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The government has offered many half-hearted incentives to encourage purchasers to choose regional towns over the more “desired” inner-city locations for their property purchases. Much of this encouragement has been via grants such as the first-home owners’ boost, which enabled some buyers to claim in excess of $30,000 if building or purchasing off the plan in an outer-suburban zone.
However the “fixes” have only been temporary and commonly when the incentive finished, overall turnover dropped along with the median house price. Calls for more permanent solutions such as heavy investment into infrastructure and the decentralisation of jobs have barely been heeded and consequently growth has been lacking.
However it now seems the government has unwittingly stumbled across its greatest and most successful incentive yet. The consistent squeeze and shuffling of cards in the inner- and middle-ring locations, causing median prices to rise disproportionably compared to over all affordability, alongside vain attempts to address shortages for renters and home buyers with mass approvals of high-rise accommodation or poorly facilitated new estates, is starting to force a dramatic shift in the way regional towns are viewed by our home buyer market.
You may remember the furore that was invoked early last year by Prosper <country-region><place>Australia</place></country-region>’s call for a “first-home buyer strike”.  At the time many in the industry viewed it as a joke, it was based on a preconceived idea that <place><country-region>Australia</country-region></place> was on the brink of a housing crash.  “Price falls are imminent – protect yourself. Don’t buy now!” was the slogan.  However as of writing, it’s yet another doomsayer prediction that has failed to eventuate with an upward turn in median prices already evidenced in various pockets of the country.
However, if you didn’t know any better, you could look back in retrospect and herald it a success, because over all turnover throughout the course of 2011 – according to data thus far released by the Valuer General – is more than 20% lower than can be recalled for over a decade. Due to our low unemployment rates and relatively healthy economic prospectus, the effect on prices wasn’t quite the demise Prosper <place><country-region>Australia</country-region></place> manager David Collyer desired. Prosper Australia had its sights set on a crash to make US vendors suffering a 40% drop in the value of their properties look like a walk in the park – thankfully we have better fundamentals.
However, while a drop in median house price won’t cripple a real estate agency – especially as on a national scale it was less than 5%  (Dec 2010 – Dec 2011) –  significantly lower turnover will. Throughout the year, larger real estate franchises shed staff and many smaller companies shut up shop. Those that held on survived only with the support of their rent roll which grew from the flood of first-ome buyers unable – or unwilling – to take a step onto the first rung of the property ladder.  Therefore, whether it was down to Prosper <country-region><place>Australia</place></country-region>’s’ campaign or not, buyers did indeed “strike” for want of a better word.
Of course, it wasn’t just first-home buyers who decided to abstain from the market in 2011; upgraders, downsizers and investors all kept their cards close to their chest either unwilling or unable to make a housing commitment.  However, we live in a welfare state and have a political and social responsibility to help those most in need. When it comes to purchasing property, there is only one demographic that fits this agenda and thus captures the media headlines – first-home buyers.
Not purchasing property in 2011 didn’t really help the first-home buyer cause.  Like it or not, “opting out” of the housing market just isn’t an option. We all require shelter and if we’re not buying, we’re living with family, renting, or one of the 105,000 nationwide with no permanent abode to call home. Inflation throughout the course of 2011 was roughly 3.1%, however due to the consequence of more than 20% lower turnover and the ensuing pressure on the rental market, yields in areas of high demand increased some 13% (according to research done by RUN property). Therefore even though median house prices have dwindled, which according to the HIA Commonwealth Bank Housing Affordability Index has improved housing affordability by 8.3% in December 2011 compared with December 2010 (something worthy of celebration), the impact certainly hasn’t assisted first-home buyers, who are struggling to save while paying exorbitant weekly rents.
Since the GFC banks have tightened their lending criteria falling hardest on the first-time buyer demographic. It’s now essential to show evidence of “genuine savings”, which should make up at least 5% of the deposit. Gifted, borrowed or inherited one- off lumps of cash don’t always fit the bill. According to Loan Market, 77% of the first-home buyers surveyed found themselves unable to meet the “genuine savings” criteria. It’s also evidenced in various other surveys, including one from ING that found only 21% of first-home buyers approached felt they’d be able to raise the required amount.
This should come as no surprise to those of us who have, at some point in our lives, had to work our way from the rental ladder to ownership.  However saving under the added pressures of a 21st-century “rich” lifestyle, which often requires possession of various big-ticket’’ items such as a car, computer, smartphone and so forth, upon commencement of employment, not to mention the pressures of population growth pushing house prices ever northwards, makes saving the required deposit harder now than ever before. This is one of the reasons I have greatly favoured encouragement of the first-home buyer’s savings account, which so far has had a relatively small take-up.
Due to the interest rate drop late last year and boost in consumer confidence, there has been a marked increase in buyer activity in the beginning of 2012 – most noticeably in the first home buyer sector.
What’s interesting however is where this activity has centralised. Since mid-2011 there’s been an increasing trend towards regional locations, which could have us changing the term “buyer strike” to “buyer vacation”. It seems a growing proportion of this demographic have finally decided to satisfy their need for ownership through a surge towards the substantially more affordable rural or outer-suburban zones. Last year, some of the biggest quarterly and yearly jumps in median value were experienced in regional locations.  Areas such as Ballarat, <city>Bendigo</city>, and Shepparton in <state><place>Victoria</place></state> showed rises in excess of 5%, while prices in more popular (and consequently over-populated) suburbs in the inner city dropped some 20% in certain pockets.  Meanwhile in <city><place>Sydney</place></city>, suburbs situated some 30 kilometres west of the city, which have historically suffered from low demand, are now showing signs of being future hotspots set for a potential boom in growth.  Of course, any location close to a mining town – such as Rockhampton and Toowoomba in <place><state>Queensland</state></place> for example – has also attracted healthy interest and consequent rises in their population and median value.
Recently, realestate.com.au conducted a “mood of the meeting” survey on its Facebook page asking first time buyers if they were interested in purchasing rural’ to gain entry into the property market.  The survey attracted an overwhelmingly positive response, with most replying either “yes, considering” or “already done”.
For example, in <city><place>Melbourne</place></city>, the population in outer-suburban Wyndham increased by 12,600 (8.8%) in 2010, which was both the largest and fastest increase of all Victorian local government areas. Strong growth was also experienced in Whittlesea (up 8,900 people or 6.1%) and Casey (8,100 people or 3.3%). The rises in median give weight to the assumption that they are gaining popularity with an increasing number of home buyers.
In <state>New South Wales</state> areas such as <city>Blacktown</city> (up 8,300 people), The Hills Shire, and <place>Liverpool</place> (both up by 3,400 people). In <state><place>Western Australia</place></state>, strong population growth has boomed in the outer-suburban fringes. The five local government areas of Wanneroo, Rockingham, <place>Stirling</place>, Swan and Armadale) accounted for more than one-third of the growth across the state in the year to June 2010.
 
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The change is a positive move from a social and political perspective, and it’s vital we not only encourage it, but also prevent a reversal by following the population surge with significant investment in infrastructure and industry. Anyone who has experienced rural living or small-town society will vouch for the strength of community that often emanates from the resident population in these towns.  It’s highlighted best when there’s a disaster such as the recent floods. 
The neighbourly spirit, camaraderie and social blossoming that results as cleanup and support systems kick into action bring out the true Australian spirit – the same spirit that was witnessed during the early settlement period and which often lacks in inner urban vicinities where people have little connection with those who live in nearby surrounds.  Although some will vacate a town after a national disaster of significant proportions – such as the recent earthquakes in Christchurch NZ – many will develop a deeper connection and respect for the land and the community strengthens.  As a lifestyle option living regional has riches to offer, and yet continually plays the poor sibling to our more populated capitals.
In urban zones, initiatives such as “neighbour day” have highlighted how little we know about those who live around us.  In short, the best asset you can have as a vendor is contained in the community that surrounds your home.  A flourishing community encourages extended periods of residency resulting in a happier and healthier population, lower crime rates, and subsequently helps underpin house prices.
Previously the overwhelming trend for buyers has been to invest in city suburbs with vibrant night life and abundance of well established infrastructure.  However, while regional locations can’t always compete on the same level, they do offer a viable option to secure cheaper housing and a quality of lifestyle which is often more suited to raising a family. It won’t please David Collyer – who wants home buyers to abstain all together, but calling for a ‘home buyer ‘rural vacation’ for those who are willing and able, rather than a ‘home buyer strike’ should have overwhelming support from all of us who hold Australia’s future interests to heart. 
For years, state governments have been trying to improve affordability and address population growth somewhat unsuccessfully. However a gradual boost in the regional populous in small satellite towns with already well developed facilities, will hopefully encourage greater investment leading the way for larger institutions to take up shop and thus create opportunities for employment.  Other initiatives already underway, such as the National Broadband Network, will also have a positive influence. 
As for investors, the party line has always been to invest as close to the city as possible in order to gain the greatest capital returns, however our cities are now so well populated, it’s clearly not going to always be a desirable prospect for home buyers – particularly families - who are essentially the demographic which fuel capital growth.  Towering high rise developments and crowded polluted roads and transport systems, along with ever decreasing blocks of land, are limiting the larger proportion of our buyer market in inner-urban zones. Instead a view to investment in well established regional towns could be a step in the right direction for those who want to take advantage of what seems to be the start of  a mini boom.
All in all, instead of praying for a monumental bubble burst to improve options for home buyers, the call should be going out from organisations such as Prosper <place><country-region>Australia</country-region></place> to promote the regional agenda.
Catherine Cashmore is an experienced buyer advocate, property investor and market analyst.  She regularly appears as Channel Ten’s property expert on The Circle.
Photographs by Scott Davies and Mike Moody, courtesy of <a href="https://flickr.com/" target="_blank">Flickr.</a>
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Home buyers head for the hills, and the outer suburbs

