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New local planning controls along two of Melbourne’s iconic rivers will put a level of restriction around development, with minister for Planning, Matthew Guy, implementing Stage 2 of the planning controls.
As part of a commitment to protect Melbourne’s main waterways, the Yarra and Maribyrnong rivers, new planning controls are being introduced.
These planning controls cover the Yarra River between Burke Road, Ivanhoe and Warrandyte, in partnership with Banyule City Council, Manningham City Council and the Shire of Nillumbik, said Guy.
“For the first time in its history, the Yarra River from Camberwell to Warrandyte will be comprehensively reviewed and planning controls strengthened to further protect our iconic river,” Guy said.
Specific areas along the Maribyrnong River have been identified for restrictions around site specific height and setback controls to assist the area in protecting itself from inappropriate development.
This review is flagged to be undertaken in partnership with Melbourne Water.
“We will continue to work with local councils and Melbourne Water to deliver consistent planning controls to protect both rivers,” he said.
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jduke-EHk3XBmHkn

Development to be tightened around Melbourne’s rivers

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Fixed rate home loans are increasingly in favour, according to a financial comparison website's recent analysis.
RateCity, using latest housing finance data from the Australian Bureau of Statistics, records that 9,932 fixed home loans were written in July 2013. This was more than double the number of that written in July 2012, at 4,509.
Loans written in the 12 months to July 2013 increased across the board compared to the year to July 2012, with 28,000 more fixed home loans written.
Alex Parsons, CEO of RateCity, said that fixed rates had been dropped below 5% in recent months and this may be contributing to this.
The average one-year fixed rate on their database is 4.94%, Parsons said. A year ago this figure was 5.92%. Standard variable rates are down by 0.88%.
“Competition at the pointy end of the fixed rate home loan market is heating up and fixed rates are now available from just 3.99% for one year,” he said. 
“Demand for fixed rates increased to almost a third of all home loan applications at RateCity in the past few months, compared with less than 10 percent last year, and we expect that growth to continue while rates stay this low".
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Fixed rates in favour

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Eight new projects, to a total of $48.7 million, are being funded by the NSW Government for the investor-favourite Hunter region.
With news in May that <a target="_blank" href="https://www.propertyobserver.com.au/new-south-wales/chinese-winery-investors-return-to-hunter-valley-after-more-than-18-months/2013050260941">Chinese winery buyers are re-emerging in the market</a> and observer<a target="_blank" href="https://www.propertyobserver.com.au/new-south-wales/the-benefits-of-developing-in-the-hunter-valley-jo-chivers/2013090564814"> Jo Chivers recently giving it a lifestyle tick of approval</a> the latest government announcements are another positive for the area.
“These projects, which were nominated by the Hunter community, include the $11 million expansion of the Newcastle Airport and the $7 million expansion of the Neonatal Intensive Care Unit at John Hunter Hospital,” NSW Planning and Infrastructure minister Brad Hazzard said. 
There had also been a recently announced $12.9 million Paediatric Intensive Care Unit announced.
The Hunter Infrastructure &amp; Investment Fund (HIIF) also outlined a $7.3 million construction of a regional football facility, a $9.6 million replacement of the Muswellbrook Sewerage Treatment Plant, a $2 million Maitland Town Hall refurbishment and a $4 million reconstruction of Thomas Mitchell Drive in Muswellbrook.
More than $10 million remains in the fund for further projects. The total NSW Government funding to the region through the HIIF over the last two years totals $338.7 million.
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$48.7 million new projects in Hunter region: NSW Government

