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ASIC has provided two information packs designed to better the advice given by advisers on investing in self-managed superannuation funds.
The downloadable documents stress ASIC's view that an SMSF with a starting balance of $200,000 or below is unlikely to be client-centric and more likely be investigated by ASIC.
ASIC Deputy Chairman Peter Kell said it is important that consumers receive good quality advice that will assist them in making informed decisions about their retirement savings.
'ASIC wants to ensure that only those investors for whom an SMSF is suitable are advised to establish an SMSF and that our expectations around the standards of advice are clear.
'SMSFs are a key priority for ASIC and we will continue to target inappropriate advice about SMSFs in our surveillance work,' Mr Kell said.
ASICs information packs can be downloaded <a href="https://www.asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-192mr-asic-releases-guidance-on-smsf-advice/" target="_blank">here</a>.
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mick.cee-iDmgDDAmu8

ASIC offers to help SMSF investment advisers

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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
Conditions in the global economy are continuing to improve. Labour markets have tightened further and above-trend growth is expected in a number of advanced economies, although uncertainties remain. Growth in the Chinese economy is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Commodity prices have risen recently, although Australia's terms of trade are still expected to decline over coming years.
Wage growth remains low in most countries, as does core inflation. Headline inflation rates have declined recently, largely reflecting the earlier decline in oil prices. In the United States, the Federal Reserve expects to increase interest rates further and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and volatility remains low.
The recent data have been consistent with the Bank's expectation that growth in the Australian economy will gradually pick up over the coming year. The decline in mining investment will soon run its course. The outlook for non-mining investment has improved recently and reported business conditions are at a high level. Residential construction activity remains at a high level, but little further growth is expected. Retail sales have picked up recently, although slow growth in real wages and high levels of household debt are likely to constrain future growth in spending.
Employment growth has been stronger over recent months and has increased in all states. The various forward-looking indicators point to solid growth in employment over the period ahead. The unemployment rate is expected to decline a little over the next couple of years.
Wage growth remains low. This is likely to continue for a while yet, although stronger conditions in the labour market should see some lift in wages growth over time. Inflation also remains low and is expected to pick up gradually as the economy strengthens.
The Australian dollar has appreciated over recent months, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to the subdued price pressures in the economy. It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.
Conditions in the housing market continue to vary considerably around the country. Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney. In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following supervisory measures to address the risks associated with high and rising levels of household indebtedness. Growth in housing debt has been outpacing the slow growth in household incomes.
The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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Sydney housing prices are easing: the official September 2017 RBA Board statement

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Bentleigh East and Reservoir in Victoria are the busiest suburbs for auctions this week, with each set to host 17 auctions, followed by Mount Waverley (Vic) with 16 auctions, and Mosman in NSW with 15 auctions scheduled according to CoreLogic.
CoreLogic's latest auction market preview expects a slight increase in auction activity this week across the combined capital cities, with 2,086 properties scheduled to go to auction, up from last week’s final of 2,064 auctions held.
<a href="https://www.propertyobserver.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.22.41%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.22.41%20AM.png" alt="">
"Volumes have remained relatively steady throughout most of July-August, and have continually tracked higher each week when compared to the equivalent week’s last year, however while volumes are to increase this week, this will be the first week since early May where volumes are expected to be lower than what was seen one year ago, with results from last year reporting a slightly higher 2,153 auctions held," CoreLogic reported.
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"Across Melbourne and Sydney, the number of properties scheduled to go to auction this week is set to be higher than last week, with 1,039 and 760 auctions currently being tracked, increasing from last week’s 1,001 and 720 auctions held respectively.
"While the larger markets are to see an uplift over the week, activity across the smaller markets is set to fall by varying degrees, with Adelaide expected to see the most notable decrease in activity down by 32.7 per cent when compared to last week, followed by Tasmania (28.6 per cent), Perth (14.3 per cent), Canberra (10.3 per cent) and Brisbane (7.4 per cent). "
A four bedroom house at <a href="https://www.realestate.com.au/property-house-vic-bentleigh+east-126061058" target="_blank">6 Wolai Avenue</a>, Bentleigh East (above) will be auctioned for between $1.1 million to $1.2 million.
A three bedroom townhouse at <a href="https://www.realestate.com.au/property-townhouse-vic-reservoir-125994938" target="_blank">1E Black Street</a>, Reservoir (below) will be auctioned for between $600,000 to $660,000.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/25/1E%20Black%20Street.jpg" alt="">
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Bentleigh East and Reservoir set to be busiest weekend auction hotspots

