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Like thousands of others, I’m an avid watcher of the UK top-rating program Grand Designs. The projects inspire such a passionate drive for the progress of new and inventive property development, there’s a distinct feeling each individual designer has a “higher” sense of purpose in their creation.
Rarely – if ever – is it focused on investment potential or capital appreciation.  Rental returns, “property clocks” and speculative bubbles are never mentioned. Instead, each home is to be a “haven of shelter” for the occupants, and the common denominator in the features valued most should form the basis of a detailed study for developers and town planners, employed with creating the modern landscape of each state capital’s 2030 expansion plan.
The series has taken us on an adventurous journey, visiting and re-visiting the projects to test their viability and sustainability for the purpose of each individual design.  The commonalities that form the needs of each participant involved in the program are relatively simple. They broadly focus on developing a space where family and guests can enjoy a sense of community with their surrounds, with great emphasis placed on designing an environmentally sustainable habitat.
Although money facilitates the design, profiting from the development is not the end focus.  For the families involved, the concentration remains firmly on lifestyle.
No one can deny that financial independence is a fundamental requirement in how we perceive an individual’s level of wellbeing – but even without a change in financial status, an upgrade in living standards provided primarily through wise and well thought-out development is enough to bring lasting happiness to the occupants involved regardless of personal income. This is something the series proves with its weekly case studies.
It’s a somewhat obvious assumption – however it’s one that has needed to be proven in various housing studies across the globe.  For example,  in the mid-1990s, the U.S Department of Housing and Urban development in Boston commissioned a 10-year research project entitled “Moving to Opportunity for Fair Housing” (MTO). The social experiment was designed to analyse how a change in living standards would affect people in poverty outside of any change in status to their financial circumstance.
You could argue that results emanating from any improvement in living standards would be easy to predict.   However, as with all government departments, money spent on “Captain Obvious” studies tend to burn a hole through common sense.  This aside, the survey produced some interesting results that should form a motivation for social policy reforms across our geographical borders.
The survey addressed whether living in a “poor” neighbourhood would have a flow-on effect in education standards, crime statistics, wellbeing, and general lower levels of achievement. To do this, public housing residents were split into three groups with the help of a random lottery.
Each group received a set of vouchers. One set enabled residents to subsidise the rent they paid, enabling an “upgrade” into private rental accommodation in an area where poverty was defined as being less than 10%.  A second group received vouchers entitling them to move wherever they wanted.  And the third group unfortunately had to stay put.
Despite the move, the financial status of each group remained predominately the same.  Salaries didn’t increase and jobs weren’t changed.  However, the 15-year study proved without doubt those who were entitled to upgrade their environment experienced a substantial reduction in obesity, diabetes, mental illness, bullying, harassment, and an overall general improvement in their family’s wellbeing.
 
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According to the findings, the subsequent “happiness” effect a change of lifestyle had on the recipients of the vouchers was equal to a $13,000 a year salary increase – and all that had altered to produce this effect, was the provision of better housing within a well-facilitated, established community.
In case you’re reading this and making the assumption that the above “happiness effect” can only be achieved by calling on more taxpayer dollars, the next experiment will hopefully put this concern to rest because Kevin McCloud, the British presenter of Grand Designs, conducted his own experiment into the effects of our living environment. Whether he did it consciously or not, he took the two commonalities I outlined above and wove them into a project called the “Big Town Plan”.
The concept involved a 42-house community development, primarily for families confined to social housing. He wanted to prove that through intelligent design, a housing estate could be established to enable an active community environment, as well as substantially lowering the environmental footprint and subsequent energy costs of each home. In doing so, he set about to prove the development would cost no more than any other – but the effect would advantage the families and their children in such a way it would enable the opportunity to get a leg up – if only in wellbeing, rather than wealth.
The project picked social housing residents who felt their current accommodation was having a compounding effect on their ability to provide a good environment in which their children could flourish. The atmosphere created by the current council housing estate in which they resided isolated a disadvantaged section of society in such a way, it resulted in a compounding, depressive and visionless environment, which expressed itself in higher rates of violence and crime.
There was no higher purpose in the development to foster a sense of community that would enable the residents to join together and improve their immediate surrounds. It was developed with cost as the sole dictator and as a consequence, children were not encouraged to venture outside to play, and neighbours did not socialise.
McCloud’s design would put the same emphasis on cost, but couple it with purpose-driven design. The houses were to be built in a triangular shape around a mini park and community garden.  This would enable residents to socialise while at the same time provide a safe area for children to play that  was visible from their parent’s homes.
The houses are designed with features to diminish their carbon footprint and keep energy bills low. Natural light was important and although there were faults along the way, the unique design of each property maximised a sense of “space and tranquillity”, which had one couple describing the feeling akin to being in a holiday home in “sunny Spain”.
When McCloud returned to his experiment a year down the line, he found the community flourishing.  Children were happily playing, neighbours were socialising – there was no isolation, and each family knew the others.
Households previously cut off through fear of their environment were experiencing an atmosphere in which their children could benefit. Pride and vision had been returned on a personal level, and the effect fed into individual aspiration.
It had nothing to do with the redistribution of wealth but everything to do with providing an atmosphere in which individuals can endeavour to improve. The houses weathered well over the period monitored – with residents expressing how they enjoyed the feeling of coming home.  All in all it was a resounding success.
McCloud may not have provided the grandeur of individual designs featured on his program, but he had at least provided the essential qualities all these homes had in common – principally an atmosphere to enhance the social and physical connection to the surrounding environment.
 
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It was therefore with interest I watched Four Corners last week, which focused on the community of Claymore – situated roughly 54 kilometres south-west of Sydney.
The housing estate featured was designed and funded by the Housing Commission of New South Wales and initially built to provide housing for blue-collar factory workers.  When employment didn’t follow, the suburb became a social housing estate and the people living there were thrown together from a range of backgrounds – low-income workers, discharges from psychiatric hospitals, single parents, Samoan refugees, and so forth.  Currently, the suburb has a median age of 20 and median income – when last measured – of just $237 per week.
The project was a social disaster.  The support services desperately needed never followed.  Employment opportunities were scarce to nonexistent.  The community was isolated in terms of facilities and essential infrastructure. Public transport was lacking, and the design of the estate had no clear community objective.
Throughout the years various volunteer groups and educators have made inroads in their attempts to create a social purpose within the estate – but as the producers of Four Corners witnessed, there is a huge amount of work yet to be done.
If we’re to take the studies above in any seriousness, the high rates of domestic violence, crime, teen pregnancy and so forth are not necessarily the fault of the social mix, but the result of isolating a group of people in a poorly designed and facilitated suburb.  This is a feature of many newly created fringe suburbs that are popping up in the state of Victoria prior to the development of any essential infrastructure such as public transport, schools, parks, medical facilities, and so forth.
Some of these fringe locations have attracted substantial population growth in recent years because the house-and-land packages offered are the answer to affordable accommodation for many of the residents. However, a majority suffer from higher rates of crime and social issues than the inner-suburban towns, which I theorise to be principally related to failings in their initial design.
It is a far more cost-effective venture to provide suitable well-facilitated suburbs than it is to provide a patchwork of support organisations to service long-term welfare commitments. But in order to do so, town planners and government heavyweights must move from behind their desks and involve, listen, and most importantly adhere to, the voices of local community.
Perhaps the answer lay in a plan, compiling of a vision similar to the UK’s “Big Town Plan”. A policy reform that aims to place more power into community hands and empower problem-solving from the ground up, rather than the top down.  Whatever the answer, we’d be a poorer society if we didn’t all agree: there must be a better way.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Why Kevin McCloud's Big Town Plan succeeded while Claymore is a social disaster

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Now we’ve established that the spring selling season has not immediately transformed the housing market from its winter of discontent, and the barrage of "spring has sprung" headlines have once again done the rounds and subsequently been exhausted.  We can perhaps start looking at the reality that’s facing a rather sick real estate market, which needs a little more than a Paracetamol to recover from recent lows.

It’s easy to come up with excuses to explain the current malaise.  Consumer confidence is a favourite – albeit overused – term.  However, it tends to suggest the market doldrums are nothing more than a brief bout of post-winter blues that simply require a short-term prescription of Prozac to recover.

The sickbed approach to market movements always assumes healing will eventuate sooner or later and based on the well-quoted premise of historical cycles, it’s not an altogether foolish assumption.

After all, although we’re consistently told the consumer has a new aversion to debt, it doesn’t stop Australians over-spending in areas where they perceive value – areas such the recent surge in overseas travel for example, and the lending boom for new and used vehicles – both of which have been influenced by the strong Aussie dollar and recent tariff cuts.

We’re fickle creatures when it comes to finance and completely subject to our ever-changing emotions.  How we gather our perception of confidence or fear in an economy broadly dictates how we spend or save our dollars –although, as the cost of living rises, there are limitations to every budget.

But for the housing market, at the very floor of sickness, lies the fear a far more serious diagnosis could be at play.  It may not be the long-awaited Armageddon bubble pop, however over the past two to three years many vendors have experienced a slow deflating puncture of lost equity as the weakness in home loan data and lower rates of turnover continue.