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When purchasing a property through a self managed super fund, the timing is absolutely crucial due to the impact it may have on your personal borrowing capacity, warns Smartline Personal Mortgage Advisers.
Due to the personal guarantee required by most lenders when buying a property in super, the SMSF strategy may best be suited to those in their 50s and older, Smartline's executive director, Joe Sirianni, said.
“For those keen to tap into the growing equity in their existing properties to purchase more properties in the future, this can be a real impediment to fast-tracking wealth creation,” Sirianni said.
“Many people don’t realise that providing a personal guarantee is reducing their borrowing ability by that amount,” he said, referring to investors' personal borrowing capacity.
“While you might not have actually incurred that debt, in the eyes of the lender, it has to be allowed for in any assessment of borrowing ability.”
With lenders more comfortable in recent years to lend to SMSFs, it's still a vastly different situation to those buying a property within another structure, he said.
Take the example of a couple who borrow $400,000 in their super fund to buy an investment property, with the associated personal guarantee. The SMSF receives the rent from the investment property, yet the guarantor is liable for the debt outside the SMSF. 
Twelve months later they want to upsize the family home and look to borrow another $300,000 to do so. The $400,000 loan and associated guarantee means they are not able to borrow the additional funds for the family home.
While an SMSF property strategy can be successful, he warns that investors need to be looking at the whole picture. 
“There are some real benefits to buying property in your super fund versus personally – when you retire. You just don’t want a SMSF loan to restrict you before you do retire," he said.
This may mean that for those in the younger age brackets, it may be best to consider investing outside of your super.
“However, once you move to an age of about, 50 or 55, where you don’t want to borrow any more money because you own your house and you’ve got a couple of investment properties, that’s then probably a better time to buy through your super fund."
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Property in SMSF may be an impediment

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Real estate group Raine &amp; Horne is reporting that the property market is experiencing the best September seen in a number of years, and it may just be a result of infrastructure.
With auction clearance rates averaging 75% around Australia, Raine &amp; Horne CEO Angus Raine said he is surprised at the pick up, but believes it will continue.
“This is surprising as federal election campaigns tend to slow real estate activity,” said Raine.
“However with clearance rates averaging around 75% in our major population centres, and as much as 85% in auction hotspots such as Sydney and Melbourne, we haven’t seen a Spring market like this since the global financial crisis half a decade ago."
The campaign to spend over $20 billion on infrastructure projects should underpin long-term property values, he said.
“I’m particularly heartened by the Federal Coalition’s commitment to improving our roads, and projects such as Queensland’s Bruce Highway, the Westconnex in Sydney and the Perth Gateway will prove a significant boost for long-term housing values".
The Bruce Highway, with $6.7 billion of improvements flagged, is expected to have a significant impact.
“The Bruce Highway impacts many regional centres in Queensland including Cairns, Townsville, Mackay, Rockhampton, Gladstone, Maryborough, Hervey Bay and the Sunshine Coast,” he said.
“Infrastructure improvements that reduce commuting times between – and within – our major population centres will be great news for economic growth, jobs and real estate values.”
This opportunity may be similar to that seen in Sydney's Hills District with the North West Rail Link, said Raine &amp; Horne Bella Vista/Glenwood principal, Emmanuel Fardouly.
“The North West Rail Link is still six years from completion, yet it’s already having an impact, with property values up by 7% since December 2012,” Fardouly said.
“I’d expect growth consistent with this, and potentially more, as we move closer to the opening of the North West Rail Link in 2019.”
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Property market experiencing best September for years

