Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Federal Budget

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GUEST OBSERVER
It is ironic that at a time when so many young Australians are finding it so hard to break into the property market, commentators are finding it so hard to break out of discussing it.
This week we saw three notable pieces of information. First, the CoreLogic home value index showed further rises in property prices across the country in the month to March 31. Year-on-year, Sydney, Melbourne, Canberra and Hobart had double-digit percentage gains. Melbourne was up 15.9 percent and Sydney a staggering 18.9 percent.
And although prices have come down a little in the volatile Perth and Darwin markets, the numbers triggered further concern from regulators.
In keeping the cash rate steady at 1.5 percent, RBA governor Philip Lowe made the following observation is the formal announcement:
“Growth in household borrowing, largely to purchase housing, continues to outpace growth in household income. By reinforcing strong lending standards, the recently announced supervisory measures should help address the risks associated with high and rising levels of indebtedness. Lenders need to ensure that the serviceability metrics that they use are appropriate for current conditions. A reduced reliance on interest-only housing loans in the Australian market would also be a positive development.”
But it was comments made outside the official script that were the most revealing. The governor specifically tied prices to “taxation arrangements” and <a href="https://www.rba.gov.au/speeches/2017/sp-gov-2017-04-04">noted</a>: “For many people, the high debt levels and low wage growth are a sobering combination.”
Yup: negative gearing plus inadequate supply plus low wage growth equals financial distress.
<h2>Prudential regulation</h2>
The Australian Prudential Regulatory Authority (APRA) announced it wanted to see the proportion of interest-only loans fall from the current strikingly-high level of 40 percent of new loans, down to 30 percent.
That’s fine, but three concerning things come quickly to mind: it treats the symptom not the cause of risky lending; it may be too late; and targets like this tend to lead to “gaming”. 
On the latter point, how much principal repayment qualifies? What about a loan with a 200-year maturity – is that interest only or not? You can bet the smart folks at the big banks are on the case figuring out how they can comply with the letter of the regulation but not necessarily the spirit.
Meanwhile, building approvals rose strongly in February, up 8.3 percent. This came mostly from NSW and Queensland, which were up 19.6% and 33.7%, respectively. These numbers reveal how volatile approvals are, and hence how little of a long-term supply trend they represent. 
The numbers were also driven largely by apartment approvals, which are particularly lumpy. Moreover, if these don’t sell well off-the-plan – perhaps because of interest-only loans drying up – then developers can quickly find themselves in trouble. 
Much as I would like to read these figures as a positive supply response, it’s hard not to be worried.
<h2>Governments aren’t helping</h2>
So while the RBA keeps cautioning market participants, governments are doing very little, or things that are explicitly unhelpful. It <a href="https://www.dailytelegraph.com.au/news/nsw/bringing-down-the-house-radical-plans-considered-to-ease-homebuyer-crisis/news-story/1c9eae05b7f7569d785dea29a5adb159">was reported</a>this week that NSW Premier Gladys Berejiklian favours extending the first home owner grant from new properties to existing properties in the June state budget. The premier has said previously that increasing supply is important (she is correct on that), but now seems to be undoing that by goosing demand.
That is the worst idea ever. Period. It just drives up prices and throws away precious government funds. As economist Saul Eslake has put it:
“All [FHOGs] do is increase the price of housing by that amount. There’s almost 50 years of evidence to show that when you give cash to would-be home buyers … the price of the housing they buy goes up by at least that amount. The people who get it think that it’s helping them - the government says ‘here’s a slab of cash’, and that’s popular, but it does nothing.” 
Meanwhile, we wait with anticipation the housing affordability package in the Commonwealth budget on May 9. No shortage of dumb ideas have already been floated – including letting people dip into their superannuation to buy a property.
Let’s hope that economics trumps politics just this once. Negative gearing needs to be reformed, and supply needs to be boosted. Housing affordability, financial stability and economic inequality are all riding on it.
Richard Holden is professor of Economics and PLuS Alliance Fellow, UNSW and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Regulators fiddle while house prices sizzle

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<div class="column">The Federal Budget remains on track to meet Government forecasts. Not only are rolling annual aggregates showing improvement, so are the so-called ‘profile’ positions estimated by the Department of Finance.</div>
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 The Government continues to exercise spending restraint.</div>
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<div class="column">In fact expenses or payments were $4.2 billion below the so-called profile level or government estimates for this point in the year. Revenue also is lifting, just above government forecasts. And the rolling annual level of revenues is growing at a 3.8 percent annual pace – the fastest rate in almost three years.</div>
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 The Budget is currently in a stronger position than the government’s finance boffins have estimated. The good news is that improvement is coming from both sides of the balance sheet.
GST revenues are also lifting, currently growing at a robust annual rate of almost 6 percent. Clearly spending is lifting across the economy a point highlighted by the CommBank business sales index of economy-wide spending and the recent retail trade data. 
What do the figures show?  
The underlying Budget deficit for the twelve months to October 2016 stood at $38.27 billion (around 2.3 percent of GDP), down from $39.15 billion in the year to September.
Smoothed revenues (twelve months to October) were up 3.8 percent on a year ago – the fastest growth in 32 months. Expenses rose by 2.6 percent over the same period – the fastest growth in 14 months. 
