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I’m not going to talk about interest rates and the RBA’s decision not to cut them this week because every man and his dog has an opinion on that right now.  Rather, I’m going to talk about being present in your investing.

Being present is what you experience when you are completely focused on this very moment. Often our thoughts and feelings are focussed on the past, which has already gone, or the future, which hasn’t yet happened.
The way I see it, our cash rate is 4.25% at present and that’s pretty damn good in the scheme of things.  Yes, it would be nicer at 4%, but let’s not worry about a few dollars in extra costs if you can make a great rental return like most investors are doing right now – in the present.
Australia has escaped a lot of the wrath of the GFC (round one anyway) and we are lucky to have our mineral resources to thank for that.  Yes the cash rate is only 0.25% in the USA, but its housing market is up the creek without any paddles. Yes, the cash rate is only 1% in Europe, but Europe is waiting for the GFCs round two, and there is a 10.4% unemployment rate in the 17 countries of the eurozone as reported by Reuters.
Look, I’m no economist, I really can’t comment on what’s happening overseas, and it is unfair to compare our interest rate or economies right now with theirs.  All I can comment on is what’s happening in the regional towns Property Bloom is developing in presently.
If I were to give you a quick overview on these towns in the Hunter Region of NSW this is how it go: strong, diverse economies, low unemployment, high demand for rental property, decent quarterly increases in median prices and awesome average annual growth of median prices of more than 12%.
I was taught that paying interest is a cost of doing business and as long as we’re not paying 18% like my parents did in the late ‘80s then I’m happy.
When it comes to property development funding you might (but not always) need to pay a little more, but if you get good accounting advice (and I’m not an accountant) the interest you pay should be a tax deduction together with paying an experienced project manager to manage your development. Consultant costs such as this and others can be taken up in the depreciation schedule.
When it comes to analysing the rental returns once you have completed your development it’s pretty simple.  If you are getting a higher net yield than the cost of your borrowings – the interest rate plus any fees – then you are out front.  If you decide to lock into a fixed rate and think that your rental return can be increased slowly over time while your rate is kept steady, you will find peace of mind in holding your dwellings and taking advantage of the depreciation benefits that a new build will bring and hopefully some good capital growth to come.
My advice right now – in the present – is not to get caught up in external (and particularly global) events that you have no influence over. Focus on the area you want to invest in and study it. Find out what is happening that will boost the local economy (infrastructure projects, new employment opportunities, etc.) and become an expert in that area. Look at what’s already happened or planned for the short term. Become present in your town and understand the dynamics of now, not of what may be.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development.
 
 
 
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Focus on the present with property investment

