For the first time, prospective off the plan apartment buyers in Sydney's <a href="https://www.apartments.com.au/developments/homebush-nsw-2140">Homebush</a> can purchase with the confidence of a 10-year defect protection for their new apartment building.

<a href="https://www.apartments.com.au/new-apartments/bridge-road-residences-homebush-3-5-bridge-road-homebush-nsw-2140">Bridge Road Residences</a>, the latest development by <a href="https://www.apartments.com.au/developers/ventus-group">Ventus Group</a>, is the first new apartment complex in the area to offer the highly sought-after 10-year Latent Defects Insurance, provided by Resilience Insurance.

This policy, which applies to all 80 apartments in the new building on Bridge Road, covers homeowners against&nbsp;structural or design defects defects that may arise within the first 10 years after the building's completion. It can only be taken out by the developer or builder of the new development, and not by individual apartment owners.

Half of the apartments in the building have already been quickly snapped up. Buyers have been attracted by the insurance policy, along with the guarantee of a quality build, thanks to the insurance's Technical Inspection Service. This service involves third-party experts visiting the construction site at least once a month to ensure the building is being properly constructed, making defects highly unlikely.

[smartcode_project:default project_id=6989 project_image_fid=2132]

Located on Bridge Road, the development offers a mix of apartment configurations, from studios to three-bedroom apartments.

Apartments have been designed&nbsp;by MX Architects with liveability in mind, featuring open-plan layouts, engineered timber floors, wool-blend carpet in bedrooms, and either ducted or split-system air conditioning depending on configuration.&nbsp;

Many apartments also include north-facing aspects or oversized balconies, enhancing natural light and outdoor usability.

The development includes landscaped communal gardens with a central lawn, shaded seating, and barbecue areas. A rooftop terrace offers views across the city and Sydney Olympic Park. These amenities are designed to provide outdoor spaces for both relaxation and socialising, without increasing maintenance burden.

[smartcode_project:default project_id=6989 project_image_fid=2135]

Bridge Road Residences is less than 10 minutes’ walk from Homebush Station and close to major road links including the M4 and M8.&nbsp;

Residents will have immediate access to Rochester Street’s cafes, grocers, and restaurants, as well as retail and dining hubs at North Strathfield’s Bakehouse Quarter, Strathfield Plaza, and DFO Homebush.&nbsp;

The area is also well-served by schools and tertiary institutions, including Homebush Public School and the University of Sydney.

Construction is being led by <a href="https://www.apartments.com.au/builders/one-way-dc">One Way Development &amp; Construction</a>. They are expecting to complete the build in Q3 2026.

[smartcode_project_cta:default project_id=6989]

Joel Robinson

Bridge Road Residences brings 10-year defects guarantee to Homebush

<a href="https://www.apartments.com.au/developers/romano-property-group">Romano Property Group</a> has appointed AG Construct to deliver their boutique new Fitzroy apartment development, Napier 235.

Half of the apartment in the architecturally-striking block of 14 have already been snapped up.

Located just 150 metres from Brunswick Street, <a href="https://www.apartments.com.au/new-apartments/napier-235-235-napier-street-fitzroy-vic-3065">Napier 235</a> will bring a mix of two and three-bedroom residences to the tightly held inner-city neighbourhood, including a full-floor penthouse and one townhouse.

[smartcode_project:default project_id=144904 project_image_fid=3217]

Designed by <a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a> with landscaping by <a href="https://www.apartments.com.au/landscape-architect/florian-wild">Florian Wild</a>, Napier 235 presents a sculptural, low-rise form that aligns with Fitzroy’s heritage character while introducing contemporary detailing.&nbsp;

Residences are all north-facing and feature large private terraces, with living areas that connect to the outdoors via floor-to-ceiling sliding glass.

Inside, kitchens are anchored by 3.5-metre stone island benches and include walk-in pantries, Miele and Gaggenau appliances, and built-in bars with wine fridges in most apartments.&nbsp;

Customisable floor plans allow buyers to tailor internal layouts to suit their needs.

[smartcode_project:default project_id=144904 project_image_fid=3220]

Sustainability has been prioritised from the outset. Napier 235 ranks in the top five per cent of Victorian developments under current planning policy benchmarks, reflecting efficient energy use and environmentally responsible design.

Napier 235 places residents within walking distance of <a href="https://www.apartments.com.au/developments/fitzroy-vic-3065">Fitzroy</a>’s food and retail precincts, including Marion, Morning Market, and Bentwood Café. Fitzroy Gardens, Carlton Gardens, and tram connections to the CBD are also nearby. Despite its proximity to major amenity, the development sits within a quieter residential pocket.

Pricing for two-bedroom apartments at Napier 235 starts at $1,225,000.

[smartcode_project_cta:default project_id=144904]

Construction to commence at Napier 235 in Fitzroy as Romano appoints builder

A rare new development in Surry Hills is aiming to replace a cluster of underutilised commercial buildings with a contemporary eight mixed-use building just 300 metres from Central Station.&nbsp;

The $27.5 million project is being led by ISL Property Investments Management and will include 35 apartments, some earmarked for affordable housing, alongside street-level retail and basement parking.

The development spans multiple lots between <a href="https://www.apartments.com.au/new-apartments/98-106-kippax-street-surry-hills-nsw-2010">Kippax, Sophia, and Waterloo Streets</a> and will involve substantial demolition of the existing structures on the 780 sqm site.