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In terms of the fiscal balance, the Department of Finance noted: “The fiscal balance for the year to 31 October 2016 was a deficit of $23,919 million, which is $4,002 million lower than the 2016-17 Budget profile deficit of $27,921 million. The difference results from lower than expected expenses and net capital investment, partially offset by lower than expected revenue.”
Revenues: “Total receipts were $58 million higher than the 2016-17 Budget profile.”
Expenses: “Total payments were $4,225 million lower than the 2016-17 Budget profile.”
The Government currently expects an underlying deficit of $37.081 billion for 2016/17 (around 2.3 percent of GDP).
Receipts from the Goods and Services Tax stood at $60.86 billion in the twelve months to October, up 5.9 per cent on a year ago, above the 4.7 per cent growth over the last twelve months and the second highest on record behind August 2016. The Government has forecast GST receipts of $63.34 billion for the entire 2016/17 year.
Actual GST receipts for the four months to October stood at $21.02 billion, below the Budget ‘profile’ of $21.45 billion.
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What is the importance of the economic data?
The Department of Finance releases the Government Financial Statements (Niemeyer Statement) almost every month. The statement allows investors to track the current Budget position and provides insights into the effectiveness of fiscal policy.
What are the implications for interest rates and investors?
The Federal Budget is on track to meet forecasts. Spending restraint is driving the improvement. Fiscal policy is more neutral at present, as is monetary policy.
There is no room for complacency. 
The Budget may be showing cyclical improvement, but in 2017 all political parties need to stay focused on fundamental tax reform to drive medium-term improvement in the fiscal position.  
 Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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cjames-5S2v74qSNK

Federal Budget spending down, revenue up: CommSec's Craig James

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The Federal Coalition is slowly appreciating that the retrospectivity of their Federal Budget SMSF changes has dire consequences.
The Australian reported the federal government would look at situations where people had entered into binding legal contracts who might be hit by the proposed superannuation changes.
The Assistant Treasurer Kelly O’Dwyer said yesterday there will be a period of consultation to make sure there are no unintended consequences from the legislative changes.
“If someone has made a binding legal agreement before budget night, the government will look at that situation in the design of the legislation.’’
Ms O’Dwyer’s comments came as the superannuation industry expressed concern that some people could have entered into binding legal contracts to buy property through their super fund or made other legal arrangements that would be hit by the budget night imposition of a $500,000 cap on post-tax superannuation.
All the government’s proposed changes to super are scheduled to operate from July 1, 2017, except the $500,000 lifetime cap on post-tax contributions, which applies from May 3, budget night.
Ms O’Dwyer said the government had no intention of backing down and rejected calls by Melbourne barrister Jack Hammond QC that people with existing superannuation accounts should be grandfathered from the negative impacts of the changes.
Off the plan apartment purchases have real concerns, the Henderson Maxwell financial planner Sam Henderson, wrote in today's Australian Financial Review in an answer to a reader question on super.
The question was: My wife (56) and I (63) are the only trustees of our SMSF, which has about $1 million. I'm retired and my wife has just retired to look after six grandchildren. Last year we entered into a contract within the super fund to buy an off-the-plan apartment ($650,000). Our plan was to put more money into super by selling the investment property, and borrowing, say, $200,000. We did this thinking that after renting it out for, say, six years, we would "in-specie" transfer it out of the super fund to ourselves. The building work has started, with estimated completion in early 2018.
The new Liberal budget has thrown a curve ball into the equation. Assuming the Liberals stay in government and the 2007 retrospective $500,000 non-concessional cap is passed, we could be in serious trouble as we are close to the maximum $500,000. If this happens, I see three choices for us: losing the deposit ($65,000) by reneging on the contract; trying to change the contract to buy the apartment outside the SMSF, or trying to get a bigger loan and proceeding with the original idea. If we take the last option, we still lose as we won't have much left in super and no way to put more in if we do the "in specie" transfer. It seemed like a great idea last year, and we did believe the Liberals would not change super as they promised not to. Have you any suggestions or other options for us? Rob
Hendserson's answer was in part: Rob, you're exactly the reason why retrospective legislation should never be enacted. You are also a good example of what can go wrong in an SMSF by purchasing apartments off the plan, despite your best intentions.
Legislation in superannuation is guaranteed to change over time. While super will always remain a concessionally-taxed savings environment and generally a good place to invest, caution needs to be exercised when purchasing assets over a longer time period. 
Your dilemma is a serious one. If you change the contract, you will almost certainly be up for another round of stamp duty for a change of ownership. If you forfeit your deposit, you are creating a loss of 6.5 percent ($65,000 loss of deposit) for your fund. Make sure you do your research to ensure the property will stand on its own two feet at settlement in all markets with a strong and growing rent, which will be a challenge based on these statistics.
One alternative is to lend the money to your super fund rather than use the bank. You simply establish your own limited recourse borrowing arrangement on commercial terms and lend the money to the fund to avoid the use of further bank funding, all assuming the bank will accept that structure which may be a challenge without personal guarantees. But it's worth considering under expert guidance.
Failing that option, you will need to tap the bank for the settlement amount and hope that its lending policy hasn't changed between now and settlement. Banks have been overhauling their investment lending policies in the past few months so jump on the phone and see what they are willing to do.
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Property 101: Dire OTP consequences to Government's Budget super retrospectivity

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 GUEST OBSERVER
As is custom, there were a number of official announcements and an abundance of rumours and unofficial ‘leaks’ in the lead up to the release of the 2016-17 federal budget.