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Discussing with Property Observer the ways she selects assets that, at minimum, double in value every seven to 10 years, Wakelin Property Advisory's Monique Sasson Wakelin divulged a few of her property perspectives.
We've shared part of our exclusive interview in the video below.
{qtube vid:=m0nhmoJanqc}
Transcript:
It becomes very obvious over a large period of time which particular property styles, suburbs, precincts, characteristics stand the test of time and actually produce the best investment outcome. What's interesting is that a lot of people argue that the past growth won't necessarily dictate the future growth, how do you reconcile those ideas?
I think the important message here is that really high quality assets tend to perform very consistently over time. That doesn't mean that property values never go down. They do. And we've recently experienced precisely that over the last three years, I think we saw about a national 10% decline in value and we've started to recoup some of that loss.
But the difference between the wider market place and the really good quality parts of the marketplace is not so much that the value never goes down, but it actually goes down far less than what more compromised parts of the marketplace will show in the later decline.
And importantly when market conditions stabilise and we see a resumption of growth, what I call the bounce back factor is hard and fast in the really good quality assets. So you'll see perhaps the wider market place recoup perhaps 3%, 4%, 5% growth but the really good quality properties might start recouping 6% or 7% right off the bat. So it's really very much about being on the ground, having the data at your disposal.
We've got files and files and files of properties and we've been able to track their trajectory over 20 years or more. And so, it's really important for investors to understand that property values and growth factors will fluctuate, but what we're trying to do in terms of really good quality asset selection is beat the performance of the wider marketplace.
Q. When you're talking about this quality asset, what does that look like to you?
When it comes to houses we like to choose investments that are anything from the 1880s probably to about the 1940s or 1950s. And the key note here is that the asset has to have what we call scarcity value. In other words, there has to be much more demand for that particular type of asset in that particular location than there ever will be supply to satisfy that demand. The same criterion applies to apartments. With apartments you want anything from 1930s through to about the 1970s. Those are the assets that really confer and satisfy that criterion of scarcity value.
I must say, and I'm well and truly on the record here, that off-the-plan investments don't work. They don't have that scarcity value, the vast majority of them. There are always two or three examples that break the rule to prove the rule, but they do tend to be geared towards owner occupiers, many of them are seven figures, rather than what I would consider to be the garden variety investment apartment at a more affordable level for most investors. I'm really talking about something between $500,000 and $700,000. Whereas these ones that may have started out as off the plan would have started out as $700,000 or $800,000 investments when they were sold but they'd now be worth well and truly in excess of $1,000,000 and sometimes even $2,000,000.
Q. What do you think about the more boutique-type off-the-plan, for example a block of six ?
I still don't like them. Not only because of the scarcity value but the location might have scarcity value if it's not a main road, but I tend to stay away from main roads when investing for clients - noise, pollution, all those things - but also from an architectural point of view.
There's something about classic architecture, of course, which can't be either replicated or replaced. Whereas even boutique off the plan apartments are somehow not architecturally scarce enough for them to still look good 20 years down the track. They tend to look architecturally obsolete and tired very quickly. That's one of the reasons.
But the biggest reason is that they tend to be well and truly overpriced when they're sold. Well and truly priced above the prevailing housing stock on the established market and people who buy them tend to have to wait years and years, and many years often, not only to maintain value but also to grow substantially. Remember the benchmark: it has got to double in value every seven to 10 years. I would have to say, I can't think of too many examples of off-the-plan apartments for investment purposes that have actually fulfilled those criteria. 
Q. If you did see that an off-the-plan apartment building was going up in an area that you'd focused on - do you think that would be a positive or a negative for that area?
I think it depends on the kind of development it is. How big it is. Exactly where it is. We've seen this, certainly in Melbourne and in Sydney many many times, where there have been proposed off-the-plan apartment buildings that have caused absolute uproar amongst the residents. So you have to really deal with that on a case-by-case basis.
If we're talking about a small, tasteful, boutique development of between four and six townhouses or some nice apartments, they're generally not a problem in terms of adversely affecting the value of existing housing stock. It's only when you start looking at towers of multi-storeys with lots of apartments that residents begin to get nervous. And rightly so, because it does affect the level of amenity in the area. Which is what those existing residents have paid for and it's why they've got into those areas in the first place because of the lifestyle and the level of amenity.
 
<hr>
 Monique Sasson Wakelin is a director of <a rel="nofollow" target="_blank" href="https://wakelin.com.au/">Wakelin Property Advisory</a>, an independent firm specialising in acquiring residential property for investors.
 