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The Year of the Dragon. 2012, has the potential to breathe life-shaping fire, to be magical and even mythical.
So as we approach the first day of 2012 under the Chinese Astrology Year – February 4 – we can look forward to a “year of great deeds, innovative ideas and big projects. This will be an advantageous time to begin new projects in business and socially”.
“The Year of the Dragon will bring excitement and big ups and downs in our lives,” according to one online site. 
I’m happy to say I’m a Dragon. After reading various overviews, I think it’s a pretty cool sign – I’m told it’s one of the most powerful and lucky signs in the Chinese zodiac. This is the Year of the Water Dragon, with water having a calming influence on Dragons’ fearless temperament, and also making them more perceptive of others. That’s good.  This also links into my Pices status. I do love a swim in the ocean!
It’s all fun and games to check in on our horoscopes –I always read mine in the Sunday paper – but really it’s up to you as we move into a new year to set down exactly what you want to achieve and not just leave it to chance, or Dragons, or any other belief.
Property development is like what we can expect this year from the Year of the Dragon: it is exciting, it does bring ups and downs (plenty of those) and hopefully in the end, it’s rewarding.
How can we sure up our property development results? I think it comes down to few simple rules:
<ol>
<li>Conduct massive due diligence before you decide to buy. You need to understand exactly what is permissible and what the local market needs in housing.  You should understand the local economics, where the employment is coming from and what projects are in the pipeline that can affect your development.  You should know the suburb inside out so that when a good deal comes along, you can jump on it.</li>
<li>Know what the potential outcome should be. Study rents and sales results in the suburb so you know what your dwellings will return/sell for. Put this into a simple feasibility spreadsheet. </li>
<li>Have a good property accountant who can check over your numbers and advise on the correct structure to purchase under to maximize your tax situation.</li>
<li>Have your finance pre-approved before you start looking so that you can move quickly to secure a good property.</li>
<li>Check out local builders, surveyors and tradies so you can quickly set up your development team.</li>
<li>Negotiate everything; purchase terms, deposit, renovation costs, building costs, agent management fees, etc. Each discount you get will lead to a better bottom line. Be careful not to “screw” your suppliers, as it needs to be a win-win situation for all. </li>
<li>Project manage your development closely so you can ensure it’s moving along as quickly as possible. This takes lots of time and patience. If you don’t have them, use a professional project management fire (like Property Bloom). </li>
<li>Consider holding property. It’s my opinion if you go to all the trouble and time to develop property the benefits of holding can be massive, especially in a few years time when you look back and ask yourself, “Why did I sell?”. Of course you need to have a good yield and depreciation benefits to support your holding costs. </li>
</ol>
So why not take advantage of the Chinese astrology forecast and make 2012 a year of great deeds, innovative ideas and big (property development) projects?
Jo Chivers is director of <a title="Property Bloom" target="_blank" href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.
For more on what's set to unfold in the Year of the Dragon, <a href="https://register.propertyobserver.com.au/foreign-investment-in-australian-property-markets/" target="_blank">download our free eBook</a>.
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Get fired up for property development in the Year of the Dragon

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As we moved into the new year of 2012, I found myself celebrating another milestone.  Right now, the NSW planning system is undergoing the biggest change in 30 years. One of the councils we work under finally gazetted a new LEP – Local Environmental Plan.  The NSW government is changing the way that LEPs are developed and approved for our communities.  This means many councils are undergoing a change to their LEPs. 
One of the biggest challenges of a property developer is keeping up with council regulations.
If you’re thinking of renovating, extending, building new dwellings, demolishing or subdividing you will need to lodge a development application (or DA) with your local council.  But even before you are ready to put your DA together, you must have a good understanding of the council’s LEP.
Something very important you should ask your council is whether there is a draft LEP in existence. A simple search of its website should tell you what’s in the planning pipeline.
There are no general regulations that apply throughout Australia – so as a developer, you must contact your local council for specific details relating to what you want to do.  DAs allow councils to assess whether your plans are appropriate for the area based on their LEP and development control plan (DCP).
This brings me to share an interesting period we’ve had with several Hunter councils as they went through the process of introducing new LEPs.
A LEP is a legal instrument that imposes standards to control development. These plans determine the areas in which various types of development can be considered and which areas of open space and environmental sensitivity need to be protected.  These plans can have a profound and lasting impact on communities. 
A LEP generally comprises a written document and accompanying maps. LEPs apply to a particular area, generally the whole, or part of, a local government area. 
Most LEPs remain in force until they are amended or repealed by an amending LEP. The process to amend an LEP is massive.  We’ve been waiting for one council to draft and finally implement its LEP for five years!  There were many changes and each time a new edition of the draft LEP went on exhibition, we had to study it.  Finally, the LEP was gazetted. When the draft LEP is gazetted, it takes over from the current LEP as the primary environmental planning instrument. 
In the case of our Hunter council, the new LEP will provide more than 1,000 additional residential lots at eight sites across the local government area. In addition the LEP zones new employment land, which will encourage job creation in close proximity to the existing centre of town, while protecting the environmental values of the area.
The LEP also identifies planning controls for a major new town. For a developer, this is very important information. A whole new town will impact greatly on the economy and the demand and availability of housing, so you can see it’s crucial for you to know of any changes to your council’s planning process.
Importantly we’ve found that as the new LEP comes in there is a big grey area. DAs that were submitted prior to the date that the new LEP was gazetted will continue to be assessed under the old LEP and the old DCP, with due consideration of the new LEP. What the?
This may sound a bit confusing but as a developer it’s your responsibility to get a handle on the requirements of your council. I’d suggest you use a planning consultant with a strong understanding of your council’s requirements if you don’t have the time. Remember, the planning phase is just one of the many phases you’ll journey through as a developer. It’s a time-consuming pursuit but one that can bring many rewards.
Jo Chivers is director of <a title="Property Bloom" target="_blank" href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.
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What a new local environment plan can mean for your development

