<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

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The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

Mortgage Debt

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The latest ratios of household finances highlight that the ratio of debt to disposable income is at a record high however, the value of household assets is also at a record high level.
With record low interest rates, the ratio of interest payments to disposable income is the lowest it has been since early 2003.
The ratio of household and housing debt to disposable incomes are each at historic highs of 186.3 percent and 133.8 percent respectively with the ratios increasing by 3.4 percent and 4.3 percent over the past year; 
Over the period from 1988 to 2015 standard variable mortgage rates have fallen dramatically and that has surely contributed to household’s preparedness to take on more debt.
<a href="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.11.34%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.11.34%20PM.png" alt="">
 
Over recent years the ratio of interest payments to disposable income has been falling with the ratios for households and housing now sitting at their lowest levels since 2003. The higher ratio of interest payments currently compare to 1988 when interest rates were substantially higher.
This is reflective of the much higher cost for household assets, particularly the cost of residential housing.
The data shows that although households have significant debt, particularly for housing, the value of the assets they hold is substantial. The ratio of household debt to disposable income is currently 186.3 percent however, the ratio of household assets to disposable income 862.8 percent, the highest it has ever been.
Similarly, the ratio of housing debt to disposable income is 133.8 percent however; the ratio of housing assets to disposable income is 471.3 percent.
What is interesting is that the ratio of household assets to disposable income is still lower than its previous peak in December 2007 at 476.2% percent, however, it is nudging back up towards its previous record high.
The value of household assets is significantly greater than the value of the debt. Based on this data, the ratio of household debt to assets is 21.6 percent and the ratio of housing debt to housing assets is 28.4 percent.
<a href="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.16.17%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.16.17%20PM.png" alt="">
 
Australian households are heavily indebted due largely to residential housing and while high; the value of the assets held is much greater than the debt. It’s important to consider that this is a national view.
Across different regions the ratios are likely to be substantially different. Furthermore, lower interest rates and a fairly strong labour market over recent decades have contributed to a willingness to borrow. Should either of these factors to change it could lead to a dramatic deterioration in the value of these assets while of course the debt would remain.
Importantly, mortgage arrears remain low and the Reserve Bank has reported that the typical mortgage holder is currently more than two years ahead on their mortgage repayments. This coupled with higher rates of household savings provide a potential buffer if unemployment were to rise sharply or interest rates began to increase.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
 
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ckusher-ujnxiKuFQs

Household and housing debt reach new record highs: CoreLogic RP Data's Cameron Kusher

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GUEST OBSERVER
Negative gearing is set for its biggest change in decades. Once considered the sacred cow of federal government policies, both major parties are proposing changes ahead of this year’s federal election.
The Labor party has already unveiled its policy, which involves only allowing negative gearing on new houses and cutting the generous 50% capital gains tax concession to 25%.
The Government has not confirmed its stance and has attacked Labor policy, but has crucially left its options open.
Less than 12 months ago, even considering changes to negative gearing was considered “unpopular” at best with then-Prime Minister Tony Abbott reassuring voters that there would be no changes to negative gearing.
Now, while neither the Liberal government or Labor opposition are keen to abolish negative gearing entirely as the Greens and some economists (most notably Saul Eslake) have proposed, both sides of politics are claiming they will “make the system fairer”.
<h2>So what has prompted this change?</h2>
First, a quick refresher on negative gearing. Gearing is the use of debt (such as a mortgage) to increase the amount of money that may be invested. Negative gearing occurs when the cost of this debt (for example, the interest charged) exceeds the income from the investment (like the rent).
Why would anyone want to incur a loss? The most widely promoted reason is because this net loss may be deducted against the investor’s taxable income, lowering their overall tax bill. This is clearly going to benefit those investors with higher incomes more than those with lower incomes. And, the statistics show that those with more to gain are more likely to take advantage of it:
 
