Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

National

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Australia’s retirement income system is the most sustainable of 50 countries, according to a new survey by Allianz.
The Allianz 2014 Pension Sustainability Index report found that Australia’s combination of a public and private retirement income made it the most sustainable, placing it ahead of Sweden, New Zealand, Norway, the Netherlands and Denmark.
The annual report examined key elements of each nation’s pension system, both public and private, and the developments that influence them. It also evaluated the pressure on governments to effect reform to improve the fiscal sustainability of their systems.
Australia’s two-tier system, with a lean public pension and highly developed funded pension, means it is under the least pressure to reform.
New Zealand was also found to have a sustainable pension system, as it is not aging as rapidly as many other countries, and its labour force tends to work beyond statutory retirement age.
The report found that Thailand has replaced Greece as the nation with the most need to reform its pension system. Thailand has an extremely low retirement age and sporadic pension coverage.
Brazil was ranked second lowest, due to its high replacement rate and low effective retirement.
Allianz found that, in addition to Greece, Ireland, Luxembourg, Romania, Singapore, Turkey and the US were able to move more than five places up in the rankings from the 2011 report. It found a combination of factors led to this improvement, including improved aging perspectives and improved economic development.
Countries that dropped in ranking included Croatia, France, Hong Kong, Malta, Slovenia and Taiwan.
Allianz general manager of corporate affairs Nicholas Scofield told SmartCompany that one of the reasons Australia’s pension was sustainable was that it paid 42% of the average wage, while other countries paid much higher portions of their country’s average wage and had been slow to implement <a href="https://www.smartcompany.com.au/finance/superannuation/35084-apra-statistics-reveal-huge-gap-between-the-best-and-worst-superannuation-funds" target="_blank">private superannuation</a>.
Schofield says that while the Australian system is sustainable, the report does not rank on generosity. In Canada, France, Germany, Spain, Italy, Japan and Korea, the portion of the average wage paid was closer to 60%, while in Spain it was more than 70% and in Italy it was 80%.
The findings of the survey appear to contradict perceptions that Australia’s superannuation system and pension is in need of urgent reform, and Scofield says it shows there is a lot Australia is doing well.
“Australia moved early on establishing a private contribution system … there are some countries that are still starting that journey,” he says.
He says that with superannuation contributions edging towards 12%, Australia’s pension sustainability should continue.
Allianz Australia managing director Niran Peiris said one area the report found concerning was that Australia’s superannuation system allowed people to give lump sum contributions.
“The report highlighted that allowing people to take all their superannuation savings as a lump sum to be used to repay home mortgages or other purposes risked leaving retirees with reduced incomes for their retirement,” he said.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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moliver-7qYWqnHmyR

Australia’s pension system is world’s most sustainable, study finds

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Taxpayers could be hit with an extra $32.5 billion in tax in the next decade, unless the federal government make changes to personal income tax brackets, according to a new report.
Research commissioned by The Australian and conducted by the University of Canberra found if there are no changes to the personal income tax brackets, the number of people paying the top tax rate would increase by 134% in the next 10 years to just under 900,000 people.
The number of Australians paying the second highest rate, 37 cents for the dollar, would jump by 85% to 3.7 million.
This article first appeared on <a href="https://www.SmartCompany.com.au">SmartCompany</a>.
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yredrup-o4Anfe78KF

