Western Australia Experiences Record-High Property Investor Lending

March 2024 saw Western Australia’s property investor lending reach a peak of $1.050 billion, marking the highest monthly figure in 17 years, according to Kevin Young, President of Property Club. This milestone last occurred in July 2007 when lending figures hit $1.055 billion, emphasising a significant resurgence in the state’s real estate investment activity.

Key Drivers of Growth: The spike in investor lending over the past three years is attributed to growing confidence in WA’s property market, fuelled by rising house prices and high rental yields. This optimism has been bolstered by a substantial 35% increase in weekly rents and a $100,000 rise in median house prices in Perth over the last two years. However, recent stabilization in rent increases and signs of moderating rental growth rates suggest a shift in market dynamics.

Future Market Predictions: Despite current growth, Property Club forecasts a cooling period. It is expected that the full impact of new rental properties, spurred by recent investments, will materialise in the latter half of 2025, potentially leading to peaked rents and a subsequent decline in some oversupplied areas. This anticipated softening in the rental market may also affect established sales markets, as weakening rental markets often precede declines in property values.

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Historical Accuracy and Investment Caution: Property Club, with nearly three decades of experience in Perth, has successfully predicted previous property boom cycles. In 2015, amidst a weakening rental market, the organization accurately forecasted a drop in median home prices below $500,000, a prediction that materialized following a peak in December 2014. Given the current market conditions, Property Club advises investors, especially those from interstate with limited local market knowledge, to conduct thorough research before purchasing properties in Perth. The recent influx has drawn comparisons to a modern-day gold rush, with Eastern states buyers particularly eager, often foregoing essential safeguards like building inspections in their rush to secure investments.

Advisory for Investors: Property Club has issued a warning to potential investors about the risks of impulsive buying in the current volatile market. The emphasis is on selecting properties that promise sustainable long-term growth rather than making hasty decisions that could lead to financial losses.

In summary, while the surge in property investment lending in WA reflects a robust market, Property Club stresses the importance of cautious investment strategies based on comprehensive research to navigate potential future market adjustments effectively.

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Archistar selected for the NSW Government’s AI Solutions Panel to Revolutionise Local Development Applications

Sydney, Australia — Archistar, a leading provider of artificial intelligence (AI) driven design and planning solutions, is proud to announce its selection to the NSW Government’s AI Solutions Panel. This inclusion comes as a result of a competitive open tender process facilitated by the NSW Department of Planning, Housing and Infrastructure, highlighting Archistar’s commitment to excellence and innovation in the field of AI-enhanced urban planning.

The AI Solutions Panel is an initiative by the NSW Government designed as a centralised hub for robust and mature AI products. These solutions are made available to councils across the state to help streamline and improve their development assessment workflows. Archistar’s selection reflects its proven expertise and the reliability of its advanced AI technologies tailored for the urban development / housing sector.

With a strategic focus on the pre-lodgement stage of local development applications, Archistar aims to transform the initial phases of council planning processes. This stage is crucial for setting the tone and efficiency of the entire application process, and by implementing AI solutions, Archistar will assist councils in becoming more efficient and responsive to developmental needs.

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Key Benefits of Archistar’s AI Solutions:

• Efficiency Gains for Council Staff: By automating routine tasks and reducing manual workloads, council staff can focus on more strategic activities, leading to faster and more effective service delivery.
• Improved Information Access for Applicants: Archistar’s technology ensures that developers and applicants have easier access to necessary information, making the application process smoother and more transparent.
• Faster Decision Making: With AI-driven analytics and insights, councils can make quicker, more informed decisions, thereby accelerating the development process and improving outcomes for communities.

“We are thrilled to be a part of the NSW Government’s AI Solutions Panel and are eager to collaborate with councils throughout the state,” said Dr. Benjamin Coorey, CEO of Archistar.

“Our goal is to make urban development more accessible, predictable, and efficient, and this opportunity allows us to extend our innovative solutions to more stakeholders in the urban planning ecosystem.”

All NSW councils can now initiate procurement of Archistar’s product solutions directly through the AI Solutions Panel, ensuring that they have immediate access to the tools needed to enhance their operations.

As Archistar looks forward to working closely with various councils through the AI Solutions Panel, it remains dedicated to pushing the boundaries of what is possible in urban development and planning through AI technology. This selection signifies an exciting step forward in the digital transformation of local government services across New South Wales.

Councils can register their interest here.

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Potential $1 Trillion Cost to Taxpayers from Superannuation Withdrawal for Home Deposits

Newly released modelling commissioned by the Super Members Council reveals significant long-term fiscal implications for Australian taxpayers stemming from proposals allowing young Australians to utilise their superannuation to fund house deposits. According to the analysis, unrestricted access to superannuation funds for this purpose could saddle taxpayers with costs amounting to a staggering $1 trillion over time.

Key Findings of the Report

• Financial Impact: The proposal to allow a capped withdrawal of $50,000 from superannuation accounts for home deposits could result in a $300 billion drain on federal resources across future decades. In contrast, an uncapped withdrawal policy could inflate this cost to approximately $1 trillion by century’s end.
• Increased Pension Dependency: The report underscores a critical concern that enabling first-time homebuyers to dip into their superannuation will lead to significantly reduced balances upon retirement. This reduction is expected to increase reliance on taxpayer-funded age pensions, thereby escalating government expenditures considerably.
• Economic Consequences: At its peak, the capped withdrawal policy could impose an additional annual cost of $8 billion on taxpayers, with the uncapped option potentially reaching an annual cost of $25 billion.

Impact on Housing Market and Home Ownership

The modelling also highlights adverse effects on the housing market, predicting an increase in capital city house prices by an average of $75,000, which could further exacerbate the housing affordability crisis. This inflationary effect contradicts the policy’s intention to enhance home ownership rates, instead potentially delaying entry into the housing market for future generations.

Expert Opinions and Recommendations

Misha Schubert, CEO of the Super Members Council, criticised the policy proposals as economically imprudent. Schubert emphasised that such policies not only fail to address home ownership rates but also worsen housing affordability and erode retirement savings, leaving a hefty tax burden for all Australians.

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“Economic evidence consistently shows that breaking open super for house deposits will not resolve the housing crisis but will rather inflate property prices and amplify pension costs,” said Schubert.

Call for Policy Rethink

The Super Members Council is advocating for a reconsideration of any policy that might weaken the integrity and success of the superannuation system, which has been pivotal in ensuring a secure retirement for millions of Australians. The Council warns against the long-term economic pitfalls of such policies, suggesting they would undermine the foundational goals of the superannuation system.

Analytical Backdrop

The findings are based on comprehensive microsimulation models developed by Deloitte, accounting for demographic shifts, superannuation contributions and balances, and projected tax and pension expenditures. This robust analytical approach reinforces the credibility of the projected fiscal and market impacts.

In conclusion, the Super Members Council urges policymakers to preserve the superannuation system’s strength, cautioning against decisions that could compromise both individual financial security and broader economic stability.

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