As widely anticipated, there was very little in terms of budget measures specifically aimed at housing. However, the significance of the tax reform contained within this budget was arguably underestimated, particularly if you consider the changes projected for the out-years. In the near term, small businesses are the main beneficiaries of the announced reforms. 
The key areas addressed in the budget: 
The Government has held firm on their commitment not to make any changes to capital gains tax or negative gearing provisions. Furthermore, comments within the Treasurer’s budget speech suggest the coalition have solidified this position ahead of the upcoming election.
The plan to lower the company tax rate to 25 percent through a staged implementation over the next decade, with a number of changes for small businesses to take effect in this budget period.
A modest change to the personal income threshold for the second highest marginal income tax rate which was increased from $80,000 to $87,000 (slightly higher than expected) in order to ameliorate concern about bracket creep; Commitment to the Smart Cities Plan; A Youth Employment Package; significant reforms to the superannuation system; the ATO has been provided with additional resources to bolster enforcement activity, primarily aimed at addressing multi-national tax avoidance. 
In the sections below we discuss the overall economic and fiscal outlook presented in the 2016/17 Budget along with some of the key forecasts. This is followed by additional explanatory detail regarding the key announcements most relevant to the residential building industry. 
Economic Backdrop &amp; Fiscal Position 
The Budget presents a “steady as she goes” outlook for economic growth over its forecast horizon. The key economic assumptions on which the Budget was developed are summarised in the table below.
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<img src="/images/2016/05/06/Screen%20Shot%202016-05-06%20at%2010.20.14%20AM.png" alt="">
In terms of the economic assumptions underlying the Budget projections, the Treasury foresees the rate of economic growth returning to 3.0 in 2017/18 and remaining at this level over the forecast horizon. The acceleration of economic growth will help drive a reduction in the unemployment rate to 5.5 per cent by the end of the forecast horizon, a little lower than the 5.75 average rate expected for 2015-16. Against this backdrop, inflation is expected to pick up a little but remain in the relatively comfortable 2 per cent to 3 per cent range. Stronger GDP growth, and the decline in the cash value of the budget deficit over time means that the relative size of the deficit is expected to fall from 2.4 per cent of GDP in 2015/16 to 1.4 per cent of GDP in 2017/18. 
Of note are the estimates of the contribution that dwelling investment will make to economic growth in the years ahead. HIA’s projections are for dwelling investment to fall by 5.4 per cent next financial year and by 6.7 per cent in 2017/18. The HIA’s forecasts are based on the assumption that new home commencements will decline from about 214,300 in 2014/15 to 160,100 in 2017/18, while renovations activity is projected to recover modestly over the same period. Realising the outcomes expected by Treasury will require a continuation of the current record levels of new housing activity and strong growth in the renovation market. 
While the changes to superannuation and the lowering of the Official Cash Rate will encourage more investment in other avenues like rental investment, it is unlikely that this will be sufficient to deliver the continued growth in residential investment that Treasury is anticipating. 
In terms of the projections contained in yesterday’s budget, the size of expected future deficits has increased since the forecasts in December 2015’s Mid-Year Economic &amp; Financial Outlook. In 2015/16, the underlying cash balance is expected to reach $39.9 billion followed by $37.1 billion in 2016/17. Thereafter, the deficit is projected to decline significantly, falling to just $6.0 billion by 2019/20, the latest year for which Treasury forecasts have been prepared.
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Extension of the provision enabling small businesses to immediately depreciate assets valued up to $20,000 to the end of June 2017, and making this provision accessible to businesses with revenue up to $10 million. 
A ‘Ten Year enterprise Tax Plan’ aims to incrementally lower the company tax rate to achieve a 25 per cent rate for all companies by 2026/27. Over time, the size of companies eligible for the 27.5 per cent tax rate will be lifted each year until all companies are taxed at this rate in 2023/24. The rate for all companies will then be incrementally lowered over the ensuing four years to reach 25 per cent by 2026/27. 
The government will extend the unincorporated small business tax discount. From 2016-17, the discount will be available to businesses with annual turnover of less than $5 million, up from the current threshold of $2 million, and will be increased to 8 per cent. The maximum discount available will remain at $1,000. Over the next decade, the discount will be further expanded in phases, to a final discount of 16 per cent. 
The Youth Employment Package 
This program, Youth Jobs PaTH (Prepare, Trial, Hire), has three components: the first provides pre-employment skills training for young job seekers; the second provides a $1,000 inducement to businesses to provide a 4-12 week internship for program participants along with an income supplement for the participant; and the third is $6,500 ‘Youth Bonus’ wage subsidy payment for employers who take on a young worker who has been in employment services for longer than six months. 
Reforms to superannuation 
The purpose of the superannuation system is to be enshrined in legislation in line with a recommendation of the Murray Review. This will define the purpose as: providing an income in retirement to substitute or supplement the Age Pension. This provides legislative basis the government of the day to target the superannuation tax concessions at those who would otherwise be likely to be remain dependent on the Age Pension, this is likely to come at the expense of tax concessions currently available to those likely to be self-funded in retirement. 
Those with combined incomes and superannuation contributions greater than $250,000 will pay 30 per cent tax on their concessional contributions, up from 15 per cent. This represents a lowering of the previous income threshold of $300,000. 
