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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
A recent real estate survey conducted by Yahoo!, concerning the aspirations of home ownership among U.S adults found 81% of those surveyed still regarded home ownership as part of the “American dream”. There’s nothing particularly surprising about this – except of course when you consider the record numbers of foreclosures and tumbling values <place><country-region>America</country-region></place> is still experiencing.  However what’s more surprising is how priorities differ from the average Australian buyer.  When asked what their “dream” home would consist of, among the choices including “water views” , “beachfront or near beach” “building a custom home”, or “living in an urban neighbourhood” , top of the list, outshining everything else, came “green or energy efficient” –  and comments such as “Small, environmentally friendly, very energy efficient” were voiced from those surveyed.
If the same survey were conducted here, I have little doubt energy efficiency would be a tad further down the list of dream priorities. This isn’t to say that consumers don’t see the importance of insuring against rising bills, however out of the hundreds of purchasers I assist throughout the year – particularly those looking for their “dream 20-year-plus” property – I’m never asked to search for an energy-efficient home.  Energy efficiency is a third or fourth thought, with location and size (bigger, not smaller) usually featuring top of list.
While vendors may like to mentally add the cost of fitting solar panels or a large outside water tank onto their perceived estimate of value when selling, purchasers and more pointedly valuers don’t generally take such additions into consideration when assessing price.  For the purchaser, they are improvements that can budgeted for at some future point and not an outlay they’re necessarily prepared to pay with an upfront premium. Therefore in<place><country-region>Australia</country-region></place>, improving a home’s energy rating may be a wise choice from a lifestyle perspective; however it’s not an outlay that’s likely to profit the vendor from an investment perspective – at least not yet.
In other countries the trend towards energy efficiency is far more pronounced. I recently met a new immigrant from the <place><country-region>Netherlands</country-region></place>.  The family are currently renting in one of the middle-ring suburbs of Melbourne and took the time to explain how an energy-efficient, “carbon-neutral” property was top of their search priority list.  In fact so forthright were these specific requirements they emphasised the property must (in comparison with Australian homes) be compact and small in size.  They didn’t see the need for a large home – in their minds it simply didn’t make economic sense.  It took me right back to my days in the UK where, due to a higher population and limited availability of land, living in a small upstairs/downstairs terrace was the accepted norm and larger single level homes were seen as rather superfluous and typically reserved for older couples. The family in question soon came to realise that they weren’t going to easily find their dream property and renovating or rebuilding was probably going to be their only option.
Australians are known for their love of large houses and we arguably have the largest in the world.  It’s been discussed more than once how the lust for large McMansion-style properties is not diminishing. It’s never more evident than in the outer suburban growth corridors, where according to market leader Oliver Hume’s latest <a href="https://www.oliverhume.com.au/assets/website-purchaser-profile-and-sentiment-survey-jun3.pdf" target="_blank">survey of purchaser sentiment</a> the preference is still for homes with a floor size of 279 square metres – even though they do concede that due to affordability, buyers often end up settling for 50 square metres less than they initially desire.
One of the main reasons purchasers buy in the outer-suburban areas is simply because they can’t afford family-sized properties close to the city.  They’re prepared to give up the luxury of a quick commute to work to secure their version of the “Aussie dream”.  However in doing so, they’re also likely to find themselves paying a premium not only because of tactics such as limited land releases and hefty development overlays – but also due to strict building regulations imposed on builders to ensure the property meets the new six-star energy rating now adhered to in most states. It’s not a choice; it’s a requirement, and one that isn’t necessarily going to provide a saving on the average electricity bill considering the initial outlay.  More importantly, it puts the price of new suburban property needlessly out of reach of those prepared to move into the newer – still developing – suburbs.
Since the efficiency code was first introduced in January 2003, the initial requirement of a four-star rating has now increased to a six-star rating in most regions of Australia. The rating covers such items as “performance of the building fabric, external glazing and shading, sealing of the building, effects of air movement, performance of the building’s domestic services” and so forth. Of course, while this all sounds like a positive move, none of it comes without cost.
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Last year, the <a href="https://www.thecie.com.au/">The Centre for International Economics</a> prepared a detailed report for the <a href="https://www.masterbuilders.com.au/">Master Builders Australia</a> highlighting how increasing the star rating and the associated cost thereof doesn’t necessarily achieve the desired measure of economic efficiency that would widely be perceived.  In fact, the marginal benefits of squeezing into to ever stricter star rating requirements are outweighed considerably by the upfront cost of the build.  And while this is disputed by various voices coming from the “green” side of the political arena, the report produced is compelling reading.
It argues the costs of moving from a five- to six-star property is $40 per square metre, five to seven stars $70 per square metre, and five to eight stars $190 square metres.  In fact, back in 2008 when the increased implementation of a six-star rating was under discussion in Victoria, Master Builders Australia was reported stating costs could add anywhere between<a href="https://www.theage.com.au/business/sixstar-energy-rating-adds-10000-to-cost-of-new-house-mba-20081120-6cv8">$10,000 to $14,000 </a>to the build of a new home.  Furthermore, before a building permit can be issued, an accredited assessor is required to perform an energy rating assessment, which falls somewhere between $1,000to  $4,000 depending on the size and design of the property – and I can vouch from experience the resulting reports differ depending on the individual used (and have therefore been highly controversial).
Not only this, but we now have the added concern of the carbon tax looming.  Estimating the increase in various prices prior to implementation is unreliable, however HIA have posed that it’s likely to put at least $6,000 on an average house-and-land package. Add all the figures together and the concept of buying in the outer suburban corridors for the sake of a larger more affordable home suddenly starts to look a little less affordable and desirable and provides very little benefit to the consumer considering the extra outlay.
All these new policies come wrapped in great noble gestures and presented for “our benefit” – or more grandly, for “the greater good of mankind”.  But the reality is an expensive one and rather than making the cost of living and acquiring shelter more affordable, the dream of home ownership – even in outer-suburban areas where land and prices should be considerably lower – is slowly slipping away for an increasing number of Australians for reasons that just do not make economic sense.
No home owner is against implementing sensible energy-saving measures. We all recognise the expense of living is increasing and many have been motivated to take advantage of solar power, double glazing, roof insulation, and other such improvements to reduce the cost to themselves (and the environment) when it makes sense to the back pocket to do so.  In other words we don’t have to be forced to reduce our carbon footprint especially when it reduces the bills.  However, forcing up the price of new homes, without clear evidence that it will not only benefit the environment but also reduce the power bills in relation to the initial outlay is both unfair and unreasonable – especially when it’s in everyone’s interest to encourage the move “outwards” and not “upwards” if we’re to ease the unsustainable levels of inflation witnessed in the inner and middle-ring suburbs during boom cycles of the property clock.
Furthermore, as outlined in many reports such as the <a href="https://www.demographia.com/dhi-ix2005q3.pdf">Annual Demographia International Housing Affordability Survey</a>, which advocates the importance of spreading outwards if we’re to reduce the cost of housing, “greenhouse gas emissions of those living in high-density areas are greater than for those living in low-density areas” and “per person, apartment living uses more overall energy”.
 This isn’t surprising – in new apartment blocks (which incidentally also have to adhere to the six-star energy requirements) lights are left burning perpetually in the common areas, electricity usage is increased to power lifts and additional security features, not to mention the price of heating the pool, sauna, and 24-hour gym used as added “enticements” for would-be residents.  It makes scant sense from an environmental perspective and in addition, once purchasers find out how extortionate the owners’ corporation fees are to power these features, it generally places first-home buyers out of the equation all together. (In fact, look into the major buyer demographic purchasing the surplus of high-rise property spruiked to ease housing affordability in the inner and middle-ring suburban areas surrounding our major capitals, and you’ll find investors take the lion’s share, with second homebuyers coming a close second). At every stage of the planning cycle, first-home buyers seem to fall through the cracks – and unless we encourage an increase in the accumulation of affordable new residential buildings in the newer growth suburbs, it’s not going to improve.
Maybe one day the average Aussie buyer will also have energy efficiency at the top of her list when it comes to choosing her dream home – however until it’s proven to save home owners in their back pocket and not pilled disproportionably onto the initial cost of a new suburban property for the sake of “looking green”, it’s not going to ease the housing pain for the average Aussie purchaser – and instead of focusing on such measures – top of the “dream” list for home buyers will simply be a roof and four walls, preferably in an area that provides an easy commute to work.
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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It's not cost-effective going green

