<html><body>
A three-month online consultation aimed at rewriting 50-year-old NSW rules governing the ownership and management of apartments will kick off today, led by NSW Fair Trading Minister Anthony Roberts.
The consultation process will seek to draw input and feedback from strata professionals, apartment owners and the general public and is hosted by public policy think-tank Global Access Partners.
There are currently 70,000 strata schemes in NSW comprising more than 700,000 apartments, numbers that are set to grow, with unit developments forecast to constitute half of Sydney’s new housing by 2040.
Strata schemes apply to anyone who owns an apartment or unit where quarterly fees are paid towards the upkeep of the building and maintenance of common areas. Members of strata schemes must also pay money into “sinking funds” to cover future long-term expenses such as painting the building or replacement of guttering.
Schemes may also contain rules restricting renovations, stating where you can and cannot park your car and whether you can keep pets, but the current complex rules are difficult to enforce.
The launch of the online consultation follows an escalation in strata cases heard by the Consumer, Trader and Tenancy Tribunal, the body that handles residential property disputes.
The end result will be the simplification of the current set of complex regulations.
“An improved, modern and more flexible framework for strata and community schemes is essential,” says Roberts.  “Many people waste thousands of dollars in legal fees because the law is not simple and clear.”
“The original strata Act only had 29 sections. Not only have schemes become larger and more complex since then, but we now have five separate acts plus five associated regulations, with more than 1,000 provisions, regulating the development and management of strata and community schemes.
“The laws have become like a tired, rundown block of flats, with various amendments tacked on over the years to try to cover up the cracks.”
“The construction of new schemes, and service delivery to existing schemes, is a multibillion-dollar industry. Reforming the strata laws can play a vital role in improving the NSW economy,” he says.
The NSW Office of Fair Trading is seeking input on the following four questions:
Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?
Q2. Can you see any future issues that need to be addressed in the legislation?
Q3. How could the management of strata and community schemes be improved?
Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?<a target="_self" href="https://www.openforum.com.au/content/strata-laws-online-consultation-question-4"></a> 
The legislation was last amended in 2008, with changes including giving strata owners greater protection on proxy voting in owners’ corporation meetings.
Feedback on strata rules can be submitted <a href="https://www.openforum.com.au" target="_blank">here</a>.
</body></html>

lschlesinger-FZcF9M3vE6

NSW begins consultation on overhauling complex strata rules

<html><body>
South Yarra property developer Mark Ronald Letten appeared before the Melbourne Magistrates’ Court yesterday following his arrest on 37 criminal charges, including 21 counts of operating unregistered managed investment schemes following an ASIC investigation.
Letten, an accountant and director of LGH Holdings Ltd, is alleged to have promoted and sold investments in commercial property joint venture projects that were required to be registered as managed investment schemes under the Corporations Act.
ASIC believes that more than 1,000 investors placed more than $100 million in the projects managed by Letten.
Schemes managed by Letten include the Healesville Walk Shopping Centre Joint Venture in Victoria, Reef House Resort in Palm Cove, Queensland and the Yarra Valley Golf Joint Venture in Chirnside Park.
Letten has also been charged with one count of carrying on a financial services business without an Australian financial services licence; and 15 counts of obtaining a financial advantage by deception involving amounts of approximately $1.4 million.
If convicted, he faces a maximum of five years’ imprisonment on each of the unregistered scheme charges and a maximum two years’ imprisonment regarding the charge of carrying on an unlicensed financial services business. The obtaining financial advantage by deception charges carry a maximum term of 10 years’ imprisonment.
The ASIC investigation dates back to February 17, 2010, when it commenced proceedings in the Federal Court in Victoria seeking declarations that 20 joint venture property projects associated with Letten were unregistered managed investment schemes.
On February 25 2010, the Federal Court appointed Damian Templeton and Phillip Hennessy from KPMG as receivers and managers to the property of the 15 unregistered managed investment schemes and their related companies and ordered that the schemes be wound up. Letten was granted bail on condition that he surrender his passport and not apply for another; not attend any international point of departure in Australia; reside at his residential address; and not contact any prosecution witnesses directly or indirectly, other than the informant and company liquidator.
The matter returns to the Melbourne Magistrates’ Court on April 4, 2012.  
 
</body></html>

Melbourne property developer Mark Ronald Letten facing criminal charges over alleged unregistered investment schemes

<html><body>
Unless there is a large-scale European banking default, Australian property prices are likely to rise in 2012, says SQM Research managing director Louis Christopher.

Christopher says he is sticking with his “relatively bullish scenario regarding dwelling prices” provided there isn’t a credit squeeze in Australia brought on by Europe falling over.

“Europe is the key. The risk is clear and present. If Europe allows for large-scale banking defaults and a general credit squeeze, this will see our banks ration housing credit by requiring more conservative loan-to-value ratios. 

“Of course, if the squeeze is large enough, banks could come up with additional ways to reduce their balance sheets.”

In a worst-case scenario banks would call in loans “simply because the loan-to-value ratios have risen too high due to drops in property prices”. 

“No doubt [this would be] an event of the last resort with the bankers knowing full well that such a move could very well trigger very deep house price falls in this country, which would further destabilise their own balance sheets.” 

However, barring any such calamities Christopher expects the housing market to respond favourably to further rate cuts in 2012.

“From our regression modelling it appears that the market is very sensitive to interest rate changes. We have had this conviction concerning the markets from some time now. 

“Yes, even a quarter-point change can move the markets and this is because buyers and owners are highly leveraged. Now that we have had a half point change, which has been passed on in full, there is a greater chance, in our opinion, that dwelling prices will rise,” he says.