The superannuation concessional contributions (ie pre-tax contributions or contributions where a deduction is claimed) cap has been lowered to $25,000 per annum, down from $30,000 for those under 50 and $35,000 for those over 50. 
This has been partially balanced by enabling unused concessional contribution caps to be carried forward on a rolling basis for up to five years for those with account balances of $500,000 or less. 
The government have introduced a $500,000 lifetime cap for non-concessional contributions (ie contributions made from savings for which no deduction is claimed). 
The Government will introduce the Low Income Superannuation Tax Offset to replace the Low Income Superannuation Contribution when it expires on 30 June 2017. 
From 1 July 2017, the Government will lift current restrictions and allow individuals under the age of 75 to claim tax deductions for personal superannuation contributions to eligible superannuation funds. 
The current spouse tax offset has been broadened. The income threshold for the receiving spouse (whether married or de facto) will be lifted from $10,800 to $37,000 
2016-17 Federal Budget 
‘Tax Integrity Package’ – additional resources for the ATO 
The government have provided additional resources to the Australian Tax Office to establish the Tax Avoidance Taskforce. The key focus will be pursuing tax avoidance by multinationals and high wealth individuals. 
The government will introduce a new ‘Diverted Profits Tax’ targeting multi-nationals shifting profits earned in Australia to lower taxing jurisdictions 
Warwick Temby is executive director, HIA and Shane Garrett is senior economist. They can be contacted <a href="https://hia.com.au" target="_blank">here</a>.
<a href="https://hia.com.au" target="_blank"></a>
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HIA's Federal Budget Report Card

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Switzer commentator Paul Rickard says Treasurer Scott Morrison was right when he said that the Tuesday budget is the biggest shake-up to super system in 10 years.
He said on Switzer Daily that middle income Australians will invest monies that would otherwise have made their way into the super system into the family home, investment property and farms.
Paul added that none income producing assets such as collectables (art, rare coins, stamps etc) might also get a boost.
He said Budget had gone one step further from the Perter Costello shake up 10 years ago by slashing what can be put into the system and reducing the tax benefits of keeping money in there.
"Super was never a vehicle for the rich.
"Tuesday night, super was an attractive proposition for the well-off.
"Now, super is really for middle income earners. And whenever tax incentives or disincentives change, behaviours change.
"The well-off or soon to be well-off will look at investments outside the super system, with property, including negatively geared property, an obvious beneficiary.
Another important change is that the transition to retirement pension has been effectively killed from 1 July 2017. The tax benefits are gone, which will come as a shock to many well-off and not-so well off over 55’ers. 
Here is a summary of the changes he saw as bad.
Impacting all superannuants, the government has slashed the concessional contributions cap to just $25,000. 
The change doesn’t apply until 1 July 2017, so he adviser have the remainder of this financial year and next financial year to maximise your contributions.
An even more important change is the new lifetime limit on non-concessional (or after tax) contributions of $500,000.
"To apply from 7.30pm on budget night, this is the change that will have most impact on the well off.
"They simply won’t be able to get large sums into super, so they will look to invest and grow their wealth outside super, most directly into property."
"While the change is not retrospective (ie if someone has already accumulated more than $500,000 in non-concessional contributions they will be allowed to keep it in super), the measurement period will commence from 1 July 2007.
"That’s not a typo - the Government will look back 9 years to count your non-concessional contributions."
Rickard pointed out these changes require legislation by the Parliament.  
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jonathanchancellor-7SQnKwU6yx

Property to be the big winner from Budget super changes: Switzer's Paul Rickard

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Homeowners and investors have got nothing in the Federal Budget, though no negative tax changes for homes either.
While superannuation cuts targeting high-income earners and small personal income cuts have been scheduled, the rules relating to negative gearing and capital gains tax will not be changed, Treasurer Scott Morrison confirmed in his Budget speech on Tuesday evening.
Mr Morrison said they will not “remove or limit negative gearing – that would increase the tax burden on Australians just trying to invest and provide a future for their families”.
“Those earning less than $80,000 a year in taxable income make up two-thirds of those who use negative gearing,” he said.
“We do not consider that taxing these Australians more on their investments, including increasing their capital gains tax, and undermining the value of their own home and investments is a plan for jobs and growth.”
LJ Hooker head of research Mathew Tiller said “one of the most positive things is what is not in [the Budget] … the fact they’re not going to touch negative gearing or capital gains tax was flagged early on in the piece but it’s good to see”.
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Nothing in Federal Budget for first home buyers

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GUEST OBSERVER
The Department of Finance released the February monthly financial statements on March 24, just prior to the Easter holiday period. This note examines the latest data.
Budget improves: In the twelve months to February 2016, the budget deficit stood at $36.1 billion (around 2.2 percent of GDP), down from $44.7 billion in the year to January and the lowest rolling annual deficit in almost two years (since April 2014).
Lower-than-expected spending: The Department of Finance says the underlying deficit for February was $743 million lower than the ‘profile’ forecast and “primarily relates to lower than expected cash payments and net future fund earnings, partially offset by lower than expected cash receipts.”
The monthly Budget figures can provide insights on the broader economy and policy settings. If fiscal settings are tight, the Reserve Bank may allow easier monetary settings.
What does it all mean?