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In 1963 the BBC interviewed the boss of American Express.  The interview was focused on a new concept taking root – the evolution of our love of debt – the credit card. 
“Well the important thing of course is to make sure that the person who has a card is somebody who is credit-worthy,” said the boss of American Express, whose sole aim it was to introduce the idea that “buy now, pay now” was becoming an outdated mode of transaction. 
As the BBC interviewer grapples with this new invention, his next question highlights perfectly how far we’ve evolved: 
“Do you have to use this exclusively yourself or could you, if you were unwise enough, give it to your wife?”
 
Not an altogether silly proposition (aside, of course, from where the question was projected). After all, it was unwise lending that got us into this global dilemma in the first place, and his reply sounds as innocent and safe as a reassurance of “sub-prime” lending practices would have done pre GFC: 
“You can certainly get a card for your wife. We’d be very happy to supply her with one,”  he quips. 
We’ve come a long way since and seen a total transformation in the way banks conduct business.  They are no longer the “middle men”, collecting disposable cash and passing it on to big business for the purpose of production and investment.  Banks have become “financialised”, with the major part of their profit coming increasingly through financial channels.  Like it or not, we’ve been swept along – both willingly and unwillingly – in the process. 
Back in the ‘60s when the concept of our modern version of “free credit” started, it felt as if we were moving into a position of personal financial control.  However due to “unwise” lending practices and the resulting 2008 fallout, we’re now in a position where – forced onto the investment ladder – we feel anything but in control.  To give an example of how upside down the system has become, Sociologist <a href="https://www.lsa.umich.edu/soc/people/faculty/ci.krippnergretar_ci.detail">Greta Krippner</a> recently highlighted in a BBC radio 4 interview “Analysis Radical Economics” that large motor companies – such as General Motors, Ford, and Chrysler – all of which have their own financial departments – potentially make more money selling loans to buy the cars than they do from the cars themselves!
In other words, the loan is the new source of profit – and often an unregulated source at that. With all the wheeling and dealing that progressively reached such peaks within in the UK, for example, when household indebtedness exceeded 160% in relation to disposable income pre-GFC, is it any wonder we’re looking at such a monumental mess? 
Australia has weathered the after-effects from unwise lending practices relatively well; however, the system we now find ourselves in whittles down to our four major banks holding us to ransom.  This week we had to wait almost three days before getting the welcome news (at least for mortgage holders and small business owners) that the big four would pass on the full RBA rate cut.  It was spruiked that the decision to drop was down to “people power” largely pushed to the fore by forthright media campaigns. Therefore, on the heel of this came a warning from ANZ that it would no longer bow to the perceived external pressure of “community power”.  In effect, they’re now big enough (and powerful enough) to sing their own tune and ignore future RBA decisions altogether. 
"We are not going to play this game of having an RBA rate move and then people asking 'who is going to move by what amount" ANZ chairman Philip Chronican told <a href="https://www.news.com.au/news/anz-split-rewrites-rate-rules/story-e6frfkp0-1226217830786">Business Daily.</a> 
No doubt the others will follow suit. 
Whether the outcome of this increasing split between the RBA and banking system is good for the consumer or the herald of an era during which there is increased interest rate volatility is unknown.  But it’s guaranteed to do nothing to increase consumer confidence, which is the one ingredient Australia needs if we’re going to start moving away from the economic doldrums and assist struggling sectors such as retail, small business and home buyers. 
 
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Investors make up roughly 30% of our real estate market – they are the buyers who will only step in when confidence – like a pseudo Jiminy Cricket – dictates at least the perception of solid growth.  Without this, they’ll simply invest their hard-earned cash elsewhere (these days, usually in the form of a term deposit), which does little to assist business and growth.  They – along with first-home buyers who make up roughly 17% of the market, are the reason overall turnover has been at its lowest ebb since 2008. No one wants to purchase into a market they anticipate will drop. 
While Wayne Swan is busy assuring us all is OK because now he’s abolished mortgage exit fees we can just play “switch-a-roo” with our lenders and become “powerful” consumers, it’s worth pointing out that back in February, Treasury documents revealed the unintended consequences likely to occur once the fees were scrapped.  This included an increase in other fees including interest rates to recoup lost revenue.  It also stripped smaller lenders of their competitiveness, and the big banks have quickly found other ways to hit consumer pockets, such as hefty establishment fees.  Therefore, at best, Swan’s words only instigated a comforting and temporary placebo effect that at least something was being done. 
We can become like the “Occupy” protestors and stage a demonstration against the banking system that has us well and truly over a barrel, however most have little time to spend walking the streets. With unemployment still low, we’re too busy juggling our financial assets to step outside the daily rat race and camp out in Treasury Gardens.  Instead we have to develop a new psychology of self-regulation – and wisdom – when it comes to future investments and property purchases. We can’t control external matters, but we can control how we react to them. 
Building wealth from debt is an addictive occupation, once the foothold on the ladder is secure, equity enables the pyramid to grow and the ”leveraging tree” begins. However, managing debt and investment involves a degree of self-restraint in order to service the repayments – something our 21st century mentality rebels against.
Indeed – market research shows the only way our younger generation now feel able to purchase is by means of a “gifted” deposit from family or friends (usually borrowing against equity on family assets).  It’s widely known that roughly 70% of Australian’s own their own homes, however the larger proportion of this (80%) – are an older generation at the high end of the income stream.  Of Gen Ys, ABS statistical data shows 57% rent and 16% are still living at home.  Therefore gifting or not, there’s clearly an increasing number falling through the net. 
A glance at the fall out across the Atlantic should be warning enough for those who can only see a resolution to this problem in terms of a national housing crash of some 40 to 50% – it’s not a pretty picture.  Instead the solution needs to come in terms of education and self-regulation, switching Gen Ys’ mentality towards the growing trend of saving rather than spending. The practice amongst mature households has already stated with research from <a title="RateCity" target="_blank" href="https://www.ratecity.com.au/">RateCity</a> revealing an unparalleled increase in deposits (particularly from businesses, which have accounted for an extra $120 billion over the past three years.) 
The reason this is so very important is because it’s becoming increasingly clear that we really have no idea what the banks will do to rates next year or what the world will throw at our feet as Europe and the US struggle with increasing debt and mismanagement.  Therefore, my one piece of advice for anyone purchasing in 2012 is: “invest within your means.  Don’t get carried away taking advantage of lower rates and jumping into various advertised schemes – such as house-and-land packages that are designed to make property look like a Harvey Norman interest-free sale.  Housing is a dream we can all achieve if we take a considered long-term approach to saving, investing, and insuring our debt does not exceed our ability to manage the repayments. 
House prices are no going to drop; neither are we facing a financial meltdown on a par with the US or Ireland.  Due to a continuing shortage of feasibly liveable accommodation close to transport and jobs (another issue that urgently needs to be addressed by state governments), low unemployment, an increasing population and an overall good economic position, not to mention the preference Australian’s have towards home ownership, we’re currently well insulated from disaster.
However, it doesn’t mean the average buyer is well insulated if they make poor choices.  It was reported only a couple of months ago that home owners in Victoria alone, had lost <a href="https://www.heraldsun.com.au/money/home-owners-300-blow/story-e6frfh5f-1226162415434">over $290 million</a> over the past three years (to July 2011) selling their properties for less than the contract price. Building wealth through property will only work if you invest for the right demographic, in those “blue-chip” areas which have a proven history of consistent solid demand.  If you’re unsure of the terrain ahead seek qualified independent advice, but above all, property is not an area where you want to learn from past failures.  It’s best to learn from the mistakes of others – and by the sound of it, over the past few years, there have been plenty of examples.
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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A house of (credit) cards

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As we look back on 2011, Property Observer is republishing some of our most noteworthy stories of the year.
 
