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GUEST OBSERVATION
It’s impossible not to notice that Australia is shedding blue collar jobs. But what about their white collar equivalents and impacts on CBD office demand?
According to Deloitte Access Economics’ latest employment forecasts, while job growth outside of the nation’s CBDs came to a halt in the second half of 2013, business district office jobs are the only big labour market group adding jobs of late. In fact they actually gained momentum in the second half of 2013.
Yet this growth is small, and the recovery is reliant on the positives of low interest rates, a falling dollar and signs of greater willingness by businesses to take on risk.
Although the news will get better in the next couple of years, nothing like the pre-GFC performance of office demand looks to be on the horizon.
With the exception of Sydney , the nation’s office markets are almost all seeing slow growth, the finance sector is still cutting its headcount and the usually reliable business services sector is losing jobs even faster.
Like Sydney, Adelaide is losing jobs, continuing the worsening trend evident since the GFC and Melbourne is motoring in low gear – also losing finance jobs, but with some business services sector resilience.
There are only two exceptions to the ‘slow growth’ character of Australian office markets: Perth, where growth is still good but slowing as cost cutting by the resources sector takes a continuing toll and the state government tightens purse strings; and Brisbane, where recent job gains have restored some previous losses.
Perth is more exposed to resource-related cutbacks than any other state and things are likely to get worse before they get better. Brisbane is already seeing a tentative recovery underway.
So, with a blue collar slowdown and white collar growth faring better inside CBDs than outside them, where to next?
Overall job growth enters 2014 devoid of momentum, yet there are some positives. One is that employment is a backward looking indicator and the news of late on the economy has been improving – retail sales growth is accelerating, evidence of a recovery in housing construction continues to strengthen, and the news out of the US looks good.
That trend points to a few reasons to expect that better job news lies ahead.
The upshot is that Deloitte Access Economics projects office demand growth to improve further from here, but from a pretty weak starting point. 
Damian Winterburn is the national leader of <a href="https://www.deloittecaplandrealestate.com.au/" target="_blank">Deloitte Capland Real Estate Advisory</a>.
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All but stagnant CBD employment puts office demand in the slow lane

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GUEST OBSERVATION
Finance Minister Mathias Cormann’s decision to back away from plans to repeal sections of the Future of Financial Advice (FOFA) reforms is not surprising. Recent comments suggest this may indeed be a complete turnaround in the government’s position, more likely now that Assistant Treasurer Arthur Sinodinos is no longer at the helm.
It’s been a long fought battle to achieve a new standard in financial planning, but more, not less reform is required to ensure financial advisers evolve beyond commission-driven salespeople.
Under the guise of reducing compliance costs, the proposed reforms to FOFA include removing the “opt-in” requirement, where clients of financial advisers must indicate annually that they wish to continue the service. Also up for removal is the need for an annual fee disclosure for clients engaging before 1st July 2013, and a watering down of the “best interest” duty and provisions directed at removing conflicted remuneration, that is the payment of commissions, on general advice.
<blockquote>
The FOFA reforms have been a huge step forward for the financial advice industry to adopt a more professional and ethical standing.
</blockquote>
While these reforms may well reduce compliance costs, they also wind back some of the important consumer protection benefits of FOFA, which has been a real win for investors.
Potential conflicts of interest are ever present in the financial planning industry where the average consumer struggles with the complexity of financial advice, and advisers can recommend options that maximise their own revenue stream. The consequent information asymmetry between clients and advisers warrants regulatory intervention, as cases such as the failure of Storm Financial have clearly demonstrated.
From salespeople to educated advisers
It would appear the pushback on restricting commissions for financial advice is coming from vertically integrated financial conglomerates such as banks, that wish their staff to be “incentivised” to sell a wider range of products to wealth management clients. They would also argue that additional costs of compliance may price financial advice out of the reach of those who need it most.
While the motivation of these organisations is understandable, removing the current restrictions on commissions under FOFA would be a retrograde step, both for consumers and the advice industry as a whole. While admittedly there are a few issues to be tidied up in the legislation, such as a better definition of personal and general advice, a little more time is really required to bed the current processes down.
If further reform is needed in the financial advice industry, surely it needs to be focused on lifting the bar on the minimum educational standard for licensees.
At present one can satisfy ASIC’s minimum educational requirements for a financial services licence by completing a course listed on its website – stated to be “at or beyond the standard required for a Diploma”, that is one year of full-time study or the equivalent to one thrid of a three year bachelor’s degree.
While this standard is widely acknowledged by finance professionals as being woefully inadequate in itself, in practice some courses that are listed as satisfying this criteria can be completed in just a few weeks of study. It is hard to see how the complex matter of financial advice might be adequately addressed in such a short time frame, no matter how intensive the course.
A gaping knowledge gap
The particular difficulty of information asymmetry in financial advice was well demonstrated by ASIC’s shadow shopping study of financial advice in 2012. In this study, ASIC examined 64 financial plans for retirement age individuals. Only 3% of the financial plans examined were found to provide good quality financial advice, while at the same time 86% of participants felt they had received good quality advice and 81% said they trusted the advice they received from their adviser “a lot”.
Hence the dilemma - consumers are often the worst at making an objective assessment of the quality of financial advice they receive.
At a time when we are seeing a rising wave of potential retirees seeking advice to maximise their well-being in retirement, there has never been a greater need for transparent, affordable and scaleable financial advice. Not just for the wealthy, but even more importantly for those with more limited financial means.
The FOFA reforms have been a huge step forward for the financial advice industry to adopt a more professional and ethical standing, focused on providing quality financial advice, as opposed to selling financial products for commission. For many financial planners, however, the FOFA legislation has simply been a codification of existing good practice. The concept of fee for service and advice in the client’s best interest is well established in better practices.
The FOFA legislation has lifted the professionalism of the financial advice industry. The way forward is not to undo what has been achieved here, but rather to move to the next stage of reform in the industry by reviewing the minimum qualification for advisers.
Deborah Ralston is professor of finance and director at <a href="https://www.australiancentre.com.au/" target="_blank" style="line-height: 1.3em;">Australian Centre for Financial Studies</a>.
Deborah is affiliated with Mortgage Choice Financial Planning.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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The future of financial advice needs educated advisers