Even with previous and prospected interest rate drops there’s been little to motivate an uplift of market movement, and it’s clearly going to take more than a monetary stimulus to produce lasting recovery.

The problem reflects a game of stalemate – consumers have a need to purchase real estate but no desire to spend big in an arena of slowly deflating equity. 

Unlike other industries, where price drops can attract a flurry of spending, Australians have been somewhat brainwashed by a decade-long credit-inflated property boom. Consequently, residential real estate is broadly considered a vehicle for investment over and above its basic value as a place of shelter.

It’s therefore highly debateable whether further drops in median values would motivate purchasers to perceive a bargain and get out their credit cards as they would for a local retail sale.  Furthermore, because the selling price is set with a large dose of emotion, it’s harder to recognise if a drop in price represents a true bargain.

As a general point, the last thing owner-occupiers will let drop in times of uncertainty are the mortgage re-payments.  The perception of security home owners gain from their principal place of residence is a tonic in turbulent times. 

Not only this, but the home is an extension of the occupant’s life – a place of precious memories and personal passions that dictate why we often see vendors withdraw from the market rather than sell for a price they don’t consider worthy.

The owner-occupier market (which forms the largest market in Australia) splits the real estate landscape between the need to sell owners and those who’ll only budge if they can get their pre-conceived price.  This is the price they have formulated based on invested emotions and one that often bears little relation to the dictates of today’s property shoppers.
 
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Although we’ve seen an uplift in forced sales on the vendor’s side – and affordability issues on the purchaser’s side – the vast majority of purchasers and vendors are not willing to meet midway (hence low rates of turnover) - and with nothing on the horizon to suggest Australia’s economy is on the precipice of financial disaster or conversely about to flourish into another boom of growth, I’m afraid we could be looking at a long period of property market stalemate, which won’t be broken by the cliché of spring headlines, interest rate cuts, or mortgage lending sweeteners.

Vendor expectation is such a fundamental part of any acquisition process; it deserves a lot more attention than simply stating that vendors currently have “unrealistic” ideals.  “Vendor education” – the commonly used term by realtors who are charged with breaking high ideals in order to achieve a sale – is a fine-tuned art that splits those who are experienced in the industry from those who still have “stars in their eyes” of easily earned commissions.

The barriers dissuading vendors from taking a monetary loss are not clear cut and form a game of behavioural economics.   Broken down you could term it the “endowment effect” – the differentiation between  what a person is willing to accept compared with a what an individual is prepared to pay.

It was the American economist Richard Thaler who first made inroads into our irrational emotions and their concurrent effect on economic data – an effect that often hinders analysts from making predictable assumptions.

He aptly demonstrated how we place a higher value on emotional objects we own compared with the price we’d be willing to pay for a replica offered for sale.  In the 1990s, he demonstrated his theory with a famous social experiment involving coffee cups.

A group of students were divided into two. One half were handed mugs while the other were given dollars.  The two groups were then asked to separately devise both an asking price and a selling price.

The sellers valued their mugs at $5.25, while the buyers were only willing to pay $2.25 to$2.75.  Even though it was assessed that the sellers would not consider paying their own inflated prices should the shoe be on the other foot, they were unwilling to drop the mug price below their preconceived notion of value.

A different experiment was derived to see if the effect carried over into non emotional items – items for which a value has already been pre-determined.

One set of students were given a token and each student assigned a mythical sell value. The other half were given money and each assigned a fictitious buy value.

In line with rational thinking, when token holders were offered more than the pre-consigned value, they agreed to sell.  Equally, when the buyers were offered a “deal” less than their pre assumed value, they purchased.  It was a perfect example of basic buy/sell economics.
 
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The difference between the two experiments comes down to the value we place on property and possessions – or in the context of this article – real estate.  We have a tendency to be truly irrational about our homes when it comes to placing monitory value on the holding.  An irrationality that has no place in basic economics, yet affects a market that in Australia is worth an estimated $4 trillion.

To emphasise the point, I was recently in discussion with a developer who wanted to offer a home owner two and a half times the value of their block to induce a sale.  The developer naturally saw the deal as a win-win for both parties.

The home/land owner would receive a windfall, enabling them to upgrade from their principal place of residence and move no more than a stone’s throw away if desired.

The developer, on the other hand, would reap the benefit of acquiring a piece of land, which was strategically located to enable his personal commercial endeavours to profit over the long term. For the developer, the inflated price he was offering was a worthy investment.

The developer naturally felt a valuation and market appraisal of the block would be enough to form the basis for a calculation of appropriate compensation.  What he hadn’t factored in however, was “endowment effect”.

Despite all available evidence proving the home owners would reap over half a million tax-free profit on top of comparable market value if they accepted the developer’s offer, they still considered the figure unworthy of the personal emotional commitment they had invested in their home.

It may seem crazy to those reading, however it’s a very real example of our irrational relationship with property.

If a deal such as the one above can’t achieve success in a highly deflated buyers’ market, you can clearly comprehend why Australia’s property market is not moving at a more microscopic level. In other words, forget about analysing a “property clock” – because it’s simply not ticking!

Whether purchasers have the dollars or not, they’re not likely to profit from the downturn until vendors are forced to change – and with nothing forcing vendors to change, we’ve got a long chess game ahead before someone knocks over the queen.

With this in mind, current conditions favour the investor who can hang out for that nugget of gold while at the same time identifying the property owners who – for personal reasons – have little choice but to reduce expectation.

Home buyers or existing owner-occupiers, however, face the challenge of finding a suitable home in a sea of advertised listings, few of which tick their “ideals” with a price tag to match.

Keen negotiation skills are the key to shifting the current game of checkmate – however, this can’t be achieved without ample on-the-ground due diligence, patience, and legwork. Unless a buyer is prepared to leave their emotions at the front door prior to entering into negotiation, they may find the current well termed buyers’ market frustratingly difficult.

Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Australian property market could be in for a long-term stalemate

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For all the complaints about our current government, Julia Gillard has always been a passionate advocate for education reform.  Although the recent Gonski review into school funding has been heavily criticised by the opposition, our current Prime Minister aims to introduce the improvements cited from 2014 as part of an “education crusade”,
Teachers and unions will no doubt have their own views on the changes planned, and there’ll be plenty of forthcoming issues and disputes the Prime Minister has to overcome.  However, out of all the industry bodies looking and hoping for a better qualified nation, the housing industry should be at the forefront.
The UK’s leading property website, Rightmove.co.uk, has produced some interesting research indicating a university education is a “vital” ingredient for current first-home buyers who aspire to buy within the next 12 months.  Seven out of 10 surveyed on the above criteria were educated with either a graduate or post-graduate degree – and despite the fees associated with higher education, the analysts at <a href="https://www.rightmove.co.uk/" target="_blank">Rightmove</a> concluded:
“Those school-leavers who are set to embark on a university education this autumn will be encouraged by the fact that further qualifications seem to be an important qualifying factor in getting onto the housing ladder."
The reasons are no doubt numerous and to some extent obvious.  A higher education generally ensures a fatter wage packet, enabling prospective buyers to build their deposits more quickly.  However, money isn’t the only part of the equation.   A quality education builds self-esteem, enhancing an individual’s critical thinking skills – enabling them to filter through a plethora of conflicting advice widely available through digital and print media.   In many cases, it also also equips individuals with the basics of money and business management, which are essential requirements to 21st-century home ownership.
However, while education plays a valuable role in the fight to stem the reducing number of first-home buyers and issues of affordability – a trend many would like to close their eyes to – it is often not possible to get a child into the best school available for their needs due to the expense of buying in a good school zone.
For example, if you analyse the statistics, being in a school zone for one of the top 20 or so government schools in Melbourne can increase the price of properties in the area at the very least 10% to 15% – and the smaller the zone, the greater the pain.  This is why there’s a strong connection between the top public schools and the price of residential property.  Add onto this property taxes and other costs associated with moving into a school zone initially, and perhaps the only thought a family can comfort themselves with during the early hours of a sleepless night is the nest egg they’ll be left with once the kids leave home and they eventually decide to sell and downsize.
Rental yields for family accommodation are also significantly inflated for properties located in a popular school zone, providing an attractive incentive for investors seeking good growth and yield.   Neither is it unheard of for an old property within the neighbourhood to be rented by a desperate family never intending to move in, but simply using the address to meet the criteria for enrolment into year 7.  I’ve even heard of school principals camping out early mornings and late into the evening, to assess the level of activity in a property suspected of sitting vacant while the family lives elsewhere.
But if you think that’s bad, a story was recently relayed to me regarding one school principal asking to check a family’s electricity bill, with threats to hire a private detective to chase up suspected “zone cheaters”. School zones are without doubt hot property.
However, it’s an unfortunate example of how restrictions on both housing and education through the implication of strict school boundaries can often feed into a culture of separation between various groups of society, thereby producing wide areas of proportional inequality, for which I admit there’s no easy answer.
It’s also worrying that newer suburbs created with the intention of increasing the provision of affordable family-sized accommodation are woefully inadequate in their applications, principally because they often have little more than a small “village-sized” primary school servicing the area.
At worst, it results in a significant disconnect for families spilling into fringe areas and consequently  suffering unintentional discrimination as they are unable to easily access suitable educational facilities.
 