You can contact Monique on <a rel="nofollow" target="_blank" href="https://twitter.com/WakelinProperty">Twitter</a>.
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Properties that will double in value in seven to 10 years: Monique Sasson Wakelin

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We've recently seen buyer's agents come out against the National Rental Affordability Scheme.
Firstly, wHeregroup's buyer’s agent, director and location researcher, Todd Hunter, said he would "<a target="_blank" href="https://www.propertyobserver.com.au/news/id-rather-stick-a-fork-in-my-eye-than-buy-nras-todd-hunter/2013090464795">rather stick a fork in (his) eye rather than buy an NRAS property</a>."
Following this article, Propertyology's managing director, and Australia's Buyer's Agent of the Year in 2012 and 2013, Simon Pressley,  told Property Observer that he believes that <a target="_blank" href="https://www.propertyobserver.com.au/residential/another-expert-comes-out-against-nras/2013091064942">NRAS properties are "terrible investments"</a>.
After Property Observer published these two articles we put a call out to property professionals, and readers, to have their say about the other side of this investment.
The responses we received were varied and outspoken, including this opinion piece in <a target="_blank" href="https://www.propertyobserver.com.au/trends/my-response-to-nras-naysayers-adrian-jenkins/2013091264998?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">repsonse to NRAS nay-sayers</a> by Adrian Jenkins, who is director of a private company, NRAS Australia,  that specialises in listing and providing information about NRAS properties.
Here are some of the highlights of our responses:
<a target="_blank" href="https://www.propertynetwork.com.au/">Property network</a>'s Stephen Lazar:
NRAS can make for an excellent investment opportunity for property investors if, and only if, the property stacks up on its own merits and you would invest in that property if it did not have NRAS. Then with NRAS as an added benefit you should grab it if your due diligence meets your investment strategy.
Think about it this way, with the income tax one would save (eg. around $7,000 through negative gearing + $10,350 tax credit per annum) within just over 2.5 years you would have ‘gotten back’ your original 10% deposit, the property remains cash flow positive and part of your financial planning is 10% paid for by someone else.
Your readers should be aware that your previous two articles were over generalised, included emotion and also contained some inaccuracies and should not let misinformation cloud their due diligence when looking for an investment property that meets their investment objectives.
NRAS because we are at the tail end of the current 40,000 licences issued is in high demand  but not all NRAS properties make for good investment opportunities, review the fundamentals that underpin the property and make an informed decision without the emotion.
<a target="_blank" href="https://www.meridiengroup.com.au/">Meridien Group</a>'s David Brown:
Consistently, NRAS can be shown to deliver a superior cash-flow outcome to a non-NRAS property. The extra cash-flow can then be directed towards either reduction of private debt or towards secondary investments.
It is the net bottom line – after costs, after discounts, after rebates and tax credits etc. that needs to be evaluated. I agree that the management costs are excessive but do not agree about exit strategies for the investor or the net bottom line benefit.
If an investor has an NRAS property they have a formula for annual rental reviews and the NRAS rebate also has annual indexation. Most property managers and landlords hold back on rent increases as they don’t like to rock the boat with a good tenant and therefore short-change themselves on their potential returns. The annual review program in NRAS is good and there are market reviews in years one, four and seven which makes sure that the market rental is in step with prevailing yields. This is a lot better than the amateur way things are done in general.
In our analysis of NRAS v non-NRAS the net cash-flow advantage is $135 per week in favour of NRAS. Given the point I made above about increasing rents, the net advantages for NRAS v non-NRAS are even greater and we estimate that there is a gap of $60,000 to $80,000 in cash for the investor to re-invest for a secondary benefit.
The selling prices of NRAS properties are generally consistent with other properties. We all know how vigilant the valuers have been lately so if the properties are over-priced, then it all falls down like a pack of cards when the valuers come into the game. We all know that the main channel for NRAS sales is via investment property agents and marketers that have fees above standard real estate commissions – but so what? If the deal stacks up then what does it matter?
There are extra costs to developers for NRAS property and these are on the increase. Submission/application fees are paid up-front to some consortiums and if the application does not get approval then that is just burnt money. There are also fees paid to the consortiums for each registration. On top of this, the lead times for approvals and the holding costs associated with that are not inconsiderable either.