According to the Urban Design Report prepared by <a href="https://www.apartments.com.au/architects/dko-architecture">DKO</a>, the design has been shaped to reflect the area’s gritty industrial past while contributing to its evolving identity as a high-density urban hub.

“The proposed development is designed to integrate sensitively and intelligently with its immediate surroundings and evolving urban context,” DKO stated. “It mediates between the existing built environment and the area’s future trajectory, ensuring a thoughtful transition”.

<img alt="First look: I.S.L. Property Investments plans eight-storey mixed-use apartments in Surry Hills" data-entity-type="file" data-entity-uuid="db880273-57af-4167-9601-f05fd7b39124" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Surry%20Hills%20isl.png?VersionId=f3Ix9jP4eJ44H69zUcgot_zxBr4rW6gJ" />

The project includes 35 one, two, three-bedroom apartments across the upper levels, with 15 per cent of the total floor area allocated to affordable housing.&nbsp;The dwelling mix is designed to cater to a range of household types, with layouts strategically oriented to maximise solar access and cross ventilation, DKO notes.

Architecturally, the building is anchored by a podium that reinforces the streetscape while referencing the area’s industrial brick fabric. Above this, a lighter tower form is chamfered to reduce visual bulk and improve solar access to the public domain.&nbsp;

“The tower mass is elevated above the podium, visibly distinct yet firmly anchored at the bookend corner of Kippax and Waterloo Streets,” DKO wrote.

The development is also aiming high on sustainability. Features include rooftop photovoltaics, water-efficient landscaping with local species, and a commitment to all-electric infrastructure.&nbsp;

<img alt="First look: I.S.L. Property Investments plans eight-storey mixed-use apartments in Surry Hills" data-entity-type="file" data-entity-uuid="8e1b99eb-6945-48b6-8222-647efe549803" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site_0.png?VersionId=fUWGEn1sGpIMuzQ6KJ5zGQxQTjUoe9gz" />

The project is lodged under the Housing SEPP and seeks approval from the City of Sydney. There have been very few new apartment developments in Surry Hills in recent years. Some of the most notable has been redevelopments of former commercial buildings, as opposed to demolishing buildings.

That's the plan for national developer Time &amp; Place, which has recently submitted their State Significant Development Application for Marlborough House, the redevelopment of the original&nbsp;David Jones department store warehouse and factory building&nbsp;on Marlborough Street. The development will have around 150 warehouse-style apartments.

First look: Rare new apartment project pitched for Sydney's Surry Hills

Award-winning Canberra developer Art Group is approaching the final stages of construction on its newest residential development, Calypso, located on the city-fringe boulevard of Northbourne Avenue in Dickson.

Now 90 per cent complete and tracking toward a 2025 move-in date, <a href="https://www.apartments.com.au/new-apartments/calypso-dickson-330-northbourne-avenue-dickson-act-2602">Calypso</a> will deliver 207 one-, two-, three-bedroom apartments designed for the owner-occupier.

The project has been described as a “vibrant oasis” within the growing Northbourne precinct, with design and amenity focused on enhancing both liveability and connectivity.

[smartcode_project:default project_id=134842 project_image_fid=1205]

<a href="https://www.apartments.com.au/developers/art-group">Art Group</a> has positioned Calypso to meet the growing preference for flexible, lifestyle-oriented urban living. All apartments feature floor-to-ceiling windows, generous internal layouts, and purpose-designed spaces such as study nooks or dedicated home offices in larger configurations.

One-bedroom layouts are designed with oversized bedrooms and dual-access bathrooms for added convenience, while two-bedroom apartments include additional study rooms and expansive kitchens.&nbsp;

The three-bedroom residences further elevate functionality with walk-in pantries, freestanding laundries, and panoramic mountain views from corner apartments.

[smartcode_project:default project_id=134842 project_image_fid=1203]

Beyond private residences, Calypso incorporates a range of shared amenities tailored to modern hybrid work and wellness lifestyles. These include dedicated coworking spaces, a gym with cardio and strength equipment, rooftop gardens, communal EV charging, and landscaped outdoor entertaining areas.

Technology integration is a key feature, with fibre-to-the-unit internet offering speeds up to 1,000 Mbps, instant-access Wi-Fi in shared zones, and an embedded network providing streamlined utilities.&nbsp;

The development also includes energy-efficient inclusions and central staircases designed to promote active living.

[smartcode_project:default project_id=134842 project_image_fid=912]

Situated on Northbourne Avenue, Calypso benefits from immediate access to light rail, placing residents within easy reach of the Canberra CBD.&nbsp;

The development is also walking distance to the <a href="https://www.apartments.com.au/developments/dickson-act-2602">Dickson</a> retail precinct and close to several key education institutions, including the Australian National University, University of Canberra, and Dickson College, as well as&nbsp;North Ainslie Primary School, Lyneham High, and Blue Gum Early Learning Centre.

With demand for inner-north apartments continuing to outpace supply, Calypso’s nearing completion places it among a select few large-scale projects delivering new stock to the area within the next 12 months.

With an exclusive final developer release, and $0 stamp duty available in the ACT, there has never been a better time to look at this unique development.

[smartcode_project_cta:default project_id=134842]

Art Group’s Calypso in Dickson approaches completion

Headland Parade is one of the most premium and tightly held streets in Barrack Point in the Shellharbour region south of Sydney.

