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As August moves closer and <a href="/news/nsw/changes-to-nsw-strata-laws-delayed-after-stakeholders-demand-more-time">NSW strata laws look to be revised</a>, there has been much coverage of one controversial proposed change in particular. This is around a proposed law to require that only 75% of strata unit owners in a block need to consent to its demolition, compared to the current law that states 100% of strata unit title owners that must consent to the block being sold to a developer and demolished to make way for a new construction.
The proposed change will include guidelines to ensure that any unit owners not wishing to sell, but are the minority in disagreement, will be as comfortably compensated as possible and assisted with relocation within their new area. Even if the proposed change does not get passed it is interesting to see such a change to strata unit laws being put forward.
The significance of this change is really quite reflective of the scarcity and expense of land in the Sydney metropolitan region. The Department of Fair Trading is really thinking ahead with this proposed law change with a shift towards building ‘upwards’ versus ‘outwards’ – more apartments and units versus detached houses. It’ll effectively make it easier for developers to scoop up older unit blocks, demolish and redevelop them to make newer, prettier and higher density blocks.
Opinions have been heavily polarised by both industry experts and everyday Australians across blogs and news articles commentaries. So I thought I’d sum-up of the more significant community perspectives – both positive and negatives – on this proposed law.
<ul>
<li>Negative – Developers profiteering from artificially increasing suburb median unit values</li>
</ul>
The role of developers in acquiring these older blocks for demolition will always focus on their own profitability. Should a suburb see substantial knock-down-rebuild developments go up, prices may artificially increase and some existing area citizens may be pushed out of the postcode entirely.
<ul>
<li>Positive – Can encourage a more efficient use of well-located land space</li>
</ul>
Some argue that Sydney runs the risk of becoming like Los Angeles where the urban sprawl creates havoc for commuting and the overall liveability for metropolitan citizens. Sydney has an inefficient road network/design and does not offer the public transport connectivity across the metropolitan area that cities like Melbourne and Brisbane do. Encouraging higher density re-purposing of existing land spaces could help to curb this.
<ul>
<li>Negative – Overseas investors may create ownership monopolies</li>
</ul>
This could have serious consequences for the cost of living for Sydney unit renters. If it becomes easier for older blocks are to be redeveloped with greater unit density and these become open to foreign investors from day one, off the plan. Some opponents suggest overseas investors may create strangleholds on certain suburbs and this could again artificially increase both unit values and rental asking prices in these suburbs.
<ul>
<li>Positive – The 25% of unit owners in opposition could benefit more than they realise</li>
</ul>
If this law is passed, it’ll mean that unit owners and strata managers will need to work more closely together when tabling developer offers. Those who are resistant to selling out to developers may benefit from the groundwork done by the 75% of owners who are for it. All offers would need to be meticulously investigated both in terms of fair price and sellout gain potential, but also the risk of not selling out sooner and having less flexibility later on.
One example of this is if a developer was interested in two blocks side by side so they could redevelop the site into one large development. If the neighbouring block wants to sell and your block does not, the dual sale won’t go ahead. However, the non-selling block may suffer because future developers can now only develop one of the sites as opposed to two. Future offers may not be as great. In these situations, the 75% who want to sell can highlight the higher gain potential of selling now versus later to the 25% against it.
<ul>
<li>Negative – Where can the 25% who are forced out, afford to live?</li>
</ul>
Opponents to the 75% majority will be forced to sell regardless. If they are owner-occupiers and wish to maintain a similar lifestyle by living in the same postcode, they may lose out. It is likely that many blocks in that area are also being bought out, meaning there is less rental stock or affordable older stock for sale, that this 25% can find for a new home. Prices would increase due to the scarcity of stock available and the 25% may be in a worse financial position than staying where they are.
<ul>
<li>Positive – Replacing blocks with higher density could promote better infrastructure in an area</li>
</ul>
Some argue that if this law is passed a postcode may then experience a few years of mass knock down rebuilds which will make for a higher population coming in to a postcode. The local government will be capturing more council rates and spending it on the same geographic area of projects. This could result in upgraded sporting grounds, parks, libraries, and public schools, community halls and community/local disability programs; thus improving services and facilities for everyone in these postcodes.
<ul>
<li>Negative – Say goodbye to strata cost affordability</li>
</ul>
Even if an unwilling unit owner sells their unit and finds something in a newer block that they can afford based on the payout sum offered for their current unit, they may still struggle. This is due to strata costs. In my experience older blocks, even with their sometimes expensive maintenance costs, still offer strata fees much cheaper than newer blocks. Older unit owners often pay in the realm of $300 – $800 in strata quarterly, versus newer blocks which are typically $1000 – $1500 per quarter. Pensioners and older Australians who are not working full time could suffer, because whilst they may have no mortgage overhead any more, they may struggle to repay higher strata costs each quarter.
As for my view on the law: I do not have one yet. Currently the proposals are still only speculation and it will be interesting to see if the law is passed and what the final parameters will look like. 
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cmcevoy-Go82SmsJA9

NSW strata law changes: Do the positives outweigh the negatives?