Another major benefit is that the state and commonwealth governments essentially underwrite a considerable part of the investment via the negative gearing benefits and the NRAS rebates – both of which are tax free. Over 10 years, the aggregate of these payments can be around $200,000 which is about 50% of the typical contract price for an NRAS property.
From my perspective, NRAS provides higher returns for lower risk and that is why we like it for our clients. And, our clients like it and are coming back for more.
<a target="_blank" href="https://www.regardingmarketing.com.au/">Regarding Marketing</a>'s Trudi McConnell:
Like all investment there is the good, the bad and the ugly.  I have been fortunate enough to have had several viewpoints of NRAS having held a number of consulting positions across the scheme – buyer, seller, developers and consortium consultant.  There are a number of entities out there doing all sorts of unscrupulous things, but there are number of them that are not.  Just to correct the statements in the recent article;
1.	The tax free incentive is $10,350 currently and indexed to CPI.
2.	Apples with apples, the fees are charged at the achieved rent, including the reporting and tax certificates, and the property managers do not or should not charge a letting fee.  Comparatively these would see a real comparison to mainstream property management fees.
3.	It is not the federal government's core industry to run rent roles – not for profit consortiums have been tasked with this service and they do a damn good job for both tenant and investor at the extent that a number of purchasers who bought into the scheme at the outset are now in a position to purchase more NRAS properties and are doing so over and over again.
4.	Banks are lending to 90% now and are extremely supportive of the scheme. It was not the scheme that the lenders had issue with, it was the head lease arrangement which has now been replaced with a management agreements across the board.
5.	There is no price discrimination for a NRAS vs non NRAS.	There is no evidence of resales as buyers / investors do not buy them to sell them.  They buy them for the tax right offs over 10 years.
7.	Like any property investment, the buyer needs to feel comfortable about capital growth in the area, the property configuration, location, rental demand etc. if everything else stacks up, then NRAS is a bonus.
8.	Not all NRAS property developers pay those copious commissions.  At the end of the day, (at least in Queensland), the commissions need to be disclosed.  Valuer practise is to wipe commissions off the final valuation. If these are too high, the property will never settle.
I urge all buyers to do due diligence, check the developer, check the seller, check the property and check the consortium.  NRAS is a fantastic investment if it’s done right.
<a target="_blank" href="https://www.moretonbayhousing.com.au/">Moreton Bay Region Housing Company</a>'s Sean McCreanor:
I am an NRAS investor and have been investing in property for 20 years.  One of our companies, Moreton Bay Region Housing Company Ltd manages a large number of NRAS properties for our investor clients.  We have been involved with the NRAS scheme since its inception and have a very detailed knowledge of the scheme and different NRAS models.
The NRAS scheme currently offers investors $10,350 per annum indexed to the rent component of CPI over 10 years.  The $10,350 is paid via a 75% tax credit from the ATO ($7,762.50) and 25% is paid by the state government ($2,587.50).  In Queensland, the state government component is paid in cash.
The $10,350 is tax free indexed over 10 years to rent component of CPI - resulting in more than $110,000 tax free over a 10 year period.  In return for this tax benefit the investor needs to rent their property at 80% or less of the market rent.
The NRAS tenants can earn between $45,956 per annum for a single person up to$109,264 per annum for a couple with three children.  The scheme is targeted at low to moderate income households.
The management fees we charge investors vary between NRAS models.  Some of the models mandate a particular fee structure.  The lowest NRAS fee we charge is 8% of the discounted NRAS rent - which is the equivalent of 6.4% of the market rent.  The highest fees charged by some models are 13% but these generally cover all costs - let fees, postage &amp; petties, relet fees, break lease fees, bank fees, etc.
When investors are looking at NRAS properties they need to consider the usual property investment criteria plus a number of other important factors:
1. How does the price compare with other local properties of the same type?
2. Would I buy the property without NRAS?
3. What is the sales commission and marketing fee?
4. What is the NRAS management model and how flexible is it?
5. What are the ongoing NRAS fees and charges?
6. How many NRAS properties are in the project/in the area?
With a good property, in a quality location and low management fees, the NRAS incentive increases the after tax yield significantly.