Local developer&nbsp;Allowrie snapped up an opportunity to develop four custom-designed townhomes on the exclusive strip, which they recently completed the luxury homes to the design by&nbsp;<a href="https://www.apartments.com.au/architects/ingenuity-home-designs">Ingenuity Home Designs</a>.

[smartcode_project:default project_id=150639 project_image_fid=3556]

From the street, the development at <a href="https://www.apartments.com.au/buildings/12-headland-parade-barrack-point-12-headland-parade-barrack-point-nsw-2528">12 Headland Parade</a>&nbsp;features gabled rooflines, muted coastal palette and landscaped frontages that reflect the enduring character of the area.

Inside, the attention to detail continues across open-plan layouts that flow into private alfresco spaces, with select residences enjoying their own inground concrete swimming pool.

The interiors are defined by their use of thoughtful materials and functional sophistication. 40mm 0% silica stone quartz benchtops, brushed brass tapware, and curved v-groove bathroom cabinetry are paired with Polytec kitchen joinery and Lappato-finished terrazzo tiles to create spaces that feel both premium and relaxed.&nbsp;

[smartcode_project:default project_id=150639 project_image_fid=3550]

Comfort underfoot is achieved through hybrid European oak flooring and extra heavy-duty loop pile carpets in the bedrooms, while ducted reverse-cycle air-conditioning ensures seasonal adaptability.

Each residence includes a garage with epoxy flake flooring, landscaped outdoor areas, and integrated energy-efficient inclusions like 5kW solar photovoltaic systems. These elements reinforce the project’s focus on longevity and liveability, making the homes equally suited to growing families and downsizers alike.

[smartcode_project:default project_id=150639 project_image_fid=3558]

Located 160 metres from Little Lake and 400 metres from Warilla Beach, the address sits within walking distance of the Shellharbour Village café strip, Shellharbour North Beach, and the coastal cycleway.&nbsp;

The Shell Cove Marina precinct is a five-minute drive, and Stockland Shellharbour provides broader retail and medical services nearby. Recreational spaces include Dawes Park, Killalea State Park, and Bass Point.

The four townhomes are move-in ready, and start from $1.25 million.

[smartcode_project_cta:default project_id=150639]

Staff Reporter

12 Headland Parade delivers rare new-build coastal homes to Barrack Point

Federal Election

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GUEST OBSERVATION
It won’t help enough, but it will get some people their keys. 
The new <a href="https://www.liberal.org.au/latest-news/2019/05/12/helping-australians-buy-their-first-home" target="_blank">First Home Loan Deposit Scheme</a> announced the Coalition, and <a href="https://theconversation.com/view-from-the-hill-quick-on-the-draw-labor-matches-morrisons-first-home-owners-scheme-116969" target="_blank">instantly backed by Labor</a>, is likely to be popular among those on the cusp of buying their first home.
It’ll be open to singles earning up to A$125,000 and couples earning up to A$200,000 who have saved at least 5% of the value of the home. The government-owned National Housing Finance and Investment Corporation will partner with private lenders to put up as much as another 15% of the value of the home to take the deposit to 20%.
However, the scheme is capped at <a href="https://www.smh.com.au/federal-election-2019/no-free-money-morrison-dismisses-concerns-over-first-home-buyer-scheme-20190513-p51moj" target="_blank">10,000 home buyers per year</a>, roughly one tenth of the number of Australians who bought first homes in 2018.
It’ll help them - the latest survey shows that <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/6553.0" target="_blank">more than half of first homebuyers</a> needed financial assistance outside of their own savings to get their deposit. The <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/14036090120617" target="_blank">benefits of home ownership</a> have been widely documented. But will it do enough?
Source of deposits
<img src="https://images.theconversation.com/files/274299/original/file-20190514-60557-572nt0.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
<a class="source" href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/6553.0" target="_blank">Authors' own calculations from ABS Survey of Income and Housing 2013-14</a>
An often-expressed concern is that such a scheme will <a href="https://www.theguardian.com/australia-news/2019/may/13/first-homebuyers-scheme-who-gets-it-and-will-it-work-explainer" target="_blank">bid up house prices</a>. However, it is means-tested, making it much less vunerable to this criticism than the non-means-tested <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Former_Committees/hsaf/report/c09" target="_blank">First Home Owners’ Grant</a>.
And is also capped at 10,000 loans per year, giving it little scope to price pressure.
However, it may not be means-tested enough.
Consider the population subgroup that broadly comprises aspiring homebuyers who qualify for the scheme: renters aged 25-34 years who meet the scheme’s income criteria and whose financial wealth is between 5% and 20% of the lowest-priced quarter of houses for sale in the borad area in which they live.
In the most-recent <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/6503.0" target="_blank">2015 ABS Survey of Income and Housing</a> there were 127,000 such potential eligible first home buyers, more than 12 times the 10,000 cap.
The cap is a practical necessity of course, needed to limit impacts on prices and prevent a cost blowout. But the weakness of the scheme is that the cap will be filled on a “<a href="https://www.smh.com.au/federal-election-2019/no-free-money-morrison-dismisses-concerns-over-first-home-buyer-scheme-20190513-p51moj" target="_blank">first come, first serve</a>” basis, without distinguishing between those who actually need help and those who are likely to meet the deposit requirement anyway.
The graph shows that some 40% of potential first home buyers have managed to save a deposit amounting to not much more than 5% of the home value. Only 7% have a 20% deposit or something near it.
Potential users of the scheme, by amount of deposit saved
<img src="https://images.theconversation.com/files/274312/original/file-20190514-60567-1rjotju.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Deposit saved by renters aged 25-34 who meet the scheme’s eligibility criteria, per cent of lower quartile property prices in area of residence, 2015-16. <a class="source" href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/6503.0" target="_blank">Authors' own calculations from the ABS Survey of Income and Housing 2015-16</a>
The Coalition could get more bang for its buck within the cap by targeting those in greater need of assistance; for example by prioritising those who cannot access the so-called <a href="https://theconversation.com/not-everyone-wins-from-the-bank-of-mum-and-dad-73842" target="_blank">Bank of Mum and Dad</a>. Not everyone has access to wealthy parents.
The Great Australian Dream of owning a home has been fading fast, and not just for young people. Naturally, the scheme’s details of the scheme require scrutiny. But overall, it provides a welcome acknowledgement (by both major parties) that the affordability crisis facing young people has not waned despite recent house price declines.
The scheme will restore the opportunity – at least to some – to accumulate wealth in property and enjoy the <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/14036090120617">security and other benefits</a> that home ownership brings.
But seriously addressing housing affordability will ultimately require a bigger intervention.<img src="https://counter.theconversation.com/content/117073/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/rachel-ong-viforj-113482" target="_blank">Rachel Ong ViforJ</a>, Professor of Economics, School of Economics, Finance and Property, <a href="http://theconversation.com/institutions/curtin-university-873" target="_blank">Curtin University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/small-but-well-formed-the-new-home-deposit-scheme-will-help-and-its-unlikely-to-push-up-prices-117073" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

