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The Yarra Hotel, which served as the first change rooms for Collingwood Football Club, will be auctioned on Friday, June 22, with offers expected around the $2.5 million mark.
Collingwood players made use of the hotel at 295 Johnston Street, Abbotsford, in 1892 because the club didn’t have the time or adequate resources to complete the grandstand and players’ rooms before the first games were played.
The players got changed at the Yarra Hotel and ran up Rich Street to the ground.
The hotel, a stone’s throw from Collingwood’s home ground of Victoria Park, was built in 1855 and sits on a land area of around 800 square metres.
It features a public bar, restaurant and large beer garden.
The hotel is being sold by Colliers International director of metro investments Jeremy Gruzewski, on behalf of a former publican who ran the pub before leasing out the hotel operations about 10 years ago.
The sale will include both the freehold and leasehold of the pub, with vacant possession available in October.
Gruzewski says there is potential for development, given the large parcel of land and two street frontages.
He expects strong interest in the property.
“All pub opportunities tend to generate a good level of interest, however when you combine the history and location of this one, it all adds up to a pretty attractive opportunity,” he says.
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lschlesinger-FZcF9M3vE6

Pub where Magpies got their stripes up for sale

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Self-managed super funds are increasingly turning to commercial property investments.
ATO statistics for March 2011 show that after listed shares (32%) and cash (27%), non-residential property (12%) is the third most-held asset by self-managed super funds.
Changes to rules governing superannuation that allow SMSFs to borrow money to buy commercial property assets, provided they structure their investments correctly, as well as attractive tax incentives, have also added to the appeal of this asset class.
Furthermore, NAB forecasts all sectors of commercial property to return to positive rental growth by March 2013, with capital values tipped to rise as well.
The June Herron Todd White Month in Review report points out retail property markets that have either just entered growth phases or are on the verge of doing so – suggesting there may be opportunities for astute investments.
According to the report, retail property values on the Gold Coast and Gippsland have already bottomed out and are starting to recover.
A little further behind in the cycle are 12 other markets that have all bottomed out, suggesting a recovery could be on the cards in the medium term.
These include the capital cities retail markets of Canberra and Brisbane; NSW regional markets of Griffith, Mudgee, the Far North Coast and Wollongong; Victorian regional markets of Warrnambool and Mildura, and the smaller Queensland markets of Cairns, Townville, Gladstone and Bundaberg.
Retail markets that have bottomed out/started recovering
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="97" valign="top">
 
</td>
<td width="67" valign="top">
Stage of property cycle
</td>
<td width="88" valign="top">
Rental vacancy situation
</td>
<td width="95" valign="top">
Volume of property sales
</td>
<td width="113" valign="top">
Local economic situation
</td>
</tr>
<tr>
<td width="97" valign="top">
Gold Coast
</td>
<td width="67" valign="top">
Start of recovery
</td>
<td width="88" valign="top">
Large over-supply relative to demand
</td>
<td width="95" valign="top">
Declining significantly
</td>
<td width="113" valign="top">
Flat/contracting
</td>
</tr>
<tr>
<td width="97" valign="top">
Gippsland
</td>
<td width="67" valign="top">
Start of recovery
</td>
<td width="88" valign="top">
Balanced market
</td>
<td width="95" valign="top">
Declining
</td>
<td width="113" valign="top">
Contraction
</td>
</tr>
<tr>
<td width="97" valign="top">
Canberra
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Balanced market
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Brisbane
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Griffith
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Declining significantly
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Mudgee
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
NSW Far North Coast
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Balanced market
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Wollongong
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Warrnambool
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Declining
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Mildura
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Declining
</td>
<td width="113" valign="top">
Severe contraction
</td>
</tr>
<tr>
<td width="97" valign="top">
Cairns
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Balanced to oversupply relative to demand
</td>
<td width="95" valign="top">
Steady/declining
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Townville
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Balanced
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Flat
</td>
</tr>
<tr>
<td width="97" valign="top">
Gladstone
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Balanced
</td>
<td width="95" valign="top">
Steady
</td>
<td width="113" valign="top">
Steady growth
</td>
</tr>
<tr>
<td width="97" valign="top">
Bundaberg
</td>
<td width="67" valign="top">
Bottom
</td>
<td width="88" valign="top">
Over-supply relative to demand
</td>
<td width="95" valign="top">
Declining
</td>
<td width="113" valign="top">
Steady growth/flat
</td>
</tr>
</tbody></table>
Source: Herron Todd White
 
Growing appeal of property
Any decision that SMSF trustees make about purchasing retail property or any other commercial property must have the sole purpose test in mind, says Peter Burgess, technical director at SMSF Professionals' Association of Australia. 
 