As with all property purchases, investors need to be careful and ensure all the facts are known before they proceed with the investment decision.  There are spruikers in the market pushing a range of property investments - coal seam gas, mining towns, off-the-plan apartments, NRAS, etc.  Investors should be seeking full disclosure and sellers providing full disclosure on all property investments.
Accountant, investor and Property Observer reader Kevin Gatto:
 I have read a few articles regarding negatives on NRAS. I have purchased two NRAS properties and I am for it. I am an accountant and I have researched this , looked at it upside down, sideways , etc to make sure there are no loopholes that I have missed. I purchased one in Marrickville, the complex being built near the station on the old RSL site. Cost: $420,000  (one-bedroom apartment). I believe it was a fair price because the real estate agent selling via the pricelists to the public was selling for the same price.
The numbers are as follows: Market rent say $450. NRAS discount at 20% is $90. Therefore tenant able to rent at $360 per week. Benefit - no shortage of tenants, nil vacancy factor, who wouldn't want to rent something at 20% less that market rental? The $90 loss per week is tax deductible, so in my pocket I lose $59 per week or $3,068 per year
I receive a tax free credit of $10,350 per year. Benefit - so I am in front by $7,282 per year. NRAS compliance costs e.g. annual certificate is approx 7% of the incentive so $724.50, again tax deductible so loss to me of $474.54. I choose what tenant rents it, just like any other rental property investment. 
My agents commissions cost is 8-10% of the rental, little bit more than standard rental property. Benefit - the incentive is indexed by rental CPI each year. Therefore this financial year it is tax free $10,350, if the CPI is 4%, you will receive $11,642 after three years, or $12,592 after five years etc. This is adjusted three times during the 10 years when a valuation is done on the rental. The NRAS scheme is optional meaning you can opt out during the scheme with notice if you want to. I ask myself, with the above figures, why would you want to.
What this all means is, the typical rental property loses between $60 to $120 per week, so an NRAS one makes the same property $30 to $90 per week positive
As with any asset purchase, taxation considerations should not be the main driver in the purchasing decision.With property purchases, location, price , growth etc should be the reasons and NRAS adds a bit more cream to the cashflow.
With NRAS, I have two properties , one in Marrickville NSW, the second on Mackay Queensland, and they will bring in to me close to $300 per week positive cash flow, after negative gearing tax benefits , and the tax free incentives received. I can buy and forget, I don't need to put money into it, it is self funding, therefore it gives me time on my side for capital growth to kick in.
Hopefully the above has convinced you that it is not a bad scheme.  What is also interesting is that the same properties for rent can be listed at two different rentals with the non-NRAS one listed at a higher rent and would be subject to competition by the nras rent due to the 20% discount.e.g Marrickville would be listed at $450 per week, while the NRAS one would be listed at $360 per week. Which one would you prefer to rent?
Reader email (owns NRAS properties):
- I agree that maybe the capital gains over time will be questionable on some properties, but a fair reasonably priced property in a fairly well placed location eventually wins. So do your research.
-	I intend to hold onto this for longer than 10 years. At which point, it will no longer be an NRAS property, therefore negating any need for legals to sell up.
- Yes, the costs incurred through NRAS add up, but your return is still higher that the outlay. I am watching it work for me as we speak.
I did meet with a buyer's agent recently and his opinion was exactly the same as this article. It was also obvious that he could not make any money from an NRAS transaction. I also met up with a financial planner and they steered me away from property in favour of shares. The banks financial planner makes no money in commissions if you buy property. The one thing they both have in common if you ask me is that they will both give advice that will favour their wallet.
Buyer's agent Sebastian James (responding via a Somersoft call out):
As a buyer's agent myself I certainly don't disregard NRAS, I just feel it is more suited to those with a debt reduction strategy and belief that the market as a whole will be subdued over the next decade or so due to limited credit growth, as the guaranteed returns therefore become an attractive option.
Whilst this is not an argument I subscribe to, I understand the logic behind the thought process.
Lastly I think its important to note that not all NRAS properties are a like, and unfortunately for every one good NRAS company which pre vets the opportunity on its own merits and conducts upfront vals, there are countless others who don't, and simply seek to generate the biggest profit margin, regardless of the inferior quality product they are offering.
Ultimately this majority creates a generally negative viewpoint on the subject as a whole, at least that is my perception of the matter.
 