The new home deposit scheme will help, and it’s unlikely to push up prices

<html><body>
EXPERT OBSERVER
The biggest recurring problem for real estate is politicians who don’t understand the industry. Which is pretty much all of them, on both sides of politics.
They also display a chronic inability to think through the consequences of their policies designed to impact housing markets. This sad truth is evident in the policies from both the major parties in the impending Federal Election.
We’re going into Saturday’s poll with no policies from any of the major parties that address the fundamental problems of the housing industry, of which affordability is the biggest. What they’ve served up just fiddles around the edges of the problem.
The Liberal Party has announced a plan that will make it easier for first-time buyers to get loans with smaller deposits, by supporting loans to people who have saved 5% of the purchase price. Federal Labor has given a “me, too” response to that policy (and why not, they’re spending like drunken sailors, why not just add this to the national credit card as well).
But the First Home Loan Deposit Scheme will be available to only a limited number of FHB borrowers and it fails to address the core issues – the price they will pay for properties and the associated costs of getting into the market.
Labor’s core policy is changing negative gearing tax benefits. This is a revenue measure dressed up as a policy to improve housing affordability but clearly it won’t make a positive difference, while creating myriad problems elsewhere.
Whenever they’re asked whether their negative gearing policy will force down house prices, Bill Shorten and Chris Bowen are adamant that it won’t. That being the case, how does it improve affordability? The answer is: it doesn’t. It’s purely a revenue measure.
What the policy will do is put first-home buyers in direct competition with investors for new properties.
This is the polar opposite of the Labor’s stated intentions, because they say they want to prevent FHBs having to compete with investors. These clowns simply don’t understand their own policy or its consequences.
Currently most first-time buyers have to buy or build a new home if they want a state grant. And investors are encouraged to buy new by the recent changes to depreciation benefits. Now Labor says investors will get tax benefits through negative gearing only if they buy new.
So everyone will be compelled to buy new rather than established property. Labor’s policy puts FHBs on a collision course with investors.
The thing is, most buyers don’t want to buy new because it’s usually considerably more expensive than a comparable second-hand home. The core problem in real estate, and none of the major parties are addressing this, is the high cost of creating new dwellings in Australia. 
The costs are so high because all three levels of government milk real estate for revenue. They treat the housing industry as their favourite cash cow. Stamp duty, land tax, capital gains tax, GST, rates, infrastructure charges, application fees, the list goes on and on.
Every time a state or territory government brings down a budget, it adds to the affordability problem by increasing existing imposts or imposing new ones. It’s relentless and it’s the core of the affordability problem.
Everyone (if Labor wins) will be pushed to buy new property but the prices are unreasonably high, thanks to our cynical politicians.
This is occurring at a time when new supply is drying up, partly because federal and state policies have extinguished the contribution of foreign investors – officially to help FHBs but in truth just another grab for cash. 
The surcharges placed on foreign investors in Australian real estate are revenue-raising measures, pure and simple, but they’re hurting Australian buyers by killing off projects that can no longer make the required level of pre-sales to get funding. The reduced supply is just another component of the affordability problem. 
Another unforeseen consequence of the Labor policy will be a revival of the spruiker industry. With most categories of buyers being compelled to buy new – e.g. off-the-plan apartments – we will see a revival of the get-rich-quick seminars that used to proliferate, where crooks make lots of money by ripping off unsuspecting consumers.
So it's not much of a choice this Saturday for voters who care about the housing industry and its related issues, like housing affordability. 
Labor proposes to increase the taxation burden on the real estate industry, which will worsen the problem, and the Liberal pitch may make it easier for FHBs to get a loan to buy a home, but it won’t make the cost of the home cheaper.
It’s a choice between dumb and dumber.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
Currently MOST first-time buyers have to buy or build a new home if they want a state grant
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terryryder-YECXbqmri2