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As a case in point, earlier this year the Victorian government announced the development of six new fringe suburbs – Diggers Rest, Lockerbie, Lockerbie North, Manor Lakes, Merrifield West and Rockbank North – which are planned to accommodate no fewer than 100,000 new residents.  Planning Minister Mathew Guy made a point of stressing these suburbs would be adequately planned and facilitated with appropriate infrastructure, and I don’t doubt the goodness of his intentions.  Currently there are barely a handful of small local primary facilities servicing the area.
However, locating an appropriate pocket zoned specifically to facilitate academic amenities is only one part of the equation – attracting teachers into the area is quite another.  This would seem to especially so following the largest teacher’s strike in the state’s history barely more than a week ago.  In light of this, it would seem the prospect of attracting additional educators to take up the slack is not currently looking encouraging.
Melbourne’s Docklands is another area lacking in educational facilities, with residents complaining they are encouraged to move out of the suburb before their <a href="https://www.docklandsnews.com.au/editions/article/we-are-not-happy-docklands-families-want-a-school_5308/" target="_blank">children reach five</a>, and while I welcome the recent announcement of an inner-city site in South Melbourne recently acquired to provide the proposed development at Fishermans Bend with primary school facilities, it’s a mere blip on the horizon in combating a far larger problem at hand.
Earlier this year, the Herald Sun flagged a concern citing “220 government schools” in Victoria alone that turn away local families due to pressures of capacity.  According to reports, 224 primary and secondary schools across Melbourne now have specific zoning and district restrictions.
The unfortunate bubble effect on real estate prices in well-established popular and restrictive school boundaries is an issue of concern especially when school zones are either reduced or extended based on under- or over-capacity.  Should a recently purchased property suddenly be placed outside the zone, it would result in an instant loss of equity to the family’s nest egg. The same would result if a school moved or for some reason closed.  Mowbray College in Melbourne – recently forced into administration – is one such example.  A family home previously marketed as being within walking distance of the college could no longer carry this attraction.
Furthermore, housing in school zones tends to be held for longer periods – periods lasting at least the length of a child’s secondary education and often beyond.  Issues of supply are therefore at the forefront of concern for families hoping to move in and get a bite of the educational cherry. And while school zoning may protect against over-crowding, thereby keeping kids local, it also restricts some families to either the local state facilities – good or bad – unless they are prepared to up sticks and move, or pay for private tuition.
No one would deny that financial literacy and the ability to see through the common myth that residential property doubles every seven to 10 years is becoming all too essential in navigating a successful plan to home ownership.
In an era of stricter lending requirements, sky-high debt-to-household disposable income ratios and what could promise to be an era of long-term economic uncertainty, it is vital we teach young potential home buyers how to minimise risk and save before they spend.
It would also be nice to think the new “Australian dream” would evolve around the vision that no one in 2050 should be hitting their 30s living paycheque to paycheque – with little idea where their super goes and no long-term financial plan.
However, in order to achieve the above, a good education is required –while I’m in no way suggesting that a child not attending a good school will never be a property owner.  I’m making a point for the perception that accessing quality education is causing families substantial pressures of affordability.
It subsequently leaves the question – do we do away with school zones all together?
Increase the number of education facilities in poorer suburbs and in doing so, meet the demands of teachers by pouring greater funding into the education coffers?
Encourage financial literacy, real estate acquisition and critical analysis within every school curriculum?
I have no answer – however there does seem to be a case for highlighting the unfortunate social divide between accessing quality education and the consequential “bubble” prices of accommodation in popular school zones.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Should we do away with school zones?

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Last week, Terry Ryder once again stressed the argument against issues of affordability, citing anyone seeing a “crisis in affordability needs to get back to the drawing board” and “stop wasting everyone’s time”. 
<a href="https://www.propertyobserver.com.au/residential/there-is-no-australian-housing-affordability-crisis-terry-ryder/2012090456393" target="_blank">According to Ryder</a>, we need do nothing to address housing affordability, and the only participants pushing prices higher are emotionally driven second-time buyers who get a little “wallet happy” when purchasing their dream homes.
Although Australia may still possess a good proportion of owner-occupiers to renters – enabling some in the industry to close their eyes to distress calls coming from the increasing numbers locked out altogether – both state and federal governments would be foolhardy to ignore the downward trend in ownership and the reducing pool of first-home buyers.
What may seem in some people’s eyes nothing more than a molehill on a well-trodden historical path is slowly threatening to evolve into a future generation’s mountain.  If we sit back today and tell everyone to “smell the roses”, we risk leaving our grandchildren to inherit a problem unable to be ignored, prevented or for that matter, fixed.
You don’t need to look far for the evidence.  With each census released the level of home ownership slides downwards, the numbers in mortgage stress or struggling to service rising yields increase, not to mention the astronomical rise in residents living in “rooming” accommodation – up fourfold since 2006.  It’s important not to dismiss the factors associated with the above trends because the growing problem – wherever you choose to lay the blame – is undeniable.
It would also be foolish to ignore – as some would have us do – lessons we can reap from the far larger housing crisis occurring in Europe and the USA. We have fared better for a number of reasons; however, this doesn’t dismiss the flaws associated with high levels of debt-financed ownership.
Australia still has a comparatively low number of mortgage defaults, however, the rising numbers suffering mortgage stress are enduring their own crisis trying to balance the family budget.  Once again this is broadly evidenced in ABS data – which goes to substantiate other data proving that housing is increasingly used as a buffer to meet welfare needs, with greater numbers dipping into the pot of reducing equity and reaching retirement whilst still servicing mortgage repayments.  Once again, you don’t need to look far for the evidence – I have cited the data in previous articles I’ve written for Property Observer. 
Should our economy go belly-up, there is little protection against the investment risks associated with this trend.  In such a circumstance, the precarious nature of the situation would be fully exposed and felt by a majority – not just the minority we’re being told to ignore.
Policies such as the first-home owners’ grant and negative gearing were put in place under the guise of aiding affordability and increasing the supply of rental accommodation.  However, based on the data above they are, to a large extent, failing to address either.  Proponents arguing that the first-home owners’ grant and subsequent GFC first-home owners’ boost did nothing to fuel an unprecedented boom of price growth during 2009 because it only applied to a minority show a degree of ignorance on the broad effects of market influences.
Certainly, first-home buyers are a minority; however an increased surge at the bottom of any market automatically spurs momentum across the buying landscape as a whole.  The snowball effect witnessed in 2009 was a result of the first-home owners’ boost stimulating a buzz of excitable market activity, along with unnaturally low interest rates, and a consequential jump in the average size of home loans across all price points.  In short – it was fuelled by an impulsive snowball of cheap credit.
It encouraged first-time buyers to rush in – many opted for new homes and off-the-plan developments, and they were given as much as $30,000 by the government for these purchases.  Consequently they purchased into a bubble, and as soon as the incentives ended, prices in the new estates plummeted.  These are the estates Ryder correctly points out to be comparatively affordable.  Of course they are – few want to live there unless there’s a large dangling carrot clouding the way.
I’m still coming into contact with vendors who – riding high on the wave of momentum – purchased into the sparsely facilitated fringe suburbs and four years later continue to fund a mortgage worth more than their principal place of residence.  They are essentially locked into an estate, sparse on amenities, unable to sell because buyers not buoyed by the momentum of a rising market and Mickey Mouse grants take the time to think before they buy. There is no activity to motivate growth or build a pool of equity, and consequently a proportion of vendors are well and truly stuck in their own housing nightmare.
 