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I caught up with a friend last night after she returned from a great holiday. As the conversation steered from cruise ships to saving money, she voiced her aspiration to purchase an investment property.
At 32 years old, I was thrilled to hear from someone so young – just shy of her 21st birthday in fact – who is already contemplating her financial security for later in life. I believe that the best executed plans in life are always those that are planned as early as possible. The thing about starting in property investing at a very young age is this: at just 20 years young, my friend will face a slew of challenges.
However, these challenges should not deter her. In fact, well-planned property buys at a young age can really expedite growth and gain for later in life. You just need to find work-arounds for the (many) challenges you will face.
Here’s a list of considerations for very young (under-25) aspiring investors.  
Identify whether property is the right investment class for you  
A property is a big commitment for anyone, but especially for a young person. I say this because between the ages of 18-25, young people are likely to have many lifestyle changes, and most of these will be unexpected. First are the financial ones: moving out of home, working part time if a student and earning a modest – and sometimes inconsistent – salary. Then there are the lifestyle ones: deciding to go backpacking for a year randomly, changing study courses or stopping/starting full time work for study reasons. Plus, as the busiest social years of your life there’s partners, friends and parties/adventures away.
What I’m getting at is this, it can be an unpredictable and inconsistent time in your life. Property investing best suits people who are disciplined and understand it is an ongoing commitment that requires focus. For this reason, investment classes that are less admin-heavy – such as shares, term deposits and managed funds – can be more attractive and a safer investment for first time younger investors.  
Managing your own expectations  
It’s smarter to do this yourself, because there will be many other parties (parents, lenders, solicitors, and so on) who will be the quick to serve you reality checks at every stage. This won’t happen as often and won’t disappoint or deter you, if your expectations out of an investment property exercise are more realistic.
At a young age it can be hard to distinguish between, say a pretty property that you ‘like’ because you think it’s a nice place to live yourself, with a property that stacks up well as an investment. Investing is not about that experience – that’s what home buying is for. No, investing is about numbers. Managing your own expectations on how you expect an investment property to look and feel, versus the reality of a property, is one of the first things you need to do.  
Savings, savings, savings  
Before you even consider budget and spend range; know this. For under-25’s and especially for under-21’s, a lender will want to see at least 12 months of consistent savings before giving loan approvals. Racking up credit card debts won’t look good either (though if you have one and are paying it off diligently, this might serve you well). Lenders want to see evidence of consistent savings efforts.
On this, it is worth considering some government savings incentives currently on offer for first home saver accounts. With these kinds of accounts you are rewarded with government contributions in proportion to the amount you contribute. Do be weary of the terms and conditions with these accounts, however, as some accounts have penalties or restrictions on pulling your savings out earlier than the term date for the accounts. Many lenders offer these kinds of saver accounts in collaboration with the Australian government. Here is <a href="https://www.infochoice.com.au/banking/savings-account/first-home-saver-accounts/" target="_blank">a great comparison site</a> for several of these saver accounts.
Be realistic about your budget
As an extension of the above point; it is unrealistic for an under 25 year old (unless they have managed to secure a very above-average wage for their age) to spend say $500,000 or $600,000 on their first property – home or investment. In fact; odds are most lenders will turn you down. Even if they didn’t, I would not personally spend that much money on a property at such a young age. It is too much of a commitment. If you are a teenager or in your early 20s I’d look at a maximum spend of $200,000 to $250,000 on your first investment property. Securing finance will be easier; and managing the property will be more realistic.  
This may mean you can’t afford your own backyard 
Based on a $250,000 maximum spend rate, you will need to assess where you can afford to invest. Odds are, if you currently live within a 20 kilometre radius of Sydney, Melbourne, or Perth, it’s highly unlikely you will be investing near where you live. Challenge yourself to consider towns and cities that aren’t your own, or even within your home state. The key to successful location-sourcing for investment properties is not simply in following trends of ‘hot suburbs’ reported in the media, but on suburbs where the sums add up to produce a viable investment prospect.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a href="https://www.propertycorrespondent.com.au/" rel="nofollow" target="_blank">Property Correspondent.</a>
                        
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Five tips for young aspiring property investors

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The house next door to the apartment block I live in, in Sydney’s inner west, went under the hammer last Saturday. The four bedroom house, on a small 450 square metre block, was very old and required a lot of work. It was passed in at $995,000, though will likely settle for over $1 million via a private offer.
Channel 9 News was there, reporting the coverage of what has been a very strong auction summer season in Sydney. Most market commentators agree that Sydney is currently in the boom – or peak as it is also known – phase of its property cycle. This has resulted in auction clearance rates remaining fiercely strong; amidst some of the most competitive interest rates on offer in many years.
So I thought I’d look at purchasing investment properties at auction, versus private sale. But first, let’s take a step back and identify why some properties go for auction, whilst other properties are advertised at a set price, for private sale.
Top reasons why properties go to auction:
<ul>
<li>
Property type. If the property is unique or a rarity for its area, the true value may not be clear. Owners may hedge their bets that an auction might drive a better sales price. Properties needn’t be hugely different or unique either, to set them apart. 
</li>
<li>
In smaller markets or postcodes where there have not been many comparable recent sales, owners may benefit from may also be a better environment for auction instead of private sales
</li>
<li>
Sometimes auction can be the preference to hasten a sale. Listed-price properties on the other hand, can risk spending too much time on the market if priced incorrectly. Then, in this digital property age we’re living in, the property appears month after month with the same list price, and buyers avoid those online listings like the plague. They do this for three reasons; firstly they assume the property has been purchased already and the listing hasn’t been updated. Secondly, property buyers think there is something seriously wrong with the property, and last of all, the market knows the property is incorrectly priced. Auctions avoid this from happening.
</li>
</ul>
Top reasons why properties are listed for private sale: 
<ul>
<li>
Owners who understand the likely true value of their property in relation to others may prefer to set a fixed sales price. Even if this is negotiated slightly during the sales process, fixed asking prices help property owners who need the security of a more precise sales price early on
</li>
<li>
In areas where an owner is selling a very common property type. For instance, say if over 80% of housing stock in your suburb are two bedroom, one bathroom, no parking apartments and your apartment is this exact same specification, the maximum likely sales price is likely very evident based on so many similar recent sales.
</li>
<li>
The jury is still out on this one, but some property sellers argue that fixed list price properties sell faster than auction properties. This is because if the seller has unrealistic expectations at auction and is not willing to sell for anything less; there may be several ‘passed in’ auction results over numerous months before a sale is identified.
</li>
<li>
Non-auctioned properties tend to attract more genuine seekers. It is said that some 70% plus of attendees at an auction are either nosy neighbours – much like myself today – or property buyers just doing their research and not seriously entertaining the idea of bidding on it.
</li>
</ul>
Bringing this in to an investor context, in my experience I’ve generally avoided properties going to auction. Here’s why:
I don’t typically consider ‘rare’ or ‘unique’ properties for investment
Regardless of the property type I am purchasing – be it house, semi, townhouse, apartment – I rarely would look for properties that are unique or substantially different from the status quo of that suburb.
This is because, as investors, it is not in our interest to do so. We’d rather hedge our bets on a property type that is high demand, so that we know it’ll always be desired by renters. This helps avoid the risk of vacancy (which can crush an investors’ bottom line if months and months of vacancy occur)
 