Millions of Australians to face higher tax brackets

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There’s a parallel universe in which Australian real estate has gone mad.
In this universe, the market changes almost every month. One month it’s white hot, the next it’s paused, the one after it’s rampant, the one following it’s off the boil and a month later it’s a bubble.
Not surprisingly, the citizens of the alternative universe Australia live in a state of constant flux and confusion. No one has a clue what’s really going on, least of all the people who write for the parallel media. In this world, you get to create your own reality by making things up.
Another significant difference in this parallel universe is that there are only two population centres in Australia, one called Sydney and the other Melbourne.
Actually, it’s not clear whether there are no other inhabits in alternative Australia outside the big two - or just that it’s been decided they don’t count, so anything that happens there is ignored.
Anyway, in parallel Australia the property market peaked back in October. That’s according to a company that mangles numbers called ridiculously premature data. But then the market surged again until, in February, it went off the boil, and ridiculously premature data declared another peak.
<blockquote>
It’s a relief to live in the real world where the information is real and not have to suffer the insanity of parallel Australia, where misinformation is as rampant as the property prices.
</blockquote>
Lo and behold, in this wondrous place of roller coaster real estate, the market re-surged and was rampant again in March – well, it was in the only two population centres that mattered.
Thank god we live in real Australia, where normality rules. Here it’s recognised that monthly data is misleading and therefore irrelevant, and that the long-term trends are the ones that matter.
In real Australia, it’s understood that two-thirds of the people live outside Sydney and Melbourne and that’s it’s wrong to extrapolate the Sydney experience to the whole nation.
It’s recognised that, in the past 12 months, six of the eight capital cities have had price growth of 4.8% or less – and therefore it’s wrong to suggest that price growth is rampant across the nation.
Things that happen in the parallel universe – such as journalists declaring that interest rates must rise because there’s “record-breaking” price growth everywhere and stating that “the surge in investors, including foreign buyers, has priced first home buyers out of the property market” – would never happen in real Australia.
In the Australia of the real universe, accuracy and balanced are cherished and only experts are allowed to write about important things like real estate.
Therefore, it’s acknowledged that the weight of evidence is that affordability is the best it’s been in 10 years and that foreign investors do not buy in the same markets as first home buyers and therefore have no influence on the prices paid by first-timers.
In this Australia, writers don’t give emphasis to month-to-month data, which is confusing and misleading, and they don’t give credence to publicity hungry organisations that spit dodgy data out of computers without proper scrutiny in their haste to be the first to publish, and accuracy be damned.
I must say, it’s a relief to live in the real world where the information is real and not have to suffer the insanity of parallel Australia, where misinformation is as rampant as the property prices.
You can contact Terry via <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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terryryder-YECXbqmri2

White hot? Off the boil? Bubble? The mad parallel world of Australian real estate