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There was a time when housing was seen primarily as a place to shelter loved ones, to keep possessions safe, to protect against the elements and through permanent settlement, stake a claim on the land, however securing this shelter has never been an easy road.  Historically, as soon as man began to “settle” housing became a luxury reserved for the rich.  You could argue that it hasn’t changed much – especially in Australia, where rising house prices and a shortage of “useable” accommodation has placed a strain on aspiring home owners thereby gradually reversing the trend from ownership to tenancy.
Since history began, housing was an integral part of the most valuable asset man desired, fought over, possessed and in many cases died for – land.  Land was – and has always been – used as a symbol of power and wealth.  Whether it be a means to make a living through effective cultivation, a form of wielding control over a resident population, a place to build the modern-day castle, or simply a speculative investment, it’s the most valuable commodity mankind owns – a valuable and finite commodity that becomes more so as the population expands.
Back in mediaeval times, there was no set system of ownership.  If you found it, you owned it, and if you wanted it, you fought for it. It didn’t come with recognised rights of ownership or tenancy laws protecting the resident population.  However all this changed on the most important date in <place><country-region>England</country-region></place>’s history – 1066.  When William the Conqueror took England, he declared all the land ownership of the Crown.  Keeping a quarter for himself as a personal holding, he gave a proportion to the church and split the rest into “manors”, which he distributed out under strict freehold conditions to barons.  He understood the value of land and the emotional envy it could inspire; therefore he was careful not to provide anyone a proportion large enough to invoke rebellion.
However, what he did provide was – as never before – the start of a recognised form of “free ownership” able to be split, used, sold and inherited as a personal holding.  In return for this generosity, the barons were required to pledge loyalty to the king in the form of monitory payment and – when required – military force.  After taking their share, the land was further subleased to knights, who thereby paid for their holding with a requirement to serve the barons’ combative needs.  The knights in turn subleased a percentage to serfs – who paid for their shelter in the form of food production and service on demand.  So started the evolution into the system we have today of “fee simple” ownership and land tenure – and thus, real estate became a valuable personal and recognised asset to be traded, sold and exchanged at the owners’ will.
Land has always equalled more than just a monitory value.  Unlike shares, the physical aspect of the asset and the emotional quality it holds have always underpinned its value.  The more potential the land holds for development or cultivation, the more value can be created.  It’s never been an asset easily liquidated, however because it’s essential to our basic needs, it stands right up there alongside food and water.  Of course, like any other investment, its value is assessed in terms of the demand created by location, potential use (the amount of accommodation it can provide) and health of the overall economy.  It follows the basic rule of any investment model – less supply fuels more demand and in Australia – particularly in the urban areas where most people want to reside – land value has increased through the continuous restriction and scarcity of supply and a population experiencing rapid, unprecedented growth.
You can debate the argument between shares vs property (land), as much as you want.  You can quibble over which will provide the best returns.  You can pull up charts, graphs, complex calculations and genuine examples to effectively win the argument for either side of the coin, because there is no doubt we have investors who have effectively wielded great wealth out of each model. However the one essential overwhelmingly obvious difference granted to investors of real estate is the personal control a privately held piece of useable land in a sought-after location provides – and it’s a lot more than a certificate of shares in the family safe.
 
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It’s not just a case of deciding when to buy and sell; you can control other aspects such as renovation, extension, subdivision, and major development.  Providing you picked the right area to invest initially, the long-term risks of loss are extremely low. Sure, we can look out from our sunny side of the rainbow and wag a finger at Greece and the US as a shining example of “when it all went wrong”, however what went wrong wasn’t peoples need for shelter, or the emotional aspirations and value they placed on property.  Neither was it the mentality of those who invested with a cautionary approach for the long term.  What went wrong was a system that fuelled speculative greed.  A system that encouraged the population and big organisations to treat real estate as nothing more than a vehicle to trade with a get-rich-quick mentality. A system that encouraged lending of “non-recourse” “get out of jail free” 100%-plus loans granted to unqualified recipients.  The irresponsible lumping of mortgages into “pools” to be purchased, sold, sliced and traded, thereby treating property as nothing more than a company share with the unrealistic expectation that what goes up never comes down.  The result was understandably cataclysmal.
You will see it stressed with regularity by Property Observer’s resident panel of authors that real estate is a fantastic investment if basic rules are applied – the first being the rule of long-term holding.  We have fees associated with the purchase of real estate that make selling and buying expensive and therefore not encouraged.  As much as real estate is a sought-after form of equity – particularly in the inner-city suburbs, where land is now just a game of musical chairs between a growing number of players – it’s not one that gains quick profit from “flipping” (buying/renovating and immediate selling) <a target="_blank" href="https://www.propertyobserver.com.au/victoria/the-block-auction-a-dose-of-reality-which-sydney-finally-loved/2011082251240">as programs like The Block on Channel 9 have duly demonstrated</a>.
It’s not akin to a company that can increase its customer base considerably without length of time being a critical factor.  Rather, it’s a steadily climbing asset dependant on many economic factors – the most fundamental being peoples need for it.  Only those vendors who have owned their acquisitions for 10-plus years will have experienced substantial returns (even taking into account the recent downward phase of the property cycle.)  Furthermore, they have been protected from any US-style “crash” by Australia’s prosperous status of low unemployment, regulation of loans, a growing population and a sunny long-term economic outlook.
It must always be remembered that our best insurance against a housing crash is not an investor, but an owner-occupier – they make up 70% of home owners. In recent times owners, not suffering under any prospect of forced sales, have underpinned the overall value of the market.  Over the past year, those who have needed to sell have – in due course – dropped expectation (in some instances lowering prices by as much as 15% to 20%).  However, even though we bandy around that popular adage of a vendor needing to meet the market – we might as well be talking to the wall, because owners – most of whom are in gainful employment – simply don’t need to meet the market, they’re perfectly happy to hold until the next boom totters along.  So, all in all – so far as Australia’s concerned – property’s been a pretty safe bet – but maybe the tables are starting to turn?
Thus far, we’ve been used to measuring patterns of growth over a number of years, not the volatility of days. But this is all about to change with the introduction of <a target="_blank" href="https://www.propertyobserver.com.au/residential/rp-data-rismark-march-1-daily-index/2012030153640">Australia’s first “daily house price index suite”</a>, which will track timely market movements (without being unduly influenced by compositional biases).  It’s been put together by the most accurate real estate data provider we currently have – RP Data/Rismark.
Most property graphs show smooth lines of movement taken from data updated on a monthly or quarterly basis.  They have not been subject to the more volatile day-to-day movements that show clearly to all who work in the property.  By updating property sales as and when they are recorded, the line on the graph starts to look a little more unstable and provides a fascinating insight into a microscopic view of market sentiment.
However, while daily house price movements avoid the violent volatility associated with various companies floated on the share market, they have the potential to inspire a similar reaction.  Furthermore, the index has been produced with the prospect of being openly traded, thereby swinging it into the hands of large overseas hedge funds that want to start betting (hedging) against future movements our property market may take.  It’s not only large institutions who can play “casino” with the daily index, it’s everyday folk like you and me who don’t want to lay down a large deposit on the real thing (which is a growing demographic).
No one can be against the concept of having increased transparency in market movements.  Australia’s residential property market is worth about $4 trillion, so access to reliable timely data is critical for institutions such as the RBA. However, encouraging anyone to view property as something to take short-term bets upon is moving away from the fundamental understanding of property’s primary purpose, which is essentially a place for shelter. This has the dangerous potential to bubble and topple under a mentality that rides on “get-rich-quick” speculation.  Even though many will argue that on the current view, volatility is marginal compared with a day’s ASX trading, it does not take away the fact that we’re encouraging people to gamble on something that should never be used for such a purpose.  We’re effectively opening the gates to a different and dangerous mindset.
As I said above, the property market is underpinned by an owner-occupier mentality, but easily tradeable assets are not.  Furthermore, investors make up an increasingly dominating proportion of certain volatile sections of our real estate market (principally high rise and mining towns) and even in the “nothing safer than bricks and mortar” side of things they’ll be quick to bail if Australia hits that sticky point. Instead of looking at graphs, we should be encouraging real ownership by providing greater promotion of solid well qualified models such as the first-home savers’ accounts.  It might be an old-fashioned view, but it’s a much safer one that taking short-term bets in a property casino.
For those tempted, feel free to lay your chips on the table because based on the information so far, it doesn’t look overly dangerous.  However, I would heartily encourage you weigh long-term risks carefully.
Catherine Cashmore is senior buyer advocate, property manager and market analyst for Elite Buyer Advocates and also Channel Ten’s property expert on The Circle.  With extensive experience in all matters regarding real estate, <a target="_blank" href="https://www.elitebuyeradvocates.com.au">Elite Buyer Advocates</a> successfully purchases, assesses and negotiates more than $200 million worth of property each year for clients. 
 