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The other minority argument citing investors as only being a small uninfluential 30% proportion of activity – is once again somewhat misleading and only applicable if you lump Australia’s entire investment market under one dismissive umbrella.  Price rises caused by this demographic occur because 93% of investor transactions are in the highly sought-after inner-suburban localities where most people need and want to live for work purposes.  Consequently, the number of renters servicing unprecedented yields in established capital city locations – up 49.2% over the previous five years – now frequently exceeds 50%.
Furthermore, Australia-wide, 58% of apartments are owned by investors. Break this data down to a state-by-state capital city level and the investor-owned percentage of inner-city apartments rises closer to 70% and in some states exceeds even this.  Apartments are broadly considered to be the stepping stone to enable first-home buyers to get an initial foothold. Therefore, investors and first-home buyers are generally targeting the same reducing pool of established stock.  Two minorities competing for the same properties, in the same areas, at the same price points and the problem no longer looks quite so “minor”.
This is by no way an argument to reduce the amount of investors Australia fosters, but rather reduce competition in established home buyer markets (something negative gearing in its current capacity fails to do) and encourage investment in outer-suburban and regional townships. In doing so, we not only increase the supply of affordable accommodation, but increase pressure to fund these regions with public infrastructure – most importantly, train lines and other essential community facilities that are vital to stimulate growth.
This was principally why the urban sprawl was successful back in the 1800s when Melbourne (a city ahead of others in this regard) was in the initial stages of outer-suburban development.  However, with the onset of the motor car in the 1950s it was all too easy to excuse the need to extend public transport systems further outwards and consequently, following a population boom, we’re now gridlocked with over congested inefficient transport arteries.  Regardless of whether people choose to commute by car or not, I have yet to meet one buyer who is happy being locked into a car-dependent lifestyle.
There is not one quick fix answer to the question of affordability or how to tackle very real and growing crisis. However, boxing it up under the guise of a “minority” or dismissing subsequent commentary as an exaggerated headline-grabbing indulgence would be overwhelmingly short-sighted and foolhardy.
For millions of existing owners, their future security is dependent on maintaining the value of their properties and utilising the existing pool of equity – however for a growing proportion of young and old Australians, the cost of accommodation is becoming unmanageable even on the average wage.
It’s a 21st-century quandary, and getting the balance right will take time and a number of long-term policy changes – however, the issue cannot be ignored.  A few months ago in April, the Australian Housing and Urban Research Institute published its own analysis of the crisis in a report – funded by the government – entitled Sustaining home ownership in the 21st century; emerging policy concerns In it the authors pose a number of possible solutions, citing:
“We believe there is clear evidence that home ownership will prove unsustainable for increasing numbers of Australians in the 21st century.”
I too believe there is clear evidence of a growing crisis in housing affordability – and it’s one that requires an attitudinal shift from the view that it’s simply limited to a “minority” market.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Australia clearly has a growing affordability crisis

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Well – is it any surprise?  Over and over again we see a drop in new homes sales.  The most recent Housing Industry Association data shows new house sales dropped 5.5% in July (barring Queensland) and new apartment sales dropped 6.4% over the same period.  As usual, the blame is placed firmly in the real estate sector’s go-to excuse of the year, namely “consumer sentiment” – or to quote the HIA “weak consumer - and business – confidence”.
It’s true the housing market has been in the doldrums of late.  However, this doesn’t mean there is no activity.   Only a few weeks ago we were informed by the ABS that “first-home buyers as a proportion of total owner-occupier housing finance commitments” had increased to 18.3% in June – a five-month high. However, it’s clearly not stimulating one of the most affordable segments of the market, the new home sector.
In new housing estates, off-the-plan prices start under $300,000 – a price unachievable in inner-suburban localities. On top of this, developers have been playing Santa Clause, offering <a href="https://www.propertyobserver.com.au/land/new-cars-%2410000-cheques-and-free-home-size-upgrades-six-spring-incentives-from-house-and-land-developers-and-builders/2012082756256" target="_blank">“new cars, $10,000 cheques”</a> and “free” ‘would you like an extra bedroom with that?’ upgrades. 
<a href="https://www.propertyobserver.com.au/land/australia-s-so-called-housing-shortage-is-a-lie-constructed-by-vested-interests/2012082756255" target="_blank">Terry Ryder</a>, who last week eloquently pointed out we don’t have a housing shortage in Australia, was quick to point out examples of outer-suburban “affordable” localities such as Albury-Wodonga. “Affordability isn’t a major issue,” he writes, clearly expecting home buyers or renters suffering increasing rental yields  (up 50% over the past four years) to flock to these areas if there’s a so-called “housing shortage”, or at the very least, a “shortage of affordable accommodation”.
As Ryder briefly touches upon, the differences between underlying demand and effective demand need to be clarified.  The first is assessed from the level of migration and changes in population growth (predictive speculation.)  The second – effective demand – is driven by the buying market and dictated by market forces.
Ryder is therefore correct in his assumption that the house buying market is currently over-supplied in the new estates.  If we weren’t oversupplied in these areas, developers would be building and selling more homes.  They are not building and selling currently because no one wants to buy the properties on offer – and more importantly no one wants to buy in an area that offers poor capital growth, where the closest doctor is an hour’s bus journey away!
However, to take the data above and conclude that we haven’t got a “housing crisis” is a little misleading.  As I’ve pointed out many a time, Australia is on her way to becoming a rental nation, which trending statistics detailed across the 2011 and previous census results underline.
Issues surrounding housing affordability are at a peak predominantly because town planners, along with state and federal governments, have failed to effectively cater to the demands and needs of a rapidly increasing population. If you didn’t know better, you’d be forgiven thinking there’s been a “vested” conspiracy to keep inner-city inflation high, with everything possible done to prevent a fall in established house prices by way of generous tax incentives for investors favouring old over new – and intermittent policies to inflate the prices of new housing by way of Mickey Mouse incentives.
I should think first-home buyers are thoroughly fed up with all the reports telling them Australia has an abundance of affordable homes just waiting to be snapped up and when questioned, wafting a finger towards the hills as if commanding a dog to fetch a ball.
It’s one of the reasons extending the city boundaries in a senseless urban sprawl is hopelessly flawed. Greenbelt lands, or designated city borders, were essentially designed to protect against the sprawl of <a href="https://www.enidblytonsociety.co.uk/book-details.php?id=2341&amp;title=Building+Noddy's+House+(No.+10)" target="_blank">‘Noddy’</a> style houses across valuable countryside needed for recreation, food production and essential wildlife preservation.  Not only this, but it’s essential to locate homes within easy commutable distance to employment centres, shopping malls, schools and community facilities. Unless the provision of such amenities has been costed and funded at the time of development, with a fixed-term plan set in motion, the result is “Lego land” suburbs containing isolated homes, disconnected residents, and unhealthy car-dependant families.
Even protected areas are not immune from the gruesome determination of profit-driven developers and investors, who aren’t shy of a little lobbying all in the name of providing a “much-needed supply of affordable accommodation”. Hence why we have groups such as the <a href="https://www.adelaide-parklands.org/html/membership" target="_blank">Adelaide Parkland Prevention Association</a> and community complaints battling <a href="https://www.melbourneweekly.com.au/news/local/news/general/aerial-highrise-delayed-by-three-months/2644274.aspx" target="_blank">poorly designed</a> high-rise towers popping up in inner-suburban localities.    
However, time and time again the same mistakes are made.  Most recently, there’s been a “new vision” for Parramatta Road - transforming it from a bleak “inner-west corridor” to a city of apartments – <a href="https://bit.ly/LQTXnX" target="_blank">no doubt in tower format</a>.  Parramatta Road has been named the most congested, poorly maintained strip in NSW.  Six lanes of nose-to-nose traffic on a route you’ll always regret taking. However no new public transport improvements have been timetabled and funded to accommodate the proposed new development of 100,000-plus apartments – aside from ongoing promises to complete the M4 East extension, which is unlikely to occur due to budget cuts.  Hands up who wants to live there?  No one – and most certainly not first-home buyers.
 
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Then, as if to confuse the mystery of the “missing buyers” further, RP Data releases a free <a href="https://www.myrp.com.au/buyorrent" target="_blank">rent vs buy</a> report “in time for the spring selling season” providing an “in-depth look at the difference between the cost of paying rent and paying a mortgage across each suburb or town around the country.”
RP Data pinpoints 238 suburbs or towns where “the mortgage repayment is lower than the median rent, based on a principal and interest loan on a variable mortgage rate”.  Obviously the list expands two-fold when assessing interest-only loans, and there are hefty disclaimers explaining how the research was pinned together.  The resulting calculations are derived from the “median” unit price (or house price depending on suburb) and median “weekly advertised rental price”, with the “buyer” purchasing on a 90% loan-to-value ratio at an initial 6.15% variable 30-year loan. (Other examples are calculated on terms of interest only; however the above example is most applicable to the classic first-home buyer profile).
The results, however, assume a great deal – to take median values and use them as a barometer of affordability against a median rental price has significant flaws.  In Carlton, for example, Melbourne's hub of student apartments and one of the suburbs highlighted in the report, obviously the median unit price is comparatively very cheap. However, try and acquire a non-student residential apartment (one worthy of buying – at the very least, providing 40 square metres of floor space) for the median price and it quickly becomes apparent you'll need to pay a good deal more than the median value represented in RP Data’s report.
As for the advertised rental – well, obviously student apartments command a higher rental yield than residential listings, therefore taking the two figures out of context will evidently produce the misleading fantasy that it's cheaper to “buy” than rent.
Similar results can be examined in their other examples and they are numerous.  In fact my own calculations – based on a handful of real sold data examples in outer-fringe locations of Victoria –  show that although the margins between renting and buying reduce considerably the further from the city you pan, it’s still broadly cheaper to rent than buy – especially if the plan is to re-locate within five to seven years.
Perhaps the only “true” representation of suburbs you can profit from purchasing rather than renting would be suburbs in regional and rural locations, where a majority of home buyers would not necessarily want to settle for an extended period, but would perhaps spend a couple of years renting due to work commitments.  This includes mining towns, for example – where rental prices are inflated due to the severe shortage of property.
This aside, until the new home market, hand in hand with suitably equipped urban planners, starts providing an increasing population of first-home buyers with feasible options, we’re not going to see a significant return to growth in construction, which is traditionally motivated by this sector of the market.
Buyers want to locate into suburbs that can provide a lifestyle suited to their needs, and whether you think their demands are unrealistic or not, we’re talking about a consumer market, not desperate, homeless individuals who are prepared to purchase any old thing because there’s a “free” iPad thrown in for good measure.
The only shortage of property Australia is currently experiencing is a shortage of affordable options home buyers actually want to purchase – and you can’t solve this dilemma with a simple “improvement in consumer sentiment”.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Australia does not have a housing shortage, but it has an affordable well-located housing shortage