FHB deposit guarantee scheme shows politicians don't understand the housing market: Hotspotting's Terry Ryder

<html><body>
The Prime Minister’s plan to help first-home buyers purchase with only a 5% deposit could have a major impact on the broader economy, says one property group. 
The First Home Loan Deposit Scheme, adopted from New Zealand’s Welcome Home Loan program and announced by the Prime Minister Scott Morrison at the Liberals’ formal campaign launch in Melbourne last week, will mean first-home buyers, who have been able to save a deposit of at least 5%, will be able to access a government guarantee for the remainder of up to 20% of a property’s value.
It will also remove the costs of paying lenders’ mortgage insurance.
The scheme will offer up to $500 million in equity through the National Housing Finance and Investment Corporation, would start on January 1, 2020, and be capped for individuals earning $125,000 and couples earning $200,000.
Labor has said it will match the Coalition plan, stating it could afford to do so as it was “closing loopholes” for the wealthy.
RiskWise Property Research CEO Doron Peleg said the Coalition’s First Home Loan Deposit Scheme would support the market instead of further weakening it.
“Although the number of loans is expected to amount to around 10,000, when you take this amount and add in the saving of the LMI, potential interest rate cuts and the flow-on effect on upgraders, this could support particularly affordable markets that are more appealing to first home buyers,” he said.
“Also, the Prime Minister has said he would like to run the scheme through second tier lenders and this will further improve the position of non-bank lenders in the market.”
Peleg said Labor’s proposed taxation changes, to limit negative gearing to new homes only and cut capital gains tax from 50 to 25%, would have “unintended consequences” and further impact an already weak housing market.
“The property market has been experiencing ongoing weakness,” he said.
“Tighter lending standards, the findings of the Banking Royal Commission, political uncertainty, fears of the potential changes to negative gearing and capital gains tax, restrictions on foreign investors, unit oversupply and large falls in dwelling commencements have all had a material impact."
 
 
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Coalition’s First Home Loan Deposit Scheme would support the market: RiskWise

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EXPERT OBSERVER
After the weekend we’ve just had, normal transmission can resume in Australia’s property markets. Well, almost.
At the start of this month, four factors were creating a perfect storm that impacted negatively on housing markets.
Thanks to the unexpected events at the weekend, two of those are done and dusted.
A Federal Election is always a brake on activity in real estate and elsewhere. It creates uncertainty in the minds of consumers who want to see what happens before deciding on big spending commitments.
Mercifully, that’s all over and we can get on with life in an atmosphere of political certainty.
The second element of the perfect storm was the prospect of a Labor Government causing major problems in real estate with its ill-advised changes to negative gearing.
Now the housing industry can get on with business without that negative-gearing negative lurking in the background.
If the Labor Party learns anything from losing the un-loseable election, it will consign the negative-gearing policy to history and never speak of it again.
The increased difficulty in getting finance, thanks to APRA’s over-eager bureaucrats and the banks’ over-reaction to the Royal Commission, is the third element of the perfect storm. That’s the next one to get sorted.
There are growing signs that major lenders are loosening the shackles and competing for new business from investors. The ANZ Bank recently admitted it had gone too far in tightening up its criteria in assessing borrowers.
If banks fail to lighten up and make it easier to get loans at competitive interest rates, they’ll be shooting themselves in the foot along with everyone else in the housing industry.
Banking boffins aren’t the sharpest tools in the corporate shed, but there’s evidence they know they have to make it faster and easier for consumers to get the loans they need on attractive terms.
The process would be aided by a reduction in the official interest rate which, according to most analysts, is likely to happen sooner rather than later – especially given the evidence that the economy is coughing and spluttering a little. Rapid and decisive action from the newly-endorsed Federal Government, as well as the Reserve Bank, is needed.
The fourth factor, and it’s been a big one, has been the attitude of mainstream media. The big newspapers have been indulging a feeding frenzy of negative sensation, taking the downturn in the two biggest cities and turning it into a national crisis.
There have been repeated claims that prices are falling everywhere. They’re not, not even in Sydney, where there are 95 suburbs with median prices higher than a year ago and particularly strong price performance by some of the apartment markets. 
In Melbourne, 57% of suburbs with unit markets have median prices higher than a year ago, as well 36% of suburbs with house markets. That’s what our suburb-by-suburb analysis shows.
The message is even more positive in cities like Adelaide and Brisbane, and in many of our regional markets, notably Victoria and New South Wales.
Notwithstanding those facts, the big city newspapers keep telling us that prices are falling across the nation and there are regular predictions of a nation-wide collapse in prices. That needs to change because, frankly, it’s becoming boring.
More recently, the tone of the headlines has started to lighten. Writers have begun to acknowledge the gathering evidence of a bottoming of the Sydney and Melbourne downturns, with the prospect of impending recovery - while also noting that there are markets elsewhere in the country that are strong and rising.
It’s amazing how fast things can turn around. A few months from now, I expect we will be able to look back to early May and marvel at the difference in conditions and atmosphere as, one by one, those four elements of the perfect storm have been struck down.
One weekend has changed the whole atmosphere surrounding residential real estate.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
<a href="https://twitter.com/hotspotting" target="_blank">twitter.com/hotspotting</a>
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Get set for the four elements of the perfect property storm to be struck down: Hotspotting's Terry Ryder