While figures can bounce around from month to month, all analytics suggest that the Federal Budget is on track to meet Government forecasts. Not only are rolling annual aggregates showing improvement, so are the so-called ‘profile’ positions estimated by the Department of Finance.
Revenue remains hard to come by with annual growth rates hovering around 2 percent. Meanwhile growth of expenses or spending is well contained, with expenses barely growing over the year. The Government was projecting a budget deficit near $37 billion and that expectation remains on target.
Looking ahead, if nominal annual growth of the economy continues to hold around 2-3 percent, then the current Government – and the next Government later this year – will find it increasingly difficult to keep spending static and thus chip away at the budget deficit. Aussies want spending maintained on schools, hospitals, defence and public services but at the same time aren’t keen to pay any more in tax. Same for all levels of Government. The hard decisions on tax will become increasingly more difficult the longer that the major parties put off reaching some form of agreement.
GST revenues continue to lift, but for state governments the difficulty – as it is for all businesses – is the absence of inflation to drive revenues.
What do the figures show?
The underlying budget deficit for the twelve months to February 2016 stood at $36.1 billion, down from $44.4 billion in the year to January. This was the lowest rolling annual deficit since April 2014.
Smoothed revenues (twelve months to December) were up 5.9 percent on a year ago, above the average growth of 2.6 percent over the past year. Expenses rose by 0.3 percent over the same period, down on the 1.7 percent growth over the past year.
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The Department of Finance noted: “The underlying cash balance for the year to 29 February 2016 was a deficit of $38,719 million, compared to the 2015-16 Mid-Year Economic and Fiscal Outlook (MYEFO) profile deficit of $39,462 million. The difference of $743 million primarily relates to lower than expected cash payments and net future fund earnings, partially offset by lower than expected cash receipts.”
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In terms of the fiscal balance, the Department of Finance noted: “The fiscal balance for the year to 29 February 2016 was a deficit of $35,292 million, compared to the MYEFO profile deficit of $36,719 million. The difference of $1,427 million primarily relates to lower than expected expenses, partially offset by lower than expected revenue.”
“Revenues: Total revenue was $1,223 million lower than the MYEFO profile, primarily due to lower than expected taxation revenue and dividend income.
Expenses: Total expenses were $2,831 million lower than the MYEFO profile, primarily due to lower than expected supply of goods and services, wages and salaries and grants expenses.”
The Government currently expects an underlying deficit of $37.4 billion for 2015/16 (around 2.3 percent of GDP).
Receipts from the Goods and Services Tax stood at $59.6 billion in the twelve months to February, up 7.0 percent on a year ago but affected by the one extra day in the month. The Government has forecast GST receipts of $59.79 billion for the entire 2015/16 year.
Actual GST receipts for the eight months to February stood at $41.367 billion, above the Budget ‘profile’ of $40.734 billion.
What is the importance of the economic data?
The Department of Finance releases the Government Financial Statements (Niemeyer Statement) almost every month. The statement allows investors to track the current budget position and provides insights into the  effectiveness of fiscal policy.
What are the implications for interest rates and investors?
The Federal Budget is on track to meet forecasts. Spending restraint including low public service wage growth (similar trend in private sector) is driving the improvement. The Federal Government and Opposition parties will eventually have to agree on tax reform to address medium term challenges for the economy.
The Government is showing restraint on spending at present, but this is actually constraining stimulus to the economy.
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<img src="/images/2016/04/6/Screen%20Shot%202016-04-06%20at%203.04.17%20PM.png" alt="" width="731" height="535">
 
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Federal Budget is on track to meet forecasts: CommSec's Craig James 

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If the 2014-15 Federal Budget was considered ‘aggressive’, this year’s Federal Budget could be considered ‘boring’ by comparison.
According to Treasurer Joe Hockey, this year’s Federal Budget engaged integrity measures in the name of fairness.
Small business owners were the big winners to come out of the Federal Budget, winning tax breaks and other incentives, while homeowners and the housing sector remained relatively unscathed.