<hr>
Next week we'll put some experts head-to-head for a comprehensive debate on the matter, and we'll share even more of the opinions flooding into our inboxes.  
If you'd like to weigh in further on the debate, either for or against, email <a target="_blank" href="mailto:%20jduke@propertyobserver.com.au">jduke@propertyobserver.com.au</a> 
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Readers respond in defence of NRAS

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There are good and not-so-good operators, developers and agents in the market. Do not let the not-so-good people distort or discolour NRAS as the investment vehicle through their own lack of fact and knowledge.
Both NRAS and non-NRAS agents who do not know what they are talking about, often misrepresenting facts and figures through lack of their own knowledge.
It has two constituent parts. The property and the rental agreement.
The property
Properties built and sold with an NRAS rental agreement, are identical to the same design neighbouring non-NRAS property built by the same developer.
NRAS properties cannot be conveniently ‘pigeonholed’ by the un-informed to be poor capital growth areas or properties.  How can major cities and State capitals be blanket covered as “poor growth areas”.
As a rule the NRAS allocations are placed in areas with population growth and upward rental pressure. Surely, some of the essential cornerstones of all research into good investment property.
The Rental Agreement
The NRAS consortiums providing the rental agreements have different models to consider.
Topline - NRAS is a very flexible rental agreement that sits over the property that you purchase as an investment. The property can be re-sold, with all benefits of NRAS passing on to the new owners. NRAS can also be dropped.
Its simple limitations are that there is an upper limit of income that precludes higher income earners from benefitting from discounted rents. It has a positive social impact. Primarily but not limited to being for tenancy by undervalued essential key workers in our community (nurses, teachers, etc).
NRAS v non-NRAS
Non-NRAS investment properties have two revenue streams.  Cash-flow is made up of a tax rebate based around investors’ marginal rate of tax (negative gearing), and rental income.
NRAS investment properties enjoy three revenue streams. More revenue streams, has to make investments, more robust and secure.  NRAS investment properties cash-flow is comprises all the benefits of negative gearing, rental income, plus the third stream of NRAS contributions being $10,350 (2013-2014).
The facts
Contracts: Any NRAS rental contract will be dealt with by a solicitor – it’s not for you to worry about. And it’s not complicated.
The finance: Most lenders lend against property with NRAS rental agreements.  Why wouldn’t they? It’s no different property build, cost and value to the same property without NRAS rental agreement.  Some NRAS models are better favored by lenders than others.
The returns: NRAS operates based around discount to market rents, not guaranteed rents.
If the rent discount amount is less than $199 per week, then you are ahead.  Most rental discounts amounts are less than $100 per week, meaning with $199 per week from NRAS tax free, investors are going to be better off by at least $99 per week or $5,148 per annum tax free.
Guaranteed rents are sometimes used to ‘prop up’ non-NRAS investments, which mean the investor will have paid for it somewhere.
Lastly, people have often been totally misinformed and say NRAS is designed for the developers to get concessions and financial benefits for delivering NRAS. The fact is that’s simply not true.
Developers are not getting any financial benefit from NRAS. In fact if anything, having to hold the land whilst making the application submissions and having to waiting to see if the proposal satisfies the NRAS stringent guidelines and the local social requirements, can only bee seen as an additional cost-risk, not a financial benefit.
NRAS simply makes the property investment far more attractive and therefore easier to sell.
Prevention is the cure
The cost of acting before being fully informed can be disastrous.
To make smart investments, understanding what you are doing is critical.  The cost of finding out facts is nothing but investing your time.
 