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EXPERT OBSERVER
No matter who wins Saturday’s federal election, you can expect to see more cranes on the skyline and hi-viz vests on the roadside. Both major parties are promising to spend big on transport infrastructure: A$42 billion for the Coalition and A$49 billion for Labor. However, many of the favoured projects are unlikely to be completed for years or even decades to come.
What’s being promised, and where?
The types of project each party is promising reflect a now-familiar pattern seen in the recent <a href="https://theconversation.com/how-much-will-voters-pay-for-an-early-christmas-eight-charts-that-explain-victorias-transport-election-106782" target="_blank">Victorian</a> and <a href="https://theconversation.com/how-the-nsw-election-promises-on-transport-add-up-112531" target="_blank">New South Wales</a> elections. The Coalition will outspend Labor on roads; Labor will outspend the Coalition on public transport.
<a href="https://images.theconversation.com/files/274293/original/file-20190514-60554-if4z2a.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/274293/original/file-20190514-60554-if4z2a.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Author provided
There’s also a story in the details of where the parties are promising to spend. In Victoria, where the Coalition suffered heavy losses in last October’s state election, <a href="https://www.theage.com.au/federal-election-2019/some-seats-are-better-than-others-coalition-sandbagging-key-electorates-with-taxpayer-funds-20190501-p51j6b" target="_blank">the federal Coalition has been busy “sandbagging”</a> key seats. Until last weekend, the Coalition had been promising much more than Labor.
Announcements on Sunday changed all that. While the Coalition <a href="https://www.theaustralian.com.au/nation/4bn-bid-to-unlock-road-link-box/news-story/1c4254f3a80bc85dc11e068b9bff62a9" target="_blank">upped its commitment to the East West Link to A$4 billion</a>, this was dwarfed by Labor’s <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-05-12/shorten-morrison-pledge-cash-for-melbourne-infrastructure/11105094" target="_blank">A$10 billion pledge for the Suburban Rail Loop</a>. Victoria now stands as the key battleground for transport promises.
Labor is also writing bigger cheques than the Coalition in Queensland, where it <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-04-12/federal-election-queensland-battleground/10975570" target="_blank">hopes to make big gains</a>.
<a href="https://images.theconversation.com/files/274294/original/file-20190514-60549-1rw76kx.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/274294/original/file-20190514-60549-1rw76kx.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Author provided
<h2>There’s some agreement on the big stuff</h2>
Despite their different ideologies and at-risk electorates, there is still much common ground between the parties. Almost one in three of the projects and funding packages that have attracted promises of at least A$50 million are backed by both the Coalition and Labor. Each party has promised almost A$24 billion for these “bilateral” projects – that’s more than half of the Coalition’s total promised transport infrastructure spending and almost half of Labor’s.
The parties are more likely to agree on big projects than small. Bilateral commitments make up almost half of all promises worth at least A$500 million, but less than a third of those below that threshold. For the very largest projects, the level of agreement is somewhere in between – the Coalition and Labor agree on four of the 11 projects attracting commitments of more than A$1 billion.
<a href="https://images.theconversation.com/files/274295/original/file-20190514-60560-esgadm.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/274295/original/file-20190514-60560-esgadm.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Author provided
<div data-react-class="Tweet" data-react-props='{"tweetId":"1044051590867378178"}'> </div>
<h2>But voters are forced to make risky choices, again</h2>
With so much cash on the table, will these vast riches be spent on the right things?
More money for roads and public transport probably sounds fine to most Australians, whether they’re navigating potholed rural roads, stuck behind trucks on regional highways, drumming the steering wheel in clogged city streets, or calling in late on delayed suburban trains.
But are the projects of national significance and therefore worthy of Commonwealth attention? And can they be relied on to return a benefit larger than their cost?
For too many projects, the answers are no and no. Infrastructure Australia (IA) publishes a <a href="https://www.infrastructureaustralia.gov.au/projects/infrastructure-priority-list.aspx" target="_blank">list of national priorities</a> and evaluates business cases for projects that are “<a href="https://www.infrastructureaustralia.gov.au/about/files/IA-Statement-of-Intent-2017-19.pdf" target="_blank">nationally significant or where Commonwealth funding of A$100 million or more is sought</a>”. Most of the commitments above A$100 million in this campaign do not have IA-approved business cases.
Some projects are under evaluation, such as a new bridge in Nowra on the NSW south coast, but the two parties should have waited for IA’s assessment before committing.
Worse still, many promised projects are not even on the national priority list.
<a href="https://images.theconversation.com/files/274296/original/file-20190514-60541-bw6rss.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/274296/original/file-20190514-60541-bw6rss.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Author provided
For projects attracting commitments of less than A$100 million, most are best left to state governments. The Commonwealth should stick to projects that are important to more than one state or are particularly important to the national economy.
Fixing <a href="https://www.barossaherald.com.au/story/5990686/budget-48-million-roundabout-at-kroemers-crossing/" target="_blank">regional</a> and <a href="https://anthonyalbanese.com.au/media-release-labor-will-fix-one-of-adelaides-worst-intersections-saturday-9-march-2019" target="_blank">suburban intersections</a> is important, but it’s hardly of national significance. When federal parties get involved, it starts to smell like pork-barrelling.
Some promises are inexcusable
Throwing taxpayer money at boondoggles is poor governance. Far worse is flagrantly ignoring independent advice and burning cash on projects that we know don’t stack up. Before the 2016 federal election, Grattan Institute reported on the <a href="https://theconversation.com/election-2016-will-the-infrastructure-promises-meet-australias-needs-61140" target="_blank">outrageous Princes Highway duplication between Winchelsea and Colac</a> in Victoria’s Western District. The Coalition promised this project even though IA determined that it would return only eight cents of value for every dollar spent.
Three years on, lessons still need to be learnt. Labor has committed A$50 million this election to the <a href="https://www.macarthuradvertiser.com.au/story/6092086/labor-pledges-50-million-to-finish-maldon-dombarton-rail-link-project/" target="_blank">Maldon-Dombarton rail link</a> in NSW’s Illawarra region. This <a href="https://www.infrastructureaustralia.gov.au/projects/files/Maldon-to-Dombarton-summary.pdf" target="_blank">A$806 million project got the thumbs-down</a> in 2017 from IA, which stated that “the project would not justify its costs and would impose a net cost on the Australian economy”.
In exceptional cases, governments may want to fund projects with costs outweighing benefits on equity grounds, <a href="https://grattan.edu.au/wp-content/uploads/2019/04/916-Commonwealth-Orange-Book-2019.pdf#page=63" target="_blank">such as to provide a minimum level of service for rural communities</a>. It is hard to make that case for a commercial freight rail link.
Every dud project built cannibalises a worthy one. Our politicians should stop donning hardhats and promising infrastructure before they’ve done their homework.<img src="https://counter.theconversation.com/content/115138/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/greg-moran-431402" target="_blank">Greg Moran</a>, Senior Associate, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a> and <a href="https://theconversation.com/profiles/james-ha-596825" target="_blank">James Ha</a>, Graduate Associate, <a href="http://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/transport-promises-for-election-2019-the-good-the-bad-and-the-downright-ugly-115138" target="_blank">original article</a>.
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jrobinson-rf4aSBido9