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111456/area14mp/image-20160215-22573-a6cfb3.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111456/width668/image-20160215-22573-a6cfb3.png" alt=""></a>Proportion of tax filers with negatively geared investment properties by income band 'Better Tax', Tax Discussion Paper, Australian Government, March 2015
<div class="enlarge_hint"> </div>
 
There is a second benefit from the property investor’s perspective - the treatment of capital gains. When a capital gain on the investment asset is realised (it is sold), the investor gets a 50% discount on the capital gains tax.
For many years now, investment properties have been the most popular investment asset after the owner-occupied home and superannuation. Like any other investment, including shares, borrowers may take on debt to facilitate the property purchase. The benefits from negative gearing, combined with the perception of housing as a “safe” asset class with steady capital appreciation has fuelled the flow of investor capital into the market.
But now, with growing public awareness of the operation of negative gearing, its cost through missed tax revenue, and increasing housing affordability concerns, even those benefiting from negative gearing are questioning whether it is appropriate.
<h2>Comparing the alternatives</h2>
The Coalition government has been reluctant to commit to any policy changes, instead hinting at “capping” the amount of negative gearing benefit that may be claimed. In a way, this is a reinvention of the 2011 Gillard government proposal to target just the “wealthiest” investors who own portfolios of investment properties. We might expect to hear more details from Treasurer Scott Morrison in his Wednesday Press Club address.
The Labor party, by contrast, has made the first solid move. In so doing they have made negative gearing a major election issue and will force the government into presenting a real policy proposal, likely as part of the 2016-17 Budget.
The Bill Shorten-Chris Bowen policy announced over the weekend has been in the works since April 2015. If implemented, negative gearing would apply as usual to properties purchased prior to July 2017. After this date, however, investors would only be able to claim negative gearing against newly constructed investment properties.
<h2>But will it work?</h2>
The Government’s suggested approach would effectively create a “progressive negative gearing”. The tax rate increases (because the discount decreases) as income increases. While still lacking details, tackling the problem this way more reasonably considers the broad range of individuals who own investment properties, from teachers and nurses to the country’s most wealthy.
Labor argues that the asymmetry of its gearing policy between new and existing properties will divert investment to housing construction and boost the housing supply.
However, critics of the Labor proposal argue that it will trigger a rush of investors to the existing housing market prior to the July 2017 change, in turn reigniting a house price bubble.
Neither the opposition nor their critics are right and this is why:
<ul>
<li>
To truly benefit from a negative gearing investment strategy, the property buyer would be hoping to win on the capital gains side. For that to occur, property prices need to keep rising, yet that is exactly what the policy is hoping to contain. Savvy investors will know this and take their savvy dollars elsewhere.
</li>
<li>
If you still believe there will be a boom in 12 months time, the better strategy would be buy now (well, technically, when or if Labor are successful at the election) in order to sell to some sucker then.
</li>
</ul>
An even more critical flaw in the Labor proposal is the absence of strategy addressing when and where we will see this new housing supply.
Fundamentally, either approach makes housing a less attractive investment. In the short term investors will look to move their capital into other asset classes, primarily the stock market, which has been volatile.
It could take decades to see the broader implications of removing the incentive to invest in housing over other assets if existing property owners continue to benefit from “grandfathering” the current rules. Therein lies the flaw with arguing this policy change will also help to repair the federal budget (remembering the owner-occupier still makes their capital gains completely tax free).
Ultimately, the tide has turned politically on negative gearing. Whichever party sells their proposal best (alongside changes to superannuation and the GST) will be the election winner.
Danika Wright is lecturer in finance, University of Sydney and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/danika-wright-121868" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Sacred cow no more: what the proposed changes to negative gearing really mean