 
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Australia's housing market could crash if property's primary purpose is forgotten: Catherine Cashmore

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Australia seems to make half-hearted appeals to encourage regional migration.  I say half-hearted because despite “generous” housing grants offered to those who venture out into these comparatively desolate locations, there is little to entice migrants to make the move into neighbourhoods crying out for growth. The expectant short-sighted and stubborn belief that building new housing and granting one-off incentives will have consistent migrational effect is futile, without investing first and foremost into infrastructure, transport, education, health and most importantly jobs. 
These are the only innovations that can open the door to a wider demographic and thereby ease inner-city inflation.  However, all of this comes at a cost, which is hard for governing powers to justify short term, therefore we’re condemned through need – and subsequently desire – to live in metropolitan locations, which are now beginning to strain at the seams. This places a tremendous responsibility on the shoulders of our town planners to get it right, as it’s their job to redesign Australia’s capitals and make the topographical alterations that will bare effect on our cultural progression. If they get it wrong, we can wave goodbye to the yet distinctive allure that sets Australian cities apart.
For the vast majority of buyers (roughly 70% of them according to the stats) purchasing a property is about purchasing a “home” and therefore a “lifestyle”.  So far we’ve been lucky in Australia.  Our cities are the essence of “liveability” – those who haven’t travelled overseas may not think it, however spend some time in the world’s other hotspots such as London, for example, and you’ll soon get tired of the comparatively high levels of crime, traffic congestion, pollution, cold winters, vandalism, unmanageable population, and the modern monstrosities architects have created in order to prove the point.  Australians love travel, but no matter how enjoyable the vacation, it’s rare to hear an Aussie express a strong desire to live elsewhere. Our national anthem says it all: here is always “home”.
For this reason, Melbourne, Sydney, Peth and Adelaide commonly drop into the top 10 of the “world’s most liveable cities” (according to The Economist's yearly survey).  A large part of this is due to our “walkability”. In the inner- and middle-ring metropolitan locations, there’s easy access to transport, schools, parks, and shops. However, this alone doesn’t make us liveable – what truly makes our cities liveable is the interaction we have with the people who share our neighbourhoods.   
This interaction comes in various forms and fosters a valuable sense of community.  Shopping strips lined with small coffee shops and cultural delicacies, corner pubs offering live music, ample parklands, bike paths, museums, sporting events, theatres, festivals, backyard barbecues, conversations over the garden fence, those we meet on an summers evening stroll – the list goes on.  It’s interactions like this that nurture empathy and without getting too detailed, ultimately keep crime rates low and people grounded. However, this cultural interaction is only possible and sustainable because our unique architecture over the decades has evolved to allowed it. Height restrictions, heritage overlays and green bans protecting parkland have all played their part. However, this is now rapidly changing.
I remember Prince Charles daring to speak out over the subject of how “modernists” were ruining the look of England’s cities. He was correct in as much as he shared the majority opinion of local residents struggling to cope with all too wilful destruction of their local communities. London – home to some of the most magnificent architecture in Europe – has largely been destroyed by mountainous glass towers, which disproportionately squash as many citizens as possible into confined square boxes. The bigger the population, the greater the temptation to provide these quick-fix relatively low-cost answers, and the result is a move away from enabling the population to physically and socially meld with their local environment. Quaint rows of terrace houses (holding similar appeal in the UK to some of Australia’s streets, which are lined Victorian and Edwardian terraces) quickly lose their attraction when surrounded by these monstrous constructions and despite various heritage overlays and supposed safeguards, Australia is heading down the same route.
There has been many a discussion in Melbourne over the disastrous development in Docklands.  It was to be one of many golden answers to Melbourne’s shortage of supply. But why hasn’t it worked? Of all the inner-city suburbs in Melbourne, Docklands (along with Southbank) consistently holds the highest vacancy rates and lacks any lasting appeal for home buyers. It’s not just down to the type of housing provided – important oversights were made from the outset such as lack of schooling, parks, trees, open spaces, community centres, pubs and so forth. However, considering the largest demographic living in the neighbourhood are young singles, you would have thought close proximity to city amenities would have quashed any negative effects this oversight caused?  Not so! The most common, encapsulating, comment you’ll hear from unhappy residents is “it lacks soul”. 
There is no diversity of housing stock in Docklands to attract a varying demographic.  The abundance of high-rise accommodation (which I admit has its place in any city and is obviously needed in proportion) fosters no social interaction whatsoever.  Children playing in the street, dogs going for a walk or residents popping down to the milk bar to stock up on essentials – you won’t find these things in Docklands.  Who wants to pop out for a stroll when it involves waiting for a lift that stops at multiple floors on the way down and puts you onto a comparatively deserted street with no perceptible verve or spirit? Had planners envisaged the suburb to involve a “useable” range of accommodation options and community facilities that nurture a wider demographic and subsequently interaction (thus thinking beyond the cost benefit of simply squashing as many people as possible into each small square metre of land), it would have eventually evolved into the success story as planned. However what a tragic (arguably) waste of residential land it’s proven to be.
For a timeless success story in architectural design, you don’t have to look far from home. As any real estate professional will tell you, the housing that attracts the broadest demand from the general population is that which holds period appeal. Although many of these homes at the time of construction were built subject to a strict budget, they engaged with the environment around them enough to maintain their attractive street aspect and keep the localities thriving.  Commonly, the main attraction to buyers of these timeless designs is the rare and opulent period detail, which is now costly to replicate. However at the point of construction, space was just as much an issue to town planners as it is now. These properties weren’t created for backyard barbecues – Victorian terrace housing is essentially the forerunner to the modern townhouse. It was (at the time) a “cheap” space-saving option. However, it maintained a balanced connection and sense of proportion to ensure the community atmosphere continued to thrive. 
For example, the veranda became an extension of the living areas – a place to welcome guests or sit in the shade on a warm summer’s eve.  Then, riding on the back of the industrial revolution, Modernist thinkers of the 1950s arrived and so did what’s often termed “Brutalist architecture” (or “streets in the sky”) – thereon followed a slow but steady demise. The tower blocks – options created by the new mass supply of building materials such as steel and concrete – were intended to be “protective and integrating” for residents, but when developed in abundance (providing accommodation for 150-plus residents), they proved just the reverse. Dark stairwells littered with rubbish, broken-down lifts, high levels of crime – even as design improved, lack of connection with the neighbours was a constant stranglehold on community participation.
Don’t get me wrong; I am not against high-density housing, nor do I have the curse of NIMBYism.  There is as much a place for apartment blocks as there is for the traditional Aussie house in the burbs – but when it’s developed vastly out of proportion with the local surrounds, it’s not conducive to society and there’s a point at which mass development must redirect its focus.
So what to do?  For those sitting behind local government desks, modern towers are the perfect solution to population growth. Like student housing, they have a place. For first-home buyers they’re a stepping stone to something bigger. For a growing population they’re essential. But step over that fine visionary balance and our cities will no longer have the appeal to top the most “liveable”.  The sustainable population debate has no easy answer – or I should probably re-express that as “no cheap answer”. Metropolitan locations will always be favoured by a majority, however we’re selling ourselves short if we don’t make the necessary efforts to unlock regional towns and encourage a broader pattern of growth.
For example, why not force large companies to locate their central offices in the smaller satellite cities that already have a strong established culture? Start to invest seriously into fast transport systems that link regional locations to the major capital cities thereby open up options for buyers.  Give back control to communities and allow local government to do what it’s essentially there to do – listen to the people and respond to residential needs.
All too often our local councils are bullied into submission by overriding federal control that never looks beyond short-term gain. All too often neighbourhood protests are ignored, because squashing more and more residents into a suburb takes a priority.  Australia has tremendous potential to be a lasting “garden of Eden” and envy of the southern hemisphere. No one needs fear population growth if we manage where we grow – however this growth must now move forward with a regional agenda.
Catherine Cashmore is senior buyer advocate, property manager and market analyst for <a href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a> and also Channel Ten’s property expert onThe Circle.  With extensive experience in all matters regarding real estate, Elite Buyer Advocates successfully purchases, assesses and negotiates more than $200 million worth of property each year for its clients.
 
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It's time to get serious about encouraging housing in regional areas