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Just in time for Christmas we’ve received the results of the National Housing Supply Council’s State of Supply Report 2011. 
The <a target="_blank" href="https://www.nhsc.org.au/supply">council’s report</a> provides independent and consistent data on housing supply, underlying demand and the supply-demand gap, as well as affordability. The report has become a trusted resource for both government and industry. 
With <a target="_blank" href="https://www.propertyobserver.com.au/residential/michael-matusik-dismisses-housing-undersupply-findings-as-spin/2011122152932">so much debate going on with whether there actually is an undersupply of housing</a> or not, this report gives some real weight to the argument. In fact, it’s pretty clear. 
The council projects that there will be a shortfall of more than 600,000 dwellings nationally in the next 20 years. 
Wow. That’s a lot of housing that will be required despite “weaker market conditions” that are being touted right now.  But I’m not really seeing “weaker” conditions. In the areas Property Bloom develops things have started to move.
Just this week we found a fabulous development site.  It is a solid three-bedroom house on 1,012 square metres with two street frontages (there’s the twist).  This potential development site had plenty of interest, so much so that we had to race to exchange in order to secure it and take it off the market before Christmas.  The agent received more than 30 enquiries in under a week.  On this site we’ll build a three-bedroom duplex – two attached three-bedroom villas – for our clients.  So we’ll create three properties from one. 
This is where I make the familiar reference to the two-speed economy.  You will find that in any large region where there is lots of employment opportunities – as we see in the Hunter region of NSW – there will be strong demand for housing. 
But it’s not just any housing that’s required. We need to tailor to the needs of the community.  The State of Supply Report uncovers that the numbers of households comprising couples without children and lone-person households are projected to grow much more rapidly in all regions than are the number of households that are families with children.  With an aging population this all points to a need for smaller dwellings. The projections suggest that most regions can expect a greater relative increase in demand for flats than for separate houses. 
Here’s an important point:  “Demand for private rental dwellings may well increase more sharply than is projected, due to social housing stock not increasing in proportion to increased underlying demand.”  What is that telling you, investors?  Rents will continue to increase, combine this with interest rates dropping, buy in the right area and you should end up with a very strong yield. 
With affordable housing in great demand, Property Bloom addresses this by developing properties, renovating houses and then building a granny flat. This strategy can be turned over very quickly and we basically double the housing capacity for that property and create a 9% gross yield for our clients.
By building villa developments in large regional towns like Muswellbrook, Cessnock and Maitland we are also providing good-quality, affordable dwellings. These are quickly snapped up in the rental market.
So if you are looking for to give yourself a Christmas present, consider developing property, or at least purchasing one, in areas where there is an under supply and strong demand. You’ll not only be doing yourself a favour, but also the communities you are investing in and assisting with the shortfall of housing.  Merry Christmas!
Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development.
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All I want for Christmas is some new housing

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As we look back on 2011, Property Observer is republishing some of our most noteworthy stories of the year.
 
