&nbsp;

A local Australian has spent a Lower North Shore record $15.1 million at <a href="https://www.apartments.com.au/new-apartments/elevate-hume-place-crows-nest-25-hume-street-crows-nest-nsw-2065">Elevate Hume Place</a>, the new TOD above the recently opened Crows Nest Metro Station.

The buyer amalgamated a penthouse and sub-penthouse to create the triplex apartment that will have five bedrooms, five bathrooms, a private rooftop pool, expansive terrace, and panoramic views of Sydney Harbour and skyline. The building is being created by burgeoning developer Third.i, alongside joint venture partner Phoenix Property Investors.

The buyer was drawn to Elevate’s unrivalled connectivity, situated directly above the&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a> Metro Station, and the vibrant lifestyle precinct that surrounds it. The Metro connects to the CBD in just seven minutes, and Chatswood in four.

[smartcode_project:default project_id=142550 project_image_fid=309367]

Designed by internationally acclaimed architects <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, Elevate draws inspiration from the ancient blue gum forests native to the area. The building is a Net Zero development, created in consultation with Indigenous communities and exceeding sustainability benchmarks. Interiors feature chevron-engineered timber flooring, natural stone benchtops, and premium Sub-Zero Wolf appliances, delivering timeless elegance and next-level comfort.

The exchange of the $15.1 million apartment, follows a recent $5 million sale, and over $30 million currently in expressions of interests. Interest in Elevate’s penthouse stock has surged, reflecting a strong appetite for ultra-luxury residences that combine design excellence with unmatched connectivity.

[smartcode_project:default project_id=142550 project_image_fid=309369]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group.&nbsp;

“These recent sales are a testament to the vision behind Elevate. It’s not just about luxury finishes or panoramic views, it’s about creating homes that are deeply connected to the city and the community. Buyers are responding to that. They want to live somewhere that offers more than just a postcode, they want culture, convenience, and long-term value. Elevate delivers all of that, and more.”

[smartcode_project:default project_id=142550 project_image_fid=297878]

As part of the Hume Place precinct, Elevate is transforming Crows Nest into Sydney’s most dynamic urban village. Elevate’s unique position directly above the metro, combined with its curated amenity offering, has made it a magnet for buyers seeking a future-proof investment and a vibrant urban lifestyle.

The next release at Elevate is expected later this year.

[smartcode_project_cta:default project_id=142550]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group


Joel Robinson

Third.i & PPI set Lower North Shore apartment record with $15.1m sale at Elevate Hume Place penthouse amalgamation

Sydney developer Deicorp is set to officially open its <a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill-nsw-2154">Showground Village</a> precinct in Castle Hill.

NSW Premier Chris Minns will attend the opening on Sunday August 31, alongside&nbsp;Minister for Planning and Public Spaces Paul Scully, The Hills Shire Council Mayor Dr Michelle Byrne, Landcom CEO Alex Wendler, and Deicorp Founder Fouad Deiri.

Located just moments from Hills Showground Metro Station, the centre spans 9,500 sqm across four levels and features 26 specialty retailers as well as a 1,400 sqm public plaza, creating a new community meeting point for shopping, dining, fitness, and everyday convenience.&nbsp;

Showground Village forms part of the Hills Showground Station Precinct, an urban renewal initiative led by Landcom and Sydney Metro that will provide for around 2,300 new jobs over the next 20 years and around 9,000 new homes.&nbsp;

Deicorp was recently approved for another new development next door to Showground Village.

The new five residential buildings in the East Showgrounds Precinct, will see another 873 dwellings delivered, as well as&nbsp;3,500 sqm of open public space in the form of landscaped courtyards, a public park and communal outdoor recreational space including a playground, barbeque area, and outdoor seating.

“This approval will allow us to start construction on a range of beautifully designed, conveniently located apartments and create another vibrant, walkable and well-connected community,” said&nbsp;<a href="https://www.apartments.com.au/developers/deicorp" target="">Deicorp</a>&nbsp;Founder Fouad Deiri.

“These new homes will provide their residents with a seamless connection to jobs and services along Metro North West, and the new&nbsp;<a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill" target="">Hills Showground Village</a>&nbsp;retail precinct currently under construction."