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Modern governments believe that during budget framing, it is politically savvy to parade the pain. We saw it with Labor and the Coalition is doing the same.
There are scary scenarios of what would happen without remediation, with warnings about problem areas. Some surprises will be held for the night, but other measures will be strategically “leaked” beforehand.
Tony Abbott, in Perth campaigning for the West Australian Senate election, let it be known he was chairing Wednesday’s meeting of cabinet’s expenditure review committee.
Shadow treasurer Chris Bowen declared it was the first time in Australian history a PM had chaired the ERC, claiming it showed dysfunction at the highest level.
This was nonsense. The government could quickly counter that Bob Hawke, John Howard and Kevin Rudd had also done so.
But it was surprising Abbott gave such a high profile to this “razor gang” meeting.
The ERC is all about nasties and, after all, Labor is making the prospect of deep budget cuts a centrepiece of its WA Senate campaigning. Abbott seemed to be providing ammunition. On the other hand, he could take the view Labor had the bullets anyway so he might as well play the longer game.
Treasury secretary Martin Parkinson publicly chimed into the pre- budget debate with a speech reinforcing the government’s lines about spending growth in the big areas.
But Parkinson also sent a public message to the government for later about what it should do on taxation.
With Hockey shining attention on health and pension costs, Parkinson documented the escalation.
Total Commonwealth spending on health is set to rise from $64.7 billion in nominal terms in 2013-14 to $74.6 billion in 2016-17, and to $116 billion in 2023-24.
The Commonwealth’s three main pension payments - for the aged, those on disability support and carers – will grow at an annual 6% in nominal terms over the forward estimates, adding $13 billion to annual payments by 2016-17, and another $39 billion by 2023-24. “Of this nearly $52 billion in additional payments in 2023-24, compared to 2013-14, over half is a result of indexation with the remainder due to increases in the number of recipients.”
That seems a fair hint that both drivers are being looked at. It should be remembered that successive governments have been trying to curtail the numbers on the disability pension but it has seemed a losing battle. It’s never as easy as it looks in theory.
Parkinson then turned to the tax side. His argument, aimed well beyond this budget and directed squarely at the political masters he will leave in December, is crystal clear. Australia needs a tax system it relies more on indirect tax, less on direct tax. The king of indirect taxes is, of course, the GST.
Parkinson pointed to one rather surprising fact, given the tax debates we’ve been through over many years. “Despite reforms that broaden the tax base (such as the GST), and decisions that have lowered corporate and personal tax rates across the decades, the share of direct and indirect taxes (as well as Australia’s reliance on income taxes) has changed little since the 1950s.”
Australia had relatively high reliance on direct taxes as a proportion of revenue raised compared with other OECD countries, he noted, before observing that: “Research consistently says that reduced reliance on income taxes and increased reliance on other, more efficient sources of revenue, including indirect taxes, can support higher growth and higher living standards by increasing workforce participation and lifting productivity.”
The problem is that “without conscious change, Australia’s tax mix will move in the opposite direction as personal income tax increases through fiscal drag”.
“We will move even further in this direction if, as we anticipate, the relative share of total indirect taxes (including GST) continues its long-term decline. Contributing to this decline is the non-indexation of fuel excise (unlike other excise rates) and a rising proportion of consumption outside the GST net, for example, in increased health expenditure.”
Parkinson warned that “continued increases in the personal income tax burden will hit lower and middle income earners with higher marginal and average tax rates. This will have adverse labour force participation impacts, while sharpening incentives for tax minimisation by higher income earners”.
The globalised economy meant Australia would be under pressure to cut the company tax rate.
“Given the pressure to return fiscal drag and to reduce the burden of corporate income tax, it will be a challenge to maintain the current levels of revenue over the medium term, let alone the increases required to achieve the budget projections.”
In the past, Parkinson said, tax reform had largely been pursued through broadening tax bases as an offset for lowering tax rates.
“However, a key challenge for the upcoming White Paper on Taxation will be to consider the mix of taxes, including whether there is a role for a greater contribution from indirect taxes.”
The opportunity were there to plot a path to a better tax system and the dangers clear if it was not done.
“If we do not start making these changes and simply keep drifting along we will be increasingly vulnerable to the next global crisis and will also lose out on the opportunities presented by the rising Asian middle class. The exceptionalism of this ‘lucky country’ will become just a distant, ironic memory and our children may really end up ‘doing it tough’”.
So there you have it. Parkinson, axed by the government (though extended until year’s end) won’t be around for the battles after the white paper, which has a long time table.
But he has signposted another lot of unpalatable truths. In terms of painful decisions ahead, this budget is only the start of it for the Abbott government, which hates the idea of tax increases, fears the politics of a robust debate about needing a higher, broader GST and has promised to take any major tax changes to the election.<img src="https://counter.theconversation.edu.au/content/25161/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Michelle Grattan is professorial fellow at the <a href="https://www.canberra.edu.au/" target="_blank" style="line-height: 1.3em;">University of Canberra</a>.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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jake-cSmGT7VXVf