According to Christopher, mortgage approvals, which increased in October without any interest rate cut stimulus, need to rise by about 3,000 per month to reach the 37,500 achieved in November 2010.
<img src="/images/stories/christopherdec15.gif">
Source: SQM Research
“The red dot on the chart is the point where housing finance approvals need to get to in order to attain capital growth equating to inflation and naturally, meet our bullish scenario forecast for 2012. So clearly we are not there yet and we will need to reach the red dot by June next year in order for our bullish scenario to play out,” he says.


 
 
 
</body></html>

Barring a European banking collapse, house prices set to rise in 2012: SQM

<html><body>
Second-tier lender Bendigo and Adelaide Bank should be able to source wholesale funding at better pricing after its credit rating was upgraded to from BBB+ to A– by Standard &amp; Poor’s.
The rating upgrade indicates S&amp;P believes the bank has a strong capacity to meet its financial commitments and is less susceptible to changes in circumstances and economic conditions.
The rating upgrade came two days before the bank announced it would pass on the full December rate cut to borrowers, reducing its variable rate to 7.3%.
However, borrowers will only see the benefit of lower mortgage repayments after Christmas, with the new rate kicking in on December 30, three and a half weeks after the RBA’s December 6 announcement.
In passing on the rate cut, managing director Mike Hirst sought to highlight the “misconception that there is an exact correlation between the official cash rate and home loan funding costs”.
“Movements in the Reserve Bank overnight cash rate actually have little bearing on the cost of the funds we require to support the borrowing needs of our customers and partners.
“In fact, while the Reserve Bank has been lowering the overnight cash rate, the cost of funding our lending has been increasing, largely because of the consequences of events in Europe,” Hirst says.
Its ratings upgrade comes as fellow regional Bank of Queensland – <a target="_blank" href="/news">the first lender to pass on the December RBA rate cut</a> – had its rating downgraded one notch from BBB+ to BBB.
BBB is the lowest investment grade rating indicates adequate capacity to meet financial commitments, but where adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to meet financial commitments.
The new Bank of Queensland variable rate of 7.36% kicks in on Friday, December 16.
S&amp;P’s decision to raise Bendigo and Adelaide Bank’s long-term rating from BBB+ to A– means the bank is now rated ‘A’ by all three of the world’s leading credit rating agencies, the others being Fitch and Moody’s.
Moody’s ‘A’ rating predates the 2007 merger of Bendigo and Adelaide banks. Fitch upgraded the bank in May 2011.
The S&amp;P upgrade has also been applied to Bendigo and Adelaide Bank’s wholly owned subsidiary Rural Bank, which gains an ‘A–‘rating with a stable outlook.
Hirst says the bank identified two years ago the need to achieve an A rating in order to open up new funding markets.
“Funding is obviously challenging all banks globally, but the upgrade will certainly enable us to access funding otherwise denied to us. Importantly, it will also enable us to service supporters who were precluded from banking with us because we were not A rated.
“One thing it will not do, though, is change our fundamental approach to risk and management. Retail funding remains our key focus because of the strong relationships it brings with our customers, partners and communities. Their support and advocacy is a key to our continued success.”
The upgrade for the regional bank comes following <a target="_blank" href="https://www.propertyobserver.com.au/economy/major-banks-play-down-sp-ratings-downgrade/2011120252649">S&amp;P downgrading the ratings of Australia’s Big Four banks to AA- as part of a global bank re-rating exercise</a>.
Hirst highlighted that Bendigo and Adelaide Bank is one of the few banks in the world to have been upgraded in the current difficult economic environment.
“That brings added lustre to our achievement, but it sounds a note of caution at the same time.
“We are obviously pleased to deliver on our stated aim to achieve an A rating from all credit agencies, but we are under no illusions about just how tough the economic environment is.
“Maintaining our hard-won position will require continued focus.”
Bendigo and Adelaide Bank has 1.4 million customers and more than $50 billion in assets held by its diversified businesses.
 
</body></html>

Ratings boost for Bendigo and Adelaide Bank as it joins the 'A' team

<html><body>
As we look back on 2011, Property Observer is republishing some of our most noteworthy stories of the year.
Alan Dixon, fund manager of the US Masters Residential Property Fund, says Australian investors are being duped into buying overvalued properties in the US, but the fund he manages does not fall into this category. 
Dixon says this is particurlarly the case in the depressed areas, “where promoters are picking up properties for US$10,000 to US$30,000 and then flipping them on to unsuspecting Australians for huge mark-ups”. 
“They are also in areas where ongoing tenancy management will be an issue.  I actually think there will be a list of horror stories involving Australians and US property over the next decade,” he tells Property Observer. 
However, the US Masters Residential Property Fund has taken “a completely different approach” to selecting properties, he says. He denies charges made by property investment commentator <a href="https://www.propertyobserver.com.au/overseas/aussie-fund-s-new-jersey-us-properties-cheap-and-nasty-monique-sasson-wakelin/2011121352822" target="_blank">Monique Sasson Wakelin and others that Dixon Advisory's properties are in a poor location</a>.
“Our target area is Hudson County, New Jersey, and all of our properties range between a 15-minute to 45-minute commute to the heart of Manhattan. 
“This is not Florida, Arizona, Nevada, California, Georgia etc where you can buy a liveable house for sub-US$50,000. 
Dixon quotes US real estate website Zillow, which lists average Jersey City house prices at around US$245,000 compared with US$360,000 in 2006, reflecting a discount of about 32%. 
To date the fund has acquired 55 properties at an average price of just over US$200,000 a property. Prices though have ranged widely from just US$120,000 for a two-family detached house on an 11.8% yield to almost US$400,000 for a four-family detached house on an 8% yield. 
<a href="https://www.propertyobserver.com.au/overseas/dixon-advisory-pays-more-than-double-recent-sales-prices-for-some-high-yielding-us-property-after-quick-refurb/2011121352826" target="_blank">The fund paid more than double the recent sales price for several of its properties</a>, but Dixon says they were still good value.
“We did our research for many months before deciding on Hudson County.  I’ve been in the US for roughly half the time we’ve been running the fund and know we’ve used the right processes to get the right prices for the fund. 
“We hired two local real estate professionals who since March have been working exclusively for the fund.  Gerald Lucas and Desi Barrios have both been working in Hudson County, New Jersey real estate for over a decade,” Dixon says. 
“Gerald’s expertise focuses on purchasing and negotiation and Desi focuses on the leasing and development side.  Desi has run his own portfolio of over 80 apartments in the area for over a decade giving great experience to the fund.  They are highly experienced in the market and lead a very strong team here.” 
Dixon says the in-house team is responsible for sourcing all tenants, completing all property management tasks and dealing with all levels of government involved in property. 
“We’ve placed a large number of tenants in to properties, dealt with ongoing management and also dealt with the difficulties that come from inherited tenants.” Among the challenges the fund has had to overcome has been the fire that broke out on September 17 at 42 Bartholdi, which it acquired for $114,000 in August. 
“Since that date and in less than 3 months, we have secured the property; received a full insurance settlement of $200,000; received all permits to remove rubbish and clean up the site; cleaned up the site; and have completed the drawings for the reconstruction,” Dixon says. 
“The next stages will include final permits for the reconstruction and completing the reconstruction to have the property on the leasing market, which we expect to occur by the middle of March 2012.” 
Dixon says Australian owners of US property need to make sure they have a top quality property management team on hand to look after their properties. 
“When you add the complications of US state and Federal taxes - which we are able to avoid under a REIT structure and individuals are not - individual ownership of US property appears a much riskier proposition than a professionally managed fund such as the US Masters fund.”
</body></html>