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GUEST OBSERVER
Does the falling household saving ratio help to reconcile the disparity in consumer and business confidence?
A solid gap has opened up between business and consumer sentiment.  A falling saving ratio, which has supported household consumption in the face of declining wages growth, looks to be one of the important factors contributing to the disparity in confidence.  It may also help to explain why investment growth is soft despite strong business conditions and confidence.  
Overview
Confidence can be a powerful force. The sentiment of households and businesses regularly plays a role in shaping economic activity. Economists and policymakers often look at measures of reported confidence as forward looking indicators of consumption and investment. Right now, however, the surveys of business and consumer sentiment are sending conflicting signals. 
<a href="https://www.propertyobserver.com.au/images/2017/07/21/Screen%20Shot%202017-07-21%20at%208.19.39%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/07/21/Screen%20Shot%202017-07-21%20at%208.19.39%20AM.png" alt="">
A solid gap has opened up between business confidence (and conditions) and consumer sentiment (chart 1). The NAB business survey suggests that business conditions are at their highest level since 2008 while confidence is at an above- average level. In stark contrast, the WBC/MI consumer sentiment report indicates that household confidence is fragile.
In the past, there have been disparities in how consumers and businesses feel. But these divergences tend to be ‘ironed out’ over time and the results converge. This time around the disparity has persisted for an unusually long time.
In this note we attempt to reconcile why business confidence has been so buoyant despite consumers feeling downbeat. On the surface it’s easy to understand why consumers don’t feel good.
Real wages have fallen, household income growth is weak, debt levels are high and the labour market still has plenty of slack in it. As we covered last week, per capita measures of the economy suggest that there hasn’t been a lot a joy for households since the downturn of the mining investment boom.
We won’t go through the details again in this note other than to say that there is nothing unusual in the persistently weak monthly readings of consumer confidence. But what looks surprising, at least on the surface, is the reported high levels of business confidence. After all, non- exporting industries are selling goods and services to domestic households. And generally speaking, pessimistic consumers are bad for businesses because they  reign in spending.
We postulate that a falling saving rate, which has supported consumer spending, has helped to prop up business confidence and profits despite the household sector feeling gloomy and doing it tough. If we are right then the disparity can only persist until the saving rate hits a floor. At which point business confidence is likely to soften without a lift in household income growth. 
Why is business confidence high?
The two headline figures in the NAB Survey that relate to business conditions and confidence have posted strong outcomes in 2017 (chart 2). Business conditions hit a post-GFC high in June. And business confidence, which was a little softer, came in well above its long-run average level. According to the survey, there’s broad-based strength in the numbers because most industries have been performing well.
Some of the recent “hard” data helps to explain why businesses have had a much 
better time than consumers of late. The big lift in national income over the past year has largely been confined to the corporate sector as profits rather than spilling over to employee wages and salaries.
And unit labour costs are low because wage growth is weak (chart 4). This has kept a lid on the single biggest operating cost that businesses face.
Growth in labour market supply has facilitated this.
<a href="https://www.propertyobserver.com.au/images/2017/07/21/Screen%20Shot%202017-07-21%20at%208.20.57%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/07/21/Screen%20Shot%202017-07-21%20at%208.20.57%20AM.png" alt="">
 