During due diligence phases, I find non-auction properties that deliver more ticks on my shopping list
This extends back to property investment 101: Do your due diligence on your chosen suburb to make sure the property type you are buying, is the type that renters are wanting the most.
Financially, auction properties just do not stack up for me
As investors we are driven ultimately by the bottom line. Financially, there is added risk to buying investments at auction.
Another investor 101 tip is this: You should never go looking for investment properties before you’ve calculated how much you can spend. You’d be surprised at the number of beginner investors who ignore this cardinal rule!
Not only should you know your budget, but you should have your deposit amount calculated and your pre-approval set already (so you can move quickly when you need to).
Deceptive agents can set investors up for disappointment
The other reason I avoid auction is timeliness and, well, real estate agent lies! Agents frequently low-ball the expected sales price, in the weeks leading to auction in order to get more foot-traffic on the day.
Let’s say you’ve done your research as mentioned about, and you’ve calculated you can buy a property to a maximum buy-rate of $320,000. You speak to an agent about an auction property where they agent feels it’ll end up at the $300,000 mark. You think to yourself: "Great, I can confidently go, maybe even bid a little higher than $300,000 and still be in-budget, and possibly win this property." Alas you get to the auction and the auctioneer calls for an opening bid of $340,000!
Already it is beyond your budget, and it only adds insult to injury when the romance-enthused home buyers (who you are also competing with at auction), bid with their heart about this and the property goes for $370,000.
Worse still, you’ve wasted weeks of research and due diligence, and you are now back to square one. It’ll be weeks before you’re ready to bid on another property at auction
Property investment is not about the romance people develop with their ‘dream home’. As investors we do not live in these houses, nor are we likely to. Auctions tend to attract head strong and heart strong buyers who have fallen in love with a property. This wildcard addition to the sales process usually only ends up benefitting home buyers, whilst hurting investors.
I am aware there may be other views on buying investment properties at auction, but in my experience, steering clear of auction properties in the best step investors can take to minimise risk and expedite property purchases.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://www.propertycorrespondent.com.au/">Property Correspondent.</a>
                  
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Why I don’t buy investment properties at auction

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1) Get savvy with the latest online tools.
Identify the online tools that will add value to either your property investing skill sets, to your portfolio, or both. There are so many little online ‘life hacks’ available to investors. For example, and this is only the tip of the iceberg, but consider tools like DSR walk score calculators, Zillow.com, Real Estate View, RP Data, loan repayment and stamp duty calculators, and so on.
2) Network digitally with your comrades.
Don’t treat them as competitors, but rather allies. In this social media age there is no excuse not to be able to find like-minded people you can learn from. That’s how I started out years ago, by connecting with people on the Somersoft forums (which I still maintain is one of the best online property investment communities in Australia).
You may be able to engage with experienced investors who may have a better understanding of a particular concept or a more specific property investing topic. LinkedIn offers excellent community groups with real-time conversations happening on the daily. Twitter is intelligent too; once you establish a group of investors and influential property people you follow (and a few follow back), Twitter’s engine will go out and find more of those types of people for you.
3) Attend events and talks.
Don’t just rely on online communities, look at attending events such as the Home Buyer and Investor Show, and also local property investment shows and seminars. Just be able to discern between an unbiased third party seminar on a topic and a property development spruiker trying to sell their wares.
There is actually a great online site called Meetup.com, where you can meet like-minded people in life – related to any interest. The idea is you join a group but they regularly meet up in person to share their passion. I’ve done this for things like tennis and surfing, but there are groups that meet up in pubs and cafes – who are also investors like yourself! You can learn so much from each other in this way.
4) Read. A lot.
I know I have previously written about the challenges of ‘analysis paralysis’, however I still think it is so important to read a lot.
Approach every article, book, magazine, or online blog post – no matter the property-related subject of it – with a view of ‘how will this trend/tactic/design style etc. pay off in terms of my overall return? If you don’t think it will – stop reading that content and move on to something else!
Investors, like so many people in life, form bad habits. Read content from more sources – books, magazines, websites, forums – to better inform yourself. Over time you will also find better quality content specific to what you are looking for.
 
5) Have an open mind and flexible approach
Unlike most things in life where the mantra is ‘it’s not about the destination, but rather the journey’, property investment is the complete opposite.
It’s the other way around. It is entirely about the destination, that being your financial future and security.
Where am I going with this? Have an open mind to property types and locations that, despite your initial distaste when considering them, actually stack well from an ‘end game’ numbers perspective.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://www.propertycorrespondent.com.au/">Property Correspondent.</a>
 
 
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Five tips to become a better property investor