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The top performing capital cities in the March quarter, according to the RP Data-Rismark Home Value Index.
<ul>
<li>
5.4%  Melbourne was the best performing capital city over the March quarter recording a 5.4% rise in dwelling values. With a median dwelling price of $515,000 Melbourne's dwelling values have increased by 11.6% over the past 12 months. 
</li>
<li>
4.7%  Hobart recorded a strong gain of 4.7% in the March quarter. However, this result is tempered somewhat by the year on year stat, which indicate that values in the Tasmanian capital have only increased by 0.9% in that time frame. Hobart remains the country's most affordable capital city with a median dwelling value of $338,000. 
</li>
<li>
4.4%  Sydney continued its strong market gains, ticking up by another 4.4% over the March quarter. The median dwelling price is now $630,000, a year on year rise of 15.%. 
</li>
<li>
2.8%  Darwin recorded the strongest gain in the month of March of 3.3%, contributing to its quarterly gain of 2.8%. Darwin's median dwelling price remains second behind Sydney at $547,000. 
</li>
<li>
2.0% A strong March result of a 2.2% rise in dwelling values, saw Canberra head back into positive territory. The nation's capital posted a 2.0% increase over the March quarter and values are now up by 1.7% on this time last year. 
</li>
<li>
1.5%  Brisbane has been tipped by some experts as the next capital city market to take-off. These forecasts have yet to come to pass and Brisbane values were up only 1.5% in the March quarter. While Sydney and Melbourne have seen values shoot up by 15.6% and 11.6% respectively over the last 12 months, other capital city markets have remained below 5% over the period. Brisbane was the next best, recording a 4.8% rise year on year, while Perth and Adelaide followed shortly behind at 4.7% and 4.6% respectively. 
</li>
<li>
1.2%  Adelaide secured its entire quarterly gain in March when values increased by 1.4%. 
</li>
<li>
-0.6%  Perth was the only capital city to show a negative change in dwelling values over the March quarter. Perth values were up 4.7% on a year on year basis. 
</li>
</ul>
<img src="/images/2014/04/01/rp-data-april-1.gif" alt="">
Source: RP Data-Rismark Home Value Index
 
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Melbourne tops the list of best performing capital cities in March quarter: RP Data-Rismark