Transport promises for election 2019: the good, the bad and the downright ugly

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EXPERT OBSERVER
<div>
Will the higher taxes announced this week make a tremendous difference on the market? The answer is no. They are dispiriting but not too damaging. There is an old saying to the effect that those who can't vote, pay. 
Victoria is the number one destination for Chinese buyers in Australia, leading Sydney with a wide margin. The fact that prices and Victoria are lower than in Sydney has helped to drive Chinese purchasing.
The foreign buyers' tax that was until now 1 per cent lower than in New South Wales also contributed to support demand.
The other big political news lately is the recent national election. The election outcome will have a positive impact on Chinese real estate investment.
The research we conducted just before the election found that a significant share of the industry believes the Coalition victory will mean more Chinese investment, while a Labor victory would have meant Chinese investment would fall. Will Chinese buying triple overnight just because Scott Morrison is in The Lodge? No, but there will be a real impact.
Our core case for 2019 is for Chinese investment to be flat, after two years of falling far and fast from the peaks we saw at the end of 2016. Chinese buyers are still the most important foreign buyers in the market. They just are not buying with the same hyperactivity as three years ago.
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The top Australian cities in 2019 are Melbourne, Sydney, Brisbane, Adelaide, and the Gold Coast, followed closely by Perth in sixth.
Melbourne and Sydney together in 2019 account for 52.3% of buying enquiries. 
The cities with the fastest growing levels of Chinese buyer interest are Hobart, Brisbane, and Canberra.
Hobart has the fastest rate of Chinese buyer growth, with 77% more buyer inquires in 2018 than the year before. Brisbane has the second fastest rate of Chinese buyer growth, with 30.8% more Chinese buyer inquiries in 2018. Canberra has the third fastest rate of Chinese buyer inquiry growth in Australia, with 24.6% more Chinese buyer inquires than the year before. 
Remember that all three of these smaller cities receive significantly less buyer interest than do Sydney or Melbourne. That’s especially true of Hobart and Canberra. Brisbane is fast becoming a real alternative for the two traditional gateway cities of Melbourne and Sydney. Hobart and Canberra, however, still account for only a small share of Chinese buyer interest.
Carrie Law is the CEO of Juwai, a Chinese website for buyers of overseas property.
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Chinese website reaction to Victorian State Budget’s new taxes on foreign buyers