There is an incredible amount of concentration on the state of the world’s economic situation and what it bodes for the average mum and dad investor in our regional location.  However, does anyone really understand all the implications of the data being both reported – and interpreted – by various journalists and economic commentators with pre-conceived ideas of their own?
Let me give you some idea of the range of opinions hitting the papers each week.  A recent article in the UK Telegraph <a target="_blank" href="https://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/" title="Ambrose Evans-Pritchard">by Ambrose Evans-Pritchard</a> – which circulated through Twitter at a rate of knots – suggested the US economy is not only rising, but “within five years or so” America will be well on its way to “self-sufficiency in fuel and energy”. The report makes plenty of other bullish assertions under the premise that the ”American phoenix “ is on the rise once again.   “World power swings back to America” reads the title and indicates a return to prosperity that would no doubt hit the real estate sector (making purchasing US property now a very appealing prospect).
I love reading upbeat reports that offer a sense of certainty and future security – the repercussions have positive effects on the investment market as a whole and give a much-needed sense of hope that we can wave goodbye to the long-winded economic depression shadowing the world’s major players.   However, if you care to investigate a little deeper and read the EIA’s Annual Energy Outlook 2011, you’ll see anything but a bullish review of America’s journey to “self-sufficiency”, with the disclaimer American “estimates of technically recoverable resources and well productivity remain highly uncertain” The report is long, however in short, the “predictions” outlined in Pritchard’s article are a long way from being set in stone and a close read of the “real” statistics in the report makes this woefully clear.  I hope no one acted too fast on the misinformation it contained.
Closer to home we can also read two sides of the coin on the property market.   Chief economist at Commsec  <a href="https://www.propertyobserver.com.au/residential/why-house-prices-should-recover-in-2012-craig-james/2011112152447">Craig James</a> came to the fore recently making the call that 2012 “should” be a year for housing market recovery – the view is widely held by others such as ANZ senior economist <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/Home-prices-to-recovery-in-2012-report-pd20110117-D7Q28?OpenDocument&amp;src=hp14">Ange Montalti, </a> who claims economic growth will lift prices during the course of 2012.  Figures have also been released from RP Data that show a slowing in the overall downward trend and have therefore been interpreted that we’ve started “to turn the corner”.
However, less bullish predictions come from <a target="_blank" href="https://www.propertyobserver.com.au/residential/house-prices-could-fall-by-15-in-three-capitals-louis-christopher/2011090651454">Louis Christopher</a>, managing director of SQM Research, who says should rates remain on hold, “by June 2012 home prices in Melbourne, Brisbane and Perth will be as much as 15% below their 2010 peaks”. He’s not alone in his pessimism – Harry Dent and Steven Keen have both warned we’re at the start of an impending crash – not to mention Prosper Australia’s continuous doom and gloom assertions.
So whom do you want to believe?  Well if you have pre-conceived ideas of your own, you’ll take the side that backs your personal perspective.  It’s natural to do so – it’s incredibly hard to be completely subjective about anything.  As the saying goes ‘‘we see and understand things not as they are but as we are'’.  It’s very difficult to lump a one-world outlook on any market and expect to hit the nail on the head like some modern day Nostradamus.  Take China for example, where stringent government regulations have forced a fall in housing demand and subsequently prices. The issue has torn Chinese society in half. On the one side are the home owners who want to see prices continue to rise. On the other are the renters, who not only want house prices to drop – they want them to drop some 50%!  Sounds like <place><country-region>Australia</country-region></place>.
No one’s been immune from the market malaise throughout 2011 – in fact on a par with other years, it’s been a very difficult atmosphere for industry professionals to muddle through.  Turnover is down – In Victoria for example, Valuer-General data shows a drop of some 33% for the June quarter this year, compared with the same time last year.  Buyers have sat on the sidelines perceiving prices may drop further and sellers have needed to meet the market and make some hard decisions. However, assuming the government doesn’t follow China’s example, I have only one outlook for the next year – and the subsequent 10 years following – and no doubt it will be brushed under the carpet by those who think I’m merely spruiking the party line.  Providing we don’t have a catastrophe on monumental proportions (I’m talking earthquakes and tsunamis) – the only way for property to go in 2012 and beyond is up.
Our property market is based on a simple formula – supply vs demand.  Australia is a mere teenager compared with Europe, and we’re growing at a dramatic, unstoppable pace.  Our population growth is higher than that even of <place><country-region>India</country-region></place>. In fact, the only country set to outgrow Australia by 2050 is Saudi Arabia!
Much of this growth comes from Australia’s immigration program aimed at attracting people of working age with the needed skills to benefit our economy. The simple equation is the bigger the population, the bigger the economy. Whether this has a major effect on our wealth as individuals is arguable and indeed doubtful, but what cannot be argued is the overall effect the population boom will have on the housing industry.  Most are trying to squash into areas that are already straining at the seams (our capital metropolitan regions), and the best seats are taken.  No wonder the property market in Australia swings between unsustainable booms followed by periods of negative growth and sharp market corrections – for decades no one has planned effectively for the growth and we’re some 20 years behind the eight ball.
Unlike areas in Europe and the US where first-home buyers are able to move out of the capital cities and feasibly live in locations with a lower median while taking advantage of reliable public transport systems and the decentralisation of jobs, Australia has ensured the bulk of its population and jobs remain confined to inner-urban regions. Therefore, when the market’s not growing, rents are rising and an increasing number of first homebuyers find they’re unable to build up a sufficient deposit to get a foothold into real estate.
This year alone, rents have increased up to (and in some cases beyond) 10.1% in Perth and a more modest 5.9% in Sydney (R P Data).  Affordability is constrained and the market may well experience only marginal growth throughout the course of 2012 – especially if confidence remains on a knife edge due to factors largely out of our control (both at home and abroad.)  However, if interest rates drop further (and the banks pass them on) – logic alone assumes we’ll see a revival of those desiring to pay their own mortgage and not someone else’s!
We’re already hearing from various mortgage brokers that pre-approvals have increased dramatically.  AFG – Australia’s largest mortgage broker – <a target="_blank" href="/news">has recorded a whopping 18% rise in approvals throughout </a> November (mostly from investors and first-home buyers.) This isn’t surprising when you see how hard the banks are working to get business.  ING and City Bank have dropped their one- and three-year fixed rates, and Westpac and CBA are not far behind.  It’s hard to assess at this point how many of those pre-approvals will turn into transactions – and we’re not out the doldrums yet.  However, it’s reasonable to assume once the starting gun fires an air of confidence and certainty into the atmosphere, we’ll see upward pressure on house prices across the board. The only question is how fast those rises will be throughout 2012.
There may be a good proportion of our population who are suffering, but equally so are a large proportion of our population reaping the rewards of a booming economy. This doesn’t mean by any stretch that you can’t lose money through property investment, it simply means that the right property, in the right location, for the right price, will continue to grow as demand grows – if you don’t believe me get a newspaper from 10, 20 or 30 years ago and look at the prices.
It’s true growth in Australian property has to some extent been fuelled by investor speculation along with easier lending conditions; however that speculation is backed by pretty sound fundamentals.  Take away the speculators, and long term you’d still be looking at home buyer demand outpacing supply in the metro regions.  This is why property is such a widely accepted model for long term investment.
As time progresses – like Europe - we’ll see a greater split between those who can afford to purchase and those who can’t. We’ll see a growing number of young adults move into the rental market, or wait until their late 30s and 40s before they purchase. I also suspect we’ll see a change in demographics, with more joint purchases and a greater number of people sharing property as family’s pool funds to ‘afford the dream’.  Less will own their home outright and more will hold the burden of a mortgage.  It’s already started to happen.
As for 2012 – if you’ve been thinking of taking the plunge don’t expect the market to stay this way perpetually.  Pondering whether our housing market will crash is an ongoing debate that will do the rounds for years to come.  The only way to reduce risk when investing in property is to invest in those areas which have the best potential to maintain consistent solid demand.  At the moment there is little to suggest that our population will diminish or demand for property decrease, so the more time you spend worrying about tomorrow is time away taking advantage of today.
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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Barring catastrophe, the only way for property to go in 2012 and beyond is up