Deicorp has several thousand apartments in planning and under construction across Sydney, from Zetland and Five Dock to Crows Nest and Macquarie Park.

[smartcode_project_cta:default project_id=133881]

Deicorp, NSW Premier officially open Showground Village, new retail and hospitality hub in Castle Hill

ASX-listed developer Cedar Woods is progressing its plans for its Southbank arts precinct site.&nbsp;

The developer has filed plans, which are now with the&nbsp;Department of Transport and Planning, for a new 20-level tower at&nbsp;<a href="https://www.apartments.com.au/new-apartments/141-151-sturt-street-southbank-vic-3006">141–151 Sturt Street</a>, a 2,718 sqm block opposite the Habitat Filter sculpture.

The proposal seeks to demolish the two-level&nbsp;commercial building, including a small supermarket and medical tenancies, and create a new building with 180 apartments and a focus on an&nbsp;active public realm and arts integration.

&nbsp;

<img alt="Southbank site" data-entity-type="file" data-entity-uuid="76a72db6-91ef-43ae-827d-a9cfa72893d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site.png?VersionId=DZgtB4K6BswVh0QtCs3iLjXaLp0CbcEb" />

&nbsp;

There will be a full mix of apartment configurations, including 28 studio apartments, 16 one-bedroom, 104 two-bedroom, and 32 three-bedroom units.

Retail, creative arts, and residential amenity functions are integrated across the lower levels. A food and drink tenancy is planned to front Dodds Street, while a retail tenancy fronting Sturt Street will be accessed via an elevated walkway. The first floor includes a substantial 734 sqm creative arts space, envisioned to support Melbourne’s growing cultural and digital industries.

Architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has put together the plans. In their&nbsp;Urban Design Report they highlighted the project’s ambition to embed itself within Southbank’s evolving cultural fabric.

A central feature of the design is a through-block link connecting Sturt and Dodds Streets, landscaped with native plantings and embedded with universal access ramps.

“The ramp has been thoughtfully integrated as the primary access point, ensuring universal accessibility for all users,” the report noted, with the link offering “a direct response to the urban planning scheme of creating more green spaces within our communities”.

<img alt="Southbank podium" data-entity-type="file" data-entity-uuid="4d24b1b2-d69c-4a11-a11d-ec6df432221c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium.png?VersionId=geWoJyZDmPSLODZ_.PNJ0LvpOmyyCdpo" />

The building’s podium form responds to the mandatory height limits along Dodds Street and maintains a fine-grain interface to adjoining developments. Above the podium, the tower is articulated with recessed balconies and a focus on views toward the CBD and surrounding arts institutions. A communal rooftop recreation deck and indoor lounge are positioned on level four, adjoining seven apartments and providing over 900 sqm of resident amenity space.

Vehicle access and loading will be provided via Dodds Street, with 155 resident car spaces located across two basement levels and the first three above-ground floors. Bicycle storage is more generous, with 226 spaces distributed across resident, staff and visitor needs.

Rothelowman describes the architecture as “humanist,” with ground-level interfaces designed to encourage social interaction and provide a dignified entry for both residents and passers-by. “All street interfaces are crafted to invite and nurture human connections,” the design report states. “The façade transitions to a human scale, providing an approachable and engaging streetscape”.

Cedar Woods, while well-known for its large communities it develops outside of Australia's capital cities, they have recently developed in Melbourne's inner-ring before. They are approaching completion at <a href="https://www.apartments.com.au/new-townhouses/88-leveson-north-melbourne-88-leveson-street-north-melbourne-vic-3051">88 Leveson</a>, just 15 townhouses in the heart of North Melbourne.

Cedar Woods progresses with new apartment plans in Southbank arts precinct

Brisbane developers Core Property Partners and Vector Property Australia has teamed up for Brisbane's newest apartment development.

The duo identified <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as their preferred suburb, on the fringe of the Gabba Precinct, where they've just revealed BANKSII, 72 apartments opposite Raymond Park.

[smartcode_project:default project_id=136432 project_image_fid=5481]

The one-, two-, and three-bedroom apartments will sit in a glass-wrapped building that will also feature a rooftop with an&nbsp;infinity-edge pool, a BBQ area and alfresco dining spaces, sun lounges, and a sauna, as well as a resident-only gym and a ground-floor cafe.