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GUEST OBSERVATION
The nation has breathed a sigh of relief that the Federal election is now over and we can all start to move forward with a greater degree of certainty. But exactly what does the continued Liberal government mean for the Australian property market and our investors?
Negative gearing remaining untouched is one of the most key policies for Australian investors. Fear-mongering in the media built up over the last few months with even Prime Minister Scott Morrison predicting that ALP’s proposed changes to negative gearing would result in a housing market crash.
ALP also proposed increasing capital gains tax which was another nail in its election campaign coffin in the eyes of the investment community along with the unpopular retiree tax which would have stung self-funded retirees.
Even the sweeteners weren’t enough to save ALP with Australians seeing through the thinly veiled attempts to support construction of new property with the proposal for negative gearing to only apply to brand new property.
Sentiment will almost instantly improve in the construction and development sectors safe in the knowledge that property will remain Australia’s preferred investment class and that investor appetite for property new and old, will continue unabated.
The message to the ALP was abundantly clear - hands off our investment property policy thanks very much!
We can expect the market to continue to hum along without the changes to negative gearing for investors – but what else is in store?
The Coalition campaign relied heavily on the words “strong economy” to get it across the line, but just how strong is the Australian economy right now and what does it need to get into place to bolster it?
According to the Reserve Bank of Australia (RBA) the economy may not be as strong as our politicians would have us believe.
RBA has scaled back its forecast for economic growth this financial year in its latest monetary policy statement to just 1.7%, over half a percentage point below its previous forecast.
In addition wages growth remains stagnant and according to commentators, has been weaker over the past six years than at any other time since World War II.
Property prices in many capitals have cooled after the period of unprecedented price hikes and inflation is at a historic low of just 1.3%, well below the RBA’s target range of 2 to 3% for more than three years.
Employment growth has been moderate but is driven by the public sector and community services while sectors considered key to driving the economy, such as manufacturing and retail, are shrinking.
While Morrison has played Mortgage Insurer for First Home Buyers, the finer details need to be fleshed out in order to deliver a great policy to stimulate the market.
ScoMo and his team really have their work cut out for him to get our domestic economy cranking.
But right now for Australian investors these conditions create a buyer’s market. Prices have come off the boil across many key markets and savvy investors can snap up some good deals that will show growth over the medium to longer term.
According to the latest HIA Affordability Index, housing affordability improved across the country by the fastest rate since September, 2013 – with the Index rising by 2.2% nationally in the March quarter. Interest rates remain low and are forecast to be reduced even further over the next 12 months.
With no changes to negative gearing policy properties both new and old will have appeal and offer different advantages for each investor’s unique circumstances.
The election is no longer looming over us all so after a “sit and wait” period over the last few months we can expect to now see greater activity in the property markets. All eyes will be on the Coalition to see if it can live up to its campaign promises now and keep the Australian economy strong.
JAMES NIHILL is the Managing Director of Patrick Leo, a Sydney based property advice and services company.
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ScoMo and the Coalition have their work out to boost the domestic economy: James Nihill

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GUEST OBSERVATION 
RiskWise Property Research has significantly downgraded the risks to the property market, particularly in Sydney and Melbourne, following the shock results of the Federal election.
Labor’s loss has eliminated the number one risk to the property market and this, combined with the high likelihood of interest rate cuts by the RBA this year and the first home buyers’ scheme, will support the bottoming of the market by the end of the year and then a gradual recovery.  
Fears of a Labor win, and with it its proposed changes to negative gearing and capital gains tax, had a major impact on buyer sentiment, particularly investors, who saw residential properties as depreciating assets.  
RiskWise’s April Quarterly Risks &amp; Opportunities Report identified two key factors that would have major impact on the market, particularly in Sydney and Melbourne, being the proposed taxation changes and interest rate cuts by the RBA.  
The number one risk of a Labor win has been eliminated.
What we saw happening was the ALP’s proposed changes have, rightfully, had a major, and tangible, impact on buyer confidence, which RiskWise identified in its report, Impact Analysis: Negative Gearing, CGT and Australia’s Residential Property Market.
Those, jointly with APRA’s credit restrictions and the banks’ scrutiny of loan applications as a result of the Royal Commission, lead to major price reductions, uncertainly and impacted buyer sentiment, according to the Westpac Consumer Report, which found house price expectations were extremely low.  
This meant even before an actual ALP win, the high possibility of these taxation changes had impacted the property market.
The Coalition win has eliminated the uncertainty and complexity in the market associated with the taxation changes, as well as significantly mitigated the property downturn, given it can be demonstrated the price reductions were, in part, due to fears of the proposed taxation changes. 
In addition, with the other key factor we identified in our Quarterly Risks &amp; Opportunities Report that RBA are extremely likely to undertake two interest rate cuts by the end of the year, we should expect the market to bottom by the end of 2019 followed by gradual price increases.  
While the impact is likely to be lower than the impact of interest rate cuts in a higher interest rate environment, this will still have a very positive impact on the market, as rental returns in Sydney and Melbourne are, generally, very low. Therefore, interest rate cuts will materially reduce the ‘out-of-pocket’ costs for property investors. 
Interest rate cuts will increase dwelling demand, decrease price reductions in weaker markets, support the recovery in Sydney and Melbourne markets, and increase prices in areas that enjoy good demand and show resilience.  
In addition, on May 11, Prime Minister Scott Morrison announced a first home buyers’ scheme, which will allow those eligible to buy with only a 5% deposit rather than the standard 20% and help stimulate the market.
Overall, there would be major improvement in comparison to the situation in April, there were still risks associated with the property market.
Tighter lending standards, the findings of the Banking Royal Commission, restrictions on foreign investors, unit oversupply and large falls in dwelling commencements still all had a material impact on the market.  
Weak markets with continuous price reductions, weak economies and poor population growth will take longer to recover and will require a more conservative and risk aware investment strategy.
While there has been a reduction in dwelling commencement, sale of new units are still very low and, therefore, in some areas it could take a longer period of time for the stock to be absorbed into the market meaning the risk is still high in many areas.
DORON PELEG is the CEO of <a href="#" target="_blank">RiskWise Property Research</a>
RiskWise will publish a Special Edition of the updated Risks &amp; Opportunities report, in the light of the election results, in the next few days.
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