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The demographics of our cities are changing at a dramatic pace.  While most are distracted by the state of the euro and the possible consequences to the Australian economy, long-term property investors should have their sights set on the emerging trends affecting Australian real estate. While immigration has bought a wonderful diversity of culture to Australian shores, flavouring suburbs with international restaurants and much-loved cosmopolitan delights, the effects on property have been startling.
The biggest increases in population between the 2001 and 2006 censuses were from China (64,000) and India (52,000) – two countries with dense populations and lifestyles very different from that of the typical Aussie family.  As a proportion of our population, ratios of migrants born in Asian countries are on the rise, and it’s suggested that by 2025 they will be the majority. 
To give you some idea of current living conditions in these two countries, India’s urban population is growing twice as fast as the rural population and China’s metropolitan areas have mushroomed.  Statistics forecast an expected 350 million people to move into China’s major cities by 2030 and there are reports China will need to build 50,000 new high-rise buildings in the over-populated towns to accommodate the surge.  To the incoming migrants landing on Australian shores, our capitals must seem luxuriously capacious and attractive in comparison. 
There is no doubt population growth has had significant impacts on the changing topography of real estate in Australia.  During the 1950s the landscape was sculpted with large blocks land, smaller houses and huge back yards.  Australia held the international image of people who enjoyed an outdoor sporty lifestyle and Victoria was aptly labelled the “garden state”. Since then city borders have been forced outwards under the increasing influx.
Once labelled outer-suburban areas are now seen as middle- and inner-ring suburbs, attracting high property prices and strong demand. The trend for inner-city apartment living has increased and been strongly favoured by investors who lean towards low-maintenance set-and-forget acquisitions – investments that are easy to rent and fall under consistent demand from international students and young migrants. 
Melbourne arguably heads the population race and Sydney isn’t far behind. Even though the ABS recently reported a slowdown in migration, Melbourne’s still on track to comfortably reach upwards of 6.5 million by 2030.  As a result, leading demographers have stated that Melbourne and Sydney will need to be “completely redesigned”.  To emphasise the point, take a look at some of the quotes below – they are taken from The Committee for Melbourne’s 2050 Melbourne Beyond 5 Million report 
“At the local street level, high-frequency public transport will be threaded through the entire city.”
 
“The development industry has learnt that it is merely a waiting game of when, not if, the UGB (urban growth boundary) line will be re-drawn”
 
“Density needs to be understood and nurtured, not feared, as it has the ability to assist in shaping and growing Melbourne into an even more liveable city.” 
The report highlights the need to plan for the “inevitable” swelling of our borders; however it also takes into account the effects of cultural diversity – something that’s rarely highlighted in property seminars.  In short, when it comes time to sell the family home you purchase today, the buying market dominating the population could have completely different tastes and preferences from that of the typical Aussie family – so much so, it could affect the future potential of your investment. 
Well-weathered property buyers understand that residential real estate with good owner-occupier appeal fuels demand and consequently holds the best prospect for positive long-term capital growth.  However, many make the mistake of purchasing what they’d consider attractive and don’t take into account future cultural changes – namely the Asian market.  For example, to the average Australian buyer, period properties hold an unqualified level of appeal and capital growth tends to outshine other more modern styles.  However, to many Asian buyers, period homes are often seen as old and dated and newer properties grab the upper hand. 
Other trends also are also starting to play an important role in the cultural hubs of our cities.  For example, properties with the number ‘4’ in the address are considered unlucky and avoided, whereas the number ‘8’ in an address has the opposite effect and in predominantly Asian populated suburbs, houses listed with an ‘8’ will attract a higher price based on this alone. 
As a buyer advocate I’m often asked to search for properties that fit a compatible feng shui floor plan with various rooms in different quadrants of the house – (not an easy task.)  Also, homes opposite a T intersection, close to a cemetery, or with a view from the front door straight through to the rear (something that attracts European and Australian buyers) are also frowned upon.  It’s worth taking these aspects into account, because stick around for a while and the trends are not only likely to grow in dominance but – depending on location – they may also start to affect the price of your best and most valuable asset. 
With lack of experience, investors often get caught up purchasing property with a preconceived set formula; they forget to think about the area they’re purchasing into.  For example if you want to gain from prospective future demand, it’s no good purchasing – or indeed planning - a modern box-style townhouse in a location that predominantly attracts buyers who flock there for the pretty streets lined with Californian bungalows on expansive blocks of land.  Neither is it wise to target a small one-bedroom apartment in a popular school zone in an area that only predominantly holds value for families with school-age children. 
Likewise, a simple look at Australia’s future demographics is giving us clues to what will affect property prices in the future – and it’s not as simple (as some would suggest) of  “house and land vs apartment”!  As individuals we can’t control future market movements, however with a bit of insightful forethought we can minimise the risks of our choices – especially when it comes to purchasing real estate.
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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How Australia's changing demographics are affecting the property market for investors