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On the one hand, increasing the ability of prospective home owners to get a foot hold in the market is admirable. After all, home ownership in Australia is all but considered a right of citizenship. However, to date, the only way governments have done so is to encourage greater debt levels by way of incentives, lower loan-to-value ratios, negative gearing, low interest rates and so forth.
Consequently, even overpriced homes have looked tempting to emotionally led home buyers who’ve heavily invested their future wealth and income into the principal place of residence. They – along with investors – were more than eager to take advantage of the pre-GFC decade-long property boom stimulated principally by debt. According to RateCity, from a random selection of more than 2,000 home loans in mid-2008, more than a quarter had a loan-to-value ratio of 100% – LVR’s now rarely encountered.
However, the above policies that increased funding without adequate investment in infrastructure to ease supply have pushed property ownership (despite the health of the economy) out the reach for an increasing number of would-be home buyers. We’re now facing a situation where the cost of living and subsequent debt levels against housing are an issue of growing concern.
For market watchers, reading the terrain ahead is somewhat clouded by the emotional aspect to property, hence why so many mis-forecast the measure of percentile change in their predictions.  The essential need for shelter, along with our creative capacity to make the home “a castle”, pins a far greater emphasis on consumer sentiment.
Each sale is the result of a carefully negotiated contract between two parties with differing needs and priorities.  In most cases, it’s a long way from being just a simple business arrangement and shouldn’t be classed as such.  Furthermore, because each property marketed has its own intrinsic qualities – which are valued differently from buyer to buyer – trying to lump residential housing alongside stocks and shares, for example, leads to errors when reading and analysing statistics.
The latest data from Residex has indicated that Australia-wide, there’s been a marginal return to growth in the house-and-land market. The news is often jumped upon as a positive sign of recovery.  However, with overall turnover back at levels not seen since the 1990s, how can we herald it as such?
Residex recorded a marginal improvement in transaction figures, however, not significant enough to prove we’ve turned a corner.  Therefore, the figures feeding into the median are representative of a comparatively small composition of properties selling and most likely stimulated by home buyer sentiment.  Broadly speaking, buyers are still taking a back seat, first-time buyers are hamstrung by stricter lending conditions, and increased supply isn’t providing feasible or affordable options to ease the consequential stagnation.
As an outsider – looking at Australia’s current environment of low interest rates, broadly dormant house prices, coupled with the “on paper” health of the economy – you’d be forgiven for wondering why overall transaction figures are so low. As a home buyer however, the increasing cost of living, as well as a general unease about the future of the economy – despite government and RBA insistence of a prospective “lucky country” outlook – is starting to bite.
Consumer sentiment is further hampered when there’s more circulating disagreement regarding the “boom” or “not so boom” cycle in the resource industry than there is surrounding residential property movements.  It’s not helping reassure Australian buyers or sellers of future market stability or job security.
As if we need further evidence of the above fact, the predominant headline from last week – picked up by every major news outlet – was the significant increase of Australian home owners <a href="https://m.smh.com.au/domain/real-estate-news/home-owners-raid-super-to-pay-mortgage-20120818-24fda">seeking access to their super</a> to fund outstanding home loans.  There’s been a 25% rise in claims between 2011-12 totalling $99.38 million. It’s a worrying statistic.
Meanwhile, the ABS has recorded a 0.1% drop in owner-occupier housing finance for the month of June ,and Westpac’s Consumer Sentiment Survey indicates a drop of 2.5% in August.
 
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There’s general disgruntlement with the current government and as far as the property industry is concerned there remains a healthy standoff between vendor expectation and buyers. Consequently, those wanting to upgrade or downsize are finding themselves unable to make a move through lack of buyer activity and as our population increases, this is causing a mismatch of ownership as downsizers hold onto property too big for their needs and families struggle with an inability to find suitable accommodation in which to upgrade.
The recent census proved the continued downward trend of home ownership figures, which – should it continue – could result in 50% of the population renting within a generation. Along with this, the current strain on both available and affordable rental accommodation is locking a significant proportion out of the property market for the foreseeable future, with renters struggling to service increasing yields – up 50% on the last census figures.
Home owners are also under pressure – median mortgage payments as a percentage of median household income are also on the rise.  ABS data indicates a 4.5% increase since 2006, currently above the broadly accepted stress level of 30%. To cut to the chase – residential property is too expensive for a growing majority – with the cost of shelter depicting more of a ball and chain than a “dream”.
Pundits in the financial and property sphere tend to pump the proposal that all we need to spike a return to growth is a lift in consumer sentiment to enable Australia to get back to its pre-GFC trajectory. However, when you consider the data above, there are some worrying rumblings under the surface that are not going to disappear when the clouds clear.
Whether you see the cup as half full or half empty will no doubt depend on personal circumstance.  We’re not currently looking at market collapse of 40% or so, as witnessed the USA or parts of Europe, due to relatively stable employment.  According to Finch Ratings, default rates are still low by world standards despite a marginal increase Queensland – up 18 basis points to 1.6%. However, the low numbers transacting on property are a concern and producing figures not dissimilar to countries in more dire straits – countries that have witnessed a 40% drop in values.
While a loss on the balance sheet of property prices would cause pain to the economy, the catch-22 is that high property prices are equally unfavourable – increasing the cost of living and leaving less in the pocket for wealth-creating projects to stimulate greater economic recovery.
Australia currently has the world’s highest household debt-to-annual disposable income at around 150%, and despite the movers and shakers in government telling us it’s OK based on debatable “responsible” lending practices, you have to wonder: what will happen when Australia can no longer shelter itself behind a mining boom?
The RBA is not ignorant of the risks outlined above, the fact that is has chosen to address the subject in detail in this year’s annual conference  <a href="https://www.rba.gov.au/publications/confs/2012/index">‘Property Markets and Financial Stability’</a> outlines that lessons reaped from booms and bust cycles in other countries are bringing the risks associated with our highly leveraged housing market to the forefront.
One of the areas addressed in detail is the housing shortage.  It was noted that cities producing an adequate supply of affordable accommodation in the USA had experienced lower long-term inflation in house prices.  The example offered in the study was Atlanta – however, you could equally cite Dallas Fort-Worth.
In 1981 both cities were of a similar size and a similar population growth trajectory as Sydney and Melbourne, yet both Dallas and Atlanta provided cheap land on the outskirts of their city boundaries and unlike Australia, developed adequate infrastructure at the same time (train lines, schools, hospitals etc) to entice their growing population.
In Australia, the limited affordable options open to first-time buyers have been by way of poor planning policies coupled with a lack of adequate investment in infrastructure. Often, the only way home buyers and investors can be incited to soak up the oversupply of “Lego” houses or high-rise rabbit hutches is when they’re lured with generous off-the-plan or new home incentives. Incentives that a significant number regret taking advantage of, when a few years later they find themselves stuck in nowhere land with little capital growth and three-hour commutes into their places of work.
The debate is both endless and tiring, and yet we never seem to move past first post. As always the most vulnerable to be hit are would-be buyers and those who reach retirement either renting or still servicing hefty mortgage repayments.  If we continue on our current path we face some undeniable certainties – certainties an adjustment in interest rates, or “talking up” the economy, will not change.
While some may be satisfied with a life living in rental accommodation rather than opting for ownership, Australia doesn’t have any “long-term” rental strategies to provide this security and protect against rising yields.
You can’t solve the dilemma by building new homes first-home buyers can’t afford to purchase or that are located in areas not suitably supplied with enough essential amenities to inspire relative demand. Furthermore, according to the Australian Taxation Office, self-managed super funds are now the “largest and fastest-growing segment of the super industry” and corresponding data proves a large proportion of this wealth is invested in established residential property – totalling over $14 billion.  In light of this, investment policies affecting the housing sector need to come under greater scrutiny, especially as they predominantly encourage activity in the established market rather than promoting regional growth and investment.
Like it or not, a core part of any housing affordability strategy needs to focus on driving down costs in areas prone to inflation due to heated demand via stimulation in the investment or home buyer sector. There’s inevitably going to be a growing need for social housing and therefore this needs to be integrated within the framework as well as tacking inevitable problems of social residualisation.
Australia once had a dream – a dream for the “right of all Australian people to have access to (land) at fair prices”. However, unless we seriously address the issues above and make serious moves to lower the cost of living and price of housing - that once held dream will become an “unobtainable nightmare” – effectively placing a huge burden on government assisted housing and our future ability to prosper and grow.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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The Australian dream of home ownership becoming unobtainable