“There must be some potential for capital appreciation and/or income being generated from the asset,” he tells Property Observer.
“You should seek professional advice from a specialist in this area as there are various ways you can transfer property into your fund, depending on your personal situations
“Commercial property is an investment like everything else – you need to do capital appreciation research,” he says.
Tax breaks
In addition to the possibility of increasing the value of your super fund, there are huge tax advantages in investing in commercial property.
“Once you transfer the asset into your fund you are in a lower tax environment,” Burgess says.
If you’re under 55 years, the maximum tax rate on rental income is 15% and 10% on capital gains once it is sold.
Once the SMSF moves into the pension phase, the tax rate drops to zero.
According to Dixon Advisory executive director Nerida Cole, investing in commercial property that has a high yield can be very beneficial if the member of the superannuation fund is approaching retirement and is relying on super to provide a regular income stream.
The key, though, is choosing the right commercial asset.
“You have to get the right property to start with otherwise you won’t achieve the capital growth you are after and the steady income you are after,” Cole says in a video blog.
She says you also need to consider what you need from this investment. “Do you need the property to boost your income or for capital growth to grow your super?”
Buying your own premises
Rules governing the purchasing of property via a SMSF are complex.
While the caveat remains that investors should always seek financial advice before making any decision, the general rule is that a commercial asset cannot by acquired by SMSF for personal use by a related party to the fund.
“You cannot own a property in your super fund and then allow your extended family or business associates to rent that property out,” Cole explains.
However, a retailer may be in a position to transfer property he or she owns into his or her own super fund (changing from a renter to an owner of the property) and take advantage of the low tax benefits so long as the property is used wholly for commercial purposes, in which case it would be deemed “business real property”.
“Business real property is property you are using in the running of a business in a day-to-day basis, and that can have a related party using the property,” Cole says.
In this case, business owners need to be aware of contribution caps.
If you’re under 65 years, you can contribute up to $150,000, but this can be brought forward by two years, taking the total contribution to $450,000.
“If that’s you and your wife, you can contribute up to $900,000 and still not breach the cap,” Burgess says.
In all cases, it is recommended that you seek specialist advice to ensure you get the structure right, particurlarly if you’re thinking about borrowing to invest in a commercial asset.
“The SMSF needs to establish a borrowing trust within the fund, since it cannot borrow itself. You pay the loan down, and SMSF takes ownership of the property,” Cole says.
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Retail could provide a good investment for self-managed super

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Newsagents are at the mercy of their landlords when it comes to negotiating rents and leasing terms, the Australian Newsagents Federation claims. 
“Newsagents have inadequate laws to protect them against some landlords’ misuse of turnover figures in rent deliberations,” the ANF, which represents 1,500 members, says in its submission to the Productivity Commission’s inquiry into the retailing industry.
Common unfair trading practices encountered by newsagents include “harsh terms and onerous lease obligations”, the submission says.
Furthermore, the ANF says specialist tenants such as newsagencies pay significantly higher rents per square metre than the major supermarkets “but still have to compete with these stores for sales”.
As a result, “rent increases can only erode an efficiently run newsagent’s net profit,” the ANF says.
The ANF argues newsagents are constrained because the prices of the majority of their products (e.g. newspapers, magazines, greeting cards and lottery tickets) are fixed, meaning they cannot increase prices to cover increase in costs.
The organisation is demanding the Federal Government establish a national leasing ombudsman and a national registration of retail leases to ensure fairer rental rates and better tenancy rights.
The ANF believes an ombudsman could ensure that newsagents whose leases are up for renewal in shopping centres are provided the first and last right of refusal for a new lease so landlords cannot threaten existing tenants with take-it-or-leave-it type negotiations.
The emergence of an unfair playing field is also identified in the Council of Small Business Organisations of Australia’s submission to the Productivity Commission.
It highlights the control of retail leasing by “the large landlords” and the inability of bricks-and-mortar retailers to compete will online sellers on price due to the major overheads associated with rental costs.
Continued increases in lease and rents will make bricks-and-mortar retailers, a category that includes newsagents, “even less profitable and less sustainable,” the organisation argues.
“In the end there can only be so many coffee shops and food outlets – the cost of rent must drop, or shops will be empty. The cost of change must be managed or compliance problems will grow,” COSBOA says in its submission.
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Newsagents say retail rents are unfair

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The Melbourne office market will be the strongest office market in 2011, according to commercial property experts.
Six out of eight experts polled by the Property Council of Australia say Melbourne will offer investors the greatest total return, with only one selecting Perth and another picking Sydney.
The most bullish prediction comes from Frank Gelber, chief economist at research group BIS Shrapnel, who forecasts Melbourne office demand at 98,000 square metres, rental growth at 15% and capital growth of 15% for a total annual return of 21%.
“This is just the beginning of what will be a boom,” Gelber says.
“Demand recovery is on track. Net absorption will increase. Supply is constrained for the next three years at least. Vacancy rates will tighten and rents will start driving values, and yields will start to firm.”
Opteon Property Group research manager Richard Jenkins forecasts a total return of 18% in Melbourne, and he says 75,000 square metres of office space will be needed in 2011.
Jenkins expects strong rental growth (12%) to be aided by the “limited amount of uncommitted new supply currently under construction and growing business confidence”.
The Melbourne market is set to offer total returns of up to 15.5% with rental growth of 5% and capital growth of 8.2%, according to Frank Allen, director of property markets at Westpac.
“Continued healthy economy and limited new supply will drive vacancy lower and rents up over 2011,” says Allen, who forecasts total office space demand of 75,000 square metres.
The two experts who disagree about Melbourne’s bullish chances are David Green-Morgan, head of Australian research at DTZ, and Jatin Chand, senior forecasting consultant at CB Richard Ellis. Green-Morgan says Perth will be the best-performing office market, thanks to a turnaround in commodity markets, and Chand tips Sydney to outperform other capital cities.
“The Sydney CBD is forecast to bounce back strongly in the second half of 2011 as the banking and finance sector is expected to rebound strongly from June 2011 onwards,” Chand says.
Australia’s hottest office market in 2011
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="117">
Expert
</td>
<td valign="top" width="98">
Prediction
</td>
<td valign="top" width="78">
Demand
(sqm)
</td>
<td valign="top" width="81">
Total return
</td>
<td valign="top" width="84">
Rental growth
</td>
<td valign="top" width="75">
Incentives
</td>
<td valign="top" width="84">
Capital growth
</td>
</tr>
<tr>
<td valign="top" width="117">
Frank Allen, Westpac
</td>
<td valign="top" width="98">
Melbourne
</td>
<td valign="top" width="78">
75,000
</td>
<td valign="top" width="81">
15.5%
</td>
<td valign="top" width="84">
5%
</td>
<td valign="top" width="75">
-3%
</td>
<td valign="top" width="84">
8.2%
</td>
</tr>
<tr>
<td valign="top" width="117">
Nerida Conisbee, Colliers
</td>
<td valign="top" width="98">
Melbourne
</td>
<td valign="top" width="78">
46,000
</td>
<td valign="top" width="81">
7%
</td>
<td valign="top" width="84">
12%
</td>
<td valign="top" width="75">
0%
</td>
<td valign="top" width="84">
7.7%
</td>
</tr>
<tr>
<td valign="top" width="117">
Frank Gelber, BIS Shrapnel
</td>
<td valign="top" width="98">
Melbourne
</td>
<td valign="top" width="78">
98,000
</td>
<td valign="top" width="81">
21%
</td>
<td valign="top" width="84">
15%
</td>
<td valign="top" width="75">
-6%
</td>
<td valign="top" width="84">
15%
</td>
</tr>
<tr>
<td valign="top" width="117">
Matt Whitby, Knight Frank
 