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I don’t think many will be upset to see the end of this year.  It’s not been the best of times for the average investor – a term that should apply to us all.  After all, most have some form of investment, even if it’s just a small amount in their super. 
Many markets have suffered extreme volatility – our strong Aussie dollar has undermined exporters and tested the tourist sector.  Half the year was spent with bullish predictions about interest rate rises, and then the single call of a potential interest rate cut came from Westpac’s chief executive and proved correct.  All in all nothing could be described as predictable – nothing, that is, except for the real estate market. 
Capital city prices are down 3.6% over the 12 months to September 30 according to RP Data, however such movements can only be described as marginal – especially when viewed in comparison with the stock market.  Clearance rates have been stubbornly predictable.  Week in, week out, <city><place>Melbourne</place></city> – the auction capital – has averaged a clearance rate of around 53%.  Sales agents, instead of using comparable data sourced from the last few weeks to value a property due to market movements, are able to pull comparisons from results a few months old. 
Quoted ranges for auction sales – which in the past have been dramatically underestimated as agents fall afoul of a rising market – now commonly have the final selling price falling within the range.  Weekly property editors are finding it hard to find something new and fresh to write each week, and we seem to be stuck in something akin to the scenario outlined in the film Groundhog Day. 
It’s tempting to grasp onto anything that might produce a change in sentiment.  The 0.25% official cut in rates caused such a furore in the press you’d have been forgiven for thinking Christmas had come early.  Not that it was set to produce any perceptible change – conditions in the real estate sector have remained flat.  Much of the responsibility for this is down to vendor expectation, which has continued to be stubbornly resilient against any pressure to meet buyer’s cautionary needs. 
A buyer can give every indication he’s interested in a home, and yet when the time comes to make that final commitment, a happy medium can’t be negotiated between vendor and purchaser.  Therefore we’ve seen a large number of re-listings lingering on the market and very few new listings to break the stalemate.  In particular, RP Data reports new listings down 18.6% compared with this time last year. 
In the end there’s only one reason a property doesn’t sell in the major capitals where supply is tight, and that’s price.  Every home will sell if priced and marketed correctly, but working out the best path to reach an agreement on that price takes nifty negotiation skills. Only the experienced real estate agents have the ability to educate their vendors to meet buyers’ expectation, and in this risk adverse atmosphere neither party is budging – at least at the moment. 
Furthermore, many vendors are not in a position where they feel forced to take a large cut in price. Unemployment is low, and while many may feel financial stress, let’s face it: not at levels felt in either Europe or the US. We have a sound banking system, normal interest rates, a record of good lending practices, extremely low default rates – add to the equation a rising population, and you should be able to see what’s ahead for the housing market – even if it’s going nowhere at the present time.  Long term, we’re on the way up.
In <country-region><place>Australia</place></country-region>, what really stands us out from the crowd is our passion for property.  We all know the stats commonly quoted when the question of home ownership hits headlines.  About 70% of us own or are paying off a mortgage.  Half that number have little or no debt leveraged against their principal place of residence.  Property brings up ideals wrapped in feelings of security, wealth, and a connection to the land.  Unlike many countries, you have to be a resident of <place><country-region>Australia</country-region></place> to own an established piece real estate – or at the least meet the requirements of the foreign investment review board. 
To draw a comparison, it’s now being debated in the US whether to stimulate the market by providing permanent residency for anyone able to invest $500,000 in real estate.  That’s something we wouldn’t even think to consider this side of the Pacific –drastic measures indeed. 
However, to further understand our obsession with property, you need to witness it.  For example, head to Melbourne on a rainy Saturday during which you’d expect most to be relaxing indoors, and you’ll see – as I did this weekend – spectators braving wet conditions in thongs and T-shirts to watch an auction just for entertainment value.  These aren’t just neighbours, they are people at all stages of the property buying and selling cycle – people animated by real estate. 
I don’t choose to invest my disposable income in the share market – I don’t understand it, feel in control of it, or – particularly on recent observation – trust it.  However I understand property, I can see where the population is heading and the type of properties they want to live and invest in. Even in good times, Australia – unlike the US – has avoided building an oversupply in her capital cities. 
Like many investors, I’ve ridden the false stimulating measures imposed by policies such as the first-home owners’ grant and changes to tax models that have produced short-term blips to the long-term graphs.  And agree, especially in comparison with many of the world’s falling markets, our housing on the face of it looks extremely unaffordable – but blame for this can be laid at the feet of consecutive governments that have failed to provide for a “big” Australia, and it’s not going to change overnight.  Never let it be said we’re immune from future crashes, no one is – however we’re also not immune from the many factors that have held us solidly on the world stage thus far.  
The ebb and flow of the property market may be tumultuous as we head into a new long-term phase of tighter lending regulations and consumer caution, but it will take more than this to stop the property wheel turning in Australia.

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. 
Photo by Jonathan Crowe
 
 
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Property Groundhog Day looks set to continue, but there could be tumult ahead: Catherine Cashmore

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Remember this picture? It might look like a museum image of pre-historic man, but it’s a rock located in the Cydonia region of <a href="https://www.solarviews.com/eng/mars.htm">Mars.</a>
<img src="/images/stories/face.jpg">
JPL scientists made the discovery of the “Face on Mars” in July of 1976 while searching for a suitable landing site for Viking 2 Lander. Wanting to give the public a familiar looking feature, they released this image to the tremendous delight of daily tabloids that ran with headlines suggesting ancient intelligent life had been found on Mars.  Of course it all ran amok a few years later when on closer inspection the imagined eyes, nose, and lips turned out to be nothing more than peaks and ridges. The search for extra-terrestrial life continues. 
It’s an example of what can happen when you look too closely at a composition and consequently miss the underlying truth. This year I’ve spoken with many anxiety-ridden investors wanting to know why the clearance rates are dropping and if their property is about to become a victim of the market snapping under the strain. Most based their concerns on reports in the media ranging from Harry Dent’s guest spots on Sunrise to sensationalist headlines run in major newspapers that suggested houses were losing thousands daily (<a href="https://bit.ly/ttQ3h3" target="_blank">for example</a>). 
The questions don’t surprise me – newspapers have to sell, and property editors need to find a new angle to explore each week. Therefore out comes the microscope and a blown-up picture is used as conclusive evidence for a brand-new theory of property evolution – one which shows property is on a long-term downward curve, usually based on short-term data and speculation (despite the weight of evidence countering otherwise).
However, no one is suggesting the view is always sunny.  Seasoned investors who have experienced and prospered through property cycles, lived through similar predictions of dramatic crashes in the 1970s, ‘80s and early 2000s, and they know how to keep the picture in perspective.  However we’re not out the doldrums yet.  Many expected the 0.25% interest rate drop to produce a change in sentiment; however a drop in rates indicates the RBA is cautioning us about the continuing fragile state of our economy, and therefore it’s no surprise cautionary sentiment still rules. 
Investors aren’t like home buyers – they can step in and out of the market as their “gut feeling” dictates. However, the mistake many make is waiting for the microscope to show a positive outlook before choosing to climb on board.   Once they can see their desired asset class rising in value, they’re happy to take the initial step. However we’ve all witnessed the unsustainable booms which suddenly escalate once they start to gain momentum. Why wait for another to occur?  It’s not wise buying – which is essentially where investors make their dollars. 
It may be a buyer’s market – it’s certainly being spruiked as such – however it’s only a buyer’s market if buyers are prepared to stop being spectators and take advantage of current flat conditions.  The fact that many are still sitting on the sidelines can only indicate there’s speculation prices may fall further.
However it’s not the likely reality - there are two parties in the purchase of real estate, and while some buyers may be willing to sit back and wait for more price falls, there’s no indication vendors are prepared to drop their expectation any further. Many aren’t in a position where they need to – hence why many homes linger on the market or get withdrawn to wait for better times ahead. 
Caution is a valuable emotion; however it can be better employed at the buying side of the equation if it’s used to build strong buffers to weather against market movements – history bears witness they’ll be more to come.   Protective measures include not over leveraging, investing within your means and understanding “long term” means more than a couple of years.
The property market in Australia isn’t immune from bubbles – invest in the wrong type of home or at the wrong time, and you could well find yourself sitting on top of one – I’m thinking in particular of mining towns, new estates, and the high-rise culture dominating inner-city CBDs.
However if you don’t see the bigger picture it’s too easy to make sweeping statements and lump everything under one umbrella. It’s a dangerous concept to promote because however strongly <country-region><place>Australia</place></country-region> has faired over the GFC the memories remain and people are susceptible to media suggestion.  What’s more, we can see GFC aftershocks continuing to affect Europe, and there are also those who suggest China will fall at some point and therefore we shouldn’t assume our strong economic position is set in stone. So investors have a right to be understandably concerned where they place their income, and confidence plays an important role in the choices they make. 
However like it or not, the well-worn argument that population growth underpins the market is based on fact, not speculation – and providing you invest where the expanding population wants to reside, you can be pretty sure you’re holding onto an asset that will grow over the long term.
Furthermore, out of all our states, Victoria is set to take the lion’s share of this population growth – everyone’s read the reports of how Melbourne’s on track to outgrow Sydney.  <city><place>Melbourne</place></city> has one of the strongest economies in the developed world.  Four of Australia’s top five most profitable public companies are headquartered in Melbourne, and the demand for Melbourne’s lifestyle and lack of inner- and middle-ring suburban dwellings to absorb the need is clearly evident in all the long-term graphs you can source.
In particular, if you choose to invest in areas that follow the train lines and if possible, also the bay, it’s hard to envisage supply ever fulfilling demand.  Town planners would do better investigating the price of extending existing train services into new outer-metropolitan areas to ease inner-suburban inflation rather than forever building in far-off lands that have little more than a daily bus service and do little to attract future growth. 
Melbourne’s real estate, for example, has historically never gone down over a 10-year period, so any arguments put on the table to suggest it’s about to happen and “the bubble burst” need to be backed up with more than a blown-up microscopic view similar to our man on Mars – I’d rather base my theories on historical data while keeping a cautionary eye on future events than run for the hills in panic of what are merely predictions of extreme market falls.   Short of a natural disaster of magnificent proportions, or a new law restricting the amount of children each family is allowed to have, the long-term cyclical upward trend in our markets is not likely to change any time soon. 
The demand for houses – particularly close to the city – is vastly beyond the supply most of our capitals are currently able to offer.  And while variables in the economy (such as interest rate rises) have an effect on certain areas of the market – for example the first-home buyer sector - the need for well-located accommodation will be largely resilient against economic factors – over the long term.
To speculate on future trends is unwise considering the problems facing Europe, however providing our economy continues to perform well and unemployment doesn’t rise disproportionably (of which there’s no indication) – and taking into account the RBA has also left the door open for a further drop in rates over the coming months – historical data (which is the best thing we can base speculation on) tells us that at some point house prices must start to rise again. It’s not a green light that we’re heading into a boom; it’s the looming reality of living in country that has a shortage of quality real estate in the areas in which people want and need to live. 
We have no control what so ever over the short-term influences that affect our market cycle, however short-term forecasts only affect those who buy today and sell tomorrow – and whether it be stocks or real estate, such high-risk investment is always a volatile option.
So don’t be fooled – you can spend your life looking through microscopes, reading long market reports and predictions based on speculation, but if you choose to look at the bigger picture and withdraw yourself from the heard, you stand a much better chance of making the right choices for your life, rather than worrying about everyone else’s. 
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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Looking through a microscope leads to property myopia