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There’s an old Jewish proverb that simply states “Ask about your neighbours, then buy the house.” It seems sensible enough advice. After all, even in prestigious zones, neighbours can make life heaven or hell, depending on how cordial the relationship is. Yet it seems even with due recognition of the importance of neighbours in daily life, Aussie home buyers spend more time watching the above-named television series than they do investigating a potential property and its neighbourhood surrounds.
A recent survey conducted by St George Bank suggests little more than an hour is spent inspecting a property prior to a home buyer happily signing on the dotted line. Consequently, over 55% of those surveyed reported experiencing problems once they’d moved in – problems ranging from plumbing complaints to insufficient parking, poor TV reception and unsurprisingly close to the top of the list: noisy neighbours.
To be fair, arranging a lengthy private inspection is not always possible due to work hours and family commitments. The majority of buyers are often restricted to weekend open for inspection times, during which the property is decked out in “show home” fashion, hiding the poor paint work or damp patch on the carpet with careful placement of furniture. This is why a building inspection is highly advisable even in the acquisition of new houses.
But what about the neighbours – how do you check the calibre of those living next door or within cooee down the street? It’s not an easy task, and there’s no fool-proof answer. However, from personal experience, spending time walking and assessing the local streets outside of work hours should uncover if there’s a yappy dog or would-be drummer residing close by. Knocking on doors, chatting to a resident while they’re putting out the bins, asking questions, checking if gardens are well attended and calling the council to assess if there are any proposed developments pending can all assist with risk management.
Of course, once you’re in the house, there’s nothing to stop new less than desirable neighbours moving in. However, if you’ve been careful and purchased into a neighbourhood predominantly attracting a similar demographic, the chance of a group of party-loving 20-year-olds renting in a family-oriented suburb should be reduced.
Another aspect affecting the type of neighbours buyers can adopt is the planning zone a residential property falls within. Purchasers are frequently unaware of the zoning around their property at the time of acquisition. They often assume they’re in a residential zone based on street appeal alone. However, business zones and industrial zones can look just as residential in their aspect and under current laws, should the council approve, unsuspecting owners can find themselves located next to a McDonald’s, factory, or worst still, an adult sex shop, rather than the dilapidated house situated there at time of purchase.
This is one reason banks are reluctant to lend on residential property in a business or industrial zones without a healthier-than-usual deposit – a matter that often catches the uneducated buyer off guard. However, all the checks in the world won’t protect a home owner if the movers and shakers in local or state government decide to meddle with current zoning laws – or for that matter, change them all together.
The primary purpose of zoning is to prevent over-development altering the character of a suburb or interfering detrimentally with residents and businesses residing there. Buy in a heritage-protected area, for example, and it’s unlikely you’ll end up with a tower block overshadowing the backyard. However, if you purchase a house situated in a business or capital city zone, it’s far more likely a high-rise monstrosity may be constructed next door.
Any change to a property’s zone can have significant consequences on the price and future potential it holds. In Perth, for example, large swathes of land have been re-zoned to allow for greater density in major activity centres. This could mean a house sitting on a block of land with the potential for a two-storey seven-metre-high development could easily become next month’s six-storey unit site! Obviously the affect it has on any area will advantage some and disadvantage others – but at the time of acquisition, none would have been the wiser.
Similar changes have been suggested in <a target="_blank" href="https://architectureinsights.com.au/events/green-paper-workshops/">Sydney</a> – and the Victorian government is also revising its zoning guidelines. Like Perth, the changes have the potential to affect individual property prices, not to mention the lifestyles of those unfortunate enough to draw the short straw. And the zoning alterations suggested in Melbourne are not by any means subtle. If you’ve ever been to a Melbourne auction and heard it spruiked in the preamble that the property to be sold is in the most desired “residential 1” zoning category, brace yourself! It’s all about to change.
As a brief rundown, the state government aims to delete the nine existing zones and merge them into five categories. Residential zone 1, 2 and 3 will become “Residential Growth Zone, General Residential Zone and Neighbourhood Residential Zone” For each the zone, the density restrictions alter. You can go <a target="_blank" href="https://www.dpcd.vic.gov.au/planning/theplanningsystem/improving-the-system/new-zones-for-victoria">here</a> to find a rundown of the changes – however, in most instances, planning controls are loser, maximum height restrictions have been removed or increased (with the proviso they can also be exceeded) – and the size of land needed for subdivisions reduced.
 
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While some areas will be protected, don’t be fooled by various articles which claim the changes will increase land values or protect backyards! Even the assertion by Planning Minister Guy that “The Victorian Coalition government's sweeping reform of planning zones, will return certainty to our suburbs and towns and in particular to councils, residents, and the development industry” is broadly misleading.
 
A close reading of the proposed guidelines for each category leaves a lot to the imagination as far as height limits, subdivisions and facades are concerned. In some cases, it’s not even necessary to specify a future build form. The submissions are wishy washy with statements such as
“higher or lower maximum building height can be set by a council” and
“a permit to exceed any height limit may be granted”.
To be fair – the government is giving the public a right of reply to express opinion – however, who thinks it will listen? The government has made it abundantly clear in its 2030 plans, the idea is to increase density rather than facilitate outer suburban locations with infrastructure.
Maximum height limits for the CBD have already exceeded reasonable levels – with 14,000 apartments due for construction through the course of 2013 in Melbourne alone. However, it’s fair to suggest areas with heritage significance will still be protected from over development. Home buyers and investors should take heed of this before they lock in a purchase.
And while we all understand the need to provide feasible options for a growing population of migrants, you would expect, at the very least, governments would learn from previous planning mishaps and avoid repeating the errors. Melbourne’s Docklands – a suburb built out of high-rise tower blocks – is widely known as a city lacking soul. With “the sky’s the limit” height restrictions and overzealous developers, the suburb has struggled to attract any diversity of resident. There are few family homes and apartment sales have been dominated by the investor sector – many of which remain vacant for much of the year.
Improvements have been made since – however with more high rise currently under construction, any improvements will be limited in what they can achieve. I met a Docklands’ advocate at a recent party I attended. While discussing future development in the suburb, I asked, “What about schools?” “Oh! We conduct many school trips,” he answered. However I wasn’t talking about trips – I was talking about primary and secondary schools – the focus of family and community life. You can build as many parks as you like, however if there’s no one to play on the swings, no children running around playing footy, something’s missing. The soul of any community focuses on the family.
This is why it was disappointing to <a target="_blank" href="https://www.theage.com.au/opinion/politics/the-ministry-of-silly-plans-20120813-244v1">read</a> this week of another Docklands in the making. One I highlighted months ago as being a potential disaster. And now, it’s coming to fruition – that of “Fishermans Bend.”
Once again the government is altering “capital city zones”, giving developers all but carte blanche to capitalise on high-density tower blocks maximising the residential capacity the land has to offer. However, as evidenced by Docklands, high-rise accommodation does not offer affordable solutions for renters or buyers – or solutions they would necessarily take advantage of even if it did.
In the Docklands development, selling agents were paid high commissions to flog off-the-plan apartments to unwitting investors.  This usually came with rental guarantees, which once expired, left the purchasers unable to achieve the same return.  Unit growth charts for Docklands read like a day’s trading on the stock exchange, with sharp rises and plummeting dips proving anything but stable capital growth. Averaged out the growth has been little more than 5% per annum, and worst following the GFC – a level currently exceeded by many long-term deposit accounts and a dim shadow of what other properties in Melbourne historically achieve.
How many of these apartments are currently sitting vacant is hard to assess, however SQM has the vacancy rate above 11%.  Considering our population growth and previous surge of single-person households, you’d expect these developments to be busting at the seams, however clearly they’re not attracting the level of demand that’s oft been spruiked.
All in all the warning is loud and clear for the home buyer or investor. You can’t avoid the planning changes currently underway, however you can minimise risks when purchasing. Take my advice and inspect the neighbourhood before you inspect the house. Or “love thy neighbour” could present more challenges than you’d expect.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Minimise your risks of bad – and high-rise – neighbours when buying property