Furthermore, the global economy has improved, which provides a boost to demand for Australia’s exporters. What is unusual, however, is that sales growth has been decent while the household sector struggles.
Why is consumer confidence weak?
It’s not hard to see why consumer sentiment is stuck in the pessimistic zone. Our note looking at the Australian economy on a per capita basis spoke to the heart of the matter. Namely that growth in living standards has stagnated and for some sections of the resident population, in particular younger people, it has gone backwards.
The trends in the data on wages (chart 5), real household income per person (chart 6), debt to income, and labour market spare capacity suggest that consumer pessimism is unlikely to lift in the near term. In fact, real wages growth may fall further into the red zone when the sharp lift in electricity prices finds its way into the headline CPI. This will naturally weigh on the consumer.
<a href="https://www.propertyobserver.com.au/images/2017/07/21/Screen%20Shot%202017-07-21%20at%208.22.16%20AM.png" target="_blank">Click to enlarge</a>
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Can the saving rate helps to explain the disparity?
The saving patterns of households can be a big driver of economic activity. The proportion of income saved influences household consumption which is worth 57 per cent of GDP.
In Australia, the saving rate1 has been falling since mid- 2012. This means that expenditure growth over that period has outpaced income growth. As chart 7 shows, household consumption growth has been pretty stable in Australia despite falling wages growth because the saving rate has come down.
There are two reasons, broadly speaking, why the saving rate may fall. First, consumers may feel good about the future and their personal finances which means they feel comfortable reducing the amount of income that is saved each period.
Alternatively, the saving rate may be falling so that households can maintain a constant level of consumption in the face of declining income growth.
The evidence suggests that it is the latter situation driving the recent decline in the saving rate. We know this because over the recent past, household income growth has slowed while consumption growth has remained broadly flat. And on top of this, consumer sentiment has been mired in the pessimistic zone all year.
We can therefore infer that businesses, at an aggregate level, have benefited from falling unit labour costs but relatively constant sales growth thanks to a falling household saving rate.
That means stronger profit growth, which lifts business confidence, all else equal. In the context of the above, we now have a better insight into the disparity between consumer and business confidence.
Of course there are other factors like firmer commodity prices which have boosted resources profits. But given the broad-based strength of the NAB business survey we think that the fall in the saving rate has played an important role in explaining the disparity.
<a href="https://www.propertyobserver.com.au/images/2017/07/21/Screen%20Shot%202017-07-21%20at%208.26.54%20AM.png" target="_blank">Click to enlarge</a>
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What does it mean for the outlook
If the savings rate stops falling, and it must hit a floor at some point, then household income growth and consumption growth will converge. Some of the consumer pain will then be felt by the business sector unless a meaningful lift in wages growth arrives that can propel consumer spending higher.
We don’t envisage that happening in the near term given the level of spare capacity in the labour market (chart 8).
Historically business confidence tends to be a good gauge of investment intentions. Higher levels of confidence are usually a precursor to a lift in capital spending. In this case, however, the strong confidence and conditions numbers have not generated a commensurate lift in investment. Again, we suspect that the consumer is playing a role here.
Many businesses will be aware that household budgets are stretched and that a falling saving rate has supported consumption. There has also been a lot of coverage recently on the level of debt that the Australian household sector is carrying.
As a result, it may be the case that expectations of future consumer demand are too low to justify a lift in investment at this point in time despite positive levels of confidence and conditions.
The upshot of this means that our monetary policy call looks more aligned with the consumer sentiment figures than what the NAB business survey is suggesting.
As such, we continue to see the RBA on hold well into 2018 despite a more optimistic tone in the July Minutes.
Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905">here</a>.
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Solid gap between business and consumer sentiment: Gareth Aird

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Lendlease has chosen architect firms, Foster + Partners to design the, Circular Quay Tower at 180 George Street, Circular Quay.
The roof structure is set to be 263m high and will feature a network of pedestrian laneways that criss-cross the site at different levels to connect the precinct. 
Mark Menhinnitt, Managing Director, Urban Regeneration, said Lendlease was impressed by Foster + Partners’ refined scheme that recognised the need for strong integration and activation of the ground plane, while ensuring the tower is a spectacular landmark worthy of its iconic location.
“Circular Quay Tower, to be located on a new internationally recognised address, will provide a dynamic workplace and environment for Sydney’s future generation of office occupiers,"
“Fronting the reinvigorated city spine of George Street with two new plazas, workers and visitors will be welcomed to an abundance of retail, dining and entertainment, and arts and culture."
Gerard Evenden, senior executive partner of Foster + Partners, said he wanted Circular Quay Tower and its surroundings to be of its place, taking advantage of its topography and unique location – a stone’s throw from Sydney Harbour.
“The tower will be the centrepiece of an urban regeneration precinct that will reshape the northern end of the CBD into a vibrant community contributing to Sydney’s status as a global city,” he said.
Local architectural firm, Stewart Hollenstein, has been selected to remodel the Jacksons on George site that promises to be an exciting transformation of the much- loved Sydney institution.
Lendlease held the design competitions following Council’s endorsement of Lendlease’s revised planning proposal and accompanying Voluntary Planning Agreement (VPA) in July 2016.
In December 2016, Lendlease confirmed Ping An Real Estate and Mitsubishi Estate Asia as development partners.
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Architects Foster + Partners to design Lendlease's new centrepiece at Circular Quay