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We’re coming to the end of a year many agents will be pleased to bid farewell.  Turnover has been down in most states – and prices ordinary at best. Last month should have been one of the busiest of the real estate yearly cycle, but turned out to be one of the quietest.  This has placed a strain on many of the smaller real estate agencies that need to bank enough commission to last through the quieter Christmas months.
Therefore the majority are celebrating the official drop in interest rates and it was widely spruiked during the weekend auction pre-ambles as being the stimulus needed to re ignite the market. However, a 25-basis-point drop will have no noticeable effect on prices – certainly not in the short term. Although there is hope, it will mark the beginning of a change in sentiment. 
The Melbourne market is a mixed bag.  There are plenty of buyers looking, but most are reluctant to step into the arena unless necessary.  Those who need to buy are often struggling to find suitable choices – quality has been meagre across the board all year.  In some respects it’s similar to 2008 – investors who need to sell will shed their poorer assets first, owner-occupiers will only sell if personal circumstance demands – and discretionary vendors will only sell if they can get their “wish price”. 
In such circumstances overpriced property will often linger on the market for months at a time, equating to large volumes of sub-par stock, much of which does not fulfil the needs of current home buyers.  Some investors have been brave enough to act against the tide and purchase, but most are cautious enough to wait and see.  If we have a second interest rate drop it may push prices. However it would be premature to make such suggestions while there are still serious global jitters. 
Clearance rates in Victoria have been stuck in the 50s for a number of months, but many vendors are still opting for the auction system over private treaty.  In bullish markets it can be a remarkably successful way to escalate the price to levels buyers wouldn’t have otherwise stretched to, however in a flat market the effect is reversed.  If a buyer sees no one else bidding, he will naturally lose confidence and tighten the wallet strings – in such cases it will take a skilled negotiator to fulfil vendor expectation. However whatever the outcome, it’s a daunting experience for any buyer – and of course seller – full of hope, anticipation, emotion, and drama. 
Melbourne auctions are advertised as a fair, transparent way to sell real estate, and on the face of the process sounds very simple.  Everyone lines up outside the property and providing the bids reach the reserve, the person still holding their hand up when the agent shouts, “sold” is the winner! Right?  Well, not exactly. 
The real estate agent shouting “sold” loudly in your direction and masterfully thrashing the contract into his hand does not complete the sale of real estate.
At this stage the buyer has offered nothing but a verbal promise, which – in real estate – is not enforceable and does not count as a successful sale.  Until the purchaser and vendor have signed the contract, the property is not sold. There’s good reason why sales agents rush the winning bidders inside to sign the contracts after the auction, avoiding excessive chatter or distractions.  Those who have been through the process will also be aware they won’t meet the vendor until the ink is drying on the paper.  It’s not been unknown for arguments to occur between the two parties and as a consequence, the sale to be thwarted. 
In fact if truth be known, the auction process works in the best interests of the sales agency who get their day in the sun performing to the local vendors. With flags on display and a street full of spectators, it provides a fantastic chance to source other prospective buyers and sellers – any agency worth their salt will use the opportunity well. 
Auction rules vary across the states, however in Victoria every agent is obligated to state that the auction will be conducted in accordance with the REIV bidding conditions on display before the event. Following this will be an explanation that no late bids will be conveyed to the vendor and at the fall of the hammer the property will be effectively sold to the “winner”. However this information can be somewhat misleading to the inexperienced ear and it’s important for prospective purchasers to understand exactly what is legally required to complete the purchase. 
Firstly there is nothing that requires the winning bidder to sign the contract.  In other words, they are allowed to change their minds if they suddenly notice something they don’t like on their walk inside the property before pen hits paper! As I said above, the verbal agreement to purchase only takes effect once in writing. 
Secondly – the vendor can also change her mind or sell to a higher bidder.  For example if she overhears someone shout out after the hammer has fallen that they’ll pay $20,000 more there is nothing to stop her instructing the auctioneer to “re-open” the auction – the rules only state that the auctioneer is not allowed to take or convey bids to the vendor after the property has been knocked down.  She can also decide she doesn’t want to sell if she doesn’t like the look of the potential purchaser. Both these situations have occurred more than once, and shouting “unfair” won’t change things one iota.  In other words, the show that has just taken place outside the property essentially offers nothing but  good street theatre. 
What about dummy bidding?  Illegal, right?  Technically yes – however in practice no! The dummy bid has simply been re-termed “vendor bid”.  It serves no purpose what so ever except enable the agent to shout out a bigger number.  It’s neither statement of the reserve, a counter offer, or a realistic idea of the property’s market value.   It’s simply the agent attempting to get the bidder to increase their offer in a vain attempt to get to get closer to announcing the property “on market” and reaching reserve. 
Considering the information above, what is the real goal of an auction in Melbourne? It’s certainly not to get the highest price – after all, the successful bidder is only going to offer one bid over what the under bidder is willing to pay. It can however be very successful when two buyers have a similar amount to spend – although there is no easy way to assess this before the event. In fact a skilled negotiator will stand a better chance of getting a purchaser’s highest price through a private negotiation process than he will at auction.  Get two potential bidders in separate rooms – each not aware of the other’s budget – and you’d be surprised what good negotiation can achieve! 
Auctions can be great street theatre, and on occasion will obtain prices well above expectation.  However as a method of sale, they are nothing more than an elaborate show – publicising the estate agency, and satisfying the vendor that their property has been marketed well enough to attract a range of spectators to the event.  It’s time we started putting more emphasis on other methods of sale and celebrating the many good negotiators in the industry who achieve excellent results without the need for a public show. 
Catherine Cashmore is senior buyer advocate and property consultant. With extensive experience in all matters regarding real estate, she is a regular commentator in the media for numerous outlets providing a broad range of expertise.
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Melbourne auctions offer little more than good street theatre