Personally, I am really bullish on the investment property market for 2012.  Please note my reference to “investment” market, as I do see a split between the owner-occupier markets and think these may remain subdued or perhaps grow slowly.  It’s property investors who will dive into action and stimulate the market into a steady capital growth wave.
While some of the points I base my predictions on relate to the national market, most relate to the Hunter region of NSW where Property Bloom develops property.  It’s where we focus our research efforts. The Hunter Region has one of Australia’s largest regional populations.  It is also within about a two-hour drive from Sydney, so we are not talking boondocks here.  It’s made up of five major cities or centres: Newcastle, Cessnock, Lake Macquarie, Maitland and Port Stephens.   However, smaller towns like Singleton and Muswellbrook have become major contributors to the region’s economy primarily due to their large coal mining projects.
Here are some of the facts that I have built my 2012 forecast for the investment property market:
-           Major banks decide to pass on the full 0.25% cut last week. According to Westpac’s chief economist, we will see another 0.5% cut by June 2012.
-          Tight labour markets in the Hunter region
-          Federal government funding just announced  in training to increase skilled labour
-          Major regional capital expenditure, particularly resource sector related or transport related initiatives will be a driving force in the Hunter economy over the next few years. Planned expenditure of over $3 billion in the Upper Hunter alone in the areas of mine expansions, rail and wharf investment, on top of a $1.7 billion Hunter Expressway roads project in the Lower Hunter.  These major projects are expected to also flow on to small-medium businesses in the area.
-          Low vacancy rates and still falling, in November we saw a drop of 0.3% to 1.4% in the Hunter Region and the Sydney Metropolitan area vacancy rate is also just 1.4%.
-          High yields. In most towns we develop in the projects finish with a 7-9% gross yield.
-          Shortage of housing.  We have seen four declines in five quarters, with total new dwelling commencements declining 11.5% in the September 2011 quarter.
To me these conditions are ripe for investors to take advantage of lower holding costs as interest rates drop.  There is one massive factor that will impact what happens in 2012, and that is consumer sentiment.  With the continued doom and gloom messages coming at us from Europe and other international markets and the dissatisfaction with our political leaders right now, I think this will also impact on consumer and investor confidence.
I see a fantastic opportunity for savvy property investors over the next 12 months to take advantage of the current environment and get in early before the mainstream investors hit the market, because when this happens it will increase demand, which will result in higher prices and translate into capital growth.
Let’s take it one step further. By developing property in this environment, you can fast-track your portfolio by creating up to three properties from one.  You can create more, but keeping to three or fewer minimises risk and works within the current lending criteria. Banks will lend on building up to three new dwellings on one title right now.
Developing property is exciting, but if you can develop at the right time when the market is moving into a growth phase, then you will see the real benefits of creating equity through the development process whilst also completing your development in time to catch the next capital growth wave. Happy surfing in 2012.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development. 
 
 
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Investors will dive into the market in 2012