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Construction has begun on what will become Australia’s largest Quest property, Quest NewQuay, in Melbourne's Docklands.
Quest NewQuay features apartment hotel accommodation and is marketed towards business travellers.
Councillor Arron Wood, Acting Lord Mayor of the City of Melbourne said this new Quest development at NewQuay is great news for the Docklands.
"It’s no secret that I am one of the most vocal advocates for the Docklands," he said.
"Tourism continues to grow and thrive in the Docklands and I have no doubt this new hotel will be at capacity when it opens.
Paul Constantinou, chairman, Quest Apartment Hotels said Quest NewQuay is in line with the company’s national growth strategy and reinforces its commitment to meeting the needs of emerging inner urban business centres.
“With Melbourne’s accommodation sector consistently receiving occupancy rates higher than 80%, Quest NewQuay’s location will be a highly appealing accommodation choice for visitors to Melbourne," he said.
"Being only 20 minutes from Melbourne Airport and connected to Melbourne’s CBD by a free 10-minute tram ride, NewQuay is well positioned to cater to Quest’s key customer, the extended-stay business traveller."
The property will feature 221 studios, one and two bedroom apartments and conference rooms, a business lounge, gymnasium and outdoor terrace with barbeque area. It is expected to open in 2019.
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Construction commences at Quest NewQuay

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Queensland's Hutchinson Builders has been chosen by Qingjian Group to build the Gold Coast 25 level residential development Northcliffe Residences.
Northcliffe Residences has sold $60 million in presales in the past 18 months..
Graham Goldman, Northcliffe Residences’ project director of Eastview Australia, said the appointment of Hutchinson Builders to bring the project to fruition was a major coup for developer CNQC.
Designed by architect Cottee Parker, Northcliffe Residences will offer luxury 75 one, two and three-bedroom apartments, a two-level penthouse with private rooftop pool and entertaining terrace, and four whole-floor sub-penthouses.
Residents will have private access to exclusive facilities at a stunning Beach Club equipped with a gymnasium, steam room, sauna, lounge, dining room, surfboard storage, and an infinity pool and terrace flowing directly to the beach.
For more information <a href="https://www.northclifferesidences.com.au/" target="_blank">click here</a>.
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Hutchinson Builders win contract for Northcliffe Residences, Gold Coast

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Harry Triguboff’s Meriton group has launched the first stage of its Sydney Olympic Park residential development The Retreat.
The development will feature more than 1200 apartments.
The Retreat is being built on a 5.17 hectare site at 5 Carter Street bought from the Goodman Group for $245 million two years ago.
The first stage will have two elliptical buildings. The North tower will be 22-storeys high and feature split-level loft-style designs, apartments with rooftop entertaining and barbecue areas and penthouses with four bedrooms and two bathrooms.
Harry Triguboff said The Retreat, being developed opposite the ANZ Stadium, is all about green open space, recreation and leisure.
“The Sydney Olympic Park precinct is a very exciting area and we are offering you an opportunity to purchase in the first release before we develop all four stages," he said.
“We have made sure at The Retreat that we provide residents with apartments, resort facilities, shops, a 113-place child-care centre and serviced apartments that complement and add to those attributes.
“We expect to finish the site in the next five years and once completed, we believe prices will rise considerably.
“The Sydney Olympic Park precinct is an idyllic choice for anyone wanting to escape the fast pace of life and more congested living of the city’s heart.”
James Sialepis, Meriton’s director sales, said The Retreat would be ‘in tune’ with the green atmosphere of the Sydney Olympic Park area and a perfect choice for new home buyers.
“The Retreat will have an extensively turfed 2500 square metre central park, with walking and cycling pathways," he said.
“On the third floor of stage one there will be podium gardens where residents will be able to barbecue, dine under cover, or just soak up the views.
“We’ve almost been caught off guard by the demand we’re experiencing for our projects with landscaped gardens and parklands, especially from families and first home buyers, in areas like Lewisham and Sydney Olympic Park.
“The Retreat will be the same and first home buyers will be chasing the great launch prices, with many apartments under $750,000.”
Sialepis said the first stage of The Retreat architects, the SJB group, had designed buildings with glass-faced apartments that capitalised on views across Bicentennial Park and the Parramatta River to the Sydney CBD and the harbour bridge.
Stage one of The Retreat has 149 apartments, some of them the biggest in the area, and they range from one-bedroom through to four-bedroom penthouses with rooftop terraces.
The apartments will start at $585,000 and peak at $2,800,000 for one of the split-level penthouses.
Stage one is expected to be completed by March 2019.
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Meriton launches Olympic-standard lifestyle haven