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It is often said that Australia has a housing shortage – which may or may not be the case – and governments have taken an active hand in pushing first-home buyers towards the purchase of off-the-plan sales by way of various incentives and handouts to aid increasing supply.
Sales of off-the-plan properties may do the hard yards when it comes to increasing stock, however in the short term they lock the buyer into a risky acquisition with a heightened potential of no short-term growth – and depending on location – poor long-term growth to enable an upgrade.
In addition, purchasers may not understand what they are getting. The contracts for off-the-plan dwellings come with the thickness of a copy of War and Peace and are incredibly onerous to the purchaser.
Imagine for example, the local council disagrees with the planned development, or aspects of it.  Unless the developer can resolve the issue or draw a compromise with the town planner, the whole project is under threat of demise. Considering the amount of investment the developer has made in this project, he can’t risk a “fussy” purchaser withdrawing from a contract based on this alone.  Therefore the contract puts in place “special conditions” to protect the developer – conditions that can’t be altered by the purchaser and lock them in for the duration.
Developments can take many months and even years to come to fruition, and the developer has the entire period to resolve any disputes, during which the purchaser is tied in.
Apartment sales come with additional considerations that should be taken on board before buying into one of the many off-the-plan blocks commencing construction in our capital cities.
For example, owners’ corporation fees stated on the contract at the time of signing are also subject to change.  The fees for each lot are generally not finalised until completion of the contract, therefore there’s significant risk they can blow the budget further down the line.  The intricacies contained in the special conditions generally allow no provision for dispute resolution or a “change of mind” – the purchaser is locked in. One of the few benefits (aside from stamp duty savings) when purchasing new or off-the-plan developments is the compulsory seven-year warranty period on building defects, including a preliminary period during which internal defects can also be addressed.  This sounds great, however the risk comes in the “untold” details.
Also – exemptions do apply – for example, unit blocks higher than three storeys (in Victoria at least) are exempt from providing a warrantee period and in some instances, the warranty is only applicable for works valued in excess of $12,000. Furthermore, it’s important to note that the bank cannot not provide a carte blanche guarantee they will lend against the development until construction has been completed.  Even with a pre-approval the final box isn’t ticked until a valuer can inspect the finished product.  During the period of construction – which can easily take in excess of 12 months or more – the market may have fluctuated downwards and therefore there’s a significant risk the valuation could fall short of the contract price.  The purchaser may have to come up with an extra $10,000 or $20,000 to complete the contract of sale or risk losing their deposit all together. Finally, off-the-plan advertisements are often aimed at the investor, with temptations such as rental guarantees and potential capital growth.  The truth once again can belie the promise.
Rental guarantees are typically added onto the purchase price.  The developer may promise a 7% yield for the first 12 months or more, however once this period has expired, it’s highly unlikely the purchaser will be able to attract a similar amount on the open market.  The tenant renting the unit in the interim will not be paying the equivalent of 7% yield – rather the developer will be making up the shortfall (all accounted for in the asking price) for the period specified.
The shock to the purchaser’s budget once the guarantee has expired and the unit only attracts comparative rental can be significant.  Some may find they’re unable to meet their mortgage repayments.
 
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In terms of capital growth, remember buying “new” comes with a premium attached. As with a new car compared with the ex-demo model, a well-advertised and presented development can boost demand (both foreign and local) more so than a similar second-hand equivalent that has lost its initial cut and polish.  Therefore, unless the investor is in it for the long run, he may find himself selling at a loss, or experiencing negative equity prior to any long-term growth. All off-the-plan sales come with risks attached.  This doesn’t mean a purchaser need rule them out altogether – however it’s essential they walk in with eyes wide open and minimise the liability involved. A good developer will generally aim to please and complete the contract as promised, however there are no guarantees and the purchaser must allow for this
Before you buy in to the government incentives read the tips below.  You may well decide to leave off-the-plan sales for foreign investors and stick to the security of real estate you can touch before you buy.
<ul>
<li>If possible, check the builder's previous developments and get a feel for the quality and finish </li>
</ul>
<ul>
<li>Allow for the “worst-case scenario”.  Should the development fall through or fail to settle within the specified period, make sure there’s a back-up plan that won’t leave you homeless while searching for a plan B.</li>
</ul>
<ul>
<li>Read the fine print – get the contract checked – and understand the worst of the risks involved before signing on the dotted line.</li>
</ul>
<ul>
<li>Try and negotiate a deposit bond rather than cash.  Should the developer become insolvent or disappear prior to construction, tracing a cash deposit may be difficult.</li>
</ul>
<ul>
<li>Ask lots of questions!  Can you visit the site prior to construction?  Will you be consulted if changes occur to the specified plans?  Where will the deposit be held? (Usually a deposit sits in the real estate agency’s trust account and doesn’t accrue interest; however this isn’t necessarily the case with off plan developments.) Can you exit the contract if the development fails to be completed on time? </li>
</ul>
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Off-the-plan properties are a risky acquisition

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Was it the Greek tragedian Sophocles who said “no enemy is worse than bad advice”? If he’d lived in the 21st century, he’d no doubt be aiming his words at media reports from the property or finance industries. He may have followed his words with “no bad advice is worse than ‘expensive’ bad advice”. Because in both these industries, the consequence of bad advice costs exactly that – a good deal of expense.
It has the power to make or break an individual - the latter it will do quickly, the former it will do slowly – but undoubtedly, a bad mistake made on bad financial or property advice alone is not easily, or painlessly, undone.
Both industries are hard to control and even if the current level of regulation increased, it would be difficult to restrict what can and can’t be published in the media altogether. The best option seems to be by way of education – teaching readers to “read between the lines”.
It starts with a broader understanding of the base motivation lying behind the authorship – although in the age of digital media, ideally it should start in school.  This aside – the reader should question everything, because currently the landscape of hype is littered with misinformation.
Like other professionals in the industry, I’m contacted weekly regarding submissions to various property magazines and websites.  Sometimes I’m given the freedom to write on a subject of choice, other times I’m asked to comment on current newsworthy items.  However, I made a personal commitment some time ago to remove the “party line” from my articles and write from an independent viewpoint – a viewpoint not always shared, or welcomed, by those I work with.
This past week, a request came from what many would assume to be a respected property investment magazine wanting to beef up the content on its website. As with many property outlets, the publication sent out a mass e-mail requesting material from “area specialists” in return for some free promotion.  Obviously the idea is not just to attract readers but more importantly advertisers – the more content, the greater the number of hits.
In this instance, the publication wanted information on “hotspots” – where the market’s heading, which areas would outperform, and so forth. Obviously if you ask selling agents to identify a hotspot for the sake of free promotion, they’re going to spruik the suburb they specialise in. The advice is not independent or unbiased, and the word “expert” should come with a large disclaimer attached. If they sell in Doreen, Victoria for example, they’re hardly going to advise a purchase in East St Kilda! However, it’s fair to suggest a broad spectrum of readers will be influenced by the data.
The information carried in local and national newspapers holds the potential to portray a more balanced viewpoint.  However, unless the reader has foundation of understanding about the subject, misconceptions can easily occur.
This leads me to a brief mention of a report a few days ago in the <a target="_blank" href="https://www.news.com.au/realestate/news/property-values-double-in-10-years/story-fndba8uq-1226441495370">Herald Sun</a> claiming “house prices” had risen some 125% in Melbourne over the past 10 years. Before vendors dance around in glee, it’s important to draw a distinction between the terms “house prices” and “median values”.
The term “house prices” suggests every property and every vendor has experienced the windfall, however we know this isn’t the case.  Common sense alone dictates that areas close to city centres and major transport hubs, where the available residential land has been used and the population continues to increase, has inevitably underpinned established property prices over the last decade. Therefore, the vendors who purchased carefully a decade ago would no doubt have attracted healthy growth – growth that could be in excess of 125% in some cases.
However, there are plenty of vendors who wouldn’t have benefitted from a 125% windfall. They may have purchased the first roll out of apartments in Melbourne’s Docklands for example, or in outer suburbs. They may not have taken due care with the type of property, price paid, or buyer demographic in the near vicinity when choosing.
Property prices rise and fall, as they do with any other asset.
Another report, <a target="_blank" href="https://au.news.yahoo.com/thewest/a/-/wa/14456028/property-experts-blame-the-gfc-for-dud-forecasts/">“Property experts blame the GFC for dud forecasts”</a>, demonstrates the foolhardy nature of trusting respected analysts without a good deal of due diligence or risk management. In this instance, the article points out how previous rather bullish forecasts regarding the outlook for Perth’s growing prospects pre GFC were a little more than off the mark.
It’s true, few could have predicted the “X factor” event – but it also highlights how a complex the arena has become and importantly, how wary any investor should be prior to accepting predictive report (especially considering eruptions from the international landscape play an increasing role in consumer sentiment).
However, it’s not just pre-GFC reports that get it wrong – a post-GFC “off the mark” example can be viewed <a target="_blank" href="https://www.realestnews.com/html/ep130_6">here</a> – BIS Shrapnel predicted in a report in 2009 that house prices in Melbourne, Sydney and Adelaide would increase up to 22% over the following three years. Or read <a target="_blank" href="https://www.news.com.au/money/property/sydney-property-prices-set-to-double/story-e6frfmd0-1225843302974">here</a> – data providers in 2009 predicting 7.6% growth per annum in Sydney over the next decade.
Granted, we still have a while to go before we can calculate the accuracy contained in some of the above information, however all are based on median house prices, which as previously mentioned have little relevance for individual property prices.
With overall sales turnover still lagging behind that of previous years, any rise in median value is only representative of the particular composition of “good” properties selling.  Buy well and you may sell well and get an average 7.5% per growth per annum.  One the other hand, purchase into one of the high-rise blocks currently under construction and based on the level of supply alone, you’ll probably get the opposite.
This aside, reading reports on future hotspots is all well and good.  However, they tend to feed the concept that money can be made from property short term.  It’s important to balance the message with an understanding of the motivation – good or bad – lurking behind the words. This aside – boom markets (hotspots) have a habit of “correcting” rather sharply.  The risks are always greater if due diligence isn’t taken initially. Be warned!
I don’t expect anyone to think politicians can be trusted on the face of the information they provide.  Even the most innocent of minds will be educated in this regard. 
<a target="_blank" href="https://www.geelongadvertiser.com.au/article/2012/08/03/341851_news">The market in Geelong, Victoria, was expected to remain flat with minimal growth over the past 12 months</a>. But it turns out, when it comes to council rates, property prices are soaring!
According to the latest rate assessments, values in Geelong have increased 10.2% over a two-year period.
<a target="_blank" href="https://www.news.com.au/realestate/investing/geelong-houses-jump-10-per-cent-in-two-years/story-fndbarft-1226444485811">“The property value increase, a jump of 10.2% over two years, follows an 11.2% increase in values during 2008-10.”</a>
The lessons gleaned from all of the above should ring clear – it’s only through careful researching and an element of self-education that you can really buffer against a risky environment. Don’t blindly accept the advice of a “property expert” or journalist, any more than you’d trust that of a politician without investigating the reliability of the data they provide or motivation behind the sales pitch.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
 