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One of the easiest and most successful small development strategies I’ve used over the years is the old corner block development. We can create around $290,000 by investing $634,000, that’s a whopping 46% return.
By using this strategy you can also create a really cheap block of land.  Developing is all about creating.
But before you start you’ll need to clarify a few things.  What is the minimum lot size in the area you are developing in? What is the land zoned – low or medium density?  Different councils use different terminology, but basically low density usually means two or fewer dwellings are allowed on one title of land.  Medium density is three or more on one title.
You’ll also need to check the council requirements around dual occupancy and medium density. Things like minimum private space requirements and setbacks may discount some corner blocks if they are not large enough to accommodate a duplex and the existing house, or two duplexes. Basically we need to get three (or more) dwellings from one corner block. So it’s important to use a consultant with strong understanding of the local council requirements if you are not up on them.
Once you are clear on this, you can start your search.  In one of the towns we develop in the minimum lot size is 450 square metres. So to be able to subdivide a corner site, you would need a minimum of 900 square metres.  Now this is not always set in concrete, the council may consider a slightly smaller land size, as long as you can show you will be developing and building within its development control plan guidelines. By this I mean you may need to build first and subdivide later or incorporate the subdivision into your development application to build. This is actually my preference, as to subdivide a block upfront takes a lot longer and is more expensive than tying in the subdivision with your development application to build.
However, there are reasons why you may need to subdivide up front. One may be to meet zoning requirements.  We’ve had to do this recently in a low-density zoned area where we found a 1,012-square-metre corner block with a house on it.   We wanted to keep the house, renovate it and build a duplex facing the other street.  In this location, we couldn’t apply to build a duplex on the block as this would be looked at as a three-villa development: the house (1) and the duplex (2 villas).  The zoning requirement was that you could only build two dwellings on this land, so the house plus one other.  Our solution was to subdivide the block and then applied to build a duplex (two dwellings) on the newly created lot.
So here is how it stacks up in this town:
Three-bedroom in need of a large renovation on 1,012-square-metre block – $210,000
Renovation costs $60,000
Set up, stamp duty, legals, surveys &amp; reports: $11.000
Subdivision costs: $23,000
Cost to build duplex after subdivision registered:  $330,000
Total Cost: $634,000
End value of the house on 400sqm after full renovation:  $280,000
End value of the two new villas @ $320,000 each:   $640,000
Total end value of the three properties:  $920,000
Less total costs of $634,000
Equity Created:  $286,000 
(note: holding costs are not included as house rent and depreciation offset interest costs)
So what about that cheap block of land?
Well, you can see that we purchased the house for $210,000, set up costs of $11,000 plus spent $60,000 on the reno.  The subdivision costs were $23,000.  Total cost of the house renovation and subdivision is $304,000.
The renovated house on only 400 square metres will be valued around $280,000.  So if we take the costs away from the end value we are paying just $24,000 for the other block of land where we can build our duplex.  So the land cost is only $12,000 per dwelling.
And that’s why I love the old corner block development.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development.
 
 
 
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How to create a cheap block of land

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
A dual-occupancy development is a relatively low-risk way to dip your toe into property development.  The simplest dual-occupancy is building a duplex.  A duplex is two attached villas/units.  So this is almost like building one larger house.
Another type of dual occupancy is to build a second dwelling behind or next to an existing house.
But my preference is to build two freestanding dwellings.  At Property Bloom we look for nice corner blocks that will allow us to build two free-standing villas or houses.  By “nice” I mean a flat block.  Each dwelling will have its own street frontage and face a different direction. You can then simply subdivide so that each villa ends up on its own, albeit smaller lot. The dual occupancy will then appear to be two separate single dwellings.  While each will be on a smaller lot than perhaps the other homes in the street, they may be valued not too much less than the same size dwelling on a larger block.
The wonderful thing about a dual-occupancy development is that the build costs may not be that much more than building one larger house.  However, the land cost is halved for each dwelling. This is how the numbers stack up and we can create over a $100,000 in equity through building a dual occupancy in the large regional towns we choose to develop in.
Let me take you through the figures on a dual-occupancy development we currently have available. Last week, we were offered first option to secure the best lot in a new land release in an upmarket estate in the town of Muswellbrook.  We quickly secured an 892-square-metre lot that was virtually flat.  There will only be three dual-occupancy sites offered in this release, so that means that the majority of dwellings will be houses and probably built by owner-occupiers rather than investors in this particular estate. That’s a big tick for when we complete the villas and clients rent them, as there will be less rental property in this area competing.
The cost of the land is $160,000, pretty cheap for almost 900 square metres of corner block, eh?
Bonus: The lucky client may not need to pay any stamp duty under the <a href="https://www.osr.nsw.gov.au/lib/doc/factsheets/ofs_hbb1.pdf" target="_blank">NSW Builders Bonus scheme:</a> 
Set up costs include; solicitor fee, contour survey and soil test:  $3,000
Estimated cost to build two freestanding three-bedroom, two-bathroom villas with double lock-up garages: $450,000
The build cost above includes all costs associated with the development; council fees and charges, design costs, turnkey building costs and even subdivision. We request that our builder loads everything into the building contract so clients can maximise their construction finance.
Contingency and holding costs:  $15,000
Property Bloom strives to minimise holding costs (interest on the land) paid by negotiating a low deposit and an extended settlement period on the purchase of the land.  During the settlement period we work fast to design the project, prepare and lodge the development application with the council and generally we can obtain development application consent before our client settles on the land.  This means we can swing quickly into action to obtain the construction certificate and then start to build. The build phase is approximately six months for a dual occupancy.
Total estimated costs for dual-occupancy project:  $628,000
Estimated end value of each villa:  $370,000 each or $740,000 for both
To find out the equity created in this project we take the estimated end value of $740,000 (for two villas) away from the total costs of $628,000.  This leaves $112,000.  Not a bad result within a 12-month period.
The rental return expected on the two villas is $450 per week or $900, giving a gross yield of 7.5%.
Jo Chivers is director of <a title="Property Bloom" target="_blank" href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.
Photograph of Property Bloom duplex in Hunter region, NSW.
 