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GUEST OBSERVATION
Only 53% of couples and 22% of single people are on track to achieve a comfortable level of retirement income, according to an in-depth study of the adequacy of retirement savings.
The outcome of a collaboration between researchers at the University of Melbourne and Towers Watson, the <a href="https://www.melbourneinstitute.com/downloads/working_paper_series/wp2014n05.pdf" target="_blank">study</a> has found a significant number of Australians are not likely to achieve adequate retirement incomes, even when all sources of savings are considered.
The research sought to address the considerable uncertainty among policy makers and the broader community about the extent and nature of retirement savings deficiencies in Australia. To do so, we developed a set of metrics indicating the adequacy of retirement savings and applied those metrics to a large representative sample of the Australian population.
The clear finding is that most Australians are still not on track towards reaching a comfortable income during retirement, and will continue to draw a large part of retirement income from the age pension. The implication is that, despite superannuation reforms dating back over 20 years, the problem of inadequate retirement savings remains a significant public policy issue for Australia.
An important innovation of our study is that the metrics we developed take into account not only superannuation holdings (and projected growth in superannuation holdings through investment returns and future contributions) and the projected age pension entitlement, but also a variety of other household assets that could be used to fund retirement, including various financial assets and property.
Using this information, we are able to forecast a person’s expected income throughout retirement. We then compare this income to a “target” income, which is provided by the <a href="https://www.superannuation.asn.au/resources/retirement-standard" target="_blank">Association of Superannuation Funds in Australia (ASFA) Retirement Standard</a> for a “comfortable” lifestyle. The ASFA standard for a comfortable lifestyle is a widely used benchmark, and specifies a minimum income of $57,665 for couples and $42,158 for single people.
The ASFA benchmarks are very close to both current average income levels of retirees in Australia and the income levels that pre-retirement Australians on average believe they will need for a satisfactory lifestyle in retirement. While this concordance may seem reassuring, our findings for the projected retirement incomes of pre-retirement Australians were not.
We projected retirement income levels for a large, representative sample of Australians aged 40 to 64 ­– drawn from the nationally representative <a href="https://www.melbourneinstitute.com/hilda/" target="_blank">Household, Income and Labour Dynamics in Australia (HILDA) Survey</a> – and compared our projections to the income required to sustain a comfortable lifestyle.
Based on our calculations, only 53% of couples and 22% of singles are on track to achieve a comfortable level of retirement income.
Our study also shows the relative importance of different sources of retirement income. If we ignore all sources of retirement income other than superannuation, only 15% of couples and 5% of singles are projected to achieve the target. Indeed, applying the <a href="https://www.oecd-ilibrary.org/sites/factbook-2013-en/03/02/02/index;jsessionid=1kd80w28k8as0.x-oecd-live-01?contentType=/ns/Chapter,/ns/StatisticalPublication&amp;amp;itemId=/content/chapter/factbook-2013-26-en&amp;amp;containerItemId=/content/serial/18147364&amp;amp;accessItemIds=&amp;amp;mimeType=text/html" target="_blank">OECD poverty benchmark</a> of half median income, most retirees would be living in poverty.
Factoring in the age pension improves projected retirement incomes for many people, but still only 32% of couples and 11% of singles are on track to have a comfortable retirement income.
Our calculations have several implications. First, they show that, for most people, superannuation is not sufficient to fund a comfortable retirement, even if they have contributed to superannuation for most of their working lives.
Second, it is important to take into account all potential sources of retirement income, including non-superannuation assets, when computing the adequacy of retirement savings. Omitting any of these sources will likely lead to substantial under-estimation of adequacy.
Third, single people are particularly under-prepared for retirement, being three times more likely than couples to have severely inadequate projected retirement incomes.
Fourth, there is a gap between expectations about the importance of the different sources of retirement income and the likely reality. <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features50March%202009">Data from the Australian Bureau of Statistics</a> show that over half of men and two-fifths of women expect superannuation to be the main source of retirement income. However, our projections show that the age pension will provide 61% of the retirement income of single people, and 39% of the retirement income of couples. Moreover, 96% of single people and 89% of couples aged 40 to 64 today are expected to receive at least a partial age pension at some stage during retirement.
Our analyses show that most people need to think ahead to their financial situation in retirement and, if possible, make some changes – the sooner, the better. The first step is to find out whether your savings are likely to be adequate – and you can now do this easily on the <a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/retirement-planner" target="_blank">ASIC MoneySmart web site</a>.
The site offers a calculator based on a simplified version of the algorithm we used in our study. It takes less than 10 minutes to enter the required information and obtain an estimate of the adequacy of your retirement savings.
Knowing now whether you need to save more towards your retirement is an essential first step towards a retirement in which you don’t have to fear running out of money.
Roger Wilkins is principal research fellow and deputy director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research at University of Melbourne.
Carsten Murawski is senior lecturer in the Department of Finance and co-head of the Decision Neuroscience Lab at University of Melbourne.
<a href="https://theconversation.com/institutions/university-of-melbourne"></a>
(Professor Kevin Davis contributed to this study, which began prior to his appointment as a panel member of the Financial System Inquiry.)
This article first appeared on <a href="https://theconversation.com/the-majority-of-australians-are-not-saving-enough-for-retirement-24957">The Conversation</a>.
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Retirement prospects not-so-super for many Australians