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Suggesting we need more investors in the property market is bound to evoke strong emotions from the first-home buyer demographic.  Many blame Australia’s “generous” tax incentives offered to property investors as the prime instigator for what’s considered (by some) to be an “overvalued” market.  The argument follows that if fewer investors purchased property, prices would fall and more young people would aspire to the dream of owning their own homes.
The basic premise is correct.  Take investors out of the marketplace and there’s no doubt demand would ease substantially with prices experiencing an immediate drop.  Investors currently make up about 30% of our market; therefore it’s a significant percentage to bear influence on capital movements.  However, if Australia’s real estate prices did drop and experience falls on a par with various states in the US (say some 40% to 50%) would there be a sudden rush of happy first-home buyers eager to snap up the “bargains”?  I doubt it.
Due to increasing concern over the global economic outlook and general market uncertainty keeping a tight cap on real estate price growth throughout the past couple of years, along with low interest rates easing the pressure for borrowers, housing in some states is more affordable now than it’s been for  years,  Some areas have corrected by more than 20% – and although it should be noted this has not happened nationwide, neither has it been restricted to the outer-suburban “nether-regions” where demand rarely stays consistent – inner-urban areas have also suffered from the current malaise.
Furthermore, despite the challenges of our “two-speed economy” and increased financial pressure on small businesses, the overall outlook for Australia paints a comparatively pretty picture, so expecting the slump to continue perpetually is unlikely.  As the deputy governor of the RBA Philip Lowe recently pointed out, it is not an exaggeration to say Australia is facing “a once-in-a-century investment boom”.
Aside from this, it seems our prospects over the next couple of years are also sunny.  Forecast growth in the economy is expected to remain on trend, unemployment rates low, and underlying inflation is bang on track to fall within 2 % to 3%.  Just in case this isn’t enough to inspire at least a smidgin of confidence from the initial home-buyer demographic, should there be any financial upsets resulting from a European disaster, we at least have the flexibility to somewhat buffer the resulting fall-out – so the picture’s looking rather rosy.
Yet despite all the above calling out to first-home buyers to enter now and realise their “Aussie dream”, purchasers love a bargain, but when it comes to property let’s face it, no one wants to take on the expense of a 30-year debt if there’s any hint it won’t provide healthy capital returns for the retirement fund.
Considering what’s happened to the property market in Europe and the US, many purchasers worry it could happen this side of the Pacific.  In addition, due to our modern transitional lifestyles, it’s become increasingly important that the first purchase has a large investment component in order to leverage up to the second.  You see, unlike during the 1950s, rarely is the first property a place to call home for the next 20 years or so.  We leave it longer to get married, have children later in life, and change jobs often.
All in all, first-home buyers prefer the amenity of more expensive inner urban locations than the relaxed atmosphere offered in the middle-suburban city ring “family-friendly” suburbs. Therefore, single first-home buyers struggle to afford their version of the dream and property purchases are often postponed for a later more settled period – during which couples can employ joint purchasing power.  However while a combined wage certainly helps, without that initial purchase to tap into, it’s hard to envisage even the family home will be achievable for a growing number caught in the long-term rental trap.  Therefore, with this front of mind, it’s clear where our future model of home ownership is heading – more renters and fewer owner-occupiers.
I’m not here to argue with anyone’s personal financial choices in life, but it stands to reason, if fewer people take the opportunity to buy, more will rent, and therefore as we transition into Australia 2030 with plans to increase housing supply substantially, we better hope there’s a growing crop of investors ready to pool their funds into property to meet this growing rental demand.
There’s one outstanding problem – the type of accommodation largely being built to absorb the need is unlikely to hold the future capital growth investors have been used to experiencing previously. At the moment Australia’s level of home ownership is high, at roughly 70%.  It’s been the desire to own a property along with our robust growing economy and population growth, which has underpinned house prices throughout the decades producing (even in the worst of times) healthy capital returns over a complete 10-year property cycle.
Considering our lucky economic stance in comparison to the rest of the world’s developed counties, along with a smaller pool of competitive buyers in the marketplace, generous tax deductions and the ease of restrictions enabling investors to tap into their self-managed super to purchase residential real estate, there’s more to encourage this demographic than ever before.  However while some property prices will continue to attract genuine owner-occupier demand and therefore maintain the long-term upward curve on capital appreciation, it’s important all property buyers understand the changes our town planners envisage if they’re going to avoid what could be a dangerous and speculative bubble.
Most renters are singles or young professional couples.  As has been demonstrated on numerous occasions by the ABS, the fastest-growing household statistic is the single person model.  The challenge of housing this demographic is providing our state governments with the perfect excuse to begin redesigning our capital cities into a potential (at least in the short term) graveyard of residential real estate.  What’s missed by the data is the type of property single home buyers really desire to own – and in many respects, long-term tenants want to rent – and I can assure you it’s not the accommodation currently undergoing mass construction.
If you take a look at an aerial shot of Australia’s “most liveable” city, Melbourne, it’s easy to see why it stays at the top of the yearly survey.  It’s largely a low-rise city that contains a wonderful feeling of human scale.  Streets surrounding the border of the CBD and running directly across it are lined with buildings of character and charm representing different eras and styles thereby giving the sense, not of urban sprawl, but of a wonderful liveable and personable nature.
However, instead of embracing this low-rise advantage and expanding the transport systems to enable the growing populous to move outward’s and commute, the local government is set to embark on an ambitious “mega city” of skyscrapers “stretching from the MCG to the West Gate Bridge and north to the University of Melbourne”. One in which the Eureka tower (the second tallest residential building in the world) could be dwarfed.  As I’ve pointed out numerous times before, this style of accommodation is designed, marketed and limited (due to lending restrictions) to a predominantly investor-based market – a market that attracts a large demographic of foreign investment from those buoyed up on Australia’s speculative growth.
As any astute property professional understands, these buildings can be poorly designed, have a tremendously high turnover of sales (and tenants), extortionate owner corporation fees and a lifestyle that often feels akin to living in holiday accommodation.  Furthermore, when you have a market dominated by investors, should there ever be an unforseen event to tip us over the brink, (something has simple as a sudden decline in demand for our underground resources, for example) we could be looking at a mass of sales, and a situation in our high-rise market, akin to the worst-affected countries in Europe (for a good example, look towards Sesena in Spain).
When times are tough, owner-occupiers will hold whereas investors will bail in an attempt to liquidise their assets – and considering such large numbers of apartment sales are focused on the foreign market, there’s no telling what other international influences may affect future growth.
Plans like this aren’t limited to Melbourne; inner-city rezoning allowing for a greater density of stock is happening country-wide – for example, Brisbane, the Gold Coast and Perth.  In all the high-rise markets over the course of the last 10 or so years, we’ve seen poor growth (from oversupply and low demand) and in some cases very poor rental take-up (a good example would be Melbourne’s Docklands, which currently has a vacancy of 7.9% (SQM) and has seen less than 5% capital growth over the past five years (RP Data).  Considering the abundance of planned construction, investors purchasing into this market can no doubt expect more of the same. Furthermore, many of these apartments are sold based on their spectacular views of the city surrounds.  This is an attractive aspect, however don’t be fooled! There’s no condition in the contract that states the view can’t be built out.  The better the view, the higher the price – often by hundreds of thousands – therefore, the consequent price drop is not marginal by any means.
All in all you have to fear the future potential of this market and the consequence any drops would have on the economy as a whole.  Make your own conclusions and assumptions, but I for one will not be placing my hard-earned dollars in this direction.  I maintain that good property that falls under consistent solid owner-occupier demand will continue to outperform throughout the foreseeable future. Just be warned however, that without plenty of due diligence, the risks of making expensive errors are more prevenient than ever.
Catherine Cashmore is senior buyer advocate, property manager and market analyst for <a href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a> and also Channel Ten’s property expert on The Circle.  With extensive experience in all matters regarding real estate, Elite Buyer Advocates successfully purchases, assesses and negotiates more than $200 million worth of property each year for its clients.
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Why investors are essential for our property markets