Aussie property investors being duped in US, but US Masters Fund not among them: Alan Dixon

<html><body>
Australia is shifting from a nation of home owners to a nation of renters, especially among young people, according to the latest Roy Morgan State of the Nation Report. 
Just over a third (35.2%) of Australians aged 14 and over own their home outright or live in a family-owned home, compared with close to one in two (45.5%) who did so in June 1998.
<img src="/images/stories/roymorgan1.gif">
When borrowers are added to the mix and home ownership is taken to its broadest sense, ownership rises 66.9%, but even this is a significant decrease from the 73.2% recorded in June 1998. 
Home ownership is particularly poor among the youngest segments of the population, with just over a quarter (27%) of young couples owning a home outright or having a mortgage. 
Roughly half (47%) of young families own a house or have a mortgage. 
In comparison, 46%% of older households own their house outright and 32% have a mortgage. 
While home ownership has declined over the past 13 years, the proportion of the population that rents has increased rising from 25.5% to 30.7% over the same period.
<img src="/images/stories/roymorgan2.gif">
Norman Morris from Roy Morgan Research says the downward trend in home ownership is partly because of the increased proportion of population paying off mortgages. 
“This is most likely the result of either the increased trend to borrow against the home to do other things or housing affordability issues as a result of the boom in housing prices and interest rate increases," Morris says.
“Recently this downward trend in home ownership has accelerated, declining substantially by 2.3% points in the last two years.”
</body></html>

Australian home ownership dream fading: Roy Morgan

<html><body>
Perth house prices have fallen at nearly four times the national rate, according to the latest Market Facts report by the Real Estate Institute of Australia.
Houses in the Western Australian capital have declined 6.3% over the September quarter to be down 8.2% over the past 12 months, with the median sales price declining $40,000 from $490,000 to $450,000 from September 2010 to September 2011.
By comparison, median capital city house prices have declined by $11,000 over the past year, with values down 3.7% over the September quarter (reversing a gain of 1.2% in the June quarter) to be down 2.3% over the past year.
The median capital city house price now stands at $521,000 compared with $533,000 a year ago.
Reflecting the current stagnant state of the market, the total number of home sales decreasing by 3.9% over the quarter to 54,529.
Home owners and investors are not the only ones struggling in Perth. The rental market has also taken a hit, with the vacancy rate declining by 0.6% to 2.8% over the quarter, the biggest fall of all capital cities.
Rents for three bedroom houses in Perth increased 2.6% over the quarter to be up 5.3% over the year to $400 per week, the largest annual increase of all capital cities.
Melbourne house prices declined 2.8% over the quarter, but it remains the only capital city where values have risen over the past 12 months – the median house price now stands at $551,000 compared with $543,500 a year ago.
The largest annual decrease has been in the depressed Hobart market, where prices are down 9.2% for the year ($345,000) followed by Darwin (8.2% to $507,000) and Brisbane (4.5% to $427,500).
Sydney house prices are down a modest 1.8% to $637,600 and more than $115,000 above the national average of $521,000. Sydney’s vacancy rate tightened further, falling by 0.1% to 1.4%.
<img src="/images/stories/reiadec14.gif">
The median prices of “other dwellings” (units, flats, townhouses, terraced housing, etc) declined by a more modest 1.4% to $424,176 during the September quarter, with prices virtually unchanged over the past 12 months.
Adelaide has recorded the greatest fall in unit prices, which are down 6% for the year following a drop of 4.8% over the quarter.
Darwin (2.4%), Sydney (0.6%) were the only capital cities to record modest rises in unit prices.
<img src="/images/stories/reiadec142.gif">
REIA president Pamela Bennett says the quarterly figures indicate the “has softened slightly”.
She notes that the quarterly figures do not reflect the rates cut in November and December, which she anticipates “will bring positive results for the residential property market by improving the level of activity in the market, in particular, the level of first home buyers entering the market”.
Other key findings of the report:
<ul>
<li>Over the September quarter, rents for three bedroom houses remained unchanged in all capital cities except for Perth and Darwin, which increased 2.6% and 0.9% respectively. 
</li>
<li>Rents for three-bedroom houses remain the highest in Darwin at $545 per week while Adelaide had the lowest rent for a three-bedroom house at $320 per week. 
</li>
<li>Over the quarter rents for two-bedroom other dwellings remained unchanged in Sydney, Melbourne, Brisbane, Adelaide, and Hobart. Perth and Darwin recorded increases of 2.7% and 1.0% respectively. Rents in Canberra decreased 2.3% during the September quarter. 
</li>
<li>Sydney recorded the highest weekly rent for two-bedroom other dwellings at $450 per week. Adelaide and Hobart recorded the lowest weekly rent at $270.</li>
</ul>
</body></html>