 
 
 
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A dual-occupancy development is twice as nice

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If you are a property investor looking to take the next step into developing property, then there’s never been a better time.  Just take a quick look at the current market conditions and you’ll see what I mean.
Australia’s housing shortage is likely to get much worse before it gets any better because construction of new housing continues to fall well behind the number of properties required. We are seeing Australia’s population growing although the ABS reports that at March 2011 growth had slowed slightly over the previous year.  But we still grew by 312,400 people. In contrast, there was a 7% decline in new dwelling commencements (nationally) over 2010-11 to 154,877.
Then there is the continually rising demand for rental properties. The national vacancy rates are now 1.8% and a lot lower in most of the areas of the NSW Hunter Region, where Property Bloom is developing. There is massive demand for new rental stock, and tenants will pay a premium for brand new.
And here’s a tip for what to build:  The changing demographics of Australia – particularly a smaller proportion of couples with children and ageing of the population – is likely to increase underlying demand for smaller dwellings proportionally more than demand for separate houses.
The government’s National Housing Supply Council’s 2010 State of Supply report concludes:
<ul>
<li>Underlying demand has continued to grow since the last report (by more than 200,000 households) and is projected to increase further by 2029 (by 3.2 million households to 11.8 million);</li>
<li>Supply is not responding to this increase in demand (and that the impact of the global financial crisis on residential development in 2008-09 is likely to reduce dwelling completions in the next few years);</li>
<li>State and territory data on future infill and greenfield supply may be higher than actual delivery of lots (contributing to a larger gap);</li>
<li>The gap between demand and supply has continued to increase and will continue to increase without any changes to demand and/or supply;</li>
</ul>
So the writing is on the wall. We need more housing and depending on where you are developing, villas or units will be in demand.  It’s a perfect time to step up and become a developer.  But if it’s your first time, you should use a project manager to guide you through the development process.
At Property Bloom we start by finding suitable and affordable development sites for clients in the right locations where there is good demand for new dwellings.  Then through a detailed process, we’ll guide the project to a result of building anywhere from two to six new villas, more if clients can finance larger developments.  In some areas we are building larger houses, as this is what is in demand right now.  The total cost of a typical development is $650,000, around the price of a two-bedroom unit in Sydney. 
While all the hard work is taken care of, clients can be as involved as they like in the process.  We have some clients who are first-time investors and need their hand held through the process. Others want to learn the development process so they can do it themselves next time. At the other end of the scale there are experienced investors who work in demanding jobs who don’t have time to source development sites for themselves, let alone manage the entire process.  Property Bloom has managed over 45 developments, so we have a tried and tested system in place. 
Using a project manager to handle your development means you are handing over all the detail to someone with the experience needed to successfully manage your investment.  Some of the responsibilities of a project manager include:
<ul>
<li>locate suitable sites</li>
<li>run feasibilities on potential development opportunities</li>
<li>brief designers and work with them ensure the site is optimised through good designs</li>
<li>consult with architects, engineers and other technical workers to make sure that design intentions are met.</li>
<li>interpret plans, estimate costs and recommend reliable suppliers</li>
<li>manage the planning phase to ensure the fastest possible approvals</li>
<li>study building contract documents and negotiate with building owners and subcontractors </li>
<li>manage construction methods and procedures </li>
<li>co-ordinate the supply of labour and materials </li>
<li>direct site managers and subcontractors to make sure standards of building performance, quality, cost schedules and safety are maintained </li>
<li>control payment to subcontractors by valuation of completed works </li>
<li>communicate effectively and report accordingly</li>
<li>keep project budgets</li>
</ul>
Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development.
 