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Ever had one of those days when you’re feeling a sensation beyond common understanding? Superstitious uncertain elements in our lives leave us with the uncomfortable feeling that some unknown, uncontrollable, pre-dictated event is “meant to be”.  It might not be the foundation of your belief; however, it’s a common feeling that most of us experience at some point in our lives and often bears unruly influence on the path we follow.  It’s particularly influential in the purchase of residential property – often stemming from elements that are buried deep in our subconscious memory.
We have the unfortunate ability to learn and speculate on future events based on influences that may or may not be working to our advantage, yet in order to really take control of our future, it’s futile to try and divorce ourselves totally from this questionable influence. The trouble remains, that all investment choices are – to some extent – speculation.  Using the recent financial catastrophe as an example, it’s possible (with savvy use of Google) to seek out those who predicted the fall and those who totally missed it.  With so much uncertainty circulating financial markets now, how enticing is it to bet on their other predictions to see if they also came to fruition?  Especially as the overriding sensation when looking at US or European residential markets is to think similar events could happen here – even if they were to occur under different circumstances.
However in Australia, when it comes to property investment there are certain things you can “speculate” on and be as close to 100% certain as speculation can get. Australia has the most transparent property market in the world.
In detailed surveys conducted by Jones Lang LaSalle, Australia consistently ranks as number one out of 81 markets across America, Europe, Asia Pacific, the Middle East, and North Africa.  For those interested, the survey covers, performance measurement, market fundamentals, listed vehicles, regulatory and legal environments and detailed elements of the transaction process. As Jones Lang LaSalle correctly point out, rising levels of transparency are important in terms of attracting both local and foreign investment and also ensuring market regulation.
However, while transparency doesn’t prevent elements that lead to market crashes, the free (or at least readily available) flow of information has the ability to speed up recovery in markets where transparency bears a priority – and Australia bears the best example.  The information available to our property investors is sight to the blind. In fact such is the detail contained in various property reports, including detailed suburb specific statistical information, the probability of walking into a property disaster is diminished considerably. Careful analysis of the data will also enable investors to time the market and purchase at the correct stage of the property cycle.  All in all, we have information and qualified advice available to ensure one of the top rules in real estate investment is adhered to: not over-paying in the first place.
Another sure thing in Australia is population growth.  In Australia, we’re averaging higher immigration than China, the US, Canada, Indonesia, Saudi Arabia and most other.  Furthermore, a quick analysis of information collected and free to all from the Australian Bureau of Statistics reveals exactly where our population is heading – the capital cities.  Even though we consistently rank in the top five for the least number of inhabitants per square kilometre, due to the unique topography of our land and climate, 85% of our population live within 50 kilometres of the coast in urban landscapes.  Well over 70% of our population is squeezed into the capital cities, with some growing faster than others.  The demands on infrastructure and existing amenities along with the challenges associated with sourcing skilled labour to build the accommodation needed to meet demand ensures consistent uprising pressure on existing property prices.
While it would be remarkably foolish to use these statistics to totally weather against the possibility of a “popped” market in some localities, it’s possible to pinpoint areas where demand will be consistent and land will remain in short supply and therefore continue to be a highly sort after asset.  A brief look at the 2030 plans of each capital city will give some scope of the relatively swift changes that are set to occur in our demographic structure, and this information will ensure educated assessment of the other major influence of property prices – supply verses demand.
If you get the supply/demand equation right, with the right property, suited to the right demographic,  you’re assured – even in the worst times – you’ll attract consistent tenancy and in the best times, solid capital growth.
For property investors, any confusion over the particular buyer market to target is another major deliberation that needs to be taken into account to ensure long-term demand.  However, risks of missing approaching trends can easily be diminished when evaluating the makeup of the future Aussie purchaser.   For example, by 2050, the Asian market is expected to dominate the Australian population.  <a href="https://www.propertyobserver.com.au/demographics/how-australia-s-changing-demographics-are-affecting-the-property-market/2011112852579">As I’ve pointed out in previous articles</a>, Asian buyers have a completely different emotional relationship to property than the now influential Australian/European purchaser.  Trends include a preference to modern interior designs, apartment living, or in areas of prestige, trophy home mansions designed to impress.
Providing you’re familiar with the local state or suburban landscape, it’s easy to pick out areas where this type of buyer market will have prominence.  Other considerations – such as school zones for example – indicate that buyer trends will incline towards family homes rather than units or townhouses.  It may be time consuming, however detailed information on local markets, developing infrastructure, buyer trends, zoning and heritage overlays, are free and accessible to anyone who cares to seek out the data, thereby cutting out the need for risky speculation.
Providing the purchase is a long-term acquisition of 10-plus years, all the major rules to diminish risky property investment are covered:  What to pay, where to purchase, and what to buy. However, other elements, dependant on real future unknowns, will certainly bear effect on short-term price movements (hence why property investment must always be a long-term plan).
It’s largely agreed that buyer and investor uncertainty has played a major part in the recent slump in Australia’s property cycle. When the RBA come out with statements such as “global uncertainty”, it’s effectively code for “we just don’t know”. From the recent overwhelming “expert” consensus that rates would drop to the out-of-sync movements between of the major banks and the RBA, it seems leading economists would have better odds betting on the Melbourne Cup than they would educating the general population.
Furthermore, in less than four years, we’ve gone from a generation that had no physical memory of recession and an $80 billion government surplus to some $153 billion of budget deficit and a global economy that looks a deeper shade of black.   Major retailers such as Borders have closed their doors, not to mention the scores of small traders and businesses who can’t keep their heads above water.  Job losses in manufacturing and a ridiculously high dollar just add to the mix.  It’s all very well stressing the strength of our mining sector, population growth, and  rosy outlook in comparison to other markets – however, short-term uncertainty has a far greater effect on  a society used to changing jobs every few years and milk-fed on Australia’s class-free “anyone can make it” mindset.
Warren Buffet is poetry in motion when it comes to giving quality advice in a single statement.  Here’s a few for property investors:
<ol start="1">
<li>“I buy on the assumption that they could close the market the next day and not reopen it for five years.” (Be prepared for an extended period of time, property only beats the odds if it’s a long-term bet)</li>
<li>“I don't look to jump over seven-foot bars: I look around for one-foot bars that I can step over.”  (Put financial buffers in place. Never invest on impulse and insure against short-term job loss and unexpected rate rises.) </li>
<li>“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” (Follow the fundamental rules of A-grade property investment – pay the right price, purchase in the right location, buy for the right demographic.)</li>
<li>“Only when the tide goes out do you discover who's been swimming naked.” (The naked are those who thought they could break the rules or skip the queue to overnight riches.)</li>
</ol>
 
Catherine Cashmore is senior buyer advocate, property manager and market analyst for <a href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a> and also Channel Ten’s property expert on The Circle.  With extensive experience in all matters regarding real estate, Elite Buyer Advocates successfully purchases, assesses and negotiates more than $200 million worth of property each year for its clients.
 
 
 
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Don't be swayed by superstition - property is as close to a sure thing as an investment can be

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It seems that just a couple of months ago we were reading headlines outlining the possibilities of a US-style crash in Australian real estate.  It was the most common question I got asked throughout the course of last year – “should I wait to buy – is the market going to drop further?” I never have to field such questions during the boom phase of a property cycle.  During these periods, despite cautioning the opposite, buyers are too busy following the herd mentality to take a step back and read the signs.  Now, less than two months after the barrage of media gloom, we’re under a new influx of subtle conditioning with headlines such as <a href="https://bit.ly/xbKQUN" target="_blank">‘Don’t bet on a property crash’</a> , <a href="https://bit.ly/Ax5RZD" target="_blank">‘Property crash just a myth’</a> and ‘Sydney streaks ahead of national market’ working their magic.
It’s totally understandable why moguls such as Gina Rinehart would see investment in Fairfax – even at a marginal level – as a valuable and strategic move. It doesn’t take Einstein’s mentality to work out we’re all – to some extent – puppets of the media.  As the author Nicholas Johnson once said about television (and equally relevant to other forms of publishing), “All television is educational television.  The question is:  what is it teaching?”  It’s a loaded query and one of which we should take note, because for most people, the only education they get on market movements is via mainstream broadcasts.  Furthermore, the stories are staged involve us emotionally, using personal examples and photos to illustrate the bias of the editor’s slant – stories that affect us on a very human level.
I have contact with a wide range of people involved in the real estate industry and often get asked to provide case studies for media stories.  Throughout 2011 the requests were for individuals undergoing rental stress or those experiencing negative equity.  So far this year, the demands have been specifically for those who have made considerable money from property investment – usually over a short period of time. I guess “normal” stories of success through long-term investment simply don’t sell in profitable numbers to warrant report.  It will be interesting to see how the year progresses in this regard, and I’m sure many investors will be left with little concept of who or what to believe.
Even more confusing – <a href="https://www.propertyobserver.com.au/residential/december-quarter-housing-data-roundup-four-sets-of-statistics-give-divergent-outlooks/2012020153215" target="_blank">the stats used in each feature are based on methods that differ considerably</a> depending on the index provider used.  Due to space requirements, these methods generally remain unexplained in the main body of text. As an example, the REIA uses the simplest method of correlation – picking out the middle number of all recorded sales results published on a quarterly basis.  Under this system, unit sales include townhouses, apartments, villa units, and so forth – with no specification of the differences between each property type. Any in-depth analysis of our market should not be based on this information alone considering how broad-based the results are.  For example, variability of sales volumes and the physical nature of stock available are two of many components that can skew the data.
Others attempt to employ more accurate assessments by breaking results down to reflect individual property attributes (two-bedroom, three-bedroom and so forth.)  This system is known as a “hedonic index”, and RPdata-Rismark is at the forefront of the research.  Then there’s the “repeat sale” methodology, which limits samples to properties previously sold.
Others only use detached dwellings thereby ignoring anything “attached”, and the preliminary “real-time data” each provider releases is only as good as the number and accuracy of results recorded from individual sales agents.  More confusing still, certain index providers assess capital city medians based on grouped suburb data – taking the 50% percentile from the correlated information to produce numbers that can differ quite remarkably in the short term to other research databases. To go into a detailed explanation of how each set of figures is collected would be an essay in itself.
Regardless, whichever is employed, it’s somewhat dangerous for investors to base their knowledge on one set of figures alone without a full understanding of the various instruments involved.  Having said this, to get a feel for overall “trends” in the market, median movements can be useful (hence why the RBA take close stock of the information).  When affordability is constrained during a downward phase of the property cycle, a higher volume of lower end sales will be reflected in the data and this can even be referenced when employing negotiation tactics.  However, they’re certainly not an accurate indication of an individual properties value.  For example, it’s possible for the overall median to drop while the price of an individual property rises.  A well-educated buyer will understand the fundamentals attributing to this quandary and override the waves of confusion – however, many will be left with <a href="https://www.propertyobserver.com.au/residential/divergent-housing-data-raises-more-questions-than-answers/2012020153216" target="_blank">more question marks than answers</a>.
Every buyer likes to feel he or she knows the market, and opinions on the prediction of long-term price movements often take a political air.  For those entering the market for the first time, or wondering whether to diversify their funds into property, this conflicting information produces a thought bubble of question marks – especially considering it’s foolish and all but impossible to make blanket assumptions on the Australian real estate market without a thorough understanding of the fragmented elements affecting each state and suburb.
Furthermore, Australia’s median movements are generally so marginal, they don’t deserve the sensationalist headlines they create.  However, I don’t underestimate the importance of the data in scrutiny of overall economic health, especially when other indicators weigh in to show the trend could be reflective of more serious concerns.
 