Treasury boss hints at the need for a broader GST

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We’ve now entered the traditional pre-budget softening-up period in which treasurers engage in expectations management ahead of the fiscal set-piece of the year in May. But even given that, Joe Hockey is treating us as complete idiots.
The line Hockey has been pushing for some days now, and which he gave a big push to yesterday in a flurry of media appearances, is that not merely did Labor hide the level of deficits in the current budget cycle, but that it left a series of hidden spending commitments in the unpublished years beyond forward estimates. Hockey has been circulating a document to journalists portrayed in the media as a “Treasury analysis” that shows how “the Coalition inherited an unsustainable budget position” and Labor “hid [expenditure] from the public”. Hockey would like us to see him as a budgetary innocent who has found himself in the middle of a fiscal minefield planted by Labor.
<a href="https://media.crikey.com.au/wp-content/uploads/2014/04/BRIEFING-NOTE.pdf"><img class="aligncenter size-full wp-image-431677" src="https://media.crikey.com.au/wp-content/uploads/2014/04/2014-04-01_11-33-411.jpg" alt="" width="520" height="180"></a>
Well <a href="https://media.crikey.com.au/wp-content/uploads/2014/04/BRIEFING-NOTE.pdf" target="_blank">here’s the document</a>, and it isn’t a “Treasury analysis” — it’s prepared by Hockey’s media adviser, former Australian Financial Review journalist Gemma Daley. And if Hockey seriously expects us to believe his latest argument, he must have nothing but contempt for us. This is Hockey yesterday: “We didn’t anticipate that everything else would be of equal or larger scale as a tsunami coming across the water. The fact is Labor’s left us with a massive forecast increase in foreign aid, a massive increase in defence – for example in one year, there’s meant to be a real increase in defence spending of 13%, a 66% increase in foreign aid.”
<blockquote>
Hockey would like us to see him as a budgetary innocent who has found himself in the middle of a fiscal minefield planted by Labor.
</blockquote>
At another media conference, he said: “If no action was taken on the budget, what the fifth-year deficit would look like, contrary to what both Labor promised was a surplus, if no action was taken, based on the approximately 6% increase in expenditure between the fourth year and the fifth year, which Labor locked in on NDIS, on Gonski, on overseas aid, on hospitals, on defence …”
Well, um, tsunamis are actually tiny when they’re on the ocean — but never mind that, let’s look at the detail. Labor in fact revealed the funding for the National Disability Insurance Scheme — or DisabilityCare as it had been renamed — in the budget last May, with new spending broken down out to 2019:
<img class="aligncenter size-full wp-image-431667" src="https://media.crikey.com.au/wp-content/uploads/2014/04/2014-04-01_11-24-28.jpg" alt="" width="501" height="179">
In addition to the numbers in the budget papers, there was a specific “glossy” with funding graphs for <a href="https://budget.gov.au/2013-14/content/glossy/NDIS_policy/download/NDIS.pdf" target="_blank">DisabilityCare</a> and one for <a href="https://budget.gov.au/2013-14/content/glossy/gonski_policy/download/NPSI.pdf" target="_blank">education funding</a> as well, which was still being finalised in deals with the states. The increase in foreign aid was also in both the budget papers and a <a href="https://budget.gov.au/2013-14/content/ministerial_statements/download/AusAid_MS.pdf" target="_blank">ministerial statement by Bob Carr</a>  — not that the government got any credit for it, because it was actually a reduction, with the government’s Millennium Development Goal commitment to lifting foreign aid to 0.5% of gross national income put back another year to 2017. The government spelt out its planned increase in foreign aid up to and including 2017-18.
In fact in question time last week, Labor invited the Prime Minister to spell out the government’s MDG policy, which he duly did: aid is to reach 0.5% of GNI when the budget returns to surplus. Which raises the question of why, in Hockey’s Mid-Year Economic and Fiscal Outlook in December, Hockey left Labor’s MDG aid funding increase intact, in defiance of the government’s own policy. The answer, of course, was that it would inflate the budget deficit for 2017 and beyond.
As for defence, the Gillard government <a href="https://www.minister.defence.gov.au/2013/05/14/minister-for-defence-budget-2013-14-defence-budget-overview/" target="_blank">gave the portfolio a “guidance”</a> that it would receive around $220 billion in the six years from 2017-18, which Hockey’s document proposes to mean funding would leap 13% in 2017, when in fact the “guidance” reflects a growth rate in defence spending from 2017 lower than the average between now and 2017 of nearly 7%. And remember that Labor was repeatedly criticised fordecreasing defence spending — every armchair general and arms industry lobbyist in the joint was whinging about how we weren’t spending enough taxpayer money on buying gear from the US military-industrial complex. “Military spending slumps to 1930s level,” The Australian’s <a href="https://www.theaustralian.com.au/opinion/columnists/military-spending-slumps-to-1930s-level/story-e6frg74x-1226352458112" target="_blank">Paul Kelly shrieked</a>. The 1930s theme — hint,appeasement!­ —  was picked up by the Coalition, including Tony Abbott and Barnaby Joyce. Abbott “aspired”, he said, to lift defence spending to 3% of GDP.
So, Labor were both neo-Chamberlain surrender monkeys for not spending enough on defence when in government and now, magically, reckless spendthrifts who committed too much to defence at the same time.
Hockey’s fiscal innocent act is a little hard to believe given we were told what an exhaustive, indeed exhausting, shadow ERC process Hockey was leading within the opposition at the time to establish its fiscal credibility.
And above all, there’s this point: if Hockey seriously believes his own claims about the budget beyond forward estimates, why did he remove Labor savings measures that offset future spending? Why did he remove the 15% tax on superannuation income over $100,000 a year, costing the budget billions beyond forward estimates, for the benefit of high income earners? Why did he restore the Fringe Benefits Tax rort on novated leases — remember Joe being photographed in front of a sports car? And why have Hockey and his leader pushed for the abolition of the mining tax, which even in its crippled form, according to Hockey’s own MYEFO, is worth more than $3 billion over forward estimates? Eventually it will be the only way of recovering some of the profits offshore owners of LNG and iron ore projects will make and ship overseas (over 60% of these projects are foreign owned or controlled).
Then there’s the silly decision to hand $8.8 billion of borrowed money to the Reserve Bank in one hit, when it doesn’t need the capital. And the sale of Medibank Private — a $4-5 billion contribution to the budget — will be spent on roads because Abbott wants to be an “infrastructure prime minister”, when it could cut the budget deficit or the debt. That could be $13-14 billion off the deficit and debt right there — or an interest saving of more than half-a-billion dollars a year.
Hockey is talking about sharing the budget burden around, but that’s only after the government plans to increase its own spending for political purposes and sought to hand billions of dollars in tax revenue back to foreign mining companies, large carbon emitters and the well-off in the community — revenue that would have offset exactly the spending on education, disability and foreign aid that Hockey is now claiming to have only just discovered.
This article originally appeared on <a href="https://www.crikey.com.au/" target="_blank" rel="nofollow">Crikey</a>.
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bkeane-XQ2u7CA6bB