Perth house prices declining at four times the national rate: REIA

<html><body>
The unlisted Investa Commercial Property Fund (ICPF) is set to acquire half of 120 Collins Street, one of Melbourne’s most recognisable office towers, from its fund manager, Investa Property Group.
The fund will use the proceeds of a $110 million capital raising due to be completed this week as well as equity commitments of $175 million received earlier in the year to acquire 50% of 120 Collins Street for about $255 million, with the remaining $30 million to be spent on increasing its stake in 400 George Street in the Sydney CBD by 5.1% to 25%.
The Investa Property Group will retain 50% ownership of the office tower.
The investments will increase total assets under management in the fund to more than $1.6 billion.
Rising up 50 levels, 120 Collins Street Melbourne is a premium-grade office building with panoramic city skyline views and a total net lettable area of 64,831 square metres. It is at the “Paris end” of Collins Street with retail tenants including Louis Vuitton, Rolex and Armani. 
The office tower has been held by Investa since its 2003 when it acquired it at part of takeover of the BT Office Trust. 
In 1993, BT Office Trust paid $286 million to buy 120 Collins Street from the Grollos family (now Grocon). 
Located on the corner of George and Kings Street, 400 George Street is an A-grade office building with 51,222 square metres of net lettable area. 
ICPF fund manager Peter Menegazzo says the ability to access “quality assets” was a major factor in attracting the capital. 
“We were seeking to make a strategic acquisition in the Melbourne CBD, and are now set to acquire an interest in one of Melbourne's best buildings, in this very tightly held market,” he says. 
Menegazzo says both new and existing investors based locally and offshore participated in the capital raising.
The fund will seek to raise new equity in 2012 to fund further acquisitions.
</body></html>

Investa Commercial Property Fund to buy half of 120 Collins in Melbourne CBD

<html><body>
As we look back on 2011, Property Observer is republishing some of our most noteworthy stories of the year.
Alan Dixon, fund manager of Dixon Advisory’s US Masters Residential Fund, has defended the fund’s decision to buy 55 rental properties in Jersey City in Hudson County across the river from Manhattan, following a stinging attack from property market commentator Monique Sasson Wakelin. 
Wakelin called the fund’s choice of properties “speculative” and said they offered limited opportunities for capital growth. 
But Dixon says the investments represent a “huge opportunity” for Australian investors. 
“Our properties have average a purchase price just below US$200,000 compared to peak prices of approximately US$500,000 and an average construction value of $280,000. We are buying below construction replacement cost and getting the land value for free. “We are getting net property yields of 8% to 12% and we are confident of capital growth over the medium term. Our firm’s view is that the Australian dollar is also moderately overvalued, so we expect some gains there as well,” he says. 
Dixon disagrees with Wakelin’s suggestion that the fund should buy in Manhattan instead due to her concern that only 30% of Jersey City locals are home owners and thus there is little chance of gentrification of the area. 
He says tenancy rules and rent controls in Manhattan mean that many renters pay more than $1,000 a month below market rents and cannot be evicted by the owner. 
“We comprehensively reviewed Manhattan and simply don’t agree with her. “Hudson County has no rent control on properties with less than four families and eviction can be achieved in six weeks upon any non-payment of rent. In Manhattan (or Australia, for that matter) it can take four to six months.” 
He also defends the choice of fund’s choice of investment property, multi-family properties, and says they compare favourably with Australian duplexes or semi-detached properties. 
“Most properties are two, three or four families and have always been. They are just like duplexes or semi-detached properties in Australia, but in a local quirk they always stay on one title. They do not have design flaws, and the local residents consider it a normal way to live. 
He says Wakelin’s attack on the fund for buying an asset when it is low and depressed actually fills him with confidence because it’s effectively buying a “quality stock on a low price-to-earnings ratio” rather than not buy because others are not.  “When it comes to valuation I’ll stick with Warren Buffett, Benjamin Graham and all great investors and I’ll be buying where there is deep value available and capitulation in the market prices.” 
Dixon has put his money where his mouth is and alongside his father Daryl Dixon (a director of the fund) has increased his own investment in the fund in the latest capital raising. 
He says “smart investors will be looking to have 4% to 12% of their SMSF portfolio in an excellent opportunity such as this”.
Aside from backing the location and choice of properties, Dixon also highlights the depth of research undertaken and US property knowledge base of the management team. 
‘[We] stared our process some 18 months ago now with a team including myself, our head of funds management, Alex MacLachlan, and our head of strategy, Chris Brown. 
“Alex grew up in New Jersey, he is a graduate of Cornell University and has an MBA from the Wharton School at the University of Pennsylvania. 
“Chris Brown is a dual US/Australian citizen and immediately prior to joining Dixon Advisory in 2008 was an executive director of UBS AG based in New York, where he had been living and working for the previous four years. As such we had very strong connections to allow us to research this opportunity properly,” Dixon writes in <a href="https://www.eurekareport.com.au/">The Eureka Report.</a> 
In addition, the fund has this week strengthened its advisory board with the appointment of Stuart Nisbett as independent director of the fund’s advisory board. 
Nisbett runs Archerfield Capital Partners, which specialises in equity raising, debt restructuring and mergers and acquisitions as well as strategic and project advice, with a focus on real estate” and formerly ran the property funds management arm of ANZ Investment Bank.
Referring to Wakelin’s October visit to Jersey City, Dixon says the fund didn’t take a day off on its holidays to buy properties – “we spent months and months researching and talking to the US’s leading economists, property professionals, money managers and investment bankers to make our decision.  Dixon takes particurlar issue with Wakelin’s claim that Hudson County (where Jersey City is based) is unlikely to gentrify due a predominance of renters over buyers (70% to 30%)
“There has been a complete renovation and gentrification of Hoboken (about 8 kilometres north east of Jersey City) to make it one of the most desirable areas in the New York Metropolitan region.
“In the words of Wikipedia, 'the character of the city has changed from a blue-collar town to one of upscale shops and condominiums'."
Dixon list a number of other developments, which he says are “signs of strong gentrification and investment in the area” including the completion of Newport, Jersey City, a 600-acre master planned mixed use community with retail, residential, office and entertainment facilities.
“More than $10 billion has been invested since the project commenced in the 1980s,” he says.
Other developments include Goldman Sachs completing the tallest building in New Jersey, a 42-storey modern office building in Exchange Place in 2004, “part of what is sometimes referred to as “Wall Street West” due to the large concentration of financial firms based there.
Dixon also rubbishes Wakelin’s claim that the journey on the Path light railway from Jersey City to Manhattan is “no 15 minute commute” and can be unreliable.
“She is wrong. From Journal Square, where the fund owns a large number of properties, to the World Trade Centre is an 11-minute PATH train ride. It is on time, clean, air-conditioned and runs every four to five minutes in peak hour. It is rarely late,” says Dixon.
He says his office also has had a “chuckle” at Wakelin’s suggestion that properties the fund purchased should not be marketed as “New York metropolitan properties”.
“A quick visit to Wikipedia would have helped her reveal that ‘New York metropolitan’, ‘tri-state and ‘greater New York’ are completely interchangeable terms and all mean the same thing. Perhaps she should spend a little more time researching her subject. Indeed, Hudson County is the closest county or borough to Manhattan of all 30 counties in the area.”
</body></html>