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Recently, we identified <a href="https://www.propertyobserver.com.au/landlords/holiday-and-short-term-rentals-does-your-property-fit-the-bill/2014012867387" target="_blank">new ways to rent out your investment property</a>, via the likes of Airbnb. Though this strategy will not work for every property, there is clearly opportunity to be had in renting your apartment with this approach.
Property Correspondent has since contacted a friend who has shared some top line stats of his experience.
Is it worth it? 
We asked our friend, who owns a modest two bedroom unit in the inner west of Sydney (within 5 kilometre access to the CBD; Balmain area) about his experience with his unit because he’d rented it out in the tradition way for a number of years, before converting it to an Airbnb property recently.
Here’s some rough apples-for-apples comparison numbers for his first year of operation:
Pre-Airbnb:
<ul>
<li>
Rented on a standard lease at $620 per week: $29,760 annually
</li>
<li>
Real estate agents’ management fees of 6% of rental revenue: $1,785.60 annually
</li>
<li>
Maintainance &amp; repairs allowance: $1,500 annually
</li>
<li>
Total actual revenue: $26,384.40
</li>
</ul>
Post-Airbnb:
<ul>
<li>
This example assumes an average of 5 out of 7 nights per week of rental occupancy.
</li>
<li>
There were several initial up front costs:
</li>
<li>
Initial cosmetic ‘light’ renovation (simply paint and new carpets) – $1,400
</li>
<li>
New furniture (master suite, 2nd bedroom suite, washer/dryer combo, ironing equipment, kitchen cookware, utensils, fridge, lounge, coffee and dining tables, side tables, art/decoration, TV/AV/Internet facilities, linen) – $7,600
</li>
<li>
Security key installation – $110
</li>
</ul>
Then there are administrative running costs that needed to paid on a regular basis, so I’ve calculated these as an annual figure:
<ul>
<li>
Airbnb listing costs (nomimal): $100 annually
</li>
<li>
Housekeeper costs: $200 per week, so $10,400 annually
</li>
<li>
Maintainance products (Cleaning products, soaps, shampoos, handwash, toilet paper, kitchen towel, perhaps a welcome gift each time. My friend joined Costco for about $50 and buys all of this in bulk once per quarter): $3,800 annually
</li>
<li>
Property maintainance and repairs (Year #2 onwards only): $2,500 annually
</li>
<li>
Nightly commandable rent rate: $230
</li>
<li>
Total rental revenue ($215 x 260 days): $59,800 annually
</li>
<li>
Total annual expenses (Year #1): $23,410 annually
</li>
<li>
Total net revenue (Year #1): $36,390
</li>
<li>
Total net revenue (Year #2 onwards): $43,000
</li>
</ul>
Of course, both ‘revenue’ figures will then require strata, water, council rate, tax and other additional property operating expenses furhter to those listed above. I asked my friend if there were any horror stories thus far in his experience. His feedback was that problems were minimal, providing that he was always contactable and available, and he screened his tenants carefully.
He did mention a couple of incidents where the tenant had clearly had parties, requiring additional housekeeping costs. Additionally, there were instances where tenants had lost keys. Although the tenants paid the key/lock replacement costs out of their bond; it did cause the property to be out of action for more days than expected, resulting in future-booked tenants having been cancelled. As you could imagine, this did not help his review ratings at the time. These were just a handful of little bumps along the road that he is still discovering.
This case study highlights the profit potential for renting an entire property out. What is missing is the ‘human’ cost – of your time commitment – in running the property for twelve months. There is also the opportunity to live in a two bedroom property yourself, and ‘Airbnb’ the second room out at a reduced nightly rate. However, investors need to be mindful of tax implications in producing rental revenue from their owner-occupied home.
Still, it may well be worth it. If instead of renting your second room for say $250 per week, you could get someone in at least four nights per week, for say $90 per night ($360 per week minimum), you’d be well ahead. An added benefit would also be that you’d only have a flatmate for four to five nights per week.
Australian investors are best served to keep this in mind when considering this approach to renting out their properties.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a href="https://www.propertycorrespondent.com.au/" rel="nofollow" target="_blank">Property Correspondent.</a>
 
 
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Holiday and short-term rentals: Do the finances stack up in a real life case study?

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If your investment property is in a highly desirable location, you may want to explore alternative ways to rent it out. It is common in some mining towns throughout Australia, northern USA and southern Canada to rent out properties at nightly rates, for near-ludicrous rental returns. These properties can command such high rates and rental structures due to their remote location and general lack of housing stock required to house the growing mining industry working population.
For those not familiar with <a target="_blank" href="https://www.airbnb.com.au">Airbnb</a> and <a target="_blank" href="https://www.flipkey.com">Flipkey</a>, it is worth visiting both websites to educate yourself on these enormous global rental listing sites.
In short, both services enable property owners to rent out their property, fully furnished, at nightly (or sometimes weekly/monthly) rates, direct to their tenant. For well located and well serviced properties, the profit possibilities are far greater than the conventional way of renting a property out in Australia (i.e. via a real estate agency who sources a tenant who pays a fixed rental rate for a six or 12 month term).
I actually recently returned from a trip to Hawaii where I enlisted both of these services, as a holidaymaker/short-term tenant, and was very pleased with the entire experience.
Introducing this for an investment property in a non-resources town location however, can be quite challenging. There are two major components that you must carefully consider components to doing this.
Location and property type – Is your property relevant?
You should consider all of the following before offering your property for rent on such services:
-          First and foremost, if your property is a unit and not a house, you need to check with your strata committee the rules on operating your investment property in such a way. Some building strata by-laws will not allow for an Airbnb-style approach to tenancy.
-          Location needs to be genuinely awesome. The two major users of these services are holiday makers and travelling business people. Short-term student stays would arguably be the third user persona. All users have a high expectation that the property is in the best location to either enjoy their holiday hotspots, commute to business meetings and offices, or close to the campus or facility where their student program will be based.
-          Users also have high expectations regarding the quality of the property and features. Holidaymakers do not want to spend time in anything less than a property that, well, makes them feel like they are on holiday. Similarly, travelling business people expect to pack less in their suitcase and have everything they need, laid out for them.
-          So, cheap second-hand furniture bought from Gumtree likely will not cut it.
-          In line with the above, this means that properties will need to have fresh linen either fitted or neatly presented for the tenant (towels, sheets, kitchen cloth).
-          AV facilities should include TV/Blu-Ray player/stereo/free wi-fi internet access. Additionally, a folder that serves as a local guide is also a smart move. Include local restaurants/attractions, directions to transport and fun things to do, in the folder.
-          Tenants expect a fully functional kitchen stocked with quality working applicances. If parking is possible, instructions for how/where they should park their vehicles need to explicitly laid of for them.
-          A bit of a wow factor. This is important as negative reviews online will hurt your continued success on the service. Future users simply won’t book. In this way, it is typical to see welcome champagne/chocolates with a nice welcome card for tenants, sometimes fresh flowers, and sometimes a cute ‘guest book’ where tenants can read about the previous tenants holiday trips.
-          Other handy tips to help make your property a more unique and special experience to consider would be a little bowl of local spices or products in the kitchen. For international travelers, you’d be surprised at the positive response to supply local delicacies such as Tim Tams, Vegemite, or Manuka Honey can provide. You can even go one step further and leave a note requesting a positive review if they’ve enjoyed the place/service
 