Joe Hockey treating Australian public as fiscal fools ahead of the federal budget

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Urban development policies do not reflect the needs of Australia’s wealthiest group of property buyers leading to a mismatch between the housing stock available and what is in demand, according to architecture and design firm Hames Sharley’s associate director Arun Broadhurst.
Speaking at the Urban Development Institute of Australia’s national congress in Brisbane last week, Broadhurst said public policy around the country was designed with an overwhelming desire to increase the density of capital cities. As part of that, developers were encouraged to build smaller types of housing with one to two bedrooms.
“The problem is that Generation X, which is our most wealthy generation, is of child bearing age and the policies don’t necessarily reflect what they need. They’re still going to need three, four or five bedroom houses,” Broadhurst said.
Most of the members of UDIA are large land developers that focus on green field sites on the city fringes. First home buyers form their main target markets.
Broadhurst told conference delegates that while some first time buyers were interested in one to two bedroom homes, many were still looking for three to five bedroom homes because they were planning to have children in future.
Broadhurst’s comments were based on the findings of The Housing We’d Choose: a study for Perth and Peel report, which was released last year. The research was conducted by Curtin Business School with Hames Sharley managing the project. The report analysed the compromises people in Perth were prepared to make when they bought a home.
The Grattan Institute had put together similar research in 2011 based on the Sydney and Melbourne markets.
The studies constrained people’s decision making by forcing them to make realistic assessments based on their own financial situations.
“If you asked people ‘What do you want to buy?’ people would say a five bedroom house in Kirribilli but we know this is unattainable for most people. [The research] constrains people’s choices by income and available stock to get a better feeling of how the real housing market works ,” Broadhurst said.
The Perth and Peel study found Perth was well catered for in three to five bedroom houses but had a large undersupply of one to two bedroom homes that suited people looking for smaller, more affordable homes. “It’s probably similar in Brisbane,” Broadhurst said. 
“In Melbourne and Sydney there’s a greater amount of housing diversity,” he said.
However, there were opportunities for developers to attract a greater variety of people to live out on the city fringes if they built homes that better suited wealthier growing families.
“Generation X tends to be affluent enough to live in the suburbs of their choosing,” Broadhurst said.
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zfielding-GvX3Uq9KTa