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Last spring, Secret Agent investigated the cost of rebuilding two period homes in inner Melbourne using current technology and materials. Our results below demonstrate that the prices paid for period property fairly represent the quality, history and scarcity of these types of homes in today’s market.
Using real examples of a Victorian terrace and an Edwardian house, we found that recreating these homes from scratch would cost at least $740,000 more than what you would pay for a genuine period home.
While it is possible to build a new home that imitates the defining features of Victorian and Edwardian houses, replacing period character to its full extent is almost impossible to get right. Note that the figures in the analysis of replacement values are conservative estimates only.
<a href="https://www.propertyobserver.com.au/images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.18.22%20AM.png">Click to enlarge</a>
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For more information, <a href="https://secretagent.com.au/">click here</a>.
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Why period homes represent good value: Secret Agent

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GUEST OBSERVER
The RBA left the cash rate unchanged at 1.5 percent at today’s meeting.
The recent data flow, coupled with RBA commentary, suggests the decision to leave policy unchanged was straight forward.
We have the RBA on hold at 1.5 percent throughout 2017 and well into 2018.
The RBA’s decision to leave policy unchanged today was no surprise. Governor Philip Lowe has made it crystal clear that concerns around rapid dwelling price growth and the level of household debt mean that the cash rate is unlikely go lower unless there is a sustained loss of momentum in job creation.
The strong, albeit questionable, March employment report has allayed fears at the RBA that the labour market was softening given the weakness in the February data.
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There was very little to gain in the way of new insights in today’s Statement. In our view, the most noteworthy change was around the outlook for wages growth. Lowe expanded on last month’s assessment that “wage growth remains slow,” and added that, “this is likely to remain the case for a while yet.” We agree given the significant amount of slack in the labour market (see here).
The Governor commented on recent developments in the labour market and noted that although, “the unemployment rate has moved a little higher over recent months, employment growth has been a little stronger.” He also added that, “the unemployment rate is expected to decline gradually over time.” In other words, the Governor views the recent lift in the unemployment rate as temporary. We agree and would add that it was driven higher by rising participation.
On inflation, the Governor noted that the headline QI CPI, published last week, was “in line with the Bank’s expectations”. And that, “a gradual further increase in underlying inflation is expected as the economy strengthens”.
The rest of today’s Statement contained only cosmetic changes compared with the April Statement.
The outlook
Our monetary policy call has the RBA on the sidelines in 2017 and well into 2018. We see jobs growth sufficient enough for policy to remain on hold. But the risk lies with another cut given very weak wages growth, below target core inflation and an expected further downturn in hard commodity prices. In our view, the recent additional measures announced by APRA to address risks in the housing market marginally lower the hurdle for another rate cut. In that context, market pricing, which implies a 13 percent chance that policy is eased again, is a fair assessment of the balance of risks.
The near term focus for the monetary policy outlook turns to Thursday when Governor Lowe will speak at a luncheon. The title of his speech, “Household Debt, Housing Prices and Resilience” – suggests the Governor will once again emphasise the RBA’s reluctance to cut the cash rate from here.
On Friday the RBA publishes its quarterly Statement on Monetary Policy (SMP). The Bank’s near-term GDP forecasts may be nudged up a little, but underlying CPI projections are expected to remain unchanged.
Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905">here</a>.
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Michael Crawford

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