Our US investments are sound and well researched: Alan Dixon  

<html><body>
See-sawing investor appetite for new houses fell sharply in October, according to the latest ABS housing finance figures.
Construction finance to investors decreased 26.2% over October, to be 2.1% lower in trend terms as the total value of loans for the purpose of building new houses decreased by 9%. Demand from investors for construction finance has risen and fallen sharply over the past year, and has been broadly flat since mid-2008.
Owner-occupier construction finance was 2.7% lower in the month.
<img src="/images/stories/absdec12.gif">
Source: ABS
The October decline follows a similar decrease in September taking the value of construction finance 8.9% lower than levels a year earlier, highlighting both the depressed current state of new housing and the poor outlook for 2012.
According to the most recent HIA - JELD-WEN New Home Sales Report, <a href="https://www.propertyobserver.com.au/residential/new-home-sales-recover-modestly-in-october-hia/2011120852759" target="_blank">the total number of new homes (detached and non-detached) sold was down 8% over the three months to October</a>.
For tips for buying your first investment property, <a href="http://propertyobserver.com.au/ebooks/free-ebook-how-to-buy-your-first-investment-property" target="_blank">download Property Observer’s free eBook</a>.
 
</body></html>

Investor interest in new housing fell 26% in October: ANZ

The Gold Coast economy has grown by 25 per cent since 2020/21 to surpass $55 billion, but perhaps the more significant story is what sits behind the headline number.

For decades, the Gold Coast has been viewed through the lens of tourism, lifestyle and population growth. The latest State of the City Report suggests that perception is increasingly out of step with reality.

Released by Invest Gold Coast, the report ranks the Gold Coast as Australia's largest non-capital city economy and, perhaps more notably, second nationally behind Sydney for Economic Complexity, a measure that assesses the diversity and sophistication of an economy.

It's a result that places the Gold Coast ahead of Melbourne, Brisbane, Perth and Adelaide, highlighting the extent to which the city's economic base has broadened beyond its traditional industries.

Today, the Gold Coast supports more than 350,000 jobs, is home to over 83,000 businesses and generates $19 billion in annual exports. Manufacturing now accounts for 62 per cent of international export growth, while sectors including health, education, advanced manufacturing, technology and professional services are becoming increasingly important contributors to the local economy.

[smartcode_project:default project_id=150017 project_image_fid=372547]

Gold Coast Mayor Tom Tate said the report confirmed the city's evolution into one of Australia's most significant economies.

"The Gold Coast economy continues to grow at an incredible pace. This is no surprise to those of us who have watched the evolution up close," Mayor Tate said.

"As one of the most entrepreneurial, investment driven and opportunity focused economies in the country our ambition has been realised and possibilities are endless.

"The Gold Coast has built a reputation as the city that says yes. We say yes to investment, yes to opportunity and yes to people who want to build something.

"It's this mindset helping us drive major growth across health, advanced manufacturing, screen production, marine, technology and the knowledge economy."

[smartcode_project:default project_id=149670 project_image_fid=360975]

While population growth has been one of the defining stories of the past decade, the report points to a broader economic transformation taking place.

The city's knowledge economy now contributes $7.9 billion annually and supports around 31,000 jobs, while the health and wellbeing sector contributes $5.2 billion and employs more than 42,000 people. Together, the six priority sectors identified in the report account for almost $24 billion in economic output and more than 145,000 jobs.

One of the strongest examples is the Gold Coast Health and Knowledge Precinct at Southport. The 200-hectare precinct now contains more than $5 billion worth of health, education, research and innovation infrastructure and supports over 16,000 jobs.

The report also highlights the growing role of advanced manufacturing, particularly in aerospace, defence and modular construction.