Service commitment – Do you have the required ongoing time spare to commit to it?
To commit to ongoing, often daily, changeover of tenants, you need to have your property serviced frequently. You can either do this yourself, or hire the services of a maid/housekeeper, which is an additional operating cost. These are just some of the many considerations to keep in mind. All of them obviously add to the time you will be spending managing this property:
-          Security maintenance. Typical setups usually enable tenants to access a little pin-coded lockbox on the exterior of the dwelling. Inside are house keys. When they leave/check out of the property, they simply put the keys back in and pin-lock the little box. Tenants will never meet the next tenant, so this is how keys/access is usually passed along. You may be up for upfront costs to install such security necessities.
-          Above mentioned maid / housekeeper costs. Typically, Airbnb properties are run where the tenant(s) check out by 12pm, and the new tenants check in no earlier than 3pm, allowing a three hour window for the housekeeper to come and perform a set roster of duties. You must set the roster and practice it through with the housekeeper prior to the first tenant stay. 
-          Site listing maintainance. Not only do Airbnb service costs need to be taken into account, but keeping the listing up to date and securing as many positive reviews as possible, also requires significant time investment.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://www.propertycorrespondent.com.au/">Property Correspondent.</a>
 
 
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Holiday and short-term rentals: Does your property fit the bill?

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It has practically become a national pastime for Australians to remark on just how expensive the property market is in this country. Be it BBQs, social functions, or even over a casual drink after work, affordable housing is always a hot topic of conversation. The reality is that be it purchasing a home that ticks all the right boxes, or securing an investment property that is affordable while still offering strong a return, property ownership remains a costly affair for many.
Even saving for a deposit can be a disheartening affair. Take lender’s mortgage insurance, for example. It is arguable one of the most unnecessary and wasteful expenses that a home or investment property buyer can.
The key issue when it comes to affordability however is not the cost of housing, but rather the cost of land. That is what you are really paying for when purchasing most properties. Land in highly desirable areas is very expensive because it is a scarce resource. This is because all but one of our capital cities are coastal, built on harbours, peninsulas and river fronts. Add to that the extensive urbanisation of our overall population, and all of these factors reduce the volume of available land to build more housing stock, where dwellers need it most.    
I believe the biggest oversight is neglecting to effectively manage the value of land throughout our capital cities. Instead, more effort has been focused on reducing construction costs.    
This is ridiculous for two reasons:    
1) Take an average three-bedroom Sydney house on a modest block (450 square metres), within a 15 kilometre radius of the CBD. You’d be looking at say $900,000 minimum to buy that property. But the land value of that parcel is more likely to be $600,000+. What good would it do for the buyer, then, to attempt to reduce the $300,000 portion of the cost for the dwelling, down to say $250,000? Overall the buyer would still be paying $850,000 for the property.
2) The impact on our construction industry, which has been hurt in recent years and only just recovering again now. Making construction and development companies less profitable will encourage them to want to build less projects, since their margins are not as great. Punishing the construction industry will only stress affordable housing concerns, and not ease it.
The Australian government has, at both federal and state levels, initiated programs in recent years to ease affordable housing challenges throughout the country. Take for instance the introduction of the National Rental Affordability Scheme (NRAS) in 2008. Almost 50,000 entirely new residential dwellings were constructed since the introduction of the scheme. The aim was to build housing in the most needed and desirable locations – so mostly throughout CBD areas of capital cities – and to make it affordable and accessible to the rental markets who needed it most.    
The government called on investors to buy into these developments and enter into a minimum 10 year arrangement. More information on how the NRAS scheme works can be found <a target="_blank" href="https://www.originalpropertybrokers.com/index.php?page=57">here</a>.    
The problem with the NRAS scheme though is that is merely a Band-Aid fix to a bigger land value issue. Making physical dwelling construction costs more affordable is not really a viable solution here because it is the high land value that will see these properties become just as unaffordable once the decade-long investor ‘ownership’ scheme ends. Furthermore, encouraging investors to buy these properties should raise affordable housing alarm bells, as investors will be pursuing values growth more than anything else.
This is the real crux of the broader affordable housing crisis that much of Australia is facing, and I believe it is all entirely related to our near-unique demographic position.
You’ll note I mentioned ‘near-unique’ above. If you compare Australia to a similar market, Canada, you’ll see that the two countries have more in common than just having an affordable housing crisis. Like Australia, Canada is a geographically massive country with a comparatively small human population. In fact, <a target="_blank" href="https://data.worldbank.org/indicator/EN.POP.DNST?order=wbapi_data_value_2011+wbapi_data_value&amp;sort=asc">according to the World Bank</a> (see link below), out of all the countries on Earth, Australia is the fourth least densely populated country in the world. Canada is ranked 10th. 
This means that with a low population of working age people (which will shrink as the baby boomer population moves to retirement in both countries) being available to ‘run’ the country, it will become more expensive to maintain the quality of life in these countries. This will push up land values over time. This has direct and indirect consequences for land values. In both Australia and Canada, there are only a handful of major cities that present as genuine employment hubs.
By no means am I about to paint a bleak picture here, however, as values could improve if the population continues to shrink after the baby boomer generation passes on. Effectively, there would be more properties then available to a smaller population, and this would make dwellings more affordable.
So yes, affordable land is needed, and it almost seems a farce that spare land is something Australia offers in abundance. So what’s the problem, right? If Australia’s population distribution had evolved to be more like a smaller-scale version of say China or the US; where the population is pretty evenly distributed around dozens of smaller size cities versus being clustered in just a handful or less of larger ones, like Australia, Canada, Brazil, and Russia; then affordable land would be less of an issue.    
Imagine if Australia’s cities were like this: Brisbane, Perth, Adelaide and Canberra were the same as they are, but instead of having Sydney (4.6 million people) and Melbourne (4.1 million people), we had lots of smaller cities in NSW and VIC instead.    
For example, in NSW, say Sydney was only 1.6 million people, then Port Macquarie was 1.5 million, and Wagga was 1.5 million, and in VIC, Melbourne was 1.5 million, Mildura 1.5 million, and Bendigo 1.5 million. Land would be infinitely more affordable because, well, there would be more of it to go around, spread across more medium-sized cities, versus two large ones.    
Sadly, our population is not spread out in such a way, and unfortunately this means that demand in our larger cities will continue to keep land costs high, and thus affordable housing will remain scarce.    
Although there does not appear to be any easy solutions to the problem, I believe a potential one is to consider satellite cities on the outskirts of major capital cities. In these kinds of locations, land values are lower, yet access to CBDs can still be feasible within say a 90 minute travel time.    
For CBD commuters this likely won’t be viable, however it is worth keeping in mind that the job you may have in five to 10 years may not even require you to commute to a CBD to do it! Australia’s workforce is embracing technology more and more. Although this is in the pursuit of greater work efficiency and not affordable housing; I believe Australian mortgage holders may be a beneficiary.
If innovation continues to evolve and the trend to negotiate more ‘work from home’ days continues, I believe many urban Australians will begin to reconsider why they are continuing to hole themselves up in an expensive ‘rat race’ shoe-box apartment, when sub-90 minute travel time coastal house may be more feasible with their new work schedules.
It will be interesting to see if this trend picks up speed in the coming years.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://www.propertycorrespondent.com.au/">Property Correspondent.</a>
 