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Delinquency and default rates for Australian residential mortgage backed securities (RMBS) and asset backed securities (ABS) will rise slightly from their current low levels in 2016, due to slower economic growth and a rise in unemployment, says a recent report by Moody's Investor Service. 
The credit quality of the mortgage collateral for new RMBS issued in 2016 will deteriorate when compared with 2015, the report says, due to the inclusion of a greater proportion of riskier housing investment and interest-only (IO) loans and mortgages originated during a period of low interest rates and rapidly rising house prices.
The report noted investment and IO loans are riskier than owner-occupier and principal and interest (P&amp;I) loans because they have higher loan-to-value (LTV) ratios, a key default driver.
Additionally, IO loans amortise slower compared with P&amp;I loans, if at all, and therefore build equity at a slower rate, resulting in a higher loss upon default.
The analysts at Moody's also expect more RMBS deals to reduce their dependence on lenders' mortgage insurance (LMI) policies in 2016. 
Australian RMBS delinquencies and defaults will rise slightly from their current low levels in 2016, due to economic growth that will be below the long-term trend, an uptick in unemployment, and a slower pace for house price growth in some cities, it said.
Housing prices, particularly in Sydney and Melbourne, are expected to slow which will mean a slowdown in economic activity which will contribute to an increase in RMBS delinquencies and defaults in 2016, the note said.
Any weaker housing market also means borrowers at risk of default are less able to sell their houses quickly at prices sufficient to fulfil their repayment obligations.
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j.ballantyne1990-6AQqhLzZaK

Australia RMBS mortgage defaults to rise slightly in 2016: Moody's 

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<img src="/images/2015/11/4/Holdencapital_banner.jpg" alt="" width="622" height="131">
 SPONSORED POST
Most banks have long memories and it’s those past experiences, which in all probability resulted in the writing off of a bad debt, that tend to have a strong influence on the executives responsible for writing the banks lending policy.
One such area of contention is the issuing of second mortgages and in most cases the approach by banks is consistent, driven by those past bad experiences.
So while there are sound arguments as to why it might actually be in the banks interest to allow a second mortgage, most credit/risk manager default to a position that will not impact on their security position and it takes some very careful negotiations to convince them to do otherwise. So lets look at the reasons why they have those concerns.
The bank does not think the developer has enough money – as the saying goes “If you want it they won’t give it to you and if you don’t want it they throw it at you”. It is true in most regards, that when considering a project a bank wants to be working with a sponsor who has the ability to invest the full equity requirement, also referred to as ‘skin in the game’, and a capacity write a cheque in the event of any unforseen cost overruns.
However, many smart sponsors choose to use Other People’s Money (OPM), usually so that they can get the best return on their funds by investing across multiple opportunities. So it is very important that the financial strength and experience of the sponsor can be demonstrated to the bank even if it is not all to be committed to the project in question.
Utilising second mortgage funding in order to expand the number of projects they can undertake is a smart way for a sponsor to leverage their return on equity provided they can show an ability to meet any unforseen financial pressures along the way. It is critical to give the bank a clear understanding of why the second mortgage funding is being used but also provide statements of position, group cash flows and approved standby arrangements to support the sponsor’s ability to meet their ongoing commitments to the project in question.
The Bank does not want any potential impediments to it realising on its security – In the event that things go wrong during a development, the bank will in most instances look to recover its exposure by disposing of the security via a quick sale rather than undertaking a lengthy workout. Even in the case of a development project, banks do not want to ‘take control’ of a project unless absolutely necessary and will usually appoint a receiver or administrator to undertake the exercise of completing the development and sale as soon as practicable with the minimum of additional expenditure.
Their concern is that where there is a second mortgage in place (and dependant on the terms of any priority agreement in place), the potential exists for that mortgagee to frustrate the actions of the bank by arguing that those actions prejudice their security position. Alternatively, while there may be no default or cause for action on the banks part, the second mortgagee may decide to take action under its securities which forces the banks hand to either take its own action in priority to the second mortgage or pay out the second mortgagee in order to gain full control. Both of these scenarios played out during the GFC and previous market corrections, continuing to make all banks hesitant about transactions involving second mortgages.
One way to address these issues is to have a reputable second mortgage provider who the banks are comfortable with and trust not to take any extreme actions during the life of the project. Additionally, the banks will require the second mortgagee to sign a priority agreement which in effect cedes all of its rights to the first mortgagee while its debt exists, effectively preventing the second mortgagee taking any action that the first mortgagee does not want to occur.
Developers skin in the game – As previously mentioned, all financiers, be they first or second mortgage providers want to see that the developer has an appropriate amount of their own “risk” money in the project – the view being that the developer will be more likely to act in the right way if they have an appropriate amount of their own cash at risk in the project. The current view is that the developer must be providing at least 10% of the required capital stack in a project.
In the eyes of the banks, this is a different risk to having a capacity to meet your obligations as detailed previously. This is about ensuring that the customer is motivated to act quickly to deal with a problem that requires either financial or physical action when it occurs and their concern is that if the equity at risk is sourced via a second mortgage provider then:
There is less motivation for the sponsor to take the required action and they have no power to require the second mortgagee to act or input further equity.
In fact it is often the case that the second mortgagee is a passive syndicate of investors with limited ability to raise additional funds or make quick decisive decisions which leaves the bank having to deal with the problems associated with the projects but also having to be conscious of not acting in a way which is prejudicial to the interest of those investors which is a complication they do not relish.
In summary, banks tend to view all second mortgages as complicating transactions rather than adding value as their interests are not always aligned with those of the borrower and it is therefore a negotiating exercise that requires a complete understanding of the interests of both sides. At HoldenCAPITAL we are often required to obtain a senior banks consent to a second mortgagee position in order to get the best outcome for our client. We do this by clearly demonstrating the positives that the structure brings to the transaction and how the risks will be dealt with.
 