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Now we’ve moved passed Australia Day, market activity is about to begin once again. Weekend clearance rates will be published, poured over, and analysed, and investment advice will be spruiked from every corner.  Affordability has certainly eased, with last year’s interest rate drops being passed on by the banks, but caution still holds strong in the investment sector.  Those states benefitting from the two-speed economy have already turned the wheel on our downward trend, with Perth and areas of Sydney showing tightening vacancy rates and a marked reduction in stock.  For both states the bottom of the property cycle may have already passed, however in others – Victoria, for example – opportunity is still ripe (for the time being).
Melbourne is undergoing some challenges. The recent blows to the manufacturing industry with the downgrade of Toyota’s Altona-based factory and the challenges they’ll face when the carbon tax is implemented – including potential rises in the state’s unemployment, are all factors that will affect Victoria’s economy and general affordability and put a stop to any bullish ideas of a boom recovery.  As a consequence, any upturns in the market are likely to be perceptible later in year – and depending on a number of possibilities, may even push into 2013.  However, having said this, reported numbers attending open for inspections and buyer enquiry has certainly increased state wide – and with stock dropping and the population still rising, it’s inevitable that disparity between supply and demand in some suburbs will place upward pressure on prices.
The global picture doesn’t need comment at this stage – only to say it increases insecurity and will bear significant influence on the RBA’s decisions to further reduce interest rates – maybe more so than domestic matters.  Therefore, even though nationally we’ve seen a rise in the number of home loans, we’ve yet to see how many will be drawn down.
Indicators across all capitals show real estate around and below the state median is likely to be the strongest performer, with top-end sales still struggling.  This has been reflected throughout 2011 with a greater population push towards the more affordable outer-suburban markets and unit sales topping detached dwellings in the overall median data.
However, for vendors who have weathered through a complete seven- to 10-year property cycle, profitability in all states cannot be disputed – they’ve come out winning regardless of our current conditions. Even in Brisbane – which has taken the largest hit in its median value over 2011 (tumbling some 7%) –  when analysed over a 10-year property cycle, compound capital growth still shows rises in excess of 7% per annum.  The news won’t make headlines, but once again the long-term stability of wise property investment is demonstrated.
Back to current the current malaise and over all confusion, and it’s in an atmosphere like this that the greatest care should be taken when purchasing.  Only quality real estate is going perform well as we progress through 2012, and without plenty of due diligence, purchasers could find themselves making expensive errors.  However, if buyers can pull themselves away from the headlines and seek out more qualified opinions based on their own individual circumstance, opportunities to win in a gloomy atmosphere are in abundance.
Catherine Cashmore is senior buyer advocate, property manager and market analyst for Elite Buyer Advocates. She is also Channel Ten’s property expert on The Circle.  With extensive experience in all matters regarding real estate, <a href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a> purchases and negotiates more than $100 million worth of property each year for its clients.
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Look beyond the headlines to invest wisely in property

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Like many other industry professionals, I’m often accused of “talking up” the market for my own greedy ends – however, the majority of my working life is spent encouraging purchasers to avoid various real estate transactions, rather than enter into them. Having worked in this industry for many years, I’m still amazed at the risks people take when purchasing a property. It’s no surprise sales agents get a bad name with consumers – buyers seem completely oblivious to the fact that they’re working for the vendor not purchaser, and as such can offer little help or advice outside essential information that can only benefit their clients – namely the vendors.
For these reasons – and many more – buyers’ agents have become commonplace over recent years and the industry has grown considerably. In America buyer advocacy is considered the norm for property shoppers. However unlike in Australia, the listing authority between the selling agent and vendor specifies that the fee will be payment for “bringing a buyer”. Therefore, when the property is sold and commission paid, the fee the buyers’ agent receives usually comes directly from the vendor-paid commission and the buyer simply pays the purchase price.
With more mouths to feed, this is why American real estate sales commissions are so high to begin with (I’m told around 6%). It’s a complicated process fraught with conflicts of interest. Obviously if the buyers’ agent is being paid from the vendor’s commission, his or her fee will be greater based on property price. In other words, the more you pay for the property, the more the buyers’ agent receives, so there is little encouragement to negotiate a low price – although I’m sure there are ethical agents in the US who do a good job regardless.
In Australia our system is a lot less complex. Buyers’ agents work exclusively for the buyer, have an authority with the buyer, are paid by the buyer, and as such are contractually obligated to work in the buyer’s best interests. Therefore when it comes to sourcing a home, avoiding risks and seeking independent advice outside that of the selling agency, working with a “good” buyers’ agent is a wise idea. However those doing so should always choose a “fee for service” model, rather than a commission-based process.
Getting reliable advice is especially relevant to those buyers who intend to invest in property in another state or territory. When I worked as a selling agent, I often sold property to buyers over the net – sight unseen. It wasn’t unusual to get emails and phone calls from purchasers who were prepared to sign a contract on the advice I relayed alone – advice benefitting the vendor. The Australian market is fragmented and as such, different states are at differing stages of the property cycle. While Perth was tracking sideways a couple of years ago, Melbourne was enjoying a 20% rise over a single quarter. Therefore investors don’t want to be tied to local purchases if it’s wiser to search further afield and if this is the case, obviously a fair amount of research has to be done remotely. But should you travel to view a property before the final decision is made?
Well, that’s the advice from some who suggest investment should be totally void of emotion. It’s not so bad if you employ a local professional to do the necessary due diligence on your behalf – but in my opinion, internet shopping into the world of real estate with no more than a few advertisements and Google maps to sway your judgement is no better than plunging your hand into a lucky dip and hope it comes out holding gold. Checking out the feel, suburb and general surrounds of a location is something you can only experience physically – and yet it wouldn’t surprise me to see “Buy Now” buttons sitting next to real estate advertisements at some point in the not-so-distant future.
For instance, who can say how many buyers this year have been tempted by the numerous spruikers of American property investments and purchased into the country’s falling market, which seemingly has no bottom to its pit of despair? However, at the Home Buyer’s Show I attended in Melbourne last year, the room was full of “property professionals” advising the wisdom of such investments.
In Australia a buyer can travel nationwide and purchase a property on a weekend away if he or she so desires. If she’s really brave, she can do it remotely – signing and returning the paperwork via fax or email. However, any transaction is subject to the laws and regulations of the state purchased – and like every other state law in Australia, they differ(in some cases quite considerably) from state to state. For example, in Victoria, buyers commonly have three business days to “cool off” on real estate sales transactions (auctions excluded). New South Wales on the other hand allows five business days. Perth has no cooling-off period, and Darwin has a four-business-day cooling-off period. In all cases there are exceptions to the rule and if you don’t know what they are, you could find yourself coming unstuck.
For example, in Victoria, buyers commonly think the cooling-off period starts when the vendor signs the contract – however not so!  It starts from when the written offer is made – regardless of it being accepted. If the vendor waits for three days before signing the contract and the buyer has not employed a solicitor to conduct the due diligence needed for the paperwork, the time to use the “get out of jail” card without losing your deposit has long passed. No doubt other states and territories have variations on this and it’s confusing enough when you work in the industry – let alone when you’re conducting a real estate transaction only two or three times in a lifetime.
There’s currently a proposal on the table to bring in national licensing for all real estate professionals. When/if implemented it would allow realtors from different states and territories to conduct their business anywhere in Australia. However, without some streamlining of the different systems in place, it’s hard to imagine how agents will have the necessary knowledge to work in the best interests of their clients without local expertise. I am hopeful the delays keeping the proposal at bay are being used to address these issues.
Other points of confusion concern the different negotiation practices employed in each state or territory. For example – the market in the inner suburbs of Melbourne can move at the speed of light. As such, placing a contract with any special conditions is a challenge in itself, and the process has to be navigated carefully if the offer is likely to be accepted. However in Perth, where – until recently – prices have languished and auctions are rare, it’s common practice to place several special conditions on sales contracts and without understanding the process, it’s not wise to venture into an unconditional agreement.
Purchasing real estate is fraught with danger. Even for those with experience, without the best research and advice, there are enough hidden dangers lurking to ruin the potential of any pricey acquisition.  For example, if you wandered into Western Australia, buoyed up on the recent market activity and population projections without due awareness of the state’s new planning schemes, you’d risk missing out on some excellent potential for short term capital growth. In Perth, large swathes of land are being 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 become next month’s six-storey unit site. Obviously it will affect the potential and value of various blocks of land depending on which way the wheel turns.  All in all, the internet’s not going to be very good at sourcing out these types of intricacies.
Despite all of the above, when property shoppers take to the streets once again, there’ll still be a swathe of investors who’ll delight sales agents as they stumble across the street theatre of an auction and decide on first look to raise their hand and place a bid.  Some may get lucky, but others will be the fodder for this year’s newspaper headlines and in essence, it’s no different to a game of Russian roulette. Property investment isn’t easy; it’s hard work and takes time. Analysing the price requires on-the-ground legwork and access to data bases that in some states are only accessible to licensed real estate agents. Working out if a property is a suitable investment requires a physical inspection from someone who is an experienced local and should not be done via internet alone. It’s true no investment is free of risk, however make sure those you take are calculated and not reckless.
Catherine Cashmore is senior buyer advocate, property manager and market analyst for Elite Buyer Advocates. She is also Channel Ten’s property expert on The Circle.  With extensive experience in all matters regarding real estate, <a href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a> purchases and negotiates more than $100 million worth of property each year for its clients.
 