Rhett Williams, Director of Vector Property Australia, said the project will lift the quality of the East Brisbane community and set a new benchmark.

"In Brisbane’s current property landscape, <a href="https://www.apartments.com.au/new-apartments/banksii-east-brisbane-169-wellington-road-east-brisbane-qld-4169">BANKSII</a> stands out through its emphasis on lifestyle-oriented living, connectivity and sophisticated design," Williams says.

[smartcode_project:default project_id=136432 project_image_fid=5479]

The 10-level building has been designed by MAS Architecture. Their designs were inspired by the native Banksia flower, with the architecture and interiors reflecting the organic symmetry of its namesake flora. MAS has interpreted this throughout the building’s curved form, façade detailing and interior palette.&nbsp;

The building’s flowing geometry and natural tones are complemented by large balconies and floor-to-ceiling glazing, maximising cross-breezes, daylight and views over the city, parklands and river.

“Having a strong narrative for a building helps us architecturally,” MAS noted. "We can choose colours that come off that species of flowers. The trunk and the trees and the flower elements all are now visible in our joinery on the inside and in our architectural finishes on the outside."

[smartcode_project:default project_id=136432 project_image_fid=5485]

Apartments will feature timber floors, soft porcelain tiles, brushed bronze fittings, and stone benchtops with warm veining.&nbsp;

Kitchens feature premium SMEG appliances and generous storage, while bathrooms have been designed as calming retreats with curved cabinetry and twin sinks in the master ensuites.

The building will feature a suite of rooftop and wellness amenities. Residents will have access to an infinity-edge pool, BBQ and alfresco dining areas, sun lounges and a rooftop sauna.&nbsp;

A residents-only gym will be located on the podium level, while a ground-floor café and landscaped laneway will further activate the site and improve neighbourhood connectivity.

[smartcode_project:default project_id=136432 project_image_fid=5488]

BANKSII will rise from a prime Wellington Road site, with the building oriented to overlook the adjacent Raymond Park and take in extensive city views. It is also on the doorstep of key&nbsp;lifestyle infrastructure, including the future Kangaroo Point Green Bridge, The Gabba stadium, and the planned Brisbane Live arena.&nbsp;

Public transport options, including ferry, bus and rail - including the future Cross River Rail Woolloongabba station - are all nearby, supporting a car-optional lifestyle just minutes from the CBD.

Williams said the team spent over a year searching for the ideal site before securing this location.

"We were attracted to <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as it is a vibrant and growing community that offers a perfect balance of urban convenience and natural beauty with the parklands and river on our doorstep.”

The project is part of the broader Woolloongabba Games precinct, which is undergoing significant investment in the lead-up to the 2032 Brisbane Olympics. This urban renewal, coupled with infrastructure upgrades, is expected to enhance long-term liveability and capital growth in the area.

Given the wide max of configurations, BANKSII is expected to suit everyone from first home buyers and investors to families and downsizers.

[smartcode_project_cta:default project_id=136432]

BANKSII sales launch in booming East Brisbane apartment market

The Minns Labor Government will deliver Sydney’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations, right next to the CBD, to tackle the housing crisis and rebalance growth across the city.

Recent reports by the NSW Productivity Commission have warned that Sydney is losing twice as many young people as it is gaining, while also finding that Woollahra is the most feasible Local Government Area (LGA) in New South Wales to build new housing.

Despite this, housing approvals in Woollahra consistently lag well behind other LGAs, and the population has declined by 11 per cent over the past 50 years while Greater Sydney as a whole has grown by 74 per cent.

The new station that will be an eight-minute trip from Sydney CBD, will be located on the Eastern Suburbs train line in Woollahra, where a station build was started in the 1970s but never completed.

To enable the delivery of new homes the NSW Government will lead a rezoning of Woollahra and Edgecliff stations similar to other state led rezonings to allow additional homes to be built around the stations.

Affordable housing will also make up a proportion of development on the site with the final amount of affordable housing required, to be determined as part of the rezoning process.

The area surrounding the new station is within walking distance of major green and recreational space including Cooper, Trumper, Rushcutters Bay and Centennial Parks.