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GUEST OBSERVATION
One of the main arguments made by Australia’s banks for the watering down of Future of Financial Advice (FoFA) reforms is that it would reduce the cost of financial advice to consumers.
Specifically, the banks want “general advice” to be exempt from the rules prohibiting conflicted remuneration - in other words, commission.
The presumption is that the cost of financial advice is too high. But what are the costs? The short answer is it varies, depending on the complexity or amounts involved.
At a minimum, a client may expect to pay about $1,500 for a comprehensive personal financial plan and more likely $3,000 or more. Then, an agreement may be put in place to charge an amount for an annual review and monitoring services (in other words – a retainer).
Let’s take an example where a consumer has a relatively small sum of $5,000 to invest. Under the law, a financial adviser is required to treat the consumer for “personal advice”. This means taking into account the person’s details, risk profile and objectives and then completing a “statement of advice” which may run to some 15 pages or more.
To comply with the Corporations Act, the adviser may need to spend some four hours or more to complete the task to the required degree. If an adviser charged $150 per hour (cheap by all accounts) then the cost of providing the service would be about $600 or 12% of the investment amount. If the hourly rate was $300 then the amount would be $1,200 or 24% of the invested amount.
Such cost levels are obscene when considered as a percentage, and have made financial advice inaccessible for people with small amounts to invest.
Prior to July last year, advisers often received commission payments from product providers allowing them to waive or reduce the upfront fees charged for advice. From July 2013 financial advisers were banned from receiving commissions for new advice, in order to ensure the advice was not biased.
A recent example of the effect of the ruling is when a member of an industry superannuation fund retired and wanted to commence a pension from his fund and was charged $1,500 for a financial plan just to make a change to his circumstances. Such a fee can be explained by the rules of compliance under which financial advisers must operate.
The case for simplification
So, in such a context, the government’s proposal to simplify things by reducing the compliance rules makes sense. The new regime would allow some advisers to waive the normal requirements of giving objective advice after considering the consumer’s circumstances by allowing “general advice” to be offered instead.
This means the financial adviser will not have undertaken an account and have recorded all details of the consumer’s personal circumstances, and the recommended investment product will not necessarily be selected for a specific purpose that meets the consumer’s investment objectives. The advice is “general” so it may not be specific for purpose.
The upshot of all this is that some advisers will change their way of doing things to comply with the rules for providing general advice, so they will not be required to complete a client risk profile or produce a time consuming statement of advice. And the benefit to be derived is the payment by way of commission.
In the earlier example of the investment of $5,000, a commission of 3% or $150 may seem to be a saving to the consumer compared to paying $600. But, if the investment was $20,000 then the commission would be worth $600 without the adviser having to comply with the personal advice requirements. If the investment amount was $50,000, then the commission amounts to $1,500. At that level, we might as well return to the old days when selling a product was the objective.
Ongoing commissions are still rife
There is another aspect to financial advice costs that is overlooked in the current debate on whether to wind back parts of FoFA.
The costs of financial advice also extend to the costs applied against the consumer’s investments. Such costs are invariably based on a percentage of the amount invested. In other words, a commission form of fee is involved.
To illustrate: a consumer invests $100,000 via a product provider into an administration platform and then spreads the risk of investment among four or five investment managers. There are a number of costs involved.
The first is an administration fee charged by the platform provider. This is based on a percentage of the amount of funds invested, say 0.8% per annum. There may also be a member fee of say, $10 per month. Then the funds are invested with a range of fund managers who charge a fee based on the size of the investment.
Such a fee can range from a conservative 0.4% to 2.2% or more and some may even include a performance fee as an extra reward to the fund manager for exceeding a performance target.
Another level of fees that may hold back the performance of the consumer’s investment is an adviser’s ongoing fee. Again, in some instances this is also levied by means of an asset-sized fee up to 1% for various adviser services, although some advisers levy a dollar amount for such service rather than an asset-based percentage.
There are many stakeholders involved in the current debate about financial advice fees and commissions – consumers, advisers, regulators and product providers. Notably, the first three are opposed to the changes currently being considered by the government.
Warren McKeown is teaching fellow at the University of Melbourne.
Warren McKeown is affiliated with a company that holds an Australian Financial Services Licence.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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The one certainty of financial advice is unfettered fees