 
 
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Don't be so quick to buy property

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When considering real estate investment one of the rules you’ll often hear quoted is “follow the population”.  An increasing population indicates work opportunities, investment in infrastructure and demand for housing – however, it doesn’t always result in the best long-term capital growth if this is the objective.
It’s always important to analyse the reasons behind any surge in population and conduct a risk assessment on the longevity of the move before committing to a purchase.  For example, mining towns attract rapid population growth and infrastructure development; however, because that growth is reliant on one industry, the risk of a quick reversal of the wheel is ever prevalent – even in mining the good times don’t last forever – hence investment in a mining town is all about “timing the market”, rather than “time in the market”.
For an example of a longer trend in population growth that can also be risky for investors, you need look no further than the city.  Back in the 1800s just 3% of the world's population lived in urban areas. By 1900, the number of people choosing to reside in a city swelled to almost 14%. By 1950, 30% of the world’s population were choosing city living above rural lifestyle and in 2008 – for the first time in recorded history – half the world’s population were living in towns and cities. Earlier this year, China recorded a 50/50 split between city dwellers and “ruralites”, and by 203 (assuming we’re not hit by a monumental plague) the number of people opting for a city lifestyle will swell to almost 5 billion – that’s 70% of the population.  Frightening statistics – especially when you take into account the challenges we already face feeding the earth’s 7 billion.
The top 25 “mega-cities” now account for over half the world’s wealth – 50% of which comes directly from within India and China – which are incidentally Australia’s largest migrant populations (now on the brink of outnumbering the European-born residents.) Here in Australia we have a population growth rate of 68%, well above the global average, which according to the “population reference bureau” is projected to grow around 38% by 2050.  We come second only to Saudi Arabia, which projects a growth rate of 74% by 2050.
Roughly 89% of our population live in urban areas, 64% of which reside in the capital cities – by 2050 this will increase considerably.  We’re seeing changes on a monumental scale and the effects on our housing, infrastructure and topography will be unprecedented. The borders of our cities will have to expand to eventually soak up the smaller satellite towns surrounding the capitals – for example, it’s feasible that Melbourne’s metropolitan area will one day include Geelong and Ballarat – and density in the inner suburbs will feature strongly.  Obviously it indicates investment in rural locations for purposes other than lifestyle is unwise as demand is likely to remain weak.  However, investing in a climate of rapid expansion requires a little more due diligence than simply “following the population” if the aim is to build the kind of wealth that results from long-term trends.
The approval of “mooted” residential developments is the first risk that must be evaluated to protect against periods of oversupply of any one type of accommodation.  For example, the massive projection of high-rise apartments in Brisbane and Melbourne has played a significant part in slowing – and in some cases reversing – the profit investors expected to achieve over the last three years principally because of the record numbers under construction.
The same scenario happened in Melbourne’s Docklands when it was established.  The apartments were flogged by sales agents taking their cut directly from the developers pushing prices up in a wave, however supply was never tight enough, or the developments attractive enough, to ensure ongoing demand.
There may be broad acceptance that apartment living will be the choice for a growing number of inner-city residents – and numbers moving into inner-suburban localities bear witness to this – however there’s currently no indication that high-density, high-rise apartments will ever attract the level of capital gain you can expect to achieve when a market is driven principally by owner-occupier demand.  Residents living in these apartments are mostly renters – not owners – therefore the demand is principally driven by one market – namely the investor market.
We’re often told <place><country-region>Australia</country-region></place> has a critical shortage of accommodation around our major employment centres – however this doesn’t mean you can purchase any accommodation and reap the rewards.  Our shortage of accommodation should not be confused with the general buyer market, which is principally a “shuffling of the cards” and not an indication of how many need a roof overhead – or an assertion that they’ll be prepared to purchase anything.
A better indication of Australia’s critical housing shortage comes from our vacancy rates, which remain well below the long-term average.  Investing next door to these job centres may attract renters – but it’s unlikely to attract the kind of growth you can expect to achieve in an owner-occupier-dominated market. Move in the wrong direction and it’s easy to walk into an investor-fuelled speculative bubble.
Jobs are transitory and many don’t want to – or can’t afford to – purchase close to their workplaces, therefore they choose to rent and make their “expensive” purchases in areas less industrialised and more appropriate for family accommodation.
Mining towns are good examples of this.  The buyers they attract are investors who want to gain positive yields from the number of workers requiring accommodation.  The capital gains are fuelled by increasing numbers of investors jumping onto the band wagon.  However the workers do not want to settle long term and therefore choose to rent, not buy – when the work dries up, the majority won’t be hanging around and losses occur as fast as the gains. Stories of investors falling foul of the market are common because they’re projected to the front pages of the media, however when the reasons are analysed it’s always possible to see where mistakes were made. There are no guarantees with any type of investment – but there are safe guards you can set in place to insure against the risk of loss.
Other risks resulting from simply “following the population” occurred during 2009, when masses of purchasers moved into the outer-suburban new estates buoyed on by the post GFC first-home buyer incentives. For example, in the year 2009-10 the areas attracting the fastest population growth were all located on Melbourne’s outer borders – Wyndham, Melton, Whittlesea, and Carndina.  The level of growth was unprecedented and capital gains were fast. Developers of new land estates inflated prices under the surge of demand, with some suburbs rising over 20% during the year. Yet the gain was short term – as soon as the incentives were pulled back most purchasers experienced a short-term loss. The pain was well publicised in the press during subsequent months.  Defaults went up, and the demand could not be sustained from the area attributes alone.
There are no fast and hard rules when it comes to property investment; most advice will have exceptions based on the idiosyncratic characteristics of the suburb.  However as a general rule try and seek out those areas where turnover is low with a good proportion of owner-occupiers to renters and a diverse range of accommodation.  Happy owners generally hold onto their properties during a market downturn and therefore short-term losses from an abundance of supply are minimised.  These areas are generally populated by generations in their middle years.  Families and mature couples in secure long-term employment benefiting from growing equity.  Risk minimisation is important, therefore sticking close to the suburb median is important to insure against market fluctuations – spending more doesn’t necessarily mean you’ll gain more.  Finally, always invest within your means: having good buffers to protect against job loss and absence of cash flow is primary.
Catherine Cashmore is senior buyer advocate for <a target="_blank" href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a>. With extensive experience in all matters regarding real estate, Elite Buyer Advocates purchases and negotiates more than $100 million worth of property each year for its clients.
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Population surges not always a good indication of a solid investment

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There’s no doubt purchasing a property is the single biggest investment most people make. Even when housing was a cheaper acquisition back in the 1950s – long before it was recognised as a common investment model and subject to turbulent property cycles, purchasing a house and servicing a mortgage was a major financial stress factor in most property owners’ lives.  It was a simpler equation then.  Most waited until they were married to make the commitment, and then tended to purchase the property they intended to stay in for the next 20 to 30 years and bring up a family.  There was little need to move or commute long distances to work, as many occupied the same job position for life.  The motivation to pay off the mortgage was a security for retirement, and equity models were largely unheard of.
We’ve come leaps and bounds since then.  Debt is no longer a dirty word but a means to “wealth creation”. House prices have been inflated by a long-established ease of lending practices, various inflationary policies such as the first-home owner’s grant, and tax incentives to encourage investors onto the property ladder. Our inability to effectively plan for future population growth has ensured prices in those areas attracting the highest demand have sustained tight vacancy rates, rising rents and unsustainable booms followed by sharp corrections in the property cycle.  And it’s hard to ignore housing affordability has split the market between those who can and those who can’t (broadly speaking, the asset-rich with access to existing equity – and the asset-poor).
The motivation to ease the pain for first-home buyers and increase affordability in particular has led to a raft of policies that have done precisely the opposite. The first-home buyer grants have been renamed by various professionals as the first-home “vendor” grant, with widespread acknowledgement that they increase competition and as a consequence, increase property prices.  The incitement to borrow against equity and increase debt with interest-only loans, decreasing loan-to-valuation ratios, and various lending models such as “rent to buy” schemes have encouraged some borrowers to invest short term – “speculating” on a continuation of the housing boom. This is dangerous territory.
In Victoria, first-home buyers are underway to get a 50% stamp duty cut by 2014, while NSW is busy reining in stamp duty cuts on established properties for first-home buyers, which will no doubt skew market prices – at least in the short term. And to confuse the equation a little further, first-home buyers could now be termed “first-investment buyers” because the choice to live at home longer and purchase the first property as an investment rather than principal place of residence is now encouraged as a method to establish a foothold.
Neither does it help to see numerous “get-rich-quick” schemes wafted around like confetti. As I write, an email with the headline “How Linda Built a $12k per Month Positive Income (from property) in Just 6 Years” has landed in my inbox, and I don’t need to emphasise it sounds too good to be true.  Everyone’s looking for short cuts into what should always and principally be regarded as a long-term investment with the primary purpose of providing shelter – and not just to creating wealth.
In short, the only effective way to ease house prices is to increase supply in “liveable” areas of the city (areas with enough amenities to provide jobs, transport and options for those able to make the move into newer estates).  However, seeing as this isn’t happening at any great pace, and it’s unlikely that the already established incentives such as depreciation models and incentives will be abolished and further constrain inflation, we have to move our focus to a more traditional path.
Among all attempts by government to encourage home ownership, the only real policy that seemed to have the potential of genuinely addressing affordability was the introduction of the first-home savers’ account. It was launched back in 2010 as a high-interest, low-tax saving account, set up specifically to assist first-home buyers enter the market.  It committed (and educated) purchasers to save over a four-year period, however on the proviso funds were “locked” for the entirety of that period and only accessible for use towards home ownership at the end of the term.  Furthermore, requirements were for at least $1,000 savings to be deposited per year. Therefore those taking up the scheme had to have a long-term plan, secure employment, and plenty of dedication and vision to stick to the contract – something our 21st-century lifestyle rebels against.
As touched upon above, changes in employment are expected, particularly among the first-home buyer generation, and understandably there was reluctance to lock away funds with no “get out” plan for an extended period of time.  Therefore, take-up was initially poor. From a predicted 750,000 accounts, just 15,300 were created, with only $40 million spent out of the $1.2 million originally allocated. Thankfully there’s been some relaxation on the previous conditions, and funds can now be accessed before four years if a purchase occurs beforehand.  However, the changes have come too late and as far as I’m aware, the savers’ accounts are now only offered by a limited number of smaller lending institutions. For those interested, more information can be accessed <a href="https://bit.ly/zg5EZE">here</a>.
Thankfully there’s been a gradual trend towards the psychology of saving and paying down debt since the GFC.  This isn’t isolated to <country-region><place>Australia</place></country-region>; the reaction has been the same worldwide – it’s natural in such times.  It’s also significant that the changes have been prevalent in gen Y’s age group.  Westpac New Year's Financial Resolution Survey questioned 2,000 Australian’s on their prospective spending habits for 2012. The results showed that three out of four gen Ys were committed to a focus on saving in the new year, and this can only be welcomed.
However, how long the changes will last is debatable, especially considering further talks of rate cuts by the RBA, which are solely designed to get us out there spending once again and will in turn stimulate inflation in the housing market.  There’s no argument from consumers that the rate cut was needed, however as has been pointed out many <a href="https://bit.ly/woOYlV">times</a>, what’s needed in one sector isn’t necessarily needed in all.
Underlying demand and a shortage of homes in the capital cities will keep growth in house prices on an upward curve; the concern is around how many we are locking out the market with “kind” inflationary incentives that do nothing to educate our future workforce of the real tricks to building wealth and sustaining growth over the long term – principally saving, limited spending and wise long-term investment of the surplus.  One of the problems that led us full throttle into the GFC in the first place was short-focused, irresponsible unrestricted lending practices (principally in the US), which promised purchasers they could jump into home ownership without the strict self-governance of basic lessons such as the ability to comfortably service debt.  We thankfully didn’t have the same phenomenon here, however if we keep feeding the psychology that when the going gets tough someone will produce the taxpayer cheque book, we’re in the process of building bubbles and unstable foundations.
The lesson isn’t just one that needs to come from above.  It starts at home – according to various surveys, including one recently conducted by <a href="https://bit.ly/xSMl0S">Rabo Direct</a>, one in five gen Xs agree with more than 35% of gen Ys who accept that the only way they will be able to purchase a property is through handouts from their family (who purchased the traditional way, with no help and stricter lending conditions and generally higher interest rates).
Is it really that much harder now than it was then?  Well, yes, it is if initial expectation is too high.  We often see headlines exclaiming that the Australian dream is no longer a suburban detached house with ample backyard for games of cricket, but instead has been replaced with apartment living.  It’s not a replacement of the dream, it’s acceptance from those who are unprepared to move into the outer, more affordable, suburban areas, that they need to compromise and build towards the dream or accept a long commute to work.
So let’s drop the incentives, the handouts, and get back down to basic education. Housing is expensive and no one – government included – is going to step in and relieve the pain.  Therefore teach your children to start saving young and build stepping stones towards their long-term dreams – one of which should always be home ownership (most don’t want a life time renting and yet that’s what we’re slowly heading towards).
Take advantage of educational incentives such as the first-home savers’ account, but don’t give the lesson with a handout.  Warren Buffet is over quoted, however when you read his pearls of wisdom you can understand why - “A very rich person should leave his kids enough to do anything but not enough to do nothing.” The valuable long-lasting lessons are the ones we work hard for.
Catherine Cashmore is senior buyer advocate for <a href="https://www.elitebuyeradvocates.com.au/" target="_blank">Elite Buyer Advocates</a>. With extensive experience in all matters regarding real estate, Elite Buyer Advocates purchases and negotiates more than $100 million worth of property each year for its clients.
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Put an end to first-home buyer handouts