The Eastern Suburbs train line between Bondi Junction and Sydney CBD also has the lowest passenger usage rates during the AM peak of any line on the Sydney network, with only 43 per cent of operating capacity during the AM peak currently being utilised by passengers.

Sydney Water and Infrastructure NSW have confirmed there is capacity in the water and wastewater systems to accommodate the proposed 10,000 dwellings without major upgrades.

The rezoning is expected to take around two years and will further support the Government’s housing targets that rebalance the delivery of new homes around existing infrastructure.

&nbsp;

&nbsp;

Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney

Pension

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GUEST OBSERVATION
How we fund retirement in an ageing century ought to worry all of us.
But one group of us should be much more worried than the rest.
In a new set of <a href="http://cepar.edu.au/resources-videos/research-briefs" target="_blank">research briefs</a> published by the Centre of Excellence of Population Ageing Research, we report that most people do well out of our retirement income system and that the living standard of retirees has improved over the past decade.
In international comparisons, our system <a href="https://www.mercer.com.au/our-thinking/mmgpi" target="_blank">ranks highly</a>, for good reason.
Most retirees do well
About 60% of older Australians can afford a lifestyle better than that deemed to be “modest” by widely used standards.
Households headed by baby boomers reaching retirement age between 2006 and 2016 did so with incomes 45% higher than those who retired a decade earlier.
Typical boomer households aged in their late 60s earn almost as much as they did when they were still working - only 20% less, that is, with about 80% of their working income maintained.
And their needs are lower. Lower spending in retirement is common because older households need to pay less for transport, less for working clothes, and have more time to cook.
Many continue to save while in retirement.
And they tend to spend less over time, rather than more over time as <a href="https://www.superannuation.asn.au/resources/retirement-standard" target="_blank">benchmarks publicised by the superannuation industry</a> assume.
When we included the value of living rent-free for the 80% or more of retirees who own their own home (about A$10,000 per year on average), we found older Australians live in no more poverty than working age Australians.
But not renters
The living standards of those who rent in retirement are very different. Only about 15% of older renters can afford a lifestyle better than “modest”.
Single renters are particularly badly off.
Among all older people only about 10% fall below the poverty line set at half the median income.
Among older Australians who rent, 40% fall below.
Among older Australians who rent alone, it’s more than 60%.
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If that relative poverty measure seems too abstract, an absolute dollar figure might help.
Alarming research aired on the ABC in September found that, on average, aged care homes were spending <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-09-17/food-in-aged-care/10212880" target="_blank">$6.08 per day on food</a> per resident.
Our research finds that among pensioners who rent alone, one quarter spend <a href="http://cepar.edu.au/sites/default/files/retirement-income-in-australia-part2.pdf" target="_blank">even less than that</a> per day.
And it’s getting worse
The pension has always favoured home owners.
On the one hand it is insufficient for renters and on the other it doesn’t cut pension payments to the owners of very valuable homes, because the value of any home - no matter how big - is excluded from the pension means test.
Rental assistance, introduced to complement the pension in the 1980s, was meant to alleviate this, and to some extent it does.
But it climbs only in line with the consumer price index every six months, which usually fails to keep pace with rents.
Sydney rents have doubled over the past two decades. The consumer price index has climbed 68%.
As a result, rental assistance is less effective in reducing financial stress than it was when it was introduced, and is set to become even less effective if rents continue to climb more quickly than the price index.
And more of us look set to rent
Households headed by Australians aged 35 to 44 are now 10 percentage points less likely to own their own home than were households headed by people of the same age a generation earlier.
They might be merely postponing buying homes until they are older as more of what would have been their income is sequestered into super and they enter the workforce and retire later.
If so, they might end up owning and paying off homes by retirement at the same rate as boomer households did before them.
If not, more and more of them could end up in poverty in retirement.<img src="https://counter.theconversation.com/content/105840/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Rafal Chomik, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/renters-beware-how-the-pension-and-super-could-leave-you-behind-105840" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Renters Beware: how the pension and super could leave you behind