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The world’s population ticked over 7 billion this weekend. Australia hosts only around 0.3% of this and is one of the least densely populated countries in the world – and yet we’re struggling to provide adequate affordable housing close to jobs and needed amenities for an increasing number of new bodies.  A recent report from the Department of Infrastructure and Transport entitled State of Australian Cities 2011 highlighted some interesting facts.  Around 85% of our population live within 50 kilometres of the coast, and more than 700,000 dwellings are situated within three kilometres of the shore.  According to the Australian Bureau of Statistics the combined population growth of our capital cities increased by 257,800 in 2010 and accounted for over two-thirds of Australia's population growth – most of that growth was in Melbourne, with Sydney coming a close second.
When migrants land on our shores they have little choice but to head to the capital cities, where most employers are based and they stand the best chance of securing work.  The challenge our state governments face is where to place a growing number of bodies within our limited city borders without losing the level of lifestyle that attracts so many migrants to our shores.  The report made some bold statements, one of which points out that by in 2031 the projected population of lone-person households will be 28%.  It’s supposedly the fastest-growing type of household in Australia – outstripping the growth of family units and couples without children.  The data is broadly used to justify the accelerated construction of high-density accommodation in the inner-city suburbs – generally high-rise small one- and two-bedroom apartments.  However, a closer look at the numbers uncovers an interesting phenomenon which seems to contradict this prediction.
While it’s expected that loan person households would typically mean a decrease in the number of bedrooms per dwelling along with the number of people living in each property – which is exactly what’s happened in NSW – this trend hasn’t followed expectation in Victoria, Queensland or Western Australia.  In these states there has been an increase in the number of people per household and Increase in the size of dwellings – In other words, there may be more people projected to live alone, but when you break down the data, it’s not quite as cut and dry as presented.
Despite this evidence seemingly showing a reduction in demand for single-person accommodation there has been no slowdown in the churn out of high-rise construction. In Victoria there have been over 20,000 applications approved for high-rise apartments over the past two years – that’s a 35% increase, in Brisbane the government recently stated 1,725 buildings of 29 storeys each were needed before 2031 – it’s a trend being repeated nationwide. Yet who’s purchasing these properties?
When Melbourne’s Docklands were initially constructed selling agents were paid high commissions to flog the developments off to unwitting investors.  The apartments usually came with rental guarantees, which once expired, left the purchasers unable to achieve the same return.  Unit growth charts for Docklands read like a day’s trading on the stock exchange, with sharp rises and plummeting dips proving anything but stable capital growth. Averaged out the growth has been little more than 5% per annum – a level currently exceeded by many long term deposit accounts and a dim shadow of what other properties in Melbourne historically achieve.
How many of these apartments are currently sitting vacant is hard to assess, however SQM have the vacancy rate above 6%.  Considering our population growth and the predicted surge of single-person households, you’d expect these developments would be busting at the seams, however clearly they’re not attracting the level of demand that’s oft been spruiked.
The City of Melbourne’s website describes the new developments as being “relatively small one and two bedroom apartments largely targeted at the student market and owned by investors.” Construction is currently underway for 16,000 of them during the 2006-2031 period.  But with the investor market as the intended recipient, they are certainly not fulfilling the needs of home buyers, or – judging by the number of similar developments sitting vacant – renters.  It seems to me we’ve got the beginning of a high-rise property bubble forming.
Anyone who advocates purchasing one of these off the plan developments will have little – if anything – to prove that asset will continue to  appreciate.  Usually they have a lot of concocted figures based on what they think will happen and if everything goes to plan they are very good at showing the riches you can make in the short term. The question to ask with any purchase of this type is what will it be worth in five years’ time?  In short any option you consider needs to be assessed on its risk profile, and “high rise” has strong evidence to show it’s “high risk”.  There’s good reason why banks go through extra checks and balances before lending for this type of accommodation - an issue which I’ve addressed in previous articles.
We’re heading into a mass over supply for one type of property and not heeding to the real changing trend that’s taking place. New statistics have shown Melbourne's outer suburbs are growing faster than anywhere else in Australia – suburbs that cater for growing families.  This should be a clear signal to our governments that investment into increasing the liveability and amenities in the outer-suburban areas, as well as easing restrictions on development and decentralising jobs, is a greater need than disproportionally increasing inner-city density. 
Australia is a teenager compared with her Western counterparts.  There is no reason why we can’t grow our population comfortably and sustainably while maintaining the quality of lifestyle we’ve all grown accustomed to.  We live in arguably the luckiest country in the world – but if we’re going to flourish, we simply have to learn to spread outwards, and not just upwards.  The growth in high rise accommodation and the disproportionally high numbers owned by investors is creating a dangerous precedent for a bubble that can’t be underpinned by demand.
Catherine Cashmore is senior buyer advocate for <a target="_blank" title="JPP" href="https://www.jpp.com.au">JPP Buyer Advocates</a> – the largest dedicated buyer advocacy service in Victoria. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiates more than $100 million worth of property each year.
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A high-rise property bubble looms: Catherine Cashmore

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This week we witnessed a high-profile agent get slapped across the wrist for “lying” about an offer.  I have to tell you, a selling agent “bending” the truth to manipulate a higher offer from a buyer is not a rare experience in real estate – or any other selling industry, for that matter.  After all, a buyer won’t increase a bid just because he appreciates the property’s attributes; however he’ll shift if he feels the heat on his neck from another “interested party”.  Sales agents won’t be slow to play on a buyer’s emotions if it means getting a higher price - they’re contractually obliged to work in the best interests of their vendor, not assist the buyer.
The vendor is paying the selling agent no meagre amount to get a premium price for their property.  While most agents won’t go out of their way to openly lie to a buyer, any advice relating to the likely sale price of a house will always come with a good degree of bias towards the vendor.  Therefore just as you wouldn’t trust the vendor’s solicitor to give you unbiased advice on a sales contract, neither should you trust a vendor’s selling agent to give you unbiased advice on price! You’ve got to do your own leg work – or you’ve got to enlist your own representative to do it for you.
The auction system claims to be a more “transparent” system of sale.  Providing the property reaches its “on market” number, the process will clearly show who is there to purchase and a figure they’re willing to pay.  However, considering most auctions in Victoria fail to be knocked down and end up being resolved via negotiation, it’s imperative buyers have a basic understanding of their rights should a property pass in.   For example, it takes just one bid from the highest bidder prior to a property passing in to grant them an exclusive right to negotiate at the vendor’s reserve.  While negotiations are ongoing, the agent may not deal with anyone else who may be willing, or able, to pay a higher price. The rule is reiterated at every auction I attend, however the message isn’t coming across.  When I see properties pass in on a vendor bid and five people immediately approach the auctioneer following the auction to embark on serious negotiation, then later in the day see the property has sold for a price higher than the vendor bid given, I can only shake my head at the lack of experience.  When this happens the agent is in the box seat – not the buyer – and as an experienced negotiator, they’ll often be able to manipulate a higher price from the buyer than they would have done had there been competitive bidding outside the property.
It’s all very well calling on the state government to place further safeguards on the industry, but it’s extremely hard to hamstring a sales agent to work fairly for both buyer and seller.  Furthermore, it’s in the government’s interests to line the coffers with hefty stamp duty payments – who’s going to worry in Parliament if a buyer pays tens of thousands over the purchase price through lack of experience?  When such issues arise, the government continually says,” We will look into it” however they will never be able to legislate that a selling agent must assist a purchaser. This would break the fundamental contractual obligation the selling agent has with their vendor.
We get a similar outcry every so often regarding price quotes. Rightly or wrongly, agents use a number of varied quoting methods to “condition” expectation. Quoting low – while unfair – is not officially underquoting.  Pricing property is not an exact equation. When a sales agent lists a property for sale he draws a fine line between market expertise – (broadly based on comparable sales) – and personal opinion. The exact requirements by law are minimal. According to the Estate Agents Act in Victoria for example, the agent is required to write an estimate of likely sale price on the sales authority. This can either be a single price, or 10% price range. This range doesn’t have to be the vendor’s asking price or – in instances where the vendor’s asking price is unknown – reflective thereof.
If an agent advertises the property under the bottom number of the estimated price range, it is regarded as underquoting. However, the agent’s price quote  is an extremely conservative appraisal of what the property can easily and comfortably achieve, not a “guesstimate” of what buyers might pay in the heat of an auction, or the vendor’s “wish” price. The vendor is employing the agent and approves of the way he quotes, markets, and advertises the property. Therefore perhaps the pressure should be placed on the vendor and if the vendor is not willing to sell within the quoted range, insist it’s changed?  However, I doubt you’ll see it happen, vendors know as well as agents how the low quoting system works to attract buyers.
While I am in full agreement of fair legislation outlawing deceitful advertising and agree whole-heartedly that an agent openly lying to a buyer about a serious offer should be frowned upon, the responsibility unfortunately falls upon the buyer to get the right advice prior to purchasing to secure peace of mind.  It would take a foolish selling agent to use deceitful tactics on an experienced licensed buyer’s agent.  Throwing out a line about some “higher” phantom offer is just too easy to debunk. We’ve seen all the tricks of the trade and know our way around each and every one of them.
Nearly every person who sells property in Victoria uses a sales agent. They pay roughly 2.5% of the sale price to employ a professional expert to market, assess and negotiate the property’s sale.  Most believe this is the best way to achieve the highest possible price in an industry where they have little expertise.  Buyers also have the option of levelling the playing field by employing their own representative.  Just as you wouldn’t stand up in court without using the services of legal counsel, so too do you risk being tripped up by the system if you purchase property without getting an experienced licenced agent to work on your side.  It’s a choice – not a requirement – but it’s one every buyer should take advantage of if they really want to avoid the pitfalls.
Catherine Cashmore is senior buyer advocate for <a target="_blank" title="JPP" href="https://www.jpp.com.au">JPP Buyer Advocates</a> – the largest dedicated buyer advocacy service in Victoria. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiates more than $100 million worth of property each year.
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A selling agent will never work in a buyer's best interest