Gold Coast-based Gilmour Space Technologies recently became the first Australian commercial company to attempt an orbital launch, while companies including Modscape and ModnPods are helping establish the Yatala-Stapylton corridor as one of Australia's fastest-growing advanced manufacturing hubs.

The city's entrepreneurial culture is also translating into business growth.

Since 2019/20, the number of businesses operating on the Gold Coast has increased by 22 per cent, while firms employing more than 200 people have grown by 80 per cent. The report suggests the next challenge is converting more local start-ups and medium-sized businesses into nationally significant companies.

Development activity remains another key indicator of confidence.

There are currently more than $23 billion worth of major projects underway across the Gold Coast, supported by a record 75 active cranes, a figure that now exceeds Brisbane and represents a 150 per cent increase since 2016.

[smartcode_project:default project_id=112024 project_image_fid=343235]

Importantly, the report notes the next phase of investment will need to extend beyond residential development.

While 93 per cent of crane activity is currently tied to housing, Invest Gold Coast argues future investment will increasingly need to focus on cultural, civic, infrastructure and industry-enabling projects that strengthen the city's long-term economic resilience.

Invest Gold Coast Chair Will Hodgman said the city was now benefiting from years of economic diversification.

"What is happening on the Gold Coast is the result of the city's economic base broadening, fuelled by industries with long-term, high-growth potential," Mr Hodgman said.

"This is no longer a secondary Australian economy, the Gold Coast is becoming a globally connected city with deeper capability across health, knowledge and creative industries, advanced manufacturing, technology and exports."

[smartcode_project:default project_id=108274 project_image_fid=365786]

Looking ahead, the Gold Coast's population is projected to exceed one million residents by 2046.

For a city that was once largely defined by tourism and lifestyle, the latest figures suggest the Gold Coast is becoming something more significant, one of Australia's most diverse and economically sophisticated urban economies, and increasingly one that national and international investors can no longer afford to overlook.

Joel Robinson

75 cranes, $23 billion pipeline and a $55 billion economy: Inside the Gold Coast economic boom

Ron Bakir's Homecorp has sold more than 75 per cent of the apartments in its wellness-driven Florence Residences in Surfers Paradise following its first weekend release.

The <a href="https://www.apartments.com.au/new-apartments/florence-residences-24-monte-carlo-avenue-surfers-paradise-qld-4217">26-storey project on Monte Carlo Avenue</a>, which commenced construction earlier this year, has seen a flurry of buyers secure their slice of the Gold Coast's latest wellbeing-focused offering in one of the nation's most competitive property markets.

Since the pandemic, the Gold Coast's population has grown by more than 11 per cent, a rate approximately four times faster than Sydney's, driven largely by lifestyle changes and interstate migration. While buyer activity has moderated in some markets nationally, demand for newly built dwellings on the Gold Coast continues to gain momentum as purchasers increasingly prioritise lifestyle, amenity, wellbeing, liveability and long-term investment potential.

&nbsp;

[smartcode_project:default project_id=150414 project_image_fid=372743]

Homecorp CEO Ron Bakir says buyers today are looking for more than just a home.

"What we are seeing is a shift in how people define value in property," Bakir says.

"What attracts residents to new developments is a desire for more than just a residence. They are looking for a place that complements their lifestyle, supports their wellbeing and reflects the way they want to live into the future.

"Lifestyle, longevity, proactive health, wellbeing, connection and a sense of community are increasingly shaping purchasing decisions, particularly on the Gold Coast, where these factors continue to be a major drawcard."

[smartcode_project:default project_id=150414 project_image_fid=372744]

Bakir says Homecorp is responding to this shift through an approach that places greater emphasis on design, amenity and experience working together to create places that feel considered, connected and enduring in value.

Inspired by Eastern European design, Florence Residences will comprise 120 apartments alongside a private residents-only wellness club featuring a resort-style rooftop pool, hot and cold plunge pools, a spa retreat, contemporary gymnasium, and a spacious yoga and Pilates studio.

The development will also feature a residents-only lounge with private dining facilities and a rooftop bar, premium outdoor entertaining areas, a hotel-style lobby lounge, generous bike parking, and pet-friendly amenities including a heated dog wash.

[smartcode_project:default project_id=150414 project_image_fid=372742]

A limited number of apartments remain available, with an exclusive collection of four-bedroom sub-penthouses set to be released in the coming months.

Florence is one of the latest additions to Homecorp's expanding multi-billion-dollar property portfolio, which also includes plans for a <a href="https://www.apartments.com.au/news/qld/homecorp-lodges-plans-for-260-million-moroccan-bathhouse-inspired-tower-in-budds-beach">$260 million development in Budds Beach</a> tailored to the growing wellness market.

A development application has been lodged for a 27-storey, 156-residence tower at 8–10 Acacia Avenue and 25–27 Oak Avenue, featuring a residents-only Moroccan spa-inspired sanctuary.

Apartments at Florence Residences are priced from $1,249,000, with construction expected to be completed by late 2027.

[smartcode_project_cta:default project_id=150414]

Buyers rush to Homecorp's Florence Residences as Gold Coast wellness trend gains momentum

The NSW Government has expanded its $1 billion Pre-sale Finance Guarantee program, broadening access for affordable housing providers and smaller residential developments as it seeks to accelerate housing delivery across the state.

The Minns Government says the program has already helped bring forward more than 600 homes across Sydney and regional NSW since launching in September 2025, with similar models now adopted in South Australia and Western Australia.

The latest changes, announced by Treasurer Daniel Mookhey and Minister for Planning and Public Spaces Paul Scully, are designed to improve access to finance for projects that have planning approval but are struggling to secure funding.

Among the key changes is an expansion of support for community housing providers. The program will now support up to 100 per cent affordable housing projects valued at up to $30 million when delivered by not-for-profit providers, while support for larger affordable housing developments will increase for projects worth up to $80 million.

