a cost of the project. Debt is typically but again not always, secured by a registered charge over the security property together with sponsor guarantees and in the final wash up, the lender’s repayment of capital, interest and fees take priority over those of the sponsor when apportioning the proceeds of sale. Clearly it is important to negotiate the best possible terms when committing to a debt position but at the end of the day, the golden rule tends to apply, he who has the gold, makes the rules.
Equity on the other hand is usually defined as the capital contribution provided by the sponsor of the project and any related parties. Equity can take the form of cash, services provided and any improvement in value derived from the revaluation of an asset as a consequence of a rezoning or similar.
Sponsor structures can take many different forms but for the purposes of this article we will treat partnerships the same as single traders (as do lenders), while Joint Ventures provide a structured arrangement enabling parties with differing skills and or capabilities to come together to undertake a project and share in the resulting profits. 
The manner in which debt and equity can be sourced and applied is almost limitless but lets take a look at the typical options available to a developer and consider the benefits.
The Debt Options:
Firstly, you need to be aware that the state of the market will often determine what is actually available. Simplistically, in a rising market, access to both debt and equity is typically more readily available and pricing is competitive. Traditional debt providers such as the banks and major funds chasing market share, will consider higher Loan to Cost/Value ratios, more competitive terms such as lower presale requirements and keenly priced interest margins and fees.
Alternatives such as mezzanine funding also become more prevalent in rising markets with participants providing funds to top up the capital stack in a project. Typically filling the gap between senior debt at say 75-80 percent up to 90-95 percent of the total project cost, the cost of Mezzanine can range from 20-25 percent p.a. but as the market gets hotter and depending on the level of risk, pricing can fall to as little as 14 percent.
While these funds may seem attractive, they are often accompanied by very tight and restrictive terms, which can result in the sponsor losing control of the project to the advantage of the mezzanine lender. Sponsors need to be aware that a Mezzanine partner is really just another lender albeit with more to lose that the senior debt provider and when the going gets tough, you potentially have two masters to satisfy rather than just one and neither is likely to have the same agenda as you.
A key point to remember is that in a rising market Mezzanine Lenders are attracted to a share of the upside and negotiate accordingly. In a falling market they will seek to cap their exposure and prioritise their returns at your expense. Conversely, you as the developer are looking to maximise the blue sky in the project or protect your downside as the case maybe.
“Stretch senior” debt is another option that is usually seen in stronger markets with some specialist lenders prepared to exceed the usual Major bank construction loan LCR’s of between 70-80 percent by lending up to 90 percent+ of LCR in return for a margin that reflects the associated risk, which might be some 3-4% above that charged by the banks, depending on their assessment of the project and sponsor risks.
In a falling or credit constrained market as we are currently experiencing, the traditional lenders tighten their terms and we see LCR’s firm to between 65-75% and the application of stricter presale requirements, typically with a minimum of 100% debt cover as a condition precedent. 
Joint Ventures:
The attraction of Joint Ventures is that they provide a multitude of structures that can be tailored to the developers needs and typically provide access to capital and expanded skill sets in return for a share of both the profit and the risk.
Like debt, Joint Venture funds are easier to secure in a rising market but even more importantly than with debt, the secret here is to find the right partner. While negotiating the right terms and a soundly drafted JV Agreement are critical (we will deal with this in a future article), the most important consideration is finding a partner who not only has complementary skills and capabilities to work with their own but also has the same goals and values in terms of their decision-making processes. This is a more challenging exercise that selecting the right debt or mezzanine partner but has the potential to be far more rewarding. 
The classic JV structure where the parties are equal in their contributions and profit entitlements are rare with most comprising of a party with the ideas/opportunities and the other with the capital and resources to make it happen or a similar permutation. As a result, in a rising market Joint Venture partners with capital are attracted by an increased share of the upside and negotiate accordingly, while in a falling market they will seek to cap their exposure and prioritise their returns at the expense of their partner or the lender. Conversely, the initiating developer is also self motivated and looking to give away as little as possible in their project which usually results in an increased downside in the event that they do not perform their obligations and for newcomers this inevitably ends in tears as they over estimate their own capabilities.
So, the question as regards more debt as opposed to equity is not simply one of cost. More importantly it is one of understanding your capabilities to deliver and being able to deal with the consequences if unforeseen forces result in a less than optimum outcome.
In the case of “more debt”, the developer needs to be aware that losing control to the lenders has a proportionally higher risk in terms of the financial consequences both in terms of the project and their personal fortunes. On the other hand the Joint Venture can reduce the downside risks from a capital exposure perspective but comes at the cost of having to give away a substantial portion of the projected profit.
So, there is no right or wrong answer here, the key question an under capitalized developer needs to ask themselves is what option best fits my situation, what is the downside if events outside my control mean that the project fails and can I live with the consequences of my decision?
 
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. To discuss your project finance requirement please call (07) 3171 4200 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au/" target="_blank">here</a>.
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Risk and Reward – Does more debt solve your problems or do you need a JV Partner? HoldenCAPITAL

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The global bond fund giant PIMCO has suggested that falling interest rates and rising house prices had the potential to drive a more irrational response with a 'herd mentality' that assumed continued capital price appreciation.
Based on the fear of missing out, PIMCO portfolio manager Aaditya Thakur said there was a risk that people build unrealistic and unsustainable expectations that house prices could continue to rise given prevailing conditions.  
"If you think about why people lever up its because they expect further income or price appreciation or a combination of both, but if they are extrapolating from past history, it might not be a true reflection of future productivity of the asset," she told The Australian Financial Review after issuance of her co-authored report.
PIMCO noted Australian household debt to net worth had increased from below 15 per cent in the early 90s to a peak to almost 30 per cent in 2009 - and now remained above 25%. 
PIMCO, which manages $US1.6 trillion of assets globally and $35 billion in Australia, completed the research paper to understand the drivers of household borrowing decisions.
The fund's thesis is of a "new neutral" which suggested Australian interest rates would be held lower for longer by a number of factors.
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Australians being "irrationally exuberant" by borrowing too much to invest in housing, exposed the economy to financial shocks, global bond fund giant PIMCO tipped.
The PIMCO researchers found that Australians' decision to borrow was driven by falling interest rates and rising house prices – not economic fundamentals that reflect the health of the economy like employment.
The world's biggest bond investor said Australians appeared to be "trigger happy" about debt – responding far quicker than others to changes in interest rates and asset prices. 
PIMCO says they start borrowing more after only six months of increases in house prices compared with a year in the US.
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