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EXPERT OBSERVER
A payment of $750 will be made from the end of this month to about 6.5 million people as part of the government’s $17.6 billion stimulus package aimed at keeping Australia out of a recession caused by the impact of the coronavirus.
The one-off tax free payment will go to pensioners and others who receive income support, including those who get the family tax benefit - with pensioners numbering about half the beneficiaries.
The payment will cost $4.8 billion, and go out from March 31. Almost all payments are expected to be made by the middle of April, in an attempt to boost spending for the vital June quarter, which will be hit hard by the fallout from the virus.
<a href="https://theconversation.com/newsletter"><img src="https://images.theconversation.com/files/320030/original/file-20200312-116261-a6ugi0.png?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=90&amp;fit=crop&amp;dpr=2" alt="Sign up to The Conversation" width="100%"></a>
Putting cash in the hands of lower income earners is considered the fastest way to stimulate the economy, because they are most likely to spend it – although the health scare makes it trickier to predict how much people could save.
The wide-ranging package is skewed to helping small and medium sized businesses, with the government’s priority being to keep people in jobs. Three out of four dollars will be spent on initiatives to assist business.
These include payments of up to $25,000 for small and medium-sized enterprises (costing $6.7 billion), wage subsidies to support apprentices ($1.3 billion), a widening of the instant asset write off ($700 million), and the acceleration of depreciation deductions ($3.2 billion).
<img src="https://images.theconversation.com/files/320073/original/file-20200312-111253-lk2w82.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
 
A $1 billion fund will be directed to help for severely-affected regions and communities. This will include measures such as the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. There will also be assistance for businesses to identify alternative export markets and supply chains.
To help people who need to access government sickness payments or are thrown out of work and require unemployment benefits, waiting times will be waived.
Scott Morrison highlighted the availability of the existing Commonwealth sickness payment, saying a casual employee who for medical reasons had to self-isolate, or who contracted the virus, and was unable to work, could access it.
Notably, the package does not contain anything for the tertiary education sector, despite it being severely affected by the travel ban on non-Australians from China, which sees tens of thousands of students stranded offshore. The government believes the universities generally have strong enough balance sheets to meet the situation.
The package will amount to 1.2% of GDP. Treasurer Josh Frydenberg said Treasury estimated the measures will add 1.5% to growth in the June quarter. Some $11 billion will go out before the end of June. The duration of measures is limited.
But Treasury has not yet been able to estimate the likely impact of the virus in the June quarter so, with the March quarter expected to be negative, it is unknown whether the economy will experience two quarters of negative growth, which would put it into recession.
The government now acknowledges the budget will be in deficit for this financial year. Finance Minister Mathias Cormann was blunt. “When you deliver a stimulus package of this size, I think people can add up the numbers. They can add up what it means in terms of the budget surplus. … This is not going to be a surplus year in 2019-20,” he told the ABC.
The package comes as the World Health Organisation declared the coronavirus a pandemic - something the Australian government had anticipated a fortnight ago - and the United States banned travellers arriving from Europe for the next 30 days.
Scott Morrison said the measures were “designed to support cash flow, boost investment and provide immediate demand stimulus to the Australian economy”.
The package has marked similarities to the Rudd government’s $10 billion first tranche stimulus in the global financial crisis, notably with its “cash splash” elements, although it is more targeted to business.
The prime minister will make an “address to the nation” at 7pm on Thursday.
The Australian Industry Group said the stimulus measures “will reduce the risk of a more severe downturn and the much worse budget outcome that it would bring”.<img src="https://counter.theconversation.com/content/133512/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/michelle-grattan-20316">Michelle Grattan</a>, Professorial Fellow, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/cash-handout-of-750-for-6-5-million-pensioners-and-others-receiving-government-payments-133512">original article</a>.
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Cash handout of $750 for 6.5 million pensioners and more