<ul></ul>
 
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Property development is needed to address the housing shortage

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The definition of a developer’s nightmare is: hearing that your builder is going into liquidation.  So what happens when a builder you’re using does go into liquidation? 

With the announcement of Cosmopolitan Homes in NSW going into liquidation last week, I thought I’d share what I know about this topic. 

When your builder raises a contract, it also needs to raise insurance. The policy that is most important is the home warranty insurance.

[smartcode_project:default project_id=6284]

Home warranty insurance is issued to the developer/homeowner to protect them against loss due to non-completion, defects and breach of statutory warranties by the builder. It is legally required and is only triggered if a builder dies, disappears or becomes insolvent before completing the home or fixing the defects.

I’ll repeat: you can only claim on this policy if your builder dies, disappears or becomes insolvent.  These are pretty drastic outcomes for the builder, but can also have dire consequences for you.

I think we all understand what ‘dies’ means.  ‘Disappearing’, well I’m not sure how this is legally defined, I couldn’t find an explanation. How long does he have to be gone for?  Does a three-month trip to Vegas count?  What I do know more about is the process of ‘becoming insolvent’, and it can be quite drawn out.

If you find yourself in the situation where your builder has gone into voluntary or court-appointed liquidation, the good news is you are most likely covered by home warranty insurance. The bad news is your cover may not be enough to complete your building works. 

I’m going to let you into a little-known fact:  Your home warranty insurance policy only covers 20% of the builder’s contract and up to a maximum of $300,000 for incomplete work.  So the stage your builder goes broke is very important, but totally out of your control. I’ll come back to this.

Going into liquidation is not easy for anyone. For voluntary liquidation the builder needs to acknowledge that he just can’t keep trading. There can be a period of denial as he comes to terms with this. He should not be trading while insolvent because that’s against the law.  Signs of distress may include: delays in completing the stage of build and disgruntled tradies who have not been paid or are continually having to chase payment and the builder being over anxious for his next drawdown. So when the builder finally faces reality and goes into liquidation, he needs to appoint an accounting firm to manage this process.  They will be known as the liquidators. Their job is to notify all “creditors” of the situation.  A creditor will be you if you are under construction with the builder and anyone else he owes money to like staff, contractors and suppliers.

The builder may be put into court-appointed or official Liquidation. This is when someone applies to the court that a company should be wound up in insolvency. If this happens the court will appoint a liquidator.

Either way, before you can make a claim under the home warranty insurance policy, the status of the company must change from “registered” to “under external administration and/or controller appointed” on the ASIC website. Once the company’s status has been changed, you can lodge your claim.

When you make your claim, you’ll be asked to complete a schedule of payments you’ve made to the builder up to this stage. You’ll know how much you have left in your construction loan account. So then it’s a roll of the dice to see if you can complete the works with the insurance payout.

The insurance company will appoint an assessor who will inspect the site and put a building schedule together for the works that are outstanding. This is sent out for tender to builders on the insurance company’s panel and you can also get your own quotes.  This is when you may discover that the works required to complete the project may not be covered by the claim and what’s left in your construction loan.  With just 20% of the original builder’s contract to play with, there really isn’t a good time for your builder to shut down.

How can you avoid the situation of a builder going broke? Well you can certainly do your research on them before signing up. Get a list of their tradies and talk to them about how they are treated by the builder. Does he pay on time? Is he good to work for?  How long have they been working with him? Talk to past clients and ask how their experience was.  Check the Department of Fair Trading website for any past complaints and the ASIC website to see how long the builder has been trading and his status. 