Small business owners to receive tax breaks to allow for future investment
From 1 July this year, small companies with annual turnover of less than $2 million will have their tax rate lowered, from 30% to 28.5%. In addition, small businesses will be able to claim up to a $20,000 tax deduction for every item they purchase. Further, employees in start-ups will get access to tax breaks on shares they receive as part of their pay. This stream of tax breaks and incentives will help small businesses to grow and flourish. It will give small business owners the opportunity to reinvest in their businesses and take their companies to the next level. And considering small businesses are the engine room of Australia, these tax breaks should spell good news for the broader economy and employment. Foreign investment framework to see o/s investors pay fees to buy property
As part of the 2015-16 Federal Budget, Treasurer Joe Hockey said changes would be made to strengthen Australia’s foreign investment framework. Under the proposed changes, a new fee regime will be introduced which will require foreign investors to pay an application fee of up to $5,000 to purchase residential properties valued under $1 million. Those purchasing a property equal to or greater than $1 million would be subject to a fee of up to $10,000. This would then increase in increments of up to $10,000 for each additional $1 million in property value.                                                       While this application fee may be high enough to deter some foreign investors, we do not believe it is high enough to significantly impact the current level of foreign investment activity within Australia. Childcare rebates introduced to encourage mothers back into the workforce
The Federal Government has committed to providing $327.7 million extra over the next four years to help vulnerable and disadvantaged families access childcare. According to the Treasurer, investing this money in childcare should help approximately 165,000 parents who are currently unable to work due to high cost of childcare re-enter the workforce. But while some parents will be given extra help to pay for childcare, new mothers who are given Paid Parental Leave by their employer will no longer be able to access the government’s Paid Parental Leave scheme. This move will more than likely encourage new mothers to re-enter the workforce sooner than they may have planned. Mr Hockey said mothers who access the government’s Paid Parental Leave scheme and are paid parental leave by their employer are ‘double dipping’ and stopping them from doing this was ‘only fair’. Superannuation to avoid further tax
The Federal government has revealed that there will be no new taxes on superannuation under their watch. Furthermore, the Age Pension will continue to increase, twice a year, this year, and every year — at the highest available indexation rate. The Age Pension is the budget’s biggest expenditure item, costing $44 billion a year. This equates to more than 10% of all government spending. Moving forward, Treasurer Joe Hockey said the pension would be increased so that it remains sustainable and affordable. But while many pensioners will benefit from the announcement, wealthy pensioners with more assets outside of the family home will miss out on any increases to the Age pension as the Government plans to tighten eligibility for those pensioners with higher levels of assets from 1 January 2017. Conclusion
While it is too early to tell how consumers will react to this year’s budget, it is widely expected that initial reaction will be more positive than it was last year. In the month following the 2014-15 Federal Budget, consumer sentiment plummeted 6.8% and failed to recover for the rest of the year. This year’s Budget would suggest the Government is looking to avoid such a strong negative reaction. Many financial commentators believe this year’s budget acts as an apology for last year’s aggressive Budget. In fact, many believe this could be an election Budget. While the theme of last year’s budget was to pay down debt, it would seem the Government is now trying to encourage Australians to spend. It is still too early to tell what impact this year’s Budget will have on buyer and seller activity in the immediate future. Auction attendance and clearance rates will come into sharp focus over the coming months to demonstrate stronger indications of consumer confidence. However, with interest rates set to remain at historically low levels throughout 2015, the housing sector remains positive for both current mortgage holders and those looking to enter the property market.
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Small business the big winners: Mortgage Choice's John Flavell

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The 2015 Federal budget left property well-alone, other than confirmation of the looming pension asset test changes in early 2017. 
Last week Property Observer suggested couples approaching retirement - and aware of the rules in advance - will possibly <a href="/expert-insights/investing/upsizing-homes-before-retirement-and-forget-passing-down-the-holiday-shack-joe-hockeys-2015-budget-pension-implications">compromise on their superannuation voluntary contributions</a> - or sell one of the two $400,000 investment properties - and instead push the funds towards buying an untaxed, un-counted bigger, better home that can be beneficially sold later in retirement.
Now with budget confirmation, data and commentary confirm that some supposed asset-rich part pensioners will wisely upsize homes in order to retain their pensions, and then build up a tax-free asset for their late retirement years. The Scott Morrison aim was for older couples who own their home and have other assets between about $800,000 and $1.2 million to lose their part-pension altogether. 
It presumes the asset test pension limit changes get through parliament.
It will certainly take some planning by nearing pensioners and professionals to ensure it all works, but as one listener told 2GB's Ross Greenwood pre-budget it makes fiscal sense to sell that second $400,000 investment property in coming years to get below the asset test threshold.
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<div>Ross Greenwood also explained to <a href="https://www.9jumpin.com.au/show/today/videos/4230274363001/" target="_blank" style="line-height: 1.3em;">his Channel 9 Today show viewers</a> pre-budget how wise financial planning following the Federal Budget would save part-pensions, to the applause of his colleagues.</div>
"Clever people can work out how to get around Scott Morrison’s new pension rules," the morning show report advised, warning part-pensioners can't give the money away as otherwise Centrelink will nab you..
"Just before you reach pension age you buy something that is not subject to the assets test.
"That something is a new house.
"So in this case the people with $800,000 sell their current home and buy a new home that is $400,000 more expensive, so they reduce their assessable assets to $400,000.
"And they get a 75% pay rise in retirement.
"Infuture if they are desperate for their dough they sell the house which hopefully keeps going up with inflation," Ross Greenwood advised.
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Ross Greenwood quickly sensed retirees set to lose their very small part pension could envisage the gradual destruction to the income under the 2015 Federal budget initiative set to start in 2017.
One pensioners was prompted to write that the Scott Morrison-Joe Hockey 2015 Federal budget proposal "can have only been dreamed up by comfortably well off politicians who have no appreciation of what it is like to try to live off one’s own assets." 
And two charts compiled by the pensioner show how home-owning couples will be effected.
In the first chart, with an interest rate of 3% a couple with $800,000 of assets would only end up with a yearly income of $25,773, whereas a couple with $400,000 and almost a full pension will have a yearly income of $44,973.
A difference in income of $19,200 to the advantage of the couple with less assets.
<img src="/images/2015/05/08/700_2015_budget.jpg" alt="">
In the second chart, where the interest is increased to 5% a couple with $800,000 of assets would only end up with a yearly income of $41,773 whereas a couple with $400,000 and almost a full pension will have a yearly income of $52,973.
A difference in income of $11,200 to the advantage of the couple with less assets.
<img src="/images/2015/05/08/700-budget2.jpg" alt="">
It was calculated it is not until the interest rate is at about 7% that the couple on $800,000 earns an income more or less level with the couple on $400,000.