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It's almost impossible to accurately estimate the number of homeless in Australia. According to the 2006 census there were 105,000 – that's 5,100 more than recorded in the in the 2001 census, which counted 99,900 without a permanent abode.  Of course there are many reasons individuals find themselves without shelter.  Some come from abusive families, many being women and children, and some are what are commonly known as “couch surfers” – sleeping a night here and there.
However, as the price of housing increases, not to mention the shortage of affordable rental accommodation, we can expect an increasing number to join the queue. It's inevitable, because although housing affordability has improved slightly throughout 2011 with marginal falls across our capital cities, subsequent interest rate cuts, with more predicted later this year, will slowly swing the balance of power back into the hands of the vendor as part of the typical cyclical nature of the “property clock”.
The primary reason we have such a shortage of affordable housing is down to limited supply in the places people want and more importantly, need to live – the city.  More than 65% of Australia's population lives in and around our major capitals. Australia is a mere teenager compared with Europe, which has evolved with a network of smaller towns and cities to soak up a comparatively even spread of businesses and thus job opportunities. Due to a consistent underestimate of our growing population from those who plan for growth, we haven't prepared effectively for the population surge.
For example, unlike in other countries, most of the job centres are centralised in and around the capitals. On the outskirts of the city where land is in abundance, the cost of housing is pushed up by limited land releases and hefty development overlays, which are designed to compensate for the current lack of facilities such as schools, shops, parks, and transport – which are needed to create a much-needed sense of community for those moving into the new estates. As a consequence housing in the areas stretching beyond the train lines fails to attract the demand needed to produce an adequate turnover of stock or attract the surplus of buyers.
Consequently inner-city areas are growing in density with a dramatic increase in high-rise accommodation often going against complaints from councils and residents who protest in vain as their once leafy suburban localities start to evolve into something akin to Manhattan – they no longer have a choice.
Those that commute daily into the CBDs have to leave extra time to battle traffic, or accept standing room only on the local train/tram network.  Many home buyers have accepted the traditional Aussie house with a backyard for games of cricket and a family barbecue has been replaced with either a flat or small subdivision and courtyard at most. For those who want a larger property the compromise is usually a move into an outer-suburban estate and accept being far from friends, family, and work – plus slower capital growth. Most first-home buyers stuck on the rental ladder are only able to afford to enter the housing market if they have either help from family/friends to raise a deposit, or meet someone with whom to combine wages and savings.
Rents have increased more than 4% this year in some areas, and it's unlikely that this will ease as the trend towards saving rather than spending continues to place a strain on affordability. And furthermore, it's been predicted that by 2020 we'll have a shortfall of 105,000 much-needed social housing homes – homes to house the neediest in our society.
Therefore it may surprise some to hear of the massive numbers of vacant residential stock we have in <country-region><place>Australia</place></country-region>. In the 2006 census about 10% of the current housing stock was recorded as vacant. Due to difficulties in collecting the data, such as assessing which properties are “reserved” as holiday homes, temporary rental accommodation or are simply in the process of renovation, it's hard to correctly assess the numbers – however it’s fair to assess a significant minority have been abandoned altogether and are therefore magnets for vandalism and short term squatters – most residents can point to at least one vacant property in their streets.
Considering the stresses caused by a shortage of available accommodation outlined above, I doubt anyone would argue that wherever possible, vacant accommodation should always be used to house those who need it most.
 
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Neither is the problem limited to Australia. In the UK there are 930,000 empty homes, 350,000 of which have been vacant for six months or more.  Therefore, there's been a massive innovation to bring derelict homes that have been inherited, or acquired – but due to financial constraints sit vacant and unused – back to liveable condition.  In some cases where families are unable or unwilling to renovate, grants have been offered by various government schemes to assist the process, and in some circumstances, properties have been re-acquired for the purpose of social housing.
More concerning however is a growing trend – particularly among Chinese investors – to acquire housing as a safe place to bank funds with no intention of ever marketing for tenancy. It's a practice common in <country-region><place>China</place></country-region> where the population have been used to a lengthy housing boom, and until recently, no taxes on property.  For these investors, there’s little benefit in struggling to find a good tenant, it’s more important to keep the property in tip-top condition for when they decide to sell. Neither do they limit their acquisitions to China, the trend is also popular in the US and Australia, where flats and luxury houses sit vacant for extended periods of time. Australian houses are “affordable” in comparison to those in the major Chinese capitals.  In China property rights don’t allow ownership of the actual land, and therefore owning a genuine piece of Aussie dirt where their money can be safely stored away from government hands is an attractive investment model.
It’s true we have strict rules regarding foreign ownership of established residential property – however it’s also sadly true that loopholes in the system are easy to navigate and the number of foreign investors entering the market is a mystery to all who attempt to find out – an issue aptly highlighted in Chris Vedelago’s recent <a target="_blank" href="https://bit.ly/ymAXTG">article</a>. Furthermore, there are few restrictions on purchasing new homes and many are just happy to soak up the abundance of freshly built high-rise accommodation that is commonly sold with promises of rental guarantees and above-market rates regardless of whether the unit sits vacant during or even after the guarantee has expired.
We should encourage investment in residential property, providing the consequence is an increase in available rental supply that can keep vacancy levels more in balance with affordability.  However, too many investors are using our precious limited housing supply merely as a bank account with no intention of navigating the difficulties associated with finding an appropriate long-term occupant.  There should be restrictions on this practice and also more energy focused on initiatives to make use of disused or neglected homes.
Identifying where the derelict homes are would be the first step – thereafter perhaps government initiatives could be proposed to set a plan in place to encourage practical moves toward getting the home occupied. After all, it’s far more cost-effective (and environmentally friendly) than building from scratch. I would go so far as to suggest there should be a named person on every council working on the issues. Property can be an excellent investment, however its primary purpose should never be neglected and therefore there should be a requirement on every home owner, wherever possible, to ensure the houses do not remain vacant without valid reason, for extended periods of time.
Yes, we have a homeless issue in Australia; however, we have arguably enough empty properties to provide housing for all. Let’s start making use of the thousands of homes that are left empty and abandoned and make 2012 a year of new positive initiatives for housing.
Catherine Cashmore is senior buyer advocate for <a target="_blank" href="https://www.elitebuyeradvocates.com.au/">Elite Buyer Advocates</a>. With extensive experience in all matters regarding real estate, Elite Buyer Advocates purchases and negotiates more than $100 million worth of property each year for its clients.
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Empty homes should house those who need accommodation: Catherine Cashmore

<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.

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“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.

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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.

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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.

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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.

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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

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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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