The government says the changes will help accelerate the delivery of housing for low-income workers, older people, people living with disability, and those at risk of homelessness, while reducing reliance on direct grants or subsidised loans to bridge funding gaps.

The eligibility criteria for smaller residential developments have also been broadened. The previous $5 million minimum project value threshold has been removed and replaced with a requirement that projects deliver at least four homes.

Support has also increased for projects delivering fewer than 20 homes, with the guarantee now able to cover up to 75 per cent of dwellings in a development, capped at $30 million per project.

The changes are expected to particularly benefit smaller-scale and regional developments, which often face greater challenges meeting pre-sale requirements imposed by lenders.

Treasurer Daniel Mookhey said the scheme demonstrates how government can use its balance sheet to stimulate housing supply without relying solely on taxpayer-funded grants.

"The Pre-sale Finance Guarantee shows how this Government is using its balance sheet to reduce risk and unlock private investment, enabling new homes to move from design to construction faster," Mookhey said.

"This landmark reform allows us to deliver homes for working families at a lower cost to taxpayers, while also maintaining strong financial discipline."

Planning Minister Paul Scully said the program had already proven effective in bringing stalled projects to market.

"The Pre-sale Finance Guarantee has already proven it can unlock stalled projects and accelerate housing delivery by giving lenders the confidence they need to back good developments," Scully said.

"These changes will allow more affordable housing and smaller developments to access support so more homes can be built faster where communities need them most."

Housing Minister Rose Jackson said the expansion would help community housing providers overcome financing barriers that often delay projects.

"We know community housing providers are ready to build more homes, too often they're held back by barriers to finance," Jackson said.

"Expanding the Pre-sale Finance Guarantee helps remove those barriers so more affordable homes can get off the ground sooner."

The announcement was welcomed by the Property Council of Australia, which has long advocated for measures aimed at improving project feasibility and access to finance.

Property Council NSW Executive Director Katie Stevenson described the expansion as a practical intervention that addresses one of the most immediate constraints on housing delivery.

"This is exactly the kind of practical intervention we need right now, focused on getting projects out of the ground, not just approved," Stevenson said.

"It builds on a model the Property Council has worked closely with government to develop following calls for such a scheme ahead of last year's NSW Budget, so it's great to see it being expanded."

Stevenson said the reforms would help unlock projects that are ready to proceed but have been delayed by financing challenges. However, she noted that broader feasibility issues remain a significant barrier to increasing housing supply.

"The biggest challenge in NSW housing today is delivery. Too many projects have planning approval but are simply not financially viable to proceed under current settings," she said.

Speaking at the Property Council's NSW Housing Summit, Housing Minister Rose Jackson acknowledged that feasibility and financing pressures continue to constrain housing delivery, while reaffirming the government's commitment to work with industry on solutions.

Stevenson said the government's recognition of those challenges was encouraging ahead of next week's state budget.

"It's positive to see the government clearly recognising that feasibility pressures are now a binding constraint on supply," she said.

"With the Budget just days away, the focus must be on backing delivery, making sure projects stack up, finance can flow, and more homes can move from approval to construction."

The expanded Pre-sale Finance Guarantee forms part of the NSW Government's broader housing agenda, which also includes planning reforms, the NSW Housing Pattern Book, and a series of rezonings intended to increase housing capacity across the state.

NSW expands Pre-sale Finance Guarantee to unlock more affordable and regional housing

Design-led developer-builder Lowe Living has unveiled its latest residential development, Jardin House, marking its first foray into Melbourne's blue-chip City of Boroondara.

Located a short walk from Camberwell Junction, <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House</a> has been designed to appeal to affluent local downsizers and established families seeking a low-maintenance alternative to the large homes that have long defined Camberwell and surrounding suburbs.

The project will comprise a collection of two and three-bedroom apartments ranging from 92 sqm to 280 sqm, alongside a limited number of penthouse residences featuring rooftop terraces spanning more than 100 sqm, with optional private pools.

&nbsp;

[smartcode_project:default project_id=146717 project_image_fid=372212]

Lowe Living Co-Founder and Managing Director Tim Lowe said Camberwell represented a natural next step for the developer as it expands into some of Melbourne's most tightly held residential markets.

"Jardin House is an important project for our team as it marks the next evolution of our portfolio into different well-established blue-chip pockets of Melbourne," Lowe said.

"Camberwell, with its incredible walkability, family-led neighbourhood feel and superb access to education and transport, makes it a natural choice for us."

[smartcode_project:default project_id=146717 project_image_fid=372227]

Designed by Tristan Wong Architects, with interiors by Hecker Guthrie and landscaping by Acre, the development takes inspiration from the Art Deco architecture that remains a defining feature of many of Camberwell's established streets.

A curved facade, arched openings, textured brickwork and sculpted forms reference the suburb's architectural heritage, while extensive landscaping softens the building's presence and creates a strong connection to the surrounding tree-lined streetscape.

The project will be set behind a secure gated entrance, with residents arriving through landscaped gardens designed to create a transition between the public realm and private residences.

Inside, the residences feature natural stone and timber finishes, full-height glazing, Miele appliances and generous open-plan living areas designed for long-term owner occupation.

[smartcode_project:default project_id=146717 project_image_fid=372225]

While the apartments themselves have been designed to attract discerning owner-occupiers, it is the amenity offering that sets Jardin House apart from many other boutique projects currently launching across Melbourne.

The centrepiece is a 350 sqm private bathhouse curated in partnership with Aurora Spa &amp; Bathhouse founder Lyndall Mitchell.

The wellness precinct includes mineral pools, hydrotherapy experiences, a Himalayan salt room, sauna, steam room, cold plunge pools and dedicated relaxation spaces, creating what Lowe Living describes as a private wellness retreat exclusively for residents.