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Treasurer Josh Frydenberg has defended the deeming rate changes as reflecting that some retirees are getting higher rates of return than the very low bank deposits.
“We’re strengthening the arm of around one million welfare recipients,” he told ABC’s Insiders program.
“What’s important to understand is — it’s not a linear equation between or comparison between the cash rate and the deeming rate, because the deeming rate applies to a whole suite of assets.
“So it applies to bank deposits and a term deposit, could be at 1.75 per cent today, but it could apply to superannuation returns, and that’s averaging around 5.5 per cent — or to yields on ASX 200 stocks, which are averaging about 4.5 per cent.”
The changes to deeming rate will deliver a marginally better deal for more than 600,000 aged pensioners and 350,000 welfare recipients on other payments including the disability support pension, parent payments and Newstart recipients with investments.
But the “$800 pension bonus” has been branded disappointing for retirees after it emerged only seniors who don’t own a family home have a chance of securing the full amount.
The changes to pensioners’ deeming rates used to determine investment income for the asset test offers up to $804 for singles and $1053 for couples.
Around 75 percent of aged pensioners will get nothing from the changes to the deeming rate because they don’t have investments in super, shares or bank deposits.
Only seniors who do not own a family home will qualify for the maximum.
The New Daily has confirmed that, for example, ‘Alan’ a single aged pensioner who doesn’t own a family home and has $540,000 in financial assets will secure an extra $30.94 a fortnight or $804.50 a year in Age Pension.
However, if ‘Alan’ owned his own home and had $280,000 in financial investments he would only secure $18.44 a fortnight or $479.50 a year extra.
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Home owning seniors won't secure the full $800 pension bonus

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<img src="https://counter.theconversation.edu.au/content/68483/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
On January 1, 2017 the age pension will undergo significant changes.
Changes to the assets test, which determine who can receive a pension and how much, could see 166,000 pensioners receive an increase in their entitlements. But many people will also have their pensions reduced and others will become ineligible entirely. 
These headline numbers are just the start, however. Changes to the pension will affect the way people plan and behave – incentivising certain types of homeownership and debt, potentially impacting younger generations.
<h2>What are the asset test changes?</h2>
The government decides who is eligible to receive the aged pension, and how much they are entitled to, by looking at their assets and income. From January 1, the maximum assets you can own to receive a full pension is being increased, for homeowners and non-homeowners, singles and couples. This will allow a larger group of people to claim a full pension. 
<a href="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%209.05.26%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%209.05.26%20AM.png" alt="">
For those who don’t qualify for the full pension, there are even more changes. For every A$1000 of assets owned above the threshold the entitlement will reduce by A$3 per fortnight, up from A$1.50 under the current system. As a result, the threshold to qualify even for the partial pension is being reduced as well.
<a href="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%209.06.49%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%209.06.49%20AM.png" alt="">
The increase in the rate that the pension is reduced, as well as the reduction in this top pension threshold, could result in some 88,000 missing out on the pension entirely, and some 225,000 seeing their pensions reduced. 
The reason given for these changes is that the federal government wants to make the age pension system more equitable. But, even though some will qualify for slightly more age pension, the overall effect will be to cut down on pension spending. 
We saw this in an earlier change made in January this year when defined benefit pensioners found their income test concession was slashed to 10%, reducing their pension entitlements. Now, this change will reduce the entitlements of “asset rich” pensioners. 
<h2>Why this could affect behaviour</h2>
For people approaching pension age, the latest changes to the asset test has changed their incentives. It is possible that those in pre-retirement phase may now decide to tailor their investments and lifestyle so that they will qualify for some age pension. 
Consider this matter in light of what behavioural experts call prospect theory, which suggests that people place a higher value on what they might lose than what they might gain. In this context, people might be so worried about losing a part of their age pension that they may make decisions that reduce their total income. 
This behaviour has already been observed, anecdotally, by many financial advisers, when clients tell them that they want to qualify for age pension regardless of how small the amount might be.
<h2>Think of the assets</h2>
Overall, if prospect theory holds, the short term incentives of the assets test will see pensioners “use up” their assets to fund their lifestyle choices and gain eligibility for the pension.
This could take the form of any combination of spending more on lifestyle, buying a more expensive home (homes are not included in the asset test), or even giving away assets (assets given away five years or more before pension age are not counted in the asset test). These are all ways of reducing the amount of assessable assets, thereby qualifying for the aged pension. 
This incentive will be especially strong for those in the middle or near the upper asset threshold, as they will gain $3 in pension per fortnight (or $78 pa) for every $1,000 of assets they “use up”. Or, in other words, they will achieve a 7.8% pa gain for “using up” $1000 in assets. This is an almost unheard of return in an age of low rates.
<h2>The secondary impact</h2>
The impact of these changes wouldn’t stop at running down assets, however. Many pensioners will want to remain at their standard of living and so will likely turn to debt. Some will use the equity in their homes to secure a reverse mortgage. Or, if they do qualify for age pension, they may take a loan from Centrelink. Both of these could result in debt left to an estate, reducing inter-generational transfers.
In addition, it is likely that instead of downsizing to a smaller and more appropriate housing, and thereby releasing surplus funds which then become assessable under the assets test, pensioners are likely to remain longer in their larger homes. This will restrict the supply of established homes for younger people to buy. Hence, demand and supply forces may result in prices for established houses to continue to increase.
Warren McKeown is teaching fellow, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/warren-mckeown-7085" target="_blank">here</a>.
 