</td>
<td valign="top" width="98">
Melbourne
</td>
<td valign="top" width="78">
70,000
</td>
<td valign="top" width="81">
16%
</td>
<td valign="top" width="84">
7%
</td>
<td valign="top" width="75">
-2%
</td>
<td valign="top" width="84">
9%
</td>
</tr>
<tr>
<td valign="top" width="117">
Richard Jenkins, Opteon
</td>
<td valign="top" width="98">
Melbourne
</td>
<td valign="top" width="78">
75,000
</td>
<td valign="top" width="81">
18%
</td>
<td valign="top" width="84">
12%
</td>
<td valign="top" width="75">
-2%
</td>
<td valign="top" width="84">
11%
</td>
</tr>
<tr>
<td valign="top" width="117">
Martin Pepper, Property Intelligence
</td>
<td valign="top" width="98">
Melbourne
</td>
<td valign="top" width="78">
80,00
</td>
<td valign="top" width="81">
12%
</td>
<td valign="top" width="84">
7.5%
</td>
<td valign="top" width="75">
-5%
</td>
<td valign="top" width="84">
8%
</td>
</tr>
<tr>
<td valign="top" width="117">
David Green-Morgan, DTZ
</td>
<td valign="top" width="98">
Perth
</td>
<td valign="top" width="78">
17,000
</td>
<td valign="top" width="81">
14.9%
</td>
<td valign="top" width="84">
3.7%
</td>
<td valign="top" width="75">
-5%
</td>
<td valign="top" width="84">
7.1%
</td>
</tr>
<tr>
<td valign="top" width="117">
Jatin Chand, CB Richard Ellis
</td>
<td valign="top" width="98">
Sydney
</td>
<td valign="top" width="78">
103.000
</td>
<td valign="top" width="81">
15.7%
</td>
<td valign="top" width="84">
7%
</td>
<td valign="top" width="75">
-7.2%
</td>
<td valign="top" width="84">
9.6%
</td>
</tr>
</tbody></table>
Source: Office market forecast, Property Council of Australia
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Majority of experts polled tip Melbourne office market to boom

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There will likely be no office space left in the western Sydney suburb of Homebush in just over a year, according to the Property Council of Australia's Office Market Forecasts for July 2011.
The report forecasts available office space declining in Homebush to 0.5% by July 2011 and to totally dry up a year later.
Another market that will tighten considerably is East Melbourne, where the vacancy rate is tipped to fall to 2.3% by July 2012.
The report forecasts commercial rents in Sydney to reach $833 per square metre by July 2011, $837 per square metre in Perth and $700 per square metre in Brisbane, the three most expensive office markets in Australia. 
According to serviced office provider Servcorp, high rents and tighter office markets are driving small businesses and micro-businesses out of the Sydney, Perth and Brisbane CBDs.
Taine Moufarrige, executive director of Servcorp, says the problem is a medium-term one and will take “more than a few years before the supply of premium space will even begin to meet demand”.
"Vacancy rates are getting lower and rents are going up," Moufarrige says. "There will be very limited affordable, well-located space available for small businesses, even in the fringe areas of the CBD."
Earlier this year, property group Knight Frank forecast “robust” nationwide growth in new CBD office space to taper off by 37% over the next two years.
According to Servcorp, the issue is exacerbated by the limited amount of construction to create more commercial space occurring in these high-demand areas.
“Brisbane in particular has focused on repair and reconstruction in the CBD following the January floods, without adding capacity,” Servcorp says.
Servcorp has noticed an increase in demand for serviced offices, “a clear symptom of the trend”.
“We’ve seen our mature floor occupancy across the country rising steadily since October 2010. Sydney and Perth have been showing particularly high rates of occupancy ­– consistently hovering above 90% during the past year,” Moufarrige says.
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Likely to be no office space left in Homebush in a year: Report