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. To discuss your project finance requirement please call (07) 3171 4200 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au" target="_blank">here</a>.
 
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firstname-zEygzUaHDN

Why the bank won't let you have a second mortgage

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The national Australian housing market is severely overpriced relative to all the fundamental measures of value: rental incomes, inflation, construction costs, household incomes and GDP.
That is the conclusion of LF Economics duo Lindsay David and Philip Soos who conclude debt-financed speculation as the major cause of the what they describe as "Australia’s largest housing bubble in the nation’s economic history."
"The media and industry has warned housing price growth will begin to moderate and fall, but the latest results from the debt accelerator, Speculative Index and Kavanagh-Putland Index, however, indicates annualised real price growth of 8.9% could remain steady over the course of the next couple of quarters, inflating the bubble further.
They noted nationwide real housing prices surged by 4.3% in 2015Q2, the single largest quarterly increase since 2009Q4.
<a href="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.35.41%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.35.41%20PM.png" alt="">
The duo calculate the price to income ratio has reached record highs in 2015Q2: houses (8.3x) and units (6.4x).
"Both historically and internationally, Australian dwelling prices are extremely expensive and unaffordable relative to household incomes," according to the LF Economics report titled Ahead of the Housing Curve,  written by Lindsay David and Philip Soos.
"Australia is catastrophically overleveraged in terms of private sector debt, particularly the household sector.
"Since 1996, housing prices have outpaced economic fundamentals such as inflation, household incomes, rents, construction costs and GDP, demonstrating the housing market is in the thrall of an asset bubble.
"Australia’s economic history indicates real estate bubbles developed during the 1830s, 1880s, 1920s, mid-1970s and late 1980s.
"Contrary to the analyses of the vested interests, the data overwhelmingly demonstrates Australia is in the midst of the largest housing bubble on record, both in terms of prices to rents and household incomes.
"The government, central bank (RBA), prudential regulator (APRA), FIRE sector (finance, insurance and real estate industries) and their economists predictably deny the existence of a housing bubble, believing a severe downturn in the housing market simply cannot occur.
"The usual arguments put forward are the same as those made everywhere else a housing bubble has occurred: prudent lending practices, deregulation of finance, recourse mortgages, dwelling shortages, restrictions on land supply, low nominal interest rates and inflation, population growth, demographic change and so on.
"Today, after centuries of asset bubbles, mainstream economists have yet to determine and define what they are, so debate on the matter is kept necessarily vague.
"Housing bubbles are poorly understood, if at all, on the basis of ‘irrational exuberance’ or ‘chasing capital gain’.
"No rational explanation can be made as to why housing prices have so radically departed from fundamental factors, most notably rental prices.
"The data strongly suggests the boom in real housing prices are not caused by any commensurate movement in economic fundamentals, but rather, debt-financed speculation as evidenced by the exponentially growing stock of mortgage debt.
<a href="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.37.53%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.37.53%20PM.png" alt="">
The report concludes there is greater awareness among policymakers and public of the housing bubble and its potential for wealth destruction.
"While there is more to say about Australia’s fascinating and quite dangerous economic experiment with financialisation and real estate speculation, the data and commentary in this report illustrates the long-term trends in the housing and debt markets, providing the necessary proof that a housing bubble does indeed exist and therefore represents a clear and present danger to the economy and banking system," the LF Economics report concluded.
For the full report from LF Economics, <a href="https://www.lfeconomics.com/news" target="_blank">click here</a>.
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Catastrophically overleveraged as Australia’s largest housing bubble in history continues: LF Economics