 
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Land values are the crux of affordability, and there's no easy solution

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As politicians debate the pros and cons of building upwards versus outwards, Australia continues to follow the international trend of building taller buildings.
In modern architecture, taller inner-city towers are able to drive greater cost and space efficiency whilst also including better environmental and green benefits. Though there are a number of down sides – shadow casting, vehicle and human traffic congestion, and flight path and noise challenges – taller towers can solve more problems than they create.
Despite this, Sydney city council imposes a building height limit of just 230 metres throughout the CBD for all residential and commercial towers. Not only are other capital cities around the country taking advantage of this; but suburbs and employment hubs through Sydney’s suburbs are too.
Developers understand that height restrictions imposed in the CBD will increase office and residential costs over time, as demand will outstrip supply, so they have been shopping their proposals elsewhere. And, it is working.
Just 20 kilometres from Sydney CBD lies Parramatta, Sydney’s ‘second CBD’; soon to be home to not only Australia’s, but the southern hemisphere’s largest residential tower. At 336 metres tall, <a target="_blank" href="https://en.wikipedia.org/wiki/Aspire_Parramatta">The Aspire Tower</a> will not only be the tallest residential building in the southern hemisphere; but the tallest building of any kind in the hemisphere. Aspire forms part of a multi-tower, massive scale <a target="_blank" href="https://www.parracity.nsw.gov.au/your_council/news/CBD_redevelopment">redevelopment of the Parramatta CBD area</a>; driving more businesses, residents, and wealth creation into the surrounding area.
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Melbourne and Brisbane are also eclipsing Sydney in tower heights. Melbourne has several stumbles, with both the Australia 108 Tower (388 metres), and 555 Collins Street Tower (404 metres), cancelled indefinitely. The most likely project for approval though is the 250 Spencer Street site, with current plans at 300 metres in height.
Brisbane is also building two towers; 222 Margaret Street, and 300 George Street, each standing 274 metres in height. The Infinity Tower, which completes construction in 2014, will be 249 metres tall, slightly shorter than its original 294 metres plan.
Sydney Mayor Clover Moore has commenced a building height restriction <a target="_blank" href="https://www.propertyobserver.com.au/https://www.altmedia.net.au/sydney-left-behind-on-building-heights/70773">review</a> for the CBD/City of Sydney area; approaching the issue of building size from an economic output perspective, to ensure Sydney remains competitive.
For Australian home buyers and investors, the issue of building heights is one that must be considered carefully during your due diligence phase. Nobody has a crystal ball and though it is impossible to know what the rules will be in five, 10, or 20 years’ time an awareness of emerging projects in the short term will help you buy better.
One of the best things to keep an eye on is council land re-zoning. This can occur anywhere in Australia, but when it occurs metropolitan city inner, middle, and outer ring suburbs, it almost always will be a rezoning to enable greater building density, not less.
Australian urban development is trending more towards ‘higher density vertical living’ a la New York, Singapore, and Sao Paulo; and away from ‘low-rise high density’ growth, such as cities like Paris,  Washington DC, and Prague.
Regardless of your view on this trend, property buying decisions in our major cities needs to occur with a solid understanding of this shift in mind.

<hr>
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://www.propertycorrespondent.com.au/">Property Correspondent.</a>
 
 
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A tall order: Australia's new wave of skyscrapers may not be where you think

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With Australia’s capital cities being home to some of the world’s most expensive rental properties, it is no surprise that overcrowding is a serious problem that many investors face. This is a serious problem in many Australian capital cities, as housing costs increase and supply of affordable property fails to meet demand levels.

Overcrowding of apartments, houses, and other property types occurs for a plethora of reasons. Some of these are profit-driven, others more situational and/or socio-economic. Whatever the reasons a tenant has for overcrowding a property they are renting; landlords suffer the ramifications of this.

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Just about everyone has heard a story or has been directly involved – perhaps as a landlord – in a property overcrowding situation. I’ve heard so many horror stories here in Sydney from friends, colleagues, and readers about overcrowded apartments. One friend, a fellow investor; discovered that after six months of a 12-month lease; his three-bedroom apartment was being permanently occupied by nine adults.