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Tasmanian Premier and Treasurer Lara Giddings has culled a long-running stamp duty concession for first-home buyers, just as housing in the state is becoming more affordable and buying conditions are improving.
From June 17 2011, first-home buyers will no longer be eligible for stamp duty concessions of up to $4,000, announced in the Tasmanian budget on June 16.
The concessions had been in place since May 20, 2004.
Under the First Home Owners Duty Concession for Vacant and Established Dwelling, concessions of up to $4,000 were available for purchase of established dwellings up to a value of $350,000.
The maximum concession available in relation to the purchase of vacant land was $2,400, provided the land did not exceed $175,000.
The removal of the concession comes at a time when Tasmanian houses are becoming more affordable and buying conditions improve, but also as first-home buyers desert the market.
The proportion of income required to meet home loan repayments in Tasmania decreased 1% to 28.2% in the March quarter according to the latest REIA/Deposit Power Housing Affordability report.
At the same time, the number of new loans to first-home buyers decreased 8.3% in the March 2011 quarter to 343 loans. The number of loans to first-home buyers decreased 23.1% over the past year, according to the same report.
The CBA Home Buyers Index rates Hobart as a buyer’s market, as it has “some of the best buying conditions in recent times” with median house prices decreasing 5.6% over the March quarter to $361,250.
The removal of the concession will save the state $9 million and is part of a drive to compensate for $1.5 billion that is has been wiped from expected revenues.
The first-home owners grant scheme remains in place.
Other housing incentives to suffer under cost-saving measures include:
<ul>
<li>limiting land tax concessions for pensioners to principle places of residence and primary production land, which will save the Government $1.6 million; and</li>
<li>removing the land tax exemption on holiday home land, which will save Tasmania $3.2 million.</li>
</ul>
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Tasmania drops stamp duty concession for first-home buyers

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At the same time as Melbourne leads the nation in falling house prices, a two-level apartment in the inner-city suburb of Southbank has been included among the list of the 10 most heavily discounted properties in Australia, the first time in 12 months a Victorian property has made the list.
The property, apartment 2506, 83 Queensbridge Street, is the nation’s ninth most heavily discounted property, according to the <a target="_blank" title="Louis Christopher's top 10 most discounted properties" href="https://www.propertyobserver.com.au/the-10-most-discounted-properties-in-australia-at-june-16/2011061550503">June 16 weekly top 10 list compiled by SQM Research</a>.
The property was listed on October 31 and has been on the market for 217 days. It was last passed in at auction on May 21, but is now being sold privately by Robert Mitchelson from Icon Property, who has only held the listing for a few weeks.
SQM has been compiling the list of discounted properties for a year, and managing director Louis Christopher told Property Observer he believed it was the first time a Melbourne property has made it on to the list.
“What is particularly noteworthy about this week's list is that we have finally been graced with the addition of a discounted property in Victoria,” Christopher says.
“Bear in mind we are cautious on it given it is going to auction and the property could be underquoted,” he says.
The three-bedroom, two-bathroom apartment was originally up for sale at a price of $2.15 million, but is currently being marketed by with a price range of $1.5 million to $1.65 million.
It has panoramic views looking south down Port Phillip Bay over Albert Park Lake, St Kilda Marina and all the way to M. Martha and the other side over the Yarra River, Crown Casino and the city. Other features include a powder room, parquet floors and a dining area that joins two large balconies.
Figures released by Real Estate Institute of Australia reveal that Melbourne has led a nationwide fall in house prices, with the average median price in the Victorian capital falling down 6% to $565,000 over the first three months of the year.
Sydney and Adelaide are the only capital cities to record house price increases, with Sydney median prices up 1.1% to $637,258 and Adelaide prices up 0.2% to $410,000.
Nationwide, the median price of a house in Australia’s capital cities has fallen 2.5% to $532,695 in the first three months of the year, according to the REIA’s Real Estate Market Facts report.
REIA president David Airey says the reductions represent a “deceleration in property prices after a period of solid growth in previous quarters”.
“We are witnessing the impact on prices of increases in cash rates during the second half of last year. Rises in the cost of living have restrained household spending and the natural disasters in Queensland have also significantly affected the property market,” he says.
However, Airey calls the latest results a “softening of the housing market explained by economic factors, not a bubble starting to burst”.
The decrease in property prices was accompanied by a decline in the value of owner-occupation and investment loans, which declined 17.6% and 18.2% during the March quarter respectively, one of the largest quarterly declines observed since the September 2002 quarter.
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Melbourne apartment among most discounted properties for first time in a year