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Housing co-operatives should be seen as a priority for expansion to assist in addressing housing affordability, according to the Business Council of Co-operatives and Mutuals' (BCCM) submission into the inquiry into Home Ownership.
Housing co-operatives are key players in the range of responses needed to address Australia’s housing affordability crisis, affirmed BCCM. 
"A report by the Co-op has revealed that nearly eight in ten Australians aged between 19 and 29 are concerned about the level of mortgage debt they may face in their lifetime, and the prospect of ever being able to own a home.
"The current speculative model of housing ownership cannot deliver affordable housing for all. It is time to consider alternative ownership models and co- operative housing has proven to be a very significant opportunity for housing market reform. 
"Co-operative housing can either be provided as rental housing or based on a wide range of co- operative ownership models. In general, co-operative housing provides long term, secure and affordable housing for people on low to moderate incomes." 
Member participation directly reduces cooperative housing management costs, asserted BCCM in the submission to the House of Representatives Standing Committee on Economics. 
"Recent benchmarking demonstrates that co-operative housing is the most cost effective form of social housing program. Community Equity New South Wales (CENSW) has estimated that housing co- operatives produce savings over ten years per 1000 properties of $4.07 million in comparison with other social housing sectors.
"Seed funding needs to be provided to specialist housing co-operative centres that can function as a central resource agency for housing co-operative development. 
"The role of the resource agency would be to refine documentation for the various models, promote models to potential consumers and provide advice services to developing co-operatives. 
"Existing co-operative housing providers could be funded to expand their educative role. 
"Funding for this initiative could come from sources not limited to government but include stakeholders with an interest and commitment to the provision of affordable housing such as trade unions, customer owned banks, consumer-focused mutuals, consumer interest groups and member-owned super funds. 
"Rental co-operative programs could be further expanded by capital funds being made available to develop new stock or alternatively through the transfer of existing social housing stock. 
"A source for this funding could be through a combination of government seeding grants and commercial loans from financial institutions with an interest in developing new lending products in the housing loans market place. 
"Collaborative partnerships are also possible with co-operative and mutual capital investment partners ranging from financial mutuals (another form of Co-operative) or member-owned super funds to community development finance institutions. 
"Financial mutuals can also assist with affordable housing through the provision of affordable housing loans and a range of other consumer/member focused products. 
"The financial mutual sector is a significant player in the provision of affordable housing finance. It is driven by member needs and concern for the community and will continue to support affordable housing in all its forms. 
"Housing co-operatives are the quiet achievers in the housing sector. They have been highly successful in Australia and many other countries." 
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