<hr>
 Adrian Jenkins is director of <a href="https://www.nrasaustralia.com.au/" target="_blank">NRAS Australia</a>.
NRAS Australia is a private company that specialises in listing and providing information about NRAS properties and walks investors through the purchasing process. 
 
 
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My response to NRAS naysayers: Adrian Jenkins

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The Aus Property Forum has tweeted out that there's a 'fear of missing out epidemic' sweeping the property market.
<a target="_blank" href="https://twitter.com/OzPropertyForum"><img alt="TWEETOFDAYNEW_sept_12" height="152" width="470" src="/images/stories/2013/09/12/TWEETOFDAYNEW_sept_12.png"></a>
Certainly, sentiment around property is back up and we're seeing investors and home buyers keen to buy again. However, their other comment, around Sydney buyers blowing their budget, just calls to attention how important it is as an investor to keep an eye on the numbers.
Even in a suburb you think will boom, look at the deal analytically, set your price and be ready to walk away. Even a hotspot suburb can't necessarily help you if you pay too much.
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Excitement causing buyers to blow budget

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Sydney's sought after Surry Hills has undergone another shift spreading the need for accommodation into the area south of Foveuax Street, according to CPM Realty.
Pointing to Surry Hills' shift of demographic, Sam Elbanna, founder and managing director, CPM Realty, said that apartments are selling out before construction begins and the area is seeing massive interest. 
"There has been a change in recent years with a culture and demographic shift in the area. The population has changed to a younger demographic, with more than half of the suburb aged between 20 and 35," Elbanna said.
"A good barometer of the change is the type of cars that you see in the area. Where you used to see clunkers and lemons, there are now more residents who are driving BMWs and Mercedes by people working in advertising, banking and medical services. And these professionals now make up around 42% of the Surry Hills population."
However, many investors believe they may have already missed the boat on these areas. Speaking exclusively to Property Observer last week, real estate expert <a href="https://www.propertyobserver.com.au/residential/exclusive-interview-with-property-investment-and-real-estate-expert-john-mcgrath/2013091064914" target="_blank">John McGrath pointed to the suburbs around Surry Hills as being the next purchasing opportunities</a>.
"In Sydney it's areas like Dulwich Hill, St Peters and Tempe that are not the Paddingtons and the Surry Hills, but they're only about four or five kilometres away and they're about 40% less expensive to buy into those areas," McGrath said.
Elbanna said that the new luxury apartment blocks in the area are currently replacing dilapidated terrace houses.
"Developments like Edgeview, The Bedford and one of the latest developments to break ground, East Central, are creating a new identity for the suburb. These stunning apartments are in such high demand that they are selling out before construction begins," he said.
"The area is an archetypical example of the inner-city regeneration and gentrification that is being seen in cities around the world, encompassing socio-economic, cultural and architectural developments. Surry Hills is now one of the premier locations for residential and commercial properties, as the atmosphere changes from run-down to up-and-coming."
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Sydney's Surry Hills undergoing change

For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.

At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.

It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.

The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.

After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.

In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.

[smartcode_project:default project_id=147685 project_image_fid=359136]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.

"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.

"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."

The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.

Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.

The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.

[smartcode_project:default project_id=147685 project_image_fid=359127]

The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.

Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.

"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.

"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."

On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.

Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.

[smartcode_project_cta:default project_id=147685]

Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.

That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.

John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.

"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.

"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."

[smartcode_project:default project_id=1979 project_image_fid=363268]

Equitifund isn't just commenting on Melbourne's property market, it's investing in it.

The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.

The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.

[smartcode_project:default project_id=1979 project_image_fid=363229]

The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.

Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.

Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.

[smartcode_project:default project_id=1979 project_image_fid=363284]

The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.

Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.

"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.

"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."

He said rising construction costs are also changing the way buyers assess completed developments.

"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."

[smartcode_project:default project_id=1979 project_image_fid=363228]

According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.

"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.

"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."

He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.

"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."

[smartcode_project_cta:default project_id=1979]

Why now is the time to buy in Melbourne's premium apartment market

Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

Jennifer Duke

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