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The Westfield Group has defended the rents it charges retailers, saying they are a product of market forces.
“Rents in Australian shopping centres are a function of a free market. Westfield and other shopping centre managers are able only to charge rents at a level that retailers are willing to pay,” Westfield has said in its submission to the Productivity Commission inquiry into retailing.
Westfield is also opposed to implementing any legislative limits on occupancy costs, quoting a 2008 Productivity Commission inquiry that concluded that “there appears to be little evidence that the current process of negotiating occupancy costs is constraining the efficient operation of the market for retail tenancies” 
The group admits that major tenants such as supermarkets and department stores have a strong negotiating position and pay lower rents per square metre than smaller retailers, but says they contribute more capital to the construction of the store, “take longer-term leases, up to 30 years in some cases, and take much larger stores”.
“Major stores bring foot traffic from which specialty stores benefit,” the group says.
In it submission, collapsed retailer REDgroup says high rents were a major factor in the failure of its book chains Borders and Angus and Robertson, labelling Australian rents among the highest in the world.
Myer also identifies high rents as a major cost in its submission to the commission, saying “in Australia we have higher rental and occupancy costs as a proportion of sales than our overseas counterparts”.
In its submission Westfield provides a table comparing average rent costs per square metre in its Australian, US and UK shopping centres, which shows that the rise in value of the Australian dollar in the last six months means Australian retailers ($1,428 per square metre) are paying significantly higher rents per square metre than retailers in the UK ($1,270) and US ($586).
<img src="/images/stories/westfieldjune17.gif">
However, Westfield says such comparisons are misleading given the current high value of the Australian dollar and says using the 10-year long-term average Australian dollar exchange rate ($A1 = US$0.75) shows that rents per square metre in Australia are higher than the US ($830) but lower than the United Kingdom ($1,857).
Using the long-term average to draw comparisons, Westfield says rents are a function of the availability of retail floor space in each market.
“The United States has lower rents but approximately double the floor space per capita of Australia. The United Kingdom has higher rents than Australia but about 40% less floor space per capita than Australia.
Australia, it says, “has taken the middle ground between the US and the UK in providing neither too much nor too little floor space”.
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Don't blame us - rent is market-driven: Westfield

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<a href="https://www.propertyobserver.com.au/residential/immigration-changes-lead-to-drop-in-demand-for-lower-end-student-housing/2011061350471" title="Demand is down for cheaper student housing" target="_blank">Demand for student housing at the cheaper end of the market is down</a>, but the market for accommodation tailored for university graduates is booming, with several major projects in the pipeline.
 
The number of foreign students enrolled in university courses in Australia continues to rise, while overall university student numbers decline.
According to official government numbers, from March 2010 to March 2011 higher education visa enrolments increased by 3.6% to 204,950, making up 53% of the 390,000 foreign students enrolled in studies in Australia. Most of the others are on VET visas. 
A year ago, students on higher education visas made up just 46% of the student market.
Students also contribute significantly to the economy, spending money on tuition and living expenses (including rent). 
The latest ABS migration data finds that from 2004-05 to 2008-09 education related spending by international students increased from $8 billion to $15.9 billion.
 
To meet the growing demand local and overseas property groups are investing heavily in new student housing projects within walking distance of or a short commute to universities.
Construction information provider Cordell says the number of new student accommodation projects in the pipeline has doubled in the past year, and projects currently on the go are worth more than $6 billion.
Melbourne’s Monash University, Sydney University, the University of NSW and Australian National University are all building or planning new student apartment buildings.
Architects Nettleton Tribe are working student accommodation projects including an $80 million, 485 apartment project for ANU being built by Baulderstone Hornibrook due to be completed in 2012. The company has also provided tenders for accommodation projects proposals put out by the University of Technology, Sydney and Southern Cross University for its Gold Coast and Coffs Harbour campuses.
Two of the bigger providers, Urbanest and Campus Living Villages, both have projects in the development pipeline targeting the university accommodation market.
In February Urbanest gained approval for a 30-storey student accommodation building in La Trobe Street in the Melbourne CBD.
Designed by Melbourne-based architecture firm dKO, the Melbourne development will be the tallest student accommodation building in Melbourne. It will be only 700 metres from the Royal Melbourne Institute Technology and just 1.7 kilometres from the University of Melbourne in Albert Park.
Urbanest CEO Andrew Lee says demand for its apartments “proves there is a strong demand within the domestic and international student market for a better accommodation solution”.
“This particular market is growing increasingly savvy and fast refusing overcrowded, unsafe and often unregulated student accommodation,” he says.
The up-market nature of the developments is outlined by Urbanest projects director James Childs, who says the objective is to offer students “privacy, with their own room and en suite” and the upper floors will offer “stunning views across Melbourne”.
Environmental initiatives include solar-heated hot water, recycled water, energy efficient glazing and the use of materials from sustainable sources.
CLV, which opened its flagship 1,021-bed, $127 million University of New South Wales Village in 2010, is working with planning consultants Urbis to develop “high-quality, affordable student accommodation” on land adjacent to University of Western Australia, following State Government approval in September 2010.
Urbanest opened new buildings in Adelaide and Sydney in February, both within walking distance of major universities.
The $57 million Adelaide student building on the corner of North Terrace and Bank Street has accommodation for 500 students and is just 650 metres from the University of Adelaide North Terrace campus. The $60 million Sydney CBD building at 83 Quay Street in Haymarket has accommodation for 334 students and is next door to the University of Technology, Sydney, and 10 minutes to the University of Sydney. 
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University housing graduates to the next level