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GUEST OBSERVATION
Prime Minister Tony Abbott’s planned repeal of 9,500 redundant regulations and 1,000 Acts of Parliament could loosen dangerously close ties between politicians and developers. While such ties are problematic in many parts of Australia, the recent investigation of the Obeid family by NSW’s Independent Commission Against Corruption has brought this issue to the forefront.
Research that I undertook when I was leading a 2011 bid for a Cooperative Research Centre in Heritage demonstrates that the nexus between politicians and developers in Australia has become perilously close. Over the last decade, red tape involved in the heritage approvals process has resulted in a dramatic increase in direct ministerial approvals for developments.
In New South Wales, for example, the use of ministerial <a href="https://majorprojects.planning.nsw.gov.au/index.pl?action=search&amp;page_id=&amp;search=&amp;authority_id=&amp;search_site_type_id=&amp;reference_table=&amp;status_id=&amp;decider=&amp;from_date=15%2F2%2F2011&amp;to_date=3%2F3%2F2011&amp;x=68&amp;y=17" target="_blank">approvals for major projects or infrastructure</a> rocketed from a total of nine during 2001-2005 to 457 in 2010. Forty-three were approved in the two weeks prior to the state government going into caretaker mode.
Red tape is needed to reduce risk and to ensure transparent and equitable processes. However, too much red tape stifles investment. Moreover, frustrated developers seek greater use of ministerial “call in” powers to circumvent slow approvals.
<blockquote>
There is an economic need for a streamlined information system that reduces the approvals delay and provides certainty for developers.
</blockquote>
Australia’s current heritage approvals process is fragmented across jurisdictions, between agencies and between Indigenous and non-Indigenous heritage. This has produced mountains of uncoordinated, non-standardised data. This data is inaccessible, often redundant and usually incomplete.
Decision-making power is dispersed across numerous agencies. Decisions depend on the interpretation and knowledge of individuals rather than on a solid evidence base. We need integrated data-sets that make it possible to determine what is common from what is rare or unique. Common approaches to data collection, storage and use should produce consistent decision-making.
The escalation of ministerial approvals for major developments in NSW emerged in 2005. The Environmental Planning &amp; Assessment Act 1979 was <a href="https://www.planning.nsw.gov.au/en-us/developmentproposals/developmentassessmentsystems/part3aassessmentsystem.aspx" target="_blank">amended to include Part 3A</a> for major projects of state and regional significance. Part 3A determined that the only planning approval required was that of the NSW planning minister. Each project had a spend in excess of $50 million.
With Part 3A, both concept and project approval from the minister had statutory force. Part 3A projects circumvented local council approval and both state heritage acts. These projects did not need approvals under either the Heritage Act, 1977 or the National Parks and Wildlife Act, 1974. Moreover, Part 3A projects were protected from emergency protection orders and third party legal challenges under state environmental or planning statutes.
While the aim of Part 3A was to provide up-front certainty for long-term or complex projects, this provision was abused. When the Liberal government came to power in NSW Part 3A was replaced by two separate assessment frameworks. One is for state significant development. The other is for state significant infrastructure. Importantly, the new system constrains the “call-in” powers of the Minister.
It was anticipated that the number of applications designated as state significant would drop by half. Nevertheless, the level of ministerial approvals for major development projects is still way beyond what it was a decade ago.
Throughout Australia fast-tracking major projects through ministerial approval has become a viable alternative to following due process. Occasional exemptions have become routine and the nexus between politicians and developers has grown murkier.
A sustainable alternative to relying on ministerial approvals for large developments is to lessen delays in heritage approvals. Reducing red tape is one part of this.
Developers need access to sound information. A standardised, integrated and coordinated information system would support sound decision-making. A comprehensive database would make it possible to assess if a cultural heritage place is unique, or one of thousands. Such a system would make it possible to classify and rank heritage assets. It would provide an evidence base for determining what can go and what needs protection.
Uncertainty over heritage approvals is costing investment and jobs throughout Australia. In the resource sector, for example, <a href="https://www.fraserinstitute.org/research-news/display.aspx?id=20902" target="_blank">The Fraser Institute’s annual Global Survey of Mining Companies</a> consistently identifies uncertainty over the protection of wilderness, parks and archaeological sites as a strong deterrent to investment across Australia.
There is an economic need for a streamlined information system that reduces the approvals delay and provides certainty for developers. Such certainty needs to be based on good, irrefutable data. In addition, decision-making should be informed by community values in order to pre-empt conflict and provide long-term confidence.
Australia’s cultural heritage is recognised globally as unique. It includes the world’s oldest continuous cultural traditions, some of the first evidence for modern human behaviours and rich rock art complexes. In addition, it includes the histories of more than 200 migrant groups.
This important heritage needs to be protected. However, we need to grow Australia’s economy and we can’t keep everything. Decisions have to be made about what we pass on to the next generation as heritage and what we let go. These decisions need to be transparent, fair and consistent.
Reliance on ministerial approvals raises concerns about transparency and challenges the integrity of the system. It is possible that the current corruption cases in NSW are only the tip of the iceberg.
Claire Smith is professor of archaeology at <a href="https://www.flinders.edu.au/" target="_blank">Flinders University</a>.<img src="https://counter.theconversation.edu.au/content/24638/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Claire has received research and community project funding from a number of mining companies, including BHP-Billiton and Rio Tinto.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Tackle fast-tracking of approvals to close nexus between politicians and developers

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GUEST OBSERVATION
Property is a critical element in the construction of any diversified investment portfolio. With characteristics such as relative capital stability, generally higher income and, by the real nature of the asset, a hedge against inflation, property can balance out the volatility experienced through equities and other riskier assets.
When retail and SMSF investors think of property however, their minds immediately turn to residential property, after all this is the asset class they are most familiar with. By not broadening their investment horizon they may run the real risk of generating too much concentration to residential property, exposing themselves to the very risks they were trying to diversify away from.
With an investment in property still an important part of an investment portfolio, investors who wish to include property exposure would do well to consider commercial property.
Investors often dismiss commercial property, believing it isn’t suitable for retail or SMSF investors because of the size of investment required, the possible lack of liquidity and the difficulties in managing a commercial property. But these concerns may be overcome by taking advantage of pooled investment vehicles, such as listed and unlisted property trusts.
Investing into a pooled property trust provides access to experienced, professional property fund managers, is no different to an equities fund. Other benefits of investing in commercial property through a managed fund include obtaining diversity of asset type and geography, a regular valuation cycle, smaller capital requirement for buy-in, greater liquidity through withdrawal facilities and a stable income from a diversified tenancy base.
<blockquote>
With an investment in property still an important part of an investment portfolio, investors who wish to include property exposure would do well to consider commercial property.
</blockquote>
Unlisted property funds are not subject to the share market volatility that listed funds have experienced in recent years. Instead, they exhibit performance that is in line with the underlying investment properties – which is ideally what those investors looking to property for its diversification and performance benefits are seeking.
Unlisted non-residential property in Australia, in particular, has consistently achieved investment yields of around seven percent over the past two years, providing stable and regular returns for investors. This has been at a time when other asset classes have faced headwinds such as falling interest rates and weakness in the share market.
In addition, investors can also gain exposure to individual sectors of the Australian economy through unlisted property trusts, with healthcare property a prime example. The healthcare property sector has been less volatile than other commercial property sectors over the past few years, and has outperformed all property on a one, three and five year basis, driven primarily by strong income returns.
The reason for this is that healthcare properties are relatively scarce, operate in a regulated industry and are typically leased to large, stable and well-resourced operators. The ageing Australian population and increasing need for healthcare services helps ensure high occupancy levels w to higher income yields.
The options for property investment, for retail investors and SMSF trustees alike, are greater than simply looking to residential property. By ignoring a large segment of the property market, and staying with the familiar, investors not only run the risk of investing in residential property at the top of the market, they risk losing the benefits that come from investment in a professionally managed unlisted property trust.
Ryan Banting is head of portfolio management with <a href="https://www.australianunity.com.au/" target="_blank">Australian Unity</a> Real Estate Investment<a href="https://www.australianunity.com.au/" target="_blank"></a>.
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Investors overlook commercial property at their peril