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It’s somewhat heartening to see the Wall Street protests gathering momentum across major Western nations.  Heartening because ordinary people (99% of us) are starting to realise we do have a voice in a world that all too often rewards the rich above the needs of the poor.  There’s no doubt our country is in a much better position to weather events than parts of Europe and even the US, although we’re not immune to the global eruptions that continually erode  investor confidence and threaten to topple nations that were once too big to fall. However, I’m confident in the resounding Aussie spirit to push for the changes we need for a healthy future.  No one can forget the recent Queensland floods where a large army of ordinary people turned out in droves to help rebuild communities while many insurance companies refused to lift a finger. 
We’re always promised security, shelter, affordable food and superior medical treatment by our pollies, but whichever side is in power, we’re usually disappointed at the outcome.  Before the “voice” of social media, our words of dissent were sounded behind closed doors – however now they can be shouted out for all to hear and it’s a privilege to bear witness to this new source of power.   Perhaps this influence can spread to our housing market because – as headlines all too often scream out – the dream of owning property is no longer feasible for a growing number of citizens.  It harks back to 1974 when Gough Whitlam aroused passions in his ‘It’s Time’ speech by pointing out: “The land is the basic property of the Australian people. It is the people's land, and we will fight for the right of all Australian people to have access to it.”
A recent report conducted by ANZ –Asset Returns: Past, Present and Future – rightly <a href="https://www.propertyobserver.com.au/residential/owner-occupied-housing-top-performing-asset-over-24-years-but-not-in-the-next-decade-anz/2011100651835" target="_blank">pointed out that residential property has had “the highest returns of any asset class over the past 24 years.”</a> The results of the report state that “Residential property averaged annual returns of 12%, compared to 8.9% for equities”.  It should be pointed out that the residential property in question is the principal place of residence – not a negatively geared investment property.  The reason being, not only is it exempt from any capital gains tax when sold, but also the “boom” in prices from easier lending conditions and lower rates witnessed since the 1980s has allowed growth in this asset class to outperform  most other investments.  The report goes on to point out that this level of growth can’t last perpetually, and over the next few years the bank expects shares to win the historic battle of “shares verses property”.  However, shares don’t provide shelter and home ownership will always be a needed priority for the majority and therefore a right we must fight to maintain.
Each year we receive the Annual International Housing Affordability Survey, and each year it lists Australia as having one of the most unaffordable housing markets in the world. The survey covers 325 markets across Australia, Canada, Hong Kong, Ireland, New Zealand, UK and the US. The latest report condemns Sydney as the second least affordable market behind Hong Kong, which tops the list.  (Melbourne doesn’t fare much better – coming in at number 321 out of the 325.) The report uses a system called the “median multiple”, which is calculated by dividing the median house price by the gross annual median household income.  According to the survey “affordable” house prices should have a ratio of no more than three times the average income level. We haven’t seen a ratio like that in Australia’s metropolitan regions since the 1980s (during which time interest rates were significantly higher). The same can be said for London, for which you’d have to go back to the 1970s to find a ratio at three times. 
If you compare Australia with London and other European cities you’d find the general cost of living more affordable with petrol prices, eating out, entertainment and travel all well under those offered in other major cities.  Therefore, if drawing comparisons, we arguably have more disposable income to put towards a mortgage.  However, the difference between here and the UK or US is our inability to spread away from our major capital cities due to high land prices and the lack of adequate infrastructure to enable a reasonable commute to inner-city areas.  This means many home buyers are only willing or able to consider city-ring suburbs, and these are largely unaffordable for those who don’t already have a foothold in the market.  We simply must start setting up our regional centres with bullet trains and capital city amenities – just as the US, UK and Canada have seen fit to do – if we want to provide long-term affordable options for property buyers.
This weekend the REIV released its September quarterly results showing <a href="https://www.propertyobserver.com.au/residential/melbourne-median-house-prices-fall-in-see-sawing-market/2011101651944?source=flicker1" target="_blank">the Melbourne median house price has deflated $16,000 (2.8%) to $551,000</a>, from a previous recorded median of $567,000.  The overall gain, year to date, is a meagre 1.4% – which is below the rate of inflation and flags our ever-present affordability constraints.  However such small changes in the median are movements we negotiate daily and therefore mean little when it comes to purchasing property.  For example, when assessing value in a flat market, a comparable sale 12 months old can be just as significant as a comparable sale a few weeks old – little changes.  We’re not facing freefalling house prices, nor are we likely to do so.  Those who have already achieved their spot in the expensive inner- and middle-ring suburbs have taken up all the best seats and are happy to sit tight until things improve.
Melbourne has significant problems because it has the highest population growth in Australia, and it’s lacking much-needed family accommodation.  Even for those willing to move to the outer suburbs and purchase a new property they’re not necessarily faced with affordable options. In a report commissioned by the Housing Industry Association for the recent tax forum, it was stated that 38% – that’s $180,000 – of the purchase price on an average sized new property in Melbourne is immediately taken up in taxes – and it’s worse in Sydney, with 44% being swallowed up in taxes.  In New South Wales there are additional problems for builders who are hamstrung by the new Environmental Planning and Assessment Act, which differs across councils and makes the issue of building new homes extremely complex. There is simply nothing to encourage new homes sales in regional areas as a feasible alternative for home buyers or spark growth in this part of the industry.
Too much time is taken up discussing housing affordability, yet we never see broad-based changes.   If we’re going to grow as a nation and maintain our standard of living, we must start lobbying for ways to provide a better functioning housing system.  Until we make our voices heard, nothing’s going to change fast enough to ease the pain.
Catherine Cashmore is senior buyer advocate for <a target="_blank" title="JPP" href="https://www.jpp.com.au">JPP Buyer Advocates</a> – the largest dedicated buyer advocacy service in Victoria. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiates more than $100 million worth of property each year.
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It's time for something to be done on housing affordability

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Catherine Cashmore

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