Urban development policies leading to a mismatch between demand and supply

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People who commit white collar crime in Australia are getting off lightly compared with those found guilty of similar offenses in other countries, a report has found.
Thousands of Australians have lost millions of dollars or been put at risk by the actions of financial planners and credit brokers who have committed fraud, provided inappropriate advice and operated without an appropriate license.
A report by the Australia Securities and Investments Commission has found the penalties that can be imposed for such offenses in Australia are limited in some cases compared with those available to regulators in other jurisdictions.
For example, people who provide financial services without a license in Australia can only be fined up to $34,000. In contrast, the report found that people guilty of the same offenses in the US face maximum fines of $5.6 million. In the UK, the maximum fine is unlimited.
The maximum civil penalty in Australia for giving inappropriate advice is $200,000, while in the UK the maximum is unlimited, and in Hong Kong it is the greater of $1.4 million or three times the benefit gained by the wrongdoer. 
Individuals who broke corporate rules in the US could be sentenced to prison terms of up to 20 years. In Australia, and most other jurisdictions studied, the maximum prison term was 10 years for criminal penalties such as fraud and insider trading. The maximum prison term for providing financial services without a license in Australia is just two years.
The report compared maximum penalties in Australia to penalties imposed for similar offenses in Hong Kong, the United Kingdom, the United States and Canadian province, Ontario.
It found that regulators elsewhere could, in addition to imposing fines and prison terms, remove financial benefits that wrongdoers had obtained through illegal profits or avoided losses. ASIC does not have that power, although it can ask other agencies to bring an action to confiscate the proceeds of crime.
The relatively low fixed fines that ASIC can impose and the fact that it cannot remove the proceeds of crime itself meant that wrongdoers may still profit from their conduct and not be deterred by the penalties, the report warned.
“The maximum fine that may be imposed may be substantially lower than the financial benefit obtained as a result of the wrongdoing,” it said.
The report also found inconsistencies between penalties that could apply to similar offenses under different pieces of legislation within Australia. For instance, offering a financial service without a license attracted a criminal penalty under the Corporations Act with individuals fined up to $34,000, while someone giving unlicensed credit advice could be subject to the same criminal penalty, or a civil penalty of up to $340,000.
Civil penalties in the Corporations Act have been eroded by inflation as they have not increased since they were set in 1992 for individuals and 2004 for corporations. In 2007, it was suggested that the penalties should be lifted following a Treasury review, although no increases were made.
The report is the first of its kind in over a decade and ASIC has recommended further work be done.
Its findings will be fed into ASIC’s submission to the Financial System Inquiry, which closes for comment on Friday, March 28.
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Australia's white collar crime penalties pale in comparison to other jurisdictions