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Read between the lines to get the most out of property investment advice

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Readers of Property Observer may be well attuned to purchasing property.  I’m sure many have attended numerous free seminars and property shows, read industry websites, commented on property forums and so forth. However, think for a moment about the first-home buyer – the buyer with few assets aside from hard-earned deposit and (in the current atmosphere) work that may not be all that secure over the long term.
With little experience in the property industry, and from my own findings, woeful ignorance regarding the transaction process, they are the ones who need the most protection when purchasing.  A first property is unlikely to be a buyer’s last, therefore it’s essential to have investment as part of the criteria as well as consideration of lifestyle needs.
Governments have taken an active hand in pushing first-home buyers towards the purchase of new house-and-land sales by way of various incentives and handouts to aid increasing supply.
It’s not hard to see where the attraction lies – the advertisements look beautiful and tempting.  Developers also have their own gift spree to encourage sales – sometimes including plasma TVs or in other cases a <a target="_blank" href="https://m.theage.com.au/business/property/gifts-galore-boost-flagging-unit-sales-20120728-233eo">holiday or car</a>.
But when it comes to property – whether buying established or new – the approach to any advertisement should always be cautionary. They’re designed to show the best aspects of the home, but the information that’s really important is the information you can’t see – most of which is written in black and white on the contract of sale.
The risks are often not highlighted in detail and in many instances, the contract for house-and-land packages are often not available until some level of commitment (application fee) from the home buyer has been received.
Here’s a quick rundown:
<ul>
<li>Imagine a large block of land – perhaps once used as farmland – recently purchased by Mr Smith (owner of a development company). Mr Smith has decided he wants to divide it into lots and sell each as a house-and-land package to potential home buyers. However, he’s not sure if he’s going to have the money to complete the project and he wants to be sure potential home buyers would be prepared to buy into the development before he proceeds. 
</li>
<li>Mr Smith puts together an advertisement, showing the proposed lots, complete with artist’s impressions and floor plans of homes purchasers can choose from. Along come the home buyers, lured in by “generous stamp duty savings” (which are discounted prior to construction or before construction is completed). They’ve seen the artist’s drawings, which perhaps include “quality carpet, tiles, Blanco appliances, double-glazed windows, locks, flyscreens, recycled-water facilities” and so forth. 
</li>
<li>The costs seem low considering the inclusions, so they gingerly choose their design – which can require an application fee – (without yet seeing a contract) – mentally locking themselves into the purchase. Once the contract has been prepared with the desired prospective floor plans and so forth, they sign on the dotted line and look forward eagerly to the date they can move in. </li>
</ul>
<ul>
<li>Mr Smith now has the ability to get a loan to fund the development and can proceed with the project as planned. </li>
</ul>
It all sounds like a dream, until you consider the risks involve, because to this point they have purchased simply that – a “dream”. The developer may – or then again, may not – acquire approval for the subdivision and even if he does, once obtained, there’s no guarantee the house will represent the depicted drawing on the advertisement.   Should the council find fault with the developer’s plans, Mr Smith has every right to alter the specifications of the purchaser’s future home (with or without permission) and with a signed contract in place, there’s nothing concrete the purchaser can do to protest. Imagine for example, the council disagree with the placement of the north-facing window in the downstairs living zone or want to alter the boundaries of the land.  Unless Mr Smith can resolve the issue or draw a compromise with the town planner, the whole project is under threat of demise.  Considering the amount of investment Mr Smith has made in this project, he can’t risk a fussy purchaser withdrawing from a contract based on this alone.  Therefore the contract puts in place “special conditions” to protect the developer – conditions that can’t be altered by the purchaser and lock them in for the duration.   Most contracts will state a time during which the developer will apply for the “plan of subdivision”. However these periods are generally long (sometimes in excess of 18 months), and the developer has the entire period to resolve any disputes, during which the purchaser is tied in.  Should the plan of subdivision not arrive within the stated period, the contract will be rescinded and deposit monies refunded – however the purchaser needs to bear in mind the length of time this can take (sometimes in excess of 12 months) and make provision for the worst-case scenario. The contracts will sometimes specify “settlement dates”, however when it comes to development, nothing is set in stone.  Delays are typical, and the contract will make provision for this.  If the purchaser has made plans to vacate his or her existing dwelling, there can be significant expense and stress involved in finding temporary accommodation for what is often an unspecified period of time.  Once again, the contract makes no provision for withdrawal. In addition to this, the lot dimensions can change due to the council specifying the need for additional public space within the community.  Contracts for house-and-land package sales generally give the developer every right to make minor (which in some cases turn out to be major) alterations – not only to the land size, but also the interior fixtures and fittings.  (Note the meaning of “minor” is not specified!) Unlike with established sales, the purchaser cannot threaten to delay settlement – he or she is “locked in”. 
<hr class="system-pagebreak">
Any new home looks great at the start of its cycle, however 10 years down the line will reveal whether it was a quality product or equivalent of a factory mass-produced item.  Developers obviously build with a guaranteed seven-year period in mind – and unless you’re familiar with the builders’ work and long-term reputation, don’t expect the property to last without fault for 10 years or more. Furthermore, it’s not unusual for significant defects – sometimes established at construction – to go “unnoticed” until after the specified period expired and age begins to kick in. The time and expense involved in legal battles of this nature is often enough to deter complaint.
 When purchasing an established dwelling, it’s possible to make offers subject to a building inspection, however this option is not applicable to new home sales.  Furthermore, if there are any defects at the completion of construction, it’s not necessarily going to be an easy ride getting the issue resolved.  By the time defect has been discovered, the builder may be working on another development therefore typically hard to contact or worse still, he may have suffered bankruptcy in the interim.
Furthermore, it’s important to note that the bank cannot not provide a carte blanche guarantee they will lend against the home until construction has been completed.  Even with pre-approval the final box isn’t ticked until a valuer can inspect the finished product.  During the period of construction – which can easily take in excess of 12 months or more – the market may have fluctuated downwards and therefore there’s a significant risk the valuation could fall short of the contract price.  The purchaser may have to come up with an extra $10,000 or $20,000 to complete the contract of sale or risk losing their deposit all together. As I specified at the beginning, all house-and-land sales come with risks attached.  This doesn’t mean a purchaser need rule them out all together – however it’s essential to walk in with eyes wide open and minimise the liability involved. A good developer will generally aim to please and complete the contract as promised, however there are no guarantees and the purchaser must allow for this.
Before you buy into the government incentives read the tips below.  You may well decide to stick to the security of real estate you can touch before you buy.
<ul>
<li>If possible, check the builder's previous developments and get a feel for the quality and finish.</li>
</ul>
<ul>
<li>Allow for the worst-case scenario.  Should the master-planned community fall through or fail to settle within the specified period, make sure there’s a back-up plan that won’t leave you homeless while searching for a plan B.</li>
</ul>
<ul>
<li>Read the fine print – get the contract checked – and understand the worst of the risks involved before signing on the dotted line.</li>
</ul>
<ul>
<li>Try and negotiate a “deposit bond” rather than cash.  Should the developer become insolvent or disappear prior to construction, tracing a cash deposit may be difficult.</li>
</ul>
Ask lots of questions!  Can you visit the site prior to construction?  Will you be consulted if changes occur to the specified plans?  Where will the deposit be held? (Usually a deposit sits in the real estate agency’s trust account and doesn’t accrue interest; however this isn’t necessarily the case with off plan developments.) Can you exit the contract if the development fails to be completed on time?
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition. 
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Be wary of uncertain house-and-land packages

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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[smartcode_project_cta:default project_id=152737]

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Catherine Cashmore

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