The outcome is not exclusive to home owning couples, but effects all four categories of retirees.
Pensioners acknowledge the present taper and thresholds can also show the same sort of warp in incomes, it is less evident and indeed at 4% interest most asset levels draw equal in the income they can achieve.
Retirees who are very cautious with investing their assets especially after their experiences in the GFC - are finding trying to earn even 3% is getting harder.
Pensioners suggest any riskier investments could invite loss of capital, which for a retiree can never be made up.
Lots of retirees will either have to dip into their capital and with the spiral down effect that this will produce, will sooner rather than later end up on the full and part pension anyway.
Many others will decide to spend their assets on holidays, upgrading homes or renovations, in order obtain a higher income via the full pension.
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Offloading assets and home upsizing: the maze to keep your part-pension in 2017

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Treasurer Joe Hockey will tomorrow announce the Abbott government’s first federal budget.
The Coalition pledges to return the budget to surplus by 2023-24. With talk of a <a href="/expert-insights/investing/australia-s-economy-is-healthy-so-how-can-there-be-a-budget-crisis">budget “emergency” or “crisis”</a>, <a href="/news/john-symond-fears-fallout-from-overly-tough-federal-budget">some are worried that the government will deliver a tough budget</a> to the detriment of the economy. 
Here's what the experts think of the prospective federal budget and the impact it will have on the country's housing sector.
<img src="/images/2014/05/12/rogers-profile.jpg" alt="" style="float: right;">DALLAS ROGERS - Research Fellow, Urban Research Centre at University of Western Sydney
It’s worth remembering on budget night that we all live in subsidised housing. The great Australian dream to own a house has long been underwritten by the great Australian housing subsidy. Whether you are a public housing tenant, a private renter or a homeowner, chances are your house was subsidised through a rental subsidy, housing grant or taxation credit. There will be housing winners and losers on budget night.
It’s not looking good for public and social housing subsidies this budget. The Commission of Audit urged the Commonwealth to limit its involvement in public and social housing by providing rent assistance to income support recipients. If Hockey followed through with these recommendations social and public housing tenants would have to pay market rent for their currently subsidised housing. The National Rental Affordability Scheme would go too. This would be bad news for housing equity. The frail and elderly, those with carer responsibilities or complex medical needs, or very low-income Australians in public or social housing would be hit hardest.
Comparably, The Commission of Audit was silent on private housing taxation. Private housing subsidies are like chocolate, we know that we should use them in moderation but we just cannot cut back. We often pretend that they are not subsidies at all. AMP <a href="https://m.afr.com/p/national/big_talk_small_acts_on_bn_budget_AkRrPW2xaygUjpIodRK8IK">chief economist</a> says ‘changes to negative gearing or the CGT exemption on the family home would be seen as “unAustralian”’. <a href="https://grattan.edu.au/">Grattan Institute</a> data suggests that more than 90 per cent of private housing subsidies go to property owners over private renters (see below). Including the roughly $30 billion pa capital gains tax benefit for owner-occupiers and the $7 billion pa negative gearing benefit for landlords. Most tax concessions do not generate new housing stock. They all, with the addition of the first homebuyers grant, drive up property prices. This is good for homeowners and developers, and bad for renters.
<img src="/images/2014/05/12/grattan.jpg" alt="">
If we want housing equity and socially just cities we need to rethink public and private housing subsidies. There is scope for innovative private sector models and taxation policy – e.g., National Rental Affordability Scheme – that provide additional housing stock. But we will always need housing tenure forms that operate outside the market for the poorest and most disadvantaged Australians.  
You might also want to read: <a href="/expert-insights/joe-hockey-treating-australian-public-as-fiscal-fools-ahead-of-the-federal-budget">Joe Hockey treating Australian public as fiscal fools ahead of the federal budget</a>
 
SHANE OLIVER - Head of investment strategy and chief economist, AMP Capital <img src="/images/stories/2014/02/21/shane-oliver-profile.jpg" alt="shane-oliver-profile" style="float: right;">
There is a possibility that negative gearing might be tightened, but at this stage I’d only put it in the possibility camp. I think it’s probably unlikely. I can’t see any other changes that directly affect housing. The government has virtually ruled out including family homes in the means test for pensions, and it’s unlikely that they’ll remove CGT tax-free status for the family home.
Most implications will be indirect. That’s the biggest risk. The government is fairly intent on significant fiscal tightening to deal with the “budget emergency.”
That means tougher means testing and reducing eligibility criteria for family benefits. We might see possible tax hikes for high income earners and numerous cuts to the level of government spending. Those changes could adversely affect spending power in the economy and could affect housing demand. The risk is that they’ll get carried away. There’s tough budget talk prior to every budget. Often things aren’t quite as tough as you’ll expect, but the rhetoric has been quite a bit tougher this time.
[The Coalition] have painted themselves into a corner, saying that there’s an emergency. Having talked up the budget crisis, there’s a bit more pressure than normal for the government to deliver.
There is a potential upside for property in the sense that if the budget is too austere and too aggressive with cut backs, it may mean lower interest rates for a longer period of time. [AMP Capital] have predicted a September or October rate hike, but we’d be inclined to think that that won’t occur if the budget is too tight. And if upper income tax rates rise, people might more inclined to negatively gear.