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The Reserve Bank of Australia has a problem.
It is relying upon a United States recovery and hawkish Federal Reserve to bring down the Australian dollar. But although US bond markets are beginning to price interest rates rises in the US, they are only doing so at the short end of the curve. Longer duration bonds are the ones that determine carry trades from cheap US dollars into the higher interest rates of other nations and they aren’t buying what the Federal Reserve is selling.
Friday evening saw more bullish Australian dollar action. It was a night of subtle “risk off” but not for the Aussie, piling on 0.5% and threatening 91 cents again:
<img class="aligncenter size-full wp-image-430237" src="https://media.crikey.com.au/wp-content/uploads/2014/03/1.jpg" alt="" width="493" height="272">
The long-term chart is now unmistakably bullish, with an inverted head and shoulders bottom and ascending triangle forming:
<img class="aligncenter size-full wp-image-430239" src="https://media.crikey.com.au/wp-content/uploads/2014/03/2.jpg" alt="" width="490" height="272">
The recent commitment of traders report is also showing large and small speculators covering their shorts:
<img class="aligncenter size-full wp-image-430241" src="https://media.crikey.com.au/wp-content/uploads/2014/03/3.jpg" alt="" width="560" height="257">
Not yet net long but trending that way. So, what’s going on? Unusual moves in US bond markets is what. Last week saw lots of comment about the Fed’s hawkish shift and its effects on the US yield curve. <a href="https://soberlook.com/2014/03/shifting-focus-in-treasury-markets" target="_blank">Sober Look has a nice summary</a>.
Long bond yields still look more likely to fall than rise; indeed the 10- and 30-year yields both fell 1% and more Friday. The 30-year especially has a bearish chart:
<img class="aligncenter size-full wp-image-430242" src="https://media.crikey.com.au/wp-content/uploads/2014/03/41.png" alt="" width="593" height="247">
The 10-year not quite so much:
<img class="aligncenter size-full wp-image-430243" src="https://media.crikey.com.au/wp-content/uploads/2014/03/51.png" alt="" width="593" height="247">
The US bond market is paying attention to a hawkish Fed but is also dismissing its long-term forecasts. Last week the Fed raised its 2016 year-end forecast for the cash rate to 2.25%. The last time the US cash rate was at that level was in March 2008 and the 10- and 30-year yield were at 4%. The time before that, in 2005, both were at 4.5%. But right now, the 10-year and 30-year are only at 2.75% and 3.6% respectively.
US bond markets are pricing the Fed’s attempt to reach its tightening targets but they’re also pricing the failure to get there.
There are reasons to think that the Fed (and RBA) is right and that longer duration bonds will follow. But there is still considerable slack in the US economy — enough to contain inflation — and there is likely to be more dis-inflationary pressure from Chinese tightening and the steady deflation of the commodities complex that is underway as result.
Even if the recovery has enough momentum to reach the Fed’s growth targets there is unlikely to be much inflation. Hence the yield curve may remain flat.
Given the yield spread on the 10-year bond is the dominant benchmark for carry trades, that is the worst of both world’s for Australia because, even though the US tightens, its recalcitrant bond market won’t allow any compression in the yield spread with Australia:
<img class="aligncenter size-full wp-image-430244" src="https://media.crikey.com.au/wp-content/uploads/2014/03/61.png" alt="" width="405" height="293">
Meanwhile, in Australia, the RBA’s revitalised housing bubble has more and more folks looking “across the valley” of the mining capex cliff to rate hikes. They’re probably wrong, not least because the expectation is self-defeating in that without a lower dollar there’ll be no sustained recovery, but that’s not the point right now.
So long as the US long bond market flips the bird at the Fed then the Australian dollar is going to be under upwards pressure.
The answer is still the macroprudential tools mentioned obliquely in the RBA minutes last week. Temporary prudential controls on credit will allow interest rates to be cut and will bring down the dollar so that the Australian recovery can progress.
This article was originally published at <a href="https://www.macrobusiness.com.au/">MacroBusiness</a>.
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How US bonds are putting a rocket under the Australian dollar