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As many property investors know, the best investment opportunities sometimes lie a little beyond your doorstep.
Are you a Sydney resident priced out of your home market, but thinking of finding some capital growth in Brisbane? Or maybe you’re dying to buy in Melbourne, but are based in Western Australia for work. While searching, buying and settling – let alone maintaining – a property from a distance may seem impossible, it’s in fact entirely manageable and often a <a href="/expert-insights/investing/four-reasons-you-should-consider-investing-in-property-interstate-ed-chan">terrific wealth builder</a>.
Finding the right property
It may well be the Property Observer mantra: do your research. If you’ve heard that the Queensland market is undervalued, take the time to determine what you want out of your investment and look at area data to see which suburbs stack up. 
Purchasing property interstate can force you to be realistic about your investment prospects – remember, you won’t be living there, so keep your eyes on the numbers and <a href="/news/qld/the-five-most-overrated-queensland-markets-to-buy-in">don't buy into hype</a>. 
With online listing sites, you can always know what's available, no matter where it's available. So there's no excuse to limit your search to your state. Finding the right people                                  
Once you’ve figured out which suburbs and what sorts of properties you’re interested in, it doesn’t hurt to enlist a little help. If you have a property savvy family member in the area who doesn’t mind putting in a little time for you, you might be able to palm off some of the legwork, like attending auctions to see whether homes tend to go for more than their listed price, or scoping out buyer demand.
Better still, consider putting some money down for a <a href="/news/how-buyers-agents-pick-the-best-performing-properties">buyer’s agent</a> or a conveyancer. Their local knowledge will surpass yours in <a href="/news/the-argument-for-against-buyers-agents">almost every way</a>; good connections with agents, the inside scoop on what properties are really worth and an understanding of <a href="/expert-insights/investing/buying-interstate-the-information-you-need-to-know">state purchasing laws</a> can be invaluable.
A conveyancer, a specialist lawyer, can look after all aspects of the process for you, from researching properties, lodging your legal documents and putting your deposit in a trust account.
Once you’re really serious about a property, it’s worth a flight to walk through yourself and have a look at the neighbourhood. You might also need a builder to do a walk through and inspection for any faults in the property and to let you know if you’ll have any troubles with renovations further down the track. 
And once the property is purchased and settled, you will, as always, need <a href="/expert-insights/investing/six-things-to-look-for-when-choosing-a-property-manager">a good property manager</a> – one who can source good tenants and maintain your property and your flow of cash.
Key differences
There are three standout differences between the states and territories when it comes to buying property: information, cooling off and government support and taxation.
The changes in the level of information vendors must disclose may influence just how much help you need to engage to buy your property. In Victoria, all vendors are required to provide Section 23 documents, which include any mortgages or debt against the land, planning information and any registered works on the property. When purchasing a property in the ACT you will have access to similar documents which will also include a pest inspection report and an energy efficiency statement.
The other states and territories require varying but generally less comprehensive levels of disclosure: NSW and SA vendors must provide Schedule 1 and Form 1 documents respectively, which won't include details of building works. Vendors in Tasmania, Queensland, NT and WA can all sell properties without giving disclosure statements to buyers.
As for "cooling off" periods, if you're buying a property in ACT, NSW or Queensland, you'll be allowed a five day period to change your mind after a purchase. SA properties come with a two day cooling off period that commences either once the contract is signed or once the Form 1 documents are provided, whichever is later. There is no legal requirement to provide a cooling off period for property purchases in WA or Tasmania, or for Victorian properties purchased at auction.
Each state has its own rate of stamp duty or land tax that is applicable. Make sure that you factor this into your budget when considering a property purchase. Many state government websites provide stamp duty calculators. Grants and concessions also differ from state to state. If you're buying a new or substantially renovated property in the ACT before June 30 2014, you may be eligible to be charged duty at the concessional rate. Buying an off the plan land and home package will get you a concession from the Victorian government. Similarly, the NSW government offers a $5,000 grant for the purchase of new homes.
Purchasing a new build in SA could also make you eligible for a Housing Construction Grant of up to $8,500. Buying an off the plan property in the state before June 30 2014 could also give you a stamp duty concession in the state. For a run down of the concessions and charges you'll be subject to, see each state and territory's revenue office website (see below).
State and Territory Revenue Offices:
<a href="https://www.sro.vic.gov.au/sro/sronav.nsf/Home+Page/SRO~Home+Page?open" target="_blank">Victoria</a>
<a href="https://www.osr.nsw.gov.au/" target="_blank">New South Wales</a>
<a href="https://www.revenuesa.sa.gov.au/" target="_blank">South Australia</a>
<a href="https://www.finance.wa.gov.au/cms/section.aspx?id=209" target="_blank">Western Australia</a>
<a href="https://www.treasury.nt.gov.au/TaxesRoyaltiesAndGrants/Pages/default.aspx" target="_blank">Northern Territory</a>
<a href="https://www.osr.qld.gov.au/" target="_blank">Queensland</a>
<a href="https://www.revenue.act.gov.au/" target="_blank">Australian Capital Territory</a>
<a href="https://www.revenuesa.sa.gov.au/generic-pages/i-am-a-property-ownerbuyer" target="_blank">Tasmania</a>
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jrichardson-uRX5hFdKfN