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Changes to the pension asset test will ripple through the economy

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The changes introduced by Scott Morrison to the age pension regime contained in Joe Hockey's May budget should be wound back, the lobby group representing union-backed super funds, Industry Super Australia says.
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From January next year the asset threshold for a couple to qualify for a part age pension will fall to $823,000 from $1.15 million.
For retirees who quality for a government pension, the amount by which the pension is reduced for each additional $1000 of assets over a threshold will rise from $1.50 a fortnight to $3.
Fairfax Media report ISA accused the government of "ad hoc" policy making.
"The more aggressive taper rate undermines the incentive for people to increase their super contributions since an increase in retirement income from this source will be largely clawed back through lower pensions."
ISA cite ISA-Rice Warner modelling that indicates that the proposed changes to the Age Pension asset test and taper rate in the bill are "misguided" because they reduce the retirement incomes of Australians who currently are on modest incomes, and whose retirement incomes are projected to be below that sufficient for a comfortable standard of living in retirement.
"Over time, the changes would adversely affect about 40 per cent of Australians, and 8 in 10 single women," it suggested.
Adopting the same methodology as Australia’s Future Tax System Review, the bill’s proposal to double the taper rate to a $3.00 per fortnight loss of pension per $1,000 of assets results in an effective taper of 156 per cent assuming a 5 per cent return. 
The proportion of new retirees affected by the proposed change will increase sharply over time, ISA noted.
The proportion of new cohorts of retirees affected by the proposed asset test change increase from one in three today to seven in 10 by 2050. This influx will increase the overall proportion of the Age Pension population who are worse off from just over 10 per cent in 2017 to over 40 per cent by 2055.
ISA noted the policy change over time reveals that:
<ul>
<li>The impacts of the change increasingly fall on those earning below average incomes</li>
<li>For couples due to retire in 10 years’ time, the largest impacts are felt just below average earnings ($62,000 or 80 per cent average full time earnings). They stand to lose around $8,600 a year ($4,300 each) or $224,000 per couple ($122,000 each) over their entire retirement</li>
<li>For those 20 years from retirement (aged 45-49 today) the big impacts start being felt by a couple in decile 4, each earning as little as $45,000 today, who would lose $3,000 ($1,500 each)</li>
<li>By contrast, a couple in decile 9 on $145,000 each experiences the barest of impacts, losing just $113 a year each</li>
<li>Over the long run, there are more people affected on below average incomes than above (5 rungs below average earnings compared with just one rung above)</li>
<li>Within 10 years around half of all new retirees leaving the workforce will be affected by these changes</li>
</ul>
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Age pensions changes should be wound back: Industry Super Australia

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The Productivity Commission has found no evidence of Australians exploiting superannuation - blowing their hard earned life savings when they retire and then moving onto a taxpayer funded pension.
The commission has also found raising the age at which people access their super to 65 years would boost federal government coffers mid-century by about $7 billion a year in today's money.
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Delaying by two years the age at which people dip into their superannuation would also leave them with a balance at least 10% larger when they get to retire.
Around 30% of people currently opt to take their benefits early as a lump sum.
</div>
<div>More than 70% take as an income stream.</div>
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<div>The commission found almost no evidence that retirees and their financial planners were aggressively restructuring their affairs to tap into the pension.</div>
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<div>But the finding comes as age pension reforms, set for January 2017 introduction, creates perverse incentives for retirees to reduce their assets to maintain or secure CentreLink payments, as the Australian Financial Review personal finance and superannuation editor Sally Patten has noted.</div>
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