Many Australians who have ever lived in inner-city areas have heard stories like ‘that apartment on the other side of my building back in my uni days that only had two bedrooms, but had eight people sleeping on mattresses in it!’.

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Some investors may have a mindset of ‘So long as the rent is being paid, I don’t care what happens in the property’. However, savvy investors know why overcrowding must be stamped out, otherwise they can be personally liable. Here’s why and how overcrowding can hurt investors:

Fire safety

-          Say you have say a two-bedroom apartment and you rent it out to just one or two people, whose names are on the lease. If there is a fire where injuries, or worse, fatalities occur, and the investigation reveals that several adults were occupying in the property at the time, insurances are likely not to be paid out.

-          This results in oftentimes crippling losses for the investor, as they are forced to either repair and renovate the apartment at great expense; or sell the apartment at great loss in order to consolidate their losses.

Property damage

-          A less severe but just as important consequence of overcrowding is property damage. This is worse for landlords of houses, however unit and townhouse investors can still suffer. I’ve heard of horror stories for house investors where tenants have ripped down walls, or added their own walls to create more bedrooms to fit more people.

-          With so many people living on top of each other in cramped spaces, carpets, walls, and appliances will get warn out much faster than regular properties.

I dug a bit deeper to find out the major reasons why properties in Australia, and in particular, in inner-CBD located properties, are prone to overcrowding:

Poor housing affordability

-          This is a huge issue not just for Australian-born citizens, but those who are new to the country, as well as international students.

-          Share houses and apartments are becoming increasingly popular in middle to outer-ring suburbs to help curb affordability issues. This is happening not just with the ‘young student’ population that most would imagine would live in this way, but with young professionals, and even mature friends living together to keep costs down.

-          However in the CBD areas, the rarity of three to four bedroom properties that can be affordably shared, means that smaller apartments can suffer overcrowding as a way to keep costs down for renters.

Proximity to centralised transport nodes

-          Those who are new to the country are also less likely to drive a car, and combined with the desire to live in the heart of a CBD or close by, to allow them to be close to work, whilst still affording the expensive rent, sharing a room in an overcrowded apartment or boarding house may be the most viable option.

-          This is also related to time efficiency. Those new to the country or international students are sometimes working two or more jobs, and this means they don’t have the time to waste on commuting from cheaper, outer-ring suburbs. Instead, it is more ‘efficient’ for them to live within minutes’ walk to the best-paying job prospects; and these are usually located close to CBD areas.

Illegal profiteering

-          Unlike the abovementioned reasons, this one is more sinister, and highly illegal. Some profiteers ‘prey’ on those who either cannot get a lease of their own, or are new to the country and there are language or other barriers that prevent them sourcing a property legitimately. This unfortunately includes illegal arrivals to the country.

-          These people will rent out large apartments and houses in prime locations from real estate agents, and then then illegally sub-let the property for profit, overcrowding the rooms as much as possible.

-          For example; a ‘tenant’ may pay $800 per week to rent a four-bedroom, well-located apartment, but may fill each room with two or more beds, and charge $150 per bed, per week, turning a profit weekly from the revenue

So what can you do to prevent overcrowding, and how can you tell from the outside if a property has too many occupants?

Get the best managing agent money can buy

-          A highly competent agent will never allow overcrowding to occur. This happens because they are conducting regular routine inspections of your property.

-          However, the best agents are almost like detectives for that. An overcrowded property; with enough notice period prior to a routine inspection, can be made to ‘appear’ it is not overcrowded, however savvy managing agents will be on the lookout for any evidence that the property is being occupied than more adults than those listed on the lease.

Be aware of strata by-laws in your state or territory

-          How many people is too many, in a property? You need to investigate what the strata by-laws are for units and apartments in strata-managed properties; as well as what the law states for houses that are not part of any strata management.

-          There are mild variances from state to state. For instance, in NSW, where overcrowding is a severe problem due to weak affordability for renters, strata-managed building now stipulate no more than two adults per-bedroom, per-apartment. This means in a one bedroom apartment, only two adults are allowed.

Tenant screening in the beginning

-          Ensure that the applicant(s) you choose to allow to rent your property have been properly screened by your managing agent.

-          If you have any doubts, it is appropriate to ask to see references and/or a tenant ledger history from your agent. Red flags to look out for include a history where the tenant(s) have not stayed in one property longer than a year (over a long period of time), or of course any black marks against their name in their rental history (such as reports of damage, tribunal hearings, and so on)

Local council and student council awareness programs

-          To help prevent international students being taken advantage of, by illegal profiteers, most CBD campuses of universities around Australia give information about overcrowding as part of student orientation and on boarding processes. This helps to prevent students being taken advantage of.

-          Local councils in densely populated local government areas also investigate reports of overcrowding. If you suspect neighbouring properties near where you live, or where friends live, are overcrowding the rooms, it is best to report them.

-          This in turn helps to combat the issue head-on. The knock on effect is then a more spread out human population throughout capital cities, and this is good for the health of all residents in big cities, because city resources and services are more evenly and fairly distributed for use to all occupants.

Have your agent ask the neighbours

-          As an investor, it is hard to keep an eye on your place when you are not actually living there yourself. This one comes back to having a good agent on board. If there is suspicion that a property is overcrowded, ask your agent to check things such as:

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<li>
	Neighbour observations. If neighbours notice lots of people regularly coming and going from the property, this could be an indicator.
	</li>
	<li>
	Rubbish share. If the property is a unit and is producing ridiculously high volumes of rubbish contribution to the shared bin areas, this is another indicator. With houses, asking neighbours on rubbish volumes is also a possibility.
	</li>
</ul>
As an investor it is vital to protect the financial prosperity of your property, and overcrowding is one of the nasties to be conscious of. Knowing how to detect if it is happening in your property; what to do if it occurs, and the potential legal consequences of not doing anything about it is an important piece of the investor success puzzle.