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Yesterday’s Reserve Bank minutes from its March meeting shed plenty of light on the bank’s current thinking — much of which was missed by the ensuing media commentary. As always, it pays to examine what the bank says, and even the order in which it says it, rather than rely on what the media says it said.
First, the dollar. From “jawboning” the market on the currency’s high value in post-RBA board meeting notes to speeches warning of possible “intervention”, RBA governor Glenn Stevens spent every public opportunity in October, November and December urging the market to take the dollar lower. In an interview with The Australian Financial Review he even nominated the 85 US cent level as his target. In November’s final Statement of Monetary Policy for 2013, the bank made numerous mentions of the pressures the dollar was causing and the need for it to go lower.
This morning the dollar was trading around 91.20 US cents — higher than when it started the year. Apart from a dip in January, it has spent most of the year so far in the narrow range of just under 89 US cents to just under 91 US cents, with the latest breakout starting late last week with the stronger-than-expected February jobs data (the data that forced Westpac chief economist Bill Evans to abandon his shag-on-a-rock forecast of two more rate cuts from the RBA).
But yesterday’s <a href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2014/04032014" target="_blank">minutes from the bank’s March board meeting</a> were notable for only the briefest of mentions of the dollar, compared to the virtual barrage of commentary late last year:  “[t]he Australian dollar had appreciated a little, although it remained around 14% below its peak in early April 2013.”
And that was that. Has the RBA have resigned itself to accepting the currency is probably not going to go much lower in the short term?
Second, wages. This is the bank on wages growth:
“Members began their discussion of the domestic economy with the labour market. They noted that wage growth remained subdued, in line with the weak conditions in the labour market and relatively low consumer and union inflation expectations.”
Note that this was top of the agenda when the board came to discussing the health of the domestic economy — not the value of the dollar, not the mining investment boom, not house prices, but the labour market and the way wage costs continue to fall. Again, like the 20-plus times the bank mentioned slow wages growth in its February Statement of Monetary Policy, you’d think the bank was trying to tell us something about its views on an issue that has been the subject of considerable stupidity in the media. As if to reinforce the point:
“The wage price index rose by 0.7% in the December quarter, to be 2.6% higher over the year, the lowest year-ended outcome since the series began in the late 1990s. Wage growth in the public sector over 2013 was around its slowest pace since 2000, consistent with ongoing fiscal restraint. Business surveys indicated that wage growth in the March quarter was likely to remain subdued, which was consistent with liaison reports that firms were having little difficulty finding suitable labour.”
And then there’s the housing boom — especially construction, which will be the main driver of growth for the economy as the mining investment boom fades. The RBA said:
“Members observed that conditions in the established housing market had remained strong. Housing price inflation had declined somewhat from the fast pace recorded in 2013, although the data were less informative around this time of year owing to relatively low turnover. Ongoing strength in the established housing market and low lending rates were expected to support new dwelling activity. Dwelling investment was expected to record a slight decline in the December quarter, but a strong increase in approvals for residential buildings over recent months — both for higher-density and detached dwellings — pointed to a substantial increase in dwelling investment in subsequent quarters.”
That’s important because it means that the bank’s low interest rate settings are feeding not merely into price growth in the established housing market but also into new dwelling construction, a key outcome if we’re to transition to a post-mining investment boom environment without a collapse in growth. And speaking of which, remember that huge and worrying fall in <a href="https://www.crikey.com.au/2014/02/28/capex-figures-makes-hockeys-budget-challenge-that-much-harder/" target="_blank">investment in the December quarter</a>? The RBA isn’t too fussed about it.
“In the first reading for 2014/15, the ABS capital expenditure data suggested that a small improvement was in prospect for non-mining business investment. Members noted that the ABS capital expenditure survey reported that mining investment was expected to decline sharply in 2014/15, which had already been embodied in the Bank’s forecasts for some time.”
That is, don’t panic, things are tracking broadly as forecast. That’s also the tone of the bank’s observations about the soft labour market, despite high-profile job loss announcements, which it acknowledged could affect consumer confidence.
This article first appeared on <a href="https://www.crikey.com.au/" target="_blank">Crikey</a>.
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RBA relaxed about the dollar and investment