[smartcode_project:default project_id=146717 project_image_fid=372222]

The collaboration follows Lowe Living's recent partnership with Aurora at Maison Savoy in Brighton, although Jardin House is the first project to incorporate both indoor and outdoor wellness experiences.

Emma Lowe, Co-Founder and Managing Director of Lowe Living, said wellness was becoming an increasingly important consideration for apartment buyers.

"Collaborating with Lyndall Mitchell from Aurora Spa &amp; Bathhouse for a second time is an intentional nod to creating residences that are more than just homes, but a way to enrich the lives of our residents through wellness and longevity," Lowe said.

The amenity offering is complemented by a Technogym fitness studio, residents' lounge, private dining spaces and concierge services.

The launch comes as developers increasingly target Melbourne's established eastern suburbs, where rising land values, ageing housing stock and growing downsizer demand are creating opportunities for boutique apartment projects.

Lowe said the company expects significant generational wealth transfer across suburbs such as Camberwell in coming years, creating further demand for luxury apartment living.

"Camberwell is a blue-chip suburb where homes regularly transact for multiple millions of dollars," he said.

"The generational change of wealth in these locations expected in the coming years is significant, so we see an opportunity to create exclusive residences that appeal to older families and downsizers in order to meet this demand."

Apartments at Jardin house start from $1,195,000. The project forms part of Lowe Living's near-$1 billion portfolio of new developments across Melbourne.

[smartcode_project_cta:default project_id=146717]

Lowe Living launches Jardin House in Camberwell

As <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> continues its transition from a commercial centre into a more layered residential and lifestyle precinct, a new generation of apartment developments is reshaping expectations around scale, amenity, and long-term liveability.

Improved transport connections through the Victoria Cross Metro, continued investment in dining and public spaces, and a constrained supply of new luxury apartments have sharpened demand for homes that combine proximity to the CBD with the privacy and outlook traditionally associated with harbourside houses.

At 177 Walker Street, <a href="https://www.apartments.com.au/developers/aland">ALAND</a>’s new apartment development <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> enters the market with a distinctly residential approach to high-rise living. The 30-level tower will deliver 161 residences, ranging from one-bedroom apartments through to sub-penthouses and a full-floor penthouse, all oriented to capture uninterrupted views across Sydney Harbour, the Opera House, and out toward the Pacific Ocean.

[smartcode_project:default project_id=134323 project_image_fid=6395]

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project takes advantage of the site’s natural topography and elevated position above the harbour. Rather than relying on density alone, the architecture focuses on outlook, orientation, and spatial flow, with every apartment occupying a corner position to maximise natural light and cross ventilation.

Rothelowman says the site itself shaped much of the architectural response.

“The site has a long history in terms of its inevitable transformation and when we came in, we took inspiration from the idea of reestablishing a sense of the site’s natural terrain and fall. Our scheme aims to integrate with the terrain and the landscape, using the undulating site to slowly reveal glimpses and views of the harbour. The rotation of the tower off grid means every apartment has a view and is naturally cross ventilated. The building's colour palette is quintessentially Sydney, with bronze and sandstone and a luminescent green colour in the glass, making it very earthy and grounded in its location.”

[smartcode_project:default project_id=134323 project_image_fid=6399]

Inside the residences, the emphasis moves toward larger-format living typically associated with standalone homes. Kitchens sit at the centre of the apartments, connecting directly to open-plan dining and living areas before extending outward into expansive winter gardens and balconies. Calacatta marble, bespoke joinery, integrated appliances, and custom metal detailing are used throughout, while three distinct interior palettes, Terrace, Opera, and Harbour, allow buyers to personalise the spaces without compromising the architectural consistency of the project.

The larger residences place particular attention on separation between entertaining and private zones. In many apartments, master suites occupy the outer corners of the floorplates, allowing bedrooms to benefit from floor-to-ceiling glazing and harbour outlooks independent of the living spaces. Dressing rooms and ensuites continue the material palette through fluted detailing, freestanding baths, and layered stone finishes.

Rothelowman says the design intent centred on creating homes that feel enduring rather than transient.

“Our philosophy is all about the way people live in these spaces, and we wanted to create homes that reflect the quality of life in this unique Sydney location. The apartments showcase expansive living spaces that are generous, sophisticated, and bold, with the ability to connect with views throughout each apartment.”

[smartcode_project:default project_id=134323 project_image_fid=353235]

A separate four-storey amenity building known as The Pavilion expands the residential offering beyond the apartments themselves. Positioned alongside the tower, the building consolidates wellness, recreation, and social spaces into a dedicated resident retreat. Facilities include a 20-metre rooftop pool and sundeck, sauna, spa, ice bath, wellness studio, gymnasium, concierge service, wine cellar, residents’ lounge, private dining spaces, and dedicated co-working areas with meeting rooms and boardroom facilities.

The amenity mix reflects the buyer profile emerging in North Sydney, where owner-occupiers and downsizers are increasingly prioritising convenience, apartment scale, and long-term usability over purely investment-driven decisions.

The Walden also represents a significant milestone for ALAND, marking the company’s first major move into Sydney’s inner-city luxury apartment market after more than two decades delivering large-scale residential communities across Greater Sydney. Founder Andrew Hrsto says the Walker Street site stood apart because of both its positioning and its rarity.

[smartcode_project:default project_id=134323 project_image_fid=6390]

“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic.”

At launch, The Walden recorded more than $103 million in sales, with buyers drawn to the project’s harbour positioning, apartment scale, and proximity to the Metro, which now connects North Sydney to Barangaroo in three minutes and Martin Place in five.

ALAND has commenced construction, and is expecting a completion date in 2028.

[smartcode_project_cta:default project_id=134323]

Larry Schlesinger

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News