At the end of the day, you will need to trust yourself and go with how you feel about a builder. After all, we cannot know everything that is going on with a company. When you find a good builder, stick with him! 

Interesting links: 

<a href="https://www.propertyobserver.com.au/https://homewarranty.nsw.gov.au/portal/server.pt/community/a%3Bhome/255">https://homewarranty.nsw.gov.au/portal/server.pt/community/a%3Bhome/255</a>  

<a href="https://www.fairtrading.nsw.gov.au/">https://www.fairtrading.nsw.gov.au</a>  

<a href="https://www.search.asic.gov.au/gns001">https://www.search.asic.gov.au/gns001.html</a>

Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development.
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What to do when your NSW builder goes into liquidation

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With this week’s RBA interest rate cut, I found myself pondering on the impact this may have on the “property clock”. 
We’ve all heard the old saying that “property runs in seven-year cycles”.   While I agree property does run in cycles, the fact is we can’t make a generalisation for the entire property market and cycles vary in length. There is not one property cycle, but many. We need to study the areas we are interested to invest in to get an understanding of its individual property clock. In addition to micro events that will affect a cycle  like the opening of a new supermarket in the area for instance (the effect is an increase in jobs and people wanting to live there), there are also macro events that impact on the cycle.  An obvious example is the impact that the GFC had on property cycles. 
Part of my research process is to track specific postcodes in the areas we develop in closely. I collect the quarterly median price growth data and put it into a graph. I like to see a visual of what’s been happening.  So looking back on one of my graphs, I can see a distinct peak in growth that started in 2002 and continued through 2003.  Since then, we’ve seen this area’s median price plateau, and then small incremental growth spikes occurred, until a larger one in 2009 as a result of the government’s first-home owners grant, which enticed more sales. From 2009 until now, there has been some decent growth. In the past 12 months to August this postcode grew by 8.92% and right now the first-home buyers are back in the market encouraged by the RBA’s rate cut. This rate cut is physiologically representative of far more than the 0.25% cut we received.  We’d been told for a year or more to expect more rate increases. This had everyone sitting on their hands, and even saving while they watched and waited. Now the RBA goes the other way and a big sigh of relief blew over the country. 
If we now take a look at the Property Clock below, and I relate it to this particular postcode in the Hunter region, then I can guess that we’ll see some substantial growth in the median price soon.
<img src="/images/stories/jochiversnov3.gif"> 
Why?  Well this suburb (keep reading and I’ll reveal its name) has a very strong rental market so yields are increasing and there is an undersupply of rental properties. I’m expecting to see more investors coming into this market once they realise the strong returns.  You see the median price is just $238,000 and the median rent is $280 per week.  But Property Bloom completed projects in this suburb rent for $380 per week. 
I believe the Lower Hunter Region is around the 7.30 stage of the clock.  There is not a shortage of stock yet but the very good properties are selling quickly.  And there is certainly a new dwelling stock deficiency here. 
A Property Bloom development will typically takes 12 to 18 months to complete, and during this time demand is likely to strengthen and rents to continue increasing (due to limited rental stock).  And if we do see more rate cuts, then I believe we will move to 9 o’clock very quickly. So it is a great time to be developing and adding value to property. If you time it right, you can create some good equity then ride a wave of capital growth. 
Add to the mix the government’s NSW home builder bonus scheme, which waives stamp duty on off-the-plan purchases of new homes up to the value of $600,000 and on land up to the value of $400,000.  <a target="_blank" href="https://www.osr.nsw.gov.au/benefits/nbb/">This bonus</a> is due to stop July 2012, so do not waste time if you want to take advantage of this bonus.
Savvy investors are always one step ahead of the general market. You can make an educated call on when you enter the market by studying the property clock – so are you savvy or mainstream?  By the way, the suburb I’ve been talking about is Cessnock.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/" target="_blank" title="Property Bloom">Property Bloom</a>, which manages property development.
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Learn where your region sits on the property clock before you begin your development

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.

Joel Robinson

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

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Jo Chivers

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