You might also want to read: <a href="/expert-insights/what-do-we-need-to-see-from-the-federal-budget-the-experts-have-their-say">What do we need to see from the federal budget? The experts have their say</a>
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ROBERT SIMEON - Director of Richardson Wrench Mosman and Neutral Bay <img src="/images/authors/fullbody/Robert-Simeon.png" width="150" style="float: right;">
Historically real estate has been a minor player come budget time. The government of the day prefers to address the industry from more of a macro positioning, given that is by far an easier option when compared to a microeconomic analysis. For all intents and purposes, if the real estate/housing demographic were that essential then it would be fair to say there would actually be a designated Housing Minister which is not the case with the Abbott led government.
Landlords and investors can breathe a sigh of relief - negative gearing won’t be touched, although given the recent Commission of Audit it would be fair to say at some time in the future this will come under much greater scrutiny. When one looks at the real estate/ housing markets there is the one common theme; record high rents and record high average prices across the board. Again this is easy to disguise as this will be camouflaged with macroeconomic dialogue.
Infrastructure will be front and centre given the recent COAG meeting endorsed the compilation of an asset sales list that would see them attain federal funding based on these sales for a massive infrastructure spend. The only problem with this is that the infrastructure expenditure is already decades behind where it should be today.
Sadly there won’t be any incentives for the housing construction industry which is seriously lagging behind where it should be today – this is reflective with what is happening to property values and rents. The Australian Bureau of Statistics (ABS) released their building approvals data to March 2014. It showed that in the past year 188,070 houses/units were approved yet the real figure is that Australia needs to be building over 300,000 each year to get close to meeting demand.
The latest ABS figures identify that total household debt in Australia stands at $1.84 trillion as at December 2013 – this is equivalent to $79,000 for every person living in Australia and is the highest amount ever recorded for the last 25 years.
Foreign ownership of Australian residential real estate should and must come into budget considerations given the government restrictions are weak and at best need tightening.
As I mentioned previously, all the machinations pertaining to the property industry will be covered with macroeconomic spin. The budget is all about the government’s financial positioning which will be hinged to weak productivity, an ageing population and falling terms of trade.
So expect the focus to be on government debt and how we all will be expected to lend a hand to correcting this economic anomaly. Just don’t mention microeconomics.
You might also want to read: <a href="/expert-insights/investing/budget-week-is-all-about-huff-and-puff">Budget week is all about huff and puff</a>
LEANNE PILKINGTON - General Manager, Laing+Simmons<img src="/images/2014/05/12/pilkington-profile.jpg" alt="" style="float: right;"> 
Affordability issues have come to the point where they are more than simply a barrier for first home buyers looking to enter the market. People in this bracket are increasingly dismissing even obtaining a mortgage as a lost cause.
While existing property owners welcome reports of rising prices and investors continue to participate actively in the market, the pessimism among first home buyers is palpable. There is a definitely a feeling among this sector that property is simply a pipedream, one that might never come true.
The flow-on impacts in the coming years and decades could be huge and potentially disastrous. It’s time Governments at different levels recognise and respond to the challenges first home buyers face and to work with industry to generate new policies capable of providing optimism and driving first home buyer activity.
One of the key barriers to more first home buyers being able to participate in the market is the difficulty many have in accumulating a deposit.
Perhaps there is scope for some form of Government-backed savings scheme whereby those first home buyers serious about saving a deposit can access tax advantages or even Government contributions to match their own, be it means tested or otherwise. Another potential avenue for Government to investigate might be to enable first home buyers to access their superannuation to contribute to their deposit.
Encouraging investors to refresh their portfolios where it’s appropriate to do so might serve to release more stock to the market. While these ideas may vary in terms of feasibility and practicality, particularly as we prepare for a difficult Federal Budget, the point is clear: something needs to be done.
You might also want to read: <a href="/expert-insights/investing/the-reias-10-point-wishlist-for-the-federal-budget">The REIA's 10 point wishlist for the federal budget</a>
CATHERINE CASHMORE - Independent market analyst<img src="/images/authors/fullbody/Catherine-Cashmore.png" width="150" style="float: right;">
As we approach the federal budget, once again we have to endure another round of economic nonsense as the Treasurer tries to convince ‘ordinary’ Australians that the country is ‘running out of money’ – facing a ‘budget crisis.’
There is no evidence and no economic wisdom that indicates running a surplus is good for the economy. 
This is something <a href="https://www.youtube.com/watch?v=D0iFiUfDqSw">Steve Keen</a> does an excellent job of demonstrating in a recent lecture given in Sydney, in which he shows the inevitable consequence to GDP should our Government attempt to do so.
Economic orthodoxy stubbornly insists on austerity measures to pay down government debt by imposing onerous taxes on its working population.
There are lessons that should have been learnt following the Great Depression in the 1930s. When the government tightens its belt for no other reason than a vain attempt to ‘spruik’ a surplus, it has the unwanted effect of withdrawing money from the economy – leaving the private sector (the working class population) to pick up the slack.
Therefore “repairing the [government] budget” is not putting the fate of  Australians on “the right track.”
It is the government’s responsibility to make sure our monetary system works for the population, by spending enough money into the economy to keep employment and productivity thriving. 
Catherine Cashmore's comment is an edited extract from <a href="/expert-insights/investing/economic-nonsense-and-the-consequences-for-future-generations">her column</a>. 
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