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GUEST OBSERVATION
The National Rental Affordability Scheme (NRAS) looks set for a major shakeup by the government, following suggestions it has been <a href="https://www.theaustralian.com.au/national-affairs/rudds-housing-gift-to-students/story-fn59niix-1226843122005" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px; line-height: 1.3em;">hijacked by universities</a> to develop subsidised studio apartments for wealthy international students, and that foreign investors, brokers and small time investors are <a href="https://www.theaustralian.com.au/higher-education/top-end-of-town-rorted-nras-scheme/story-e6frgcjx-1226855021305" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px; line-height: 1.3em;">exploiting</a> NRAS tax breaks.
It is true that about 20% of dwellings approved for NRAS subsidies are student accommodation. About 25% of these (5% of all the housing produced, or around 1000 dwellings) are apparently let to foreign students. Whether they are indeed wealthy is another question, though it’s clear some fine tuning of NRAS eligibility might be warranted.
At the same time, it could equally be argued that the increased supply of subsidised units in high rent areas around universities will create some downward pressure on rents to the benefit of all tenants in the area.
Indeed, even if some units are rented to people outside the initial target group, by far the more important concern should be the failure of the scheme to achieve anything like its supply target.
Failing to meet targets
To make a real difference for low income renters in major cities, NRAS needs to impact market rents by providing a genuine alternative at the local level. But against an initial target of 50,000 dwellings, more than six years in NRAS has stimulated construction of only about 20,000 new rental properties nationally. At this scale the supply effect of the scheme is minimal. So we are effectively left with another form of welfare housing – albeit for working households – which also means an emphasis on eligibility and targeting, and thus the worry about overseas students.
<blockquote>
if private investment is to power the housing system then we have to accept that the property investment market is now a global one.
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For more than 20 years governments in Australia have tried to attract private investors in ways that are sometimes creative, and sometimes crude. Examples include public-private toll roads, or the sell-off of once public assets like Qantas. Reducing public debt, increasing efficiency, improved choice for consumers and increased accountability are among the reasons given.
But there are two sides to this ledger, and recruiting market operators to deliver policy objectives carries inevitable costs. This might be in the form and distribution of services, the final cost to consumers, and the ethical behaviour of self-interested investors and providers.
Australia’s skewed housing market
NRAS was designed to induce private investors into providing affordable rental housing. The cost of housing is not just a problem for lower income households unable to afford decent and secure accommodation. Unavailability of affordable housing, especially in Sydney, Melbourne, Brisbane and Perth, has much wider social, economic and environmental consequences.
Many lower paid workers are forced to choose between spending more than half their income on rent, or commuting long distances – if they are able to access work at all – and bearing the cost in time, money and family life. When unemployment or family breakdowns happen, the next step is often homelessness, which can so easily begin a cycle of social exclusion.
When the population is growing and there is undersupply of housing, rents rise to meet the repayment commitments of mortgage holders. These in turn are driven upwards by speculation. The same process adds to insecurity for tenants as landlords turn property over to realise their capital gains.
Of course negative gearing already allows investors to reduce the cost of housing investments. By offsetting interest payments, maintenance and other costs, investors reduce their taxable income. Despite plenty of opponents, governments have retained it for fear that investors will desert the rental property sector. But as its critics point out, negative gearing directs the biggest benefits to the most expensive properties and provides an incentive to upgrade property and charge more rent.
NRAS is also a tax benefit, but it provides a fixed rebate of around $10,000 a year for 10 years. Investors can claim the rebate so long as a property is rented through an approved non-profit housing manager at 20% below the market rate. Potential tenants are means tested. In this way NRAS sought to keep investors in the affordable sector for the longer term. If they sell early in order to realise capital gains then the benefit is lost. It also means that low income tenants are less exposed to unexpected rent rises and unscrupulous landlords.
Beware xenophobia
Concerns about international and small investors exploiting NRAS tax benefits appear to be misplaced if not simply mischievous. The main purpose of NRAS is to make affordable housing at least as attractive to investors as short-term capital gains. It was intended to stimulate exactly the kind of activity that its critics describe. Indeed if it was really a “cash cow for canny investors” then a lot more new housing might have been built.
Pointing to international investors and students as somehow ripping off Australian taxpayers through NRAS plays directly into xenophobic fears about Asian interest in Australian property. The question must be asked: is a locally based speculator with an interest in short-term capital gains preferable to an international investor committed to providing affordable rental housing in Australia for at least 10 years?
In his review Minister for Social Services Kevin Andrews should carefully consider whether NRAS should be allowed to fulfil its aim of creating a viable long-term investment option in affordable rental housing.
Should it be expanded so that it puts downward pressure on rents in our major cities, or should it be reduced to another welfare housing program?
If the government prefers closely targeted housing then a market/private sector driven scheme is surely not the way to go, while if private investment is to power the housing system then we have to accept that the property investment market is now a global one.
Michael Darcy is Associate Professor and Lecturer of Geography and Urban Studies at the University of Western Sydney
Michael receives funding from Pacific Link Housing; and the Australian Research Council. He is a former Board member of NSW Shelter and has had a research partnership with the tenants Union of NSW. He is a member of the ALP.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>. 
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Forget international students, NRAS' biggest concern is failure to meet supply targets

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

The Eveleigh brings house-like apartments to Broadbeach

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

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

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

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

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

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

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