 

<hr>
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a href="https://www.propertycorrespondent.com.au/" rel="nofollow" target="_blank">Property Correspondent.</a>

 

 

 
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Overcrowded properties: Why it happens and how to stop it

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It was reported recently in October 2013, the NSW state government made the largest monthly windfall on stamp duty since it began recording such data trends back in 2005.
With over $350 million collected in the month of October, stamp duty is unquestionably one of the biggest revenue raisers for NSW.
However, we shouldn’t get too carried away with what, at face value, appears as a larger than usual money-grab by the state government. The increase in stamp duty revenue also needs to take into account some other market factors, such as near-record high auction clearance rates for the months of August, September, and October of 2013. It is within these two to three months that the state government’s stamp duty tax windfall reported, would have been derived from.
It is safe to call a spade and spade and realise that in NSW, higher than usual auction and private sales data – and thus higher volumes of stamp duty collection as a result – is an indication of renewed buyer and market interest in residential property.
And hey, why wouldn’t there be?
The current property market climate has been something of a perfect storm for home buyers and investors alike in recent months. This is especially evident in NSW. Though housing affordability challenges continue to persist, there are just too many well-received positive factors at play that are stirring home buyer and investor market activity. These include:
-          Some of the lowest interest rates on offer of all time
-          Not only are rates low, but some of the most competitive and cost-efficient two-year, three-year, and five-year fixed interest rate deals are on offer. These deals are ‘security’ music to a first home buyer’s ears
-          Though affordability remains a challenge, property values throughout most of NSW have not risen in as high a proportion as other states in the past 12-24 months
-          Previously the construction industry was in a slump, however it is starting to heave back into prosperity and with more construction upstarts and projects commencing, buyer confidence levels boost
As an investor, my view on stamp duty is in a constant state of flux. Though it prohibits many first home buyers from entering the market initially, it can be argued that it also prevents first home buyers entering the market foolishly and setting themselves up for failure. Yes, saving that initial first home deposit will take a little longer due to the needed stamp duty capital being raised, however it also means buyers need to learn more diligent saving and spending habits in their quest to home ownership.
This can be a good thing for buyers who have unrealistic expectations or a view that their first home purchase should be the ‘forever dream beach house’ that they want, long term. First home buyers need to view stamp duty as a challenge; a necessary evil that means they may need to compromise on certain elements of their first property purchase.
Stamp duty also encourages would-be first home buyers to consider renting longer, and perhaps buying a more affordable investment property to start with, saving first home ownership for a few more years down the track. I personally think this is one of the smarter and more cost-efficient strategies out there.
Say for example your goal is to buy your first home, a $500,000 property, within the next few months and you have your 15% deposit saved. Here’s what you’d be up for if you bought it as a home and lived in it for three years:
-          15% deposit: $75,000 (leaving a mortgage value of $425,000)
-          LMI (Lender’s Mortgage Insurance) because you do not have the needed 20% deposit: around $4,000 (that’s $4,000 of wasted money you can never get back or make any claims on)
-          NSW stamp duty on purchase of $500,000 (payable at time of settlement, remember): $18,010 (yes, that is dead money you can never get back)
-          Other settlement costs (legal, any loan fees, searches): $2,000
-          Total upfront payable: $99,010
Assuming you take out a mostly-fixed loan product (say 30 years), two to three years of chipping away at the mortgage will not make much of a dent, because remember, most 30-year mortgages do not start to make headway until around year #5 or #6. You are also liable to pay hefty interest on your mortgage from day one, because of a substantial $425,000 sized mortgage.
In my view, a better strategy for this home buyer is to rent for a few years, but buy a cheaper investment property up front. Let’s say a modest unit or apartment in middle-outer Sydney suburbs, or a well-located property in a regional centre such as Wagga, Newcastle, or the North Coast. Let’s say you still have that $99,000 upfront budget mentioned above to spend.
-          Buy one $250,000 investment property right away
-          Put down 20% deposit (thus negating the need to pay LMI): $50,000
-          This means you have a loan amount of $200,000. I’d take out a split loan that is 60% fixed for three to five years, and 40% variable (with an offset facility that is redraw-capable). This means 40% ($80,000) of your mortgage is offset-capable
-          NSW stamp duty on $250,000: $7,260
-          Other settlement costs (same as above): $2,000
-          You are ‘all in’ for $59,260 initially
-          As for the remaining $30,000 of savings, don’t spend it, but put it into that $80,000 offset account. This means that for the first few years you are only paying interest on $50,000 of offset plus 120,000 of fixed loan = interest payable only on $170,000
-          Over years one to three you continue to rent and pour savings into that offset account, all the while reducing the interest you pay on the investment property. Then in year three, you pull out your original $30,000, plus three years’ worth of savings revenue. Assuming you save an average $20,000 per year, this will see you back at the $90,000 mark to buy your home with.
-          Oh and let’s not forget some of the tax minimisation benefits that often come with well-purchased investment properties. Even if this saves you only a couple of thousand per year, that’s still an additional $2,000 each tax year that will help to ease the mortgage stress of your big chunky home mortgage, when you are ready to buy your home.
This strategy will not work for everyone or every situation. It is not financial advice and is not to be construed or applied as such. However, it is an example of how renting for a few more years whilst having an investment property up your sleeve, can better your home-buying position later on.
Stamp duty is one of those necessary evils in the property game. It may not always be, but for now, it is. In my view, though stamp duty is an evil, it is not the real problem here – a poor buying strategy mixed with unrealistic buying expectations is. Australian property buyers need to get smarter in their home ownership aspirations and realise that the best course to take isn’t always the direct one.

<hr>
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://www.propertycorrespondent.com.au/">Property Correspondent.</a>
 
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The best course to home ownership is not always the most direct one 

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.

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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."

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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.

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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."

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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.

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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>.

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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.

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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."

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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.

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<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.

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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.

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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;

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<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;

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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;

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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;

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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.

Cameron McEvoy

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