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Regional area housing markets are outperforming state capitals in what is now a “nationwide buyers’ market”, according to the inaugural Commonwealth Bank/RP Data Home Buyers Index (HBI) report.
On a national basis, property values have fallen by 2.1% during the first quarter of 2011, compared with a 1.8% drop outside of the state capitals.
Among regional areas performing strongly are the Hunter and Illawarra regions in NSW, which have recorded house price increases of 1.5% and 0.8% respectively
In comparison Sydney, the closest capital city to these regions, is down 1.1% for the first quarter of 2011. For NSW as a whole, the market is up 0.3%
According to RP Data, the Hunter and Illawarra regions are being supported by a “strong mining sector and the fact that they are closely linked to Sydney – currently one of the more resilient capital city markets for capital growth”.
In Queensland, a number of regional areas have recorded declines in value far below those of state capital, Brisbane.
For the first three months of the year house prices in the far north region of Queensland are down 2.8%, on the Sunshine Coast values have fallen 2.3% and on the Gold Coast they are down 2.5% – all outperforming the Brisbane market, which has fallen 4.6% over the same time period. The Queensland market as a whole has declined 2.6% over the quarter.
Melbourne and Adelaide have recorded more modest quarterly declines of 1.5% and 1.6% while the Perth market is down 3.4%.
A drop in purchases and an increase in homes for sale are the primary causes of the current buyers’ market.
Commonwealth Bank executive general manager Michael Cant says the number of houses sold in 2010 was the lowest of any year in more than a decade.
“However, outlook for home prices is hardly dire,” he says. “Resent research suggested home prices will be flat over 2011 before growing by approximately 5% in 2012. As always, conditions will vary substantially from region to region.”
The report provides overviews of all the major markets:
<img src="/images/stories/hbi_report_june2011-2.gif">
Sydney (buyer’s market): Buying conditions have eased over the quarter, with stock levels rising and finance commitments softening. Prospective buyers in the Sydney market are likely to have an improved bargaining position relative to the same time last year, and vendors are having to adjust their price expectations accordingly. 
Melbourne (balanced market): Selling conditions have been moderating since June of last year, when homes were selling quickly and buyers had little room for negotiation. Melbourne market conditions have now moved to a fairly neutral position, where buyers and sellers are reasonably evenly balanced. 
Brisbane (extreme buyer’s market): The Brisbane market has been one of the weakest performing since the end of 2007, and market conditions are still very much in favour of the buyer. Sellers will need to be realistic in their asking prices as buyers continue to hold a clear upper hand in negotiations. 
Adelaide (buyer’s market): Buyers and sellers are reasonably evenly balanced within the Adelaide market, however conditions are turning in favour of the buyer. At the same time last year the Adelaide market was well and truly biased in favour of sellers. 
Perth (buyer’s market): Prospective home buyers in Perth remain in the driver’s seat, with the number of homes for sale still outweighing effective demand. The index suggests that buyers are still enjoying a strong position when it comes to settling on the purchase price. Sellers will need to be flexible in their price expectations in order to make a sale. 
Hobart (buyer’s market): The index for Hobart shows market conditions remain in favour of the buyer, which suggests some of the best buying conditions in recent times. Effective supply is now outweighing effective demand, which is likely to result in a prime negotiation position for buyers. 
Darwin (extreme buyer’s market): The Darwin market has swiftly moved from being one of the strongest seller’s markets in the country to one where buyers are very much in control. Since about August last year selling conditions have been deteriorating, and they have continued to do so quite rapidly over the last month.
Canberra (balanced market): Selling conditions have eased over the quarter, however, the market remains quite balanced. The scope for price negotiation in Canberra is not likely to be as strong as it is in most other centres of the country.
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Regional centres outperforming capital cities: CBA

Eddy Haddad's <a href="https://www.apartments.com.au/developers/level-33">Level 33</a> is levelling up its approved Wollongong development, as the coastal city south of Sydney continues to prove popular in the high-density development space.

Level 33, a longtime developer in the Wollongong area, has gone through the NSW Government's Housing Delivery Authority to upsize its approved two-tower development on the corner of Crown Street and Gladstone Avenue, just 100 metres from Wollongong Station.

The developer currently has approval for 252 apartments across two buildings rising to 19 storeys. It is now seeking approval for 33 and 38-storey towers that would deliver 467 apartments, including 67 affordable homes.

Designed by <a href="https://www.apartments.com.au/architects/bka-architecture">BKA Architecture</a>, the development would comprise apartments above a three-level podium with around 1,100 sqm of retail space, along with basement parking for 448 vehicles.

According to the Urban Design Report by BKA, the proposal has the capacity to "reinforce the precinct's identity by strengthening links between health, education, and transport services, while also contributing to Wollongong's ongoing evolution as a key regional centre."

Wollongong is somewhat in vogue. Between Level 33 and Urban Property Group, the two developers have several thousand apartments planned across the city.

Level 33 is currently delivering Easterly Wollongong, one of its most boutique projects to date with just 21 high-end apartments, as well as Atchison &amp; Kenny, a 329-apartment development due for completion later this year. The developer also plans to redevelop the 13,088 sqm WIN Grand megasite into a new $500 million precinct with nearly 600 apartments and has more than 900 apartments planned for the former Bunnings Warehouse site at the intersection of Gipps and Flinders streets.

Urban Property Group is also playing a major role in the city's transformation. Its five-tower Keira Place precinct will deliver more than 800 homes, and it has recently lodged plans for a further 300 apartments near Wollongong Station.

Joel Robinson

First look: Level 33 upsizes Wollongong apartment towers

Just a week after filing plans for the final stage of its major Keira Place masterplan, <a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has unveiled another significant housing proposal in Wollongong, this time targeting a prominent site opposite North Wollongong Station.

The developer has lodged a State Significant Development Application for a 38-storey mixed-use tower at <a href="https://www.apartments.com.au/new-apartments/4-4a-flinders-street-north-wollongong-nsw-2500">4-4A Flinders Street</a>, around one kilometre north of the <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place precinct</a> currently taking shape on the edge of the CBD.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="2b6428f1-6405-4038-8476-897de440e90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium.png?VersionId=QLqEvK0OuCEwRC47oHNftrw2B1YqaHF8" />

Designed by Studio.SC, the proposal comprises a 38-storey mixed-use development containing 303 apartments, including 45 affordable housing units, alongside 174 co-living residences. The scheme also includes ground-floor retail space, extensive landscaping and public domain improvements.

Studio.SC noted in the proposal it "outlines a vision for a landmark transit-oriented mixed-use development centred around North Wollongong Station, designed to support the city’s future growth while responding to the NSW Government’s housing and planning reforms."

The architecture firm said the proposal responds to the opportunities and constraints shaping future growth within the 400-metre catchment of the station and represents "a coordinated and future-focused approach to urban intensification, contributing to the long-term evolution of North Wollongong as a connected, walkable and high-density station precinct."

The site occupies a strategic corner bounded by Flinders Street, Station Street, Stafford Street and the Princes Highway, directly opposite North Wollongong Station.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="7863adad-1f71-4022-b850-f44b252738fd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium%20a.png?VersionId=WsU7av0g8_8R2tGHWxgHeFSlhu7yeY1V" />

The proposal follows Urban Property Group's recent submission for the second and final stage of Keira Place, which would deliver a further three buildings comprising 657 homes opposite Beaton Park. It builds on the first stage, which features 150 apartments across two towers and recently commenced construction.

Urban Property Group CEO Patrick Elias said breaking ground on the first stage marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/urban-property-group-unveils-trio-of-towers-for-next-stage-of-new-wollongong-precinct-keira-place">Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place</a>

First look: Urban Property Group plans next major Wollongong tower

<a href="https://www.apartments.com.au/developers/arada">Arada</a> has wasted little time expanding its ambitions in Campsie, lodging plans for a second major project in the rapidly transforming town centre just months after unveiling its three-tower One Campsie proposal on Beamish Street.

The UAE-backed developer has now taken aim at one of the suburb’s most strategically positioned sites, filing a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/10-north-parade-campsie-nsw-2194">33-storey mixed-use tower</a> at 10 London Street and 43 North Parade, directly opposite the future Campsie Metro Station. The proposal is currently on public exhibition and represents another significant vote of confidence in Campsie's emergence as one of Sydney’s key transit-oriented growth centres.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the development would deliver 156 apartments above a podium containing retail and commercial space, creating a new residential and commercial gateway to the town centre. The scheme also includes a four-level above-ground parking podium and a dedicated residential amenity floor featuring wellness and recreation facilities. At least 10 per cent of the apartments would be allocated as affordable housing for a period of 10 years.

The proposal occupies a 1,631 sqm site bounded by London Street, North Parade and Dispensary Lane, immediately adjoining the future Metro station precinct and just metres from Beamish Street’s retail and dining strip. According to the Urban Design Report, the project seeks to deliver "a great place that prioritises human-scaled experience and provides spatial improvements to the area."

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="175a8324-015b-4856-abe3-ce6f23199fa7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium%20campsie.png?VersionId=742UGwXFhFBX4GEl6wX4PYIWREAgn6il" />

Woods Bagot describes the tower as a key marker within Campsie's next phase of growth.

"Located directly opposite the new Campsie Metro Station on North Parade, 10 London Street is a thoughtfully composed 33-storey mixed-use tower that contributes to the ongoing transformation of the town centre," the Architectural Design Report states. The report says the project is intended to provide "high-quality homes within a vibrant, connected urban environment, while helping define Campsie's future skyline."

A strong emphasis has been placed on the public realm. The ground floor incorporates over 500 sqm of retail space and active frontages along both London Street and North Parade, while the podium is wrapped by extensive landscaped planting intended to soften the building's scale and strengthen the pedestrian experience. The development would also widen surrounding footpaths and improve connections between the Metro station and the broader town centre.

Above the podium, residents would have access to more than 1,400 sqm of communal amenities, including a pool, gym and landscaped recreation spaces. A distinctive green-wall treatment extending across four podium levels forms a major architectural feature, helping differentiate the project within the emerging high-density precinct.

The tower's design is closely tied to the broader Campsie Town Centre Master Plan and the arrival of Sydney Metro. The Urban Design Report notes the proposal "directly supports the Campsie Town Centre Master Plan by delivering new homes in a location explicitly identified for growth, improved accessibility, and high-quality urban renewal." It adds that the project contributes to the master plan's vision for a strengthened town centre supported by thousands of new homes around the future Metro station.

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="bfd17654-253e-489a-bade-6278d63db412" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/base%20campsie.png?VersionId=3roJPMQGs36dazpkhvpvbDDP73Ld.Ica" />

The application follows Arada's recently lodged One Campsie project at 124–142 Beamish Street and 16–18 Ninth Avenue, where the developer is seeking approval for 346 apartments across three towers rising 24, 32 and 39 storeys. Together, the two proposals would cement Arada as one of the most influential developers shaping Campsie's future urban form.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-arada-files-for-trio-of-apartment-towers-in-campsie-town-centre">First Look: Arada files for trio of apartment towers in Campsie town centre</a>

Arada entered the Australian market in 2024 and has rapidly assembled a significant development pipeline across Sydney. Alongside its Campsie holdings, the developer is soon to launch <a href="https://www.apartments.com.au/new-apartments/wattle-green-2-fishburn-crescent-castle-hill-nsw-2154">Wattle Green</a> in Castle Hill, and has expanded its local operations following its acquisition of construction firm Roberts &amp; Co.

Located around 14 kilometres south-west of the Sydney CBD, the site sits at the centre of one of Sydney's fastest-changing middle-ring precincts. The Metro conversion of Campsie Station, combined with Canterbury-Bankstown Council's master planning framework, is driving significant residential intensification around Beamish Street and North Parade, with thousands of new homes expected over coming decades.

First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans

For the first time in a long time, Australia's inflation story is starting to look more like a landing than a fight.

The latest Consumer Price Index figures from the Australian Bureau of Statistics showed annual inflation eased to four per cent in May, down from 4.2 per cent in April. On the surface, that might not seem like a major move. Inflation remains above the Reserve Bank's target range and some categories continue to record stubborn price growth.

But the significance of this result lies less in where inflation sits today and more in what it means for where interest rates are likely heading next.

The biggest takeaway is that inflation continues to move in the right direction.

Markets had been bracing for another sticky result after a period where progress appeared to stall. Instead, headline inflation came in softer than expected, helped by falling fuel prices and easing transport costs. Annual transport inflation halved from 6.6 per cent in April to 3.3 per cent in May, while automotive fuel prices fell 11.9 per cent during the month following lower oil prices and the impact of reduced fuel excise measures.

While petrol prices don't solve Australia's affordability challenges, they are one of the most visible and immediate costs for consumers. Falling fuel costs feed through the economy quickly, helping ease pressure on household budgets and business operating expenses.

The ABS data also showed headline inflation is now sitting at its lowest annual level in several months, reinforcing the broader trend that price growth is gradually moderating.

That trend is important because it aligns with what many economists and lenders have been saying for the last month.

Prior to this week's inflation data, ANZ, NAB and Commonwealth Bank had all shifted their forecasts, now believing the Reserve Bank had likely reached the peak of the interest rate cycle. Following the May inflation release, ANZ reaffirmed that view.

In its latest economic update, ANZ said it expects quarterly trimmed mean inflation to come in at 3.7 per cent for the June quarter, slightly below the Reserve Bank's forecast of 3.8 per cent. Importantly, the bank said that outcome, when combined with slowing economic activity, "supports our view that the cash rate has peaked".

The Reserve Bank has spent the better part of three years attempting to bring inflation under control through higher interest rates. If Australia's major banks are correct and rates have now peaked, the conversation shifts from how much higher rates could go to when they might begin coming down.

Westpac's caution comes from underlying inflation. The trimmed mean, the measure most closely watched by the Reserve Bank, increased from 3.4 per cent to 3.6 per cent annually. Housing inflation remains elevated at 6.5 per cent, reflecting ongoing increases in rents, electricity costs and new dwelling construction.

Electricity prices remain particularly problematic, rising 21.1 per cent over the past year following the removal of government rebates.

Housing construction costs are also showing signs of renewed pressure. ANZ noted new dwelling costs rose 0.9 per cent in May and are now running at an annualised pace of 8.6 per cent over the past three months. Builders continue to face higher labour, fuel and material costs, a reminder that inflationary pressures have not completely disappeared.

Housing affordability has deteriorated largely because of higher interest rates rather than higher property prices alone. Even modest reductions in mortgage rates would improve borrowing capacity, increase buyer confidence and reduce repayment pressure on existing homeowners.

While August is far from a certainty, the latest inflation result has strengthened the view that the next move in rates is more likely to be down than up. For borrowers, buyers and the development sector, that alone represents a significant shift from the conversation that dominated much of the past two years.

The inflation result the property market was waiting for

Commercial property group FiveX is doubling down on its move into the residential space.

The group, founded by Joshua and Marko Berger more than five decades ago, has followed up its plans for a 39-storey tower on North Sydney's Alfred Street with a proposed 61-storey tower in Chatswood.

The new tower at <a href="https://www.apartments.com.au/new-apartments/815-pacific-highway-chatswood-nsw-2067">815 Pacific Highway</a>, which would be one of the tallest proposed in Chatswood in recent years, will comprise 490 apartments, 76 of which will be dedicated affordable housing and managed by Evolve Housing for a minimum of 15 years.

The project will replace the long-standing Panorama Building, originally known as the BMA Tower, a 14-storey office building completed in 1972 and designed by Hungarian-born architect Hugo Stossel. At the time of its completion, the building was the tallest structure in Chatswood and became a local landmark due to its distinctive curved form and external glass lift.

<img alt="FiveX" data-entity-type="file" data-entity-uuid="956bd299-3864-47a0-8ea6-162b5524c5d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-24%20at%201.02.03%E2%80%AFPM.png?VersionId=EWx7teUr7RcYrI9mgRytwppwt5AdUDtb" />

fjcstudio is behind the designs. Its Architectural Design Report argues the ageing commercial building no longer reflects Chatswood's role as one of Sydney's key strategic centres and that the site is ideally positioned to support significantly higher residential density.

"The site is located at the heart of Chatswood, within the TOD accelerated rezoning area that supports higher density development around the new Metro station," the report states.

"The site's role within a walkable 400-metre radius catchment is where housing, employment, retail and community uses are encouraged to cluster in support of transit-oriented living."

<img alt="fjc" data-entity-type="file" data-entity-uuid="8d198f5e-cc71-4175-9357-be6ec7207473" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-24%20at%201.18.27%E2%80%AFPM.png?VersionId=5WUFc3IYBPvhQMBUYLCsjJhzdcVeYodE" />

The proposal has undergone two rounds of review by the NSW State Design Review Panel, with the design evolving through an extensive assessment process focused on design excellence, public realm outcomes, residential amenity and the integration of affordable housing.

fjcstudio says the residential component provides a diverse mix of apartment typologies, supporting a broad demographic and contributing to housing