How to: Buy property interstate

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Got a bee in your bonnet about an issue and want some national attention? Go harass the federal government and they’ll create an inquiry.
It’s not hard to achieve. The ruling junta will believe almost anything, particularly if there’s been a bit of media hysteria to put the issue front and centre.
Certainly the property industry is having no trouble getting federal politicians to waste time and taxpayers money on talkfests about some of their pet topics.
Last week there was a housing affordability roundtable. According to the “communiqué” issued from Parliament House in Canberra, this was prompted by the belief first home buyers can’t afford to get into the market. It also stated that: “a major driver of increasing house prices and declining affordability is the under-supply of housing.”
In other words, a major talkfest involving government and industry leaders was based on real estate’s biggest furphies.
These are (a) that the only explanation for the low levels of first home buyers is a lack of affordability, (b) that affordability is declining, and (c) that there’s a housing shortage and that’s been forcing up prices.
All are red herrings which have been dragged around by some of the industry’s representative bodies for the past several years. (The true reason for lower first home buyer numbers is a major demographic shift that everyone seems to be missing).
<blockquote>
It’s a stunt to talk politicians into making decisions favourable to the industry, such as reduced taxes, faster approvals and favourable development policies.
</blockquote>
The prime mover behind this monumental waste of time was the Real Estate Institute of Australia, which is determined to oust the Housing Industry Association as the voice of insanity in the residential property industry.
The REIA has a serious obsession with first home buyer numbers. The reasons for that are obscure, given that major markets around the nation are rising and the institute’s members are having their best time of it in several years.
The institute hasn’t bothered to do any research into why first home buyer numbers are lower than normal. It has simply assumed that the only explanation is that they can’t afford to buy. This is surprising because the REIA is joint-publisher of a quarterly index that shows affordability has improved markedly over the past five years and is currently as good as it’s been any time in the past decade.
Why do they bother producing the report if they’re going to ignore its findings? Especially as the findings (that affordability is particularly strong at the moment) is supported by a host of other research reports, including those by the Housing Industry Association, the Australian Bureau of Statistics, Canstar and CommSec.
Apparently federal politicians don’t read because, despite the weight of evidence that we don’t have an affordability problem, they’ve accepted the industry line that young buyers “are finding it increasingly difficult to enter the housing market”.
They’ve also swallowed real estate’s biggest lie – that we have a serious housing shortage.
Given that price growth over the past decade has been lower than wages growth and not much bigger than inflation, and that there has been negligible rental growth in most of our major cities in the past couple of years, it’s clear we do not have the much-touted housing shortage.
Indeed, the most serious current issue is oversupply in some of our major markets.
Unless the forces of supply and demand no longer apply to real estate, how can the REIA and other industry bodies explain the lack of price and rental growth (keeping in mind that only Sydney had major growth last year, its first growth year in a decade) when they’ve been claiming a “chronic housing shortage crisis” for the past five years or so?
It’s a stunt to talk politicians into making decisions favourable to the industry, such as reduced taxes, faster approvals and favourable development policies.
The housing affordability roundtable follows the recent announcement that elements in the industry have managed to talk federal politicians into an inquiry to examine how foreign investors (read Chinese) are forcing up Australian property prices and dooming a whole generation of young Australians to a lifetime of renting.
If the inquiry is genuine, it will discover that the impact of foreign investors on the mainstream market populated by Aussie home buyers is zero and that they’ve wasted a lot of time and money.
<a href="https://mailto:ryder@hotspotting.com.au" target="_blank" style="line-height: 1.3em;">ryder@hotspotting.com.au</a>
<a href="https://www.twitter.com/hotspotting" target="_blank">twitter.com/hotspotting</a>
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Major talkfests based on nothing but industry's biggest furphies

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A recently launched investment tool is giving self-managed superannuation fund members access to invest in real property with a lower capital outlay.
The Fractional Property Investment Platform, released by DomaCom in early March, allows investors to buy shares in any property on the market through an Australian Securities and Investments Commission-registered managed investment scheme (MIS).
“We are targeting the SMSF sector because that’s the sector that we know wants to invest,” DomaCom general manager of sales and marketing Warren Gibson said.
The average SMSF balance was just over $1 million at the end of the December 2013, according to Australian Taxation Office data. The median balance for the funds is around half that figure.
Gibson told Property Observer that the high cost to buy real estate meant most SMSFs wishing to invest in the asset class had to borrow to do so or invest through a syndicate or managed fund. Funds that did not wish to borrow risked having an undiversified portfolio.
“Syndicates are costly to set up, once you are in the syndicate you are there for the duration and there’s no liquidity for the structure. What we set about doing was introducing equity market concepts into the product,” Gibson said.
Investors can choose from the 18,320 properties already been listed on the Fractional Property Investment Platform, or request that any other property for sale be included. Around 17,000 of the properties currently listed are residential, 1,000 are commercial and 300 are rural.
The company aims to increase the number of listing to around 100,000 by the end of the year and eventually have all properties for sale listed, Gibson said.
After selecting a property, the investor bids on what proportion they would like to hold and a price range they believe it is worth.
The platform allows them to create a book build to buy the property with other investors who also wish to purchase a stake. When enough investors have joined the book build to account for the expected full value, DomaCom engages a buyers’ agent to acquire the property. Property valuers and conveyancers are also engaged.
After purchase, the property is placed into an MIS with sub-accounts set up for each investor. Rent and property-related costs are allocated to each investor in proportion to their holding.
The minimum amount to open an account is $20,000 but investors can put as little as $2,000 into each property.
Management fees to DomaCom are around 1% a year.
Gibson said the DomaCom platform also offered a secondary market where investors could sell their holdings in the MIS to others.
Investors can only access the structure through financial planners, who must be accredited to advise on the products.
DomaCom is also working on a product that will allow home owners to sell part of the equity in their property to investors. Gibson said the company hoped to release that product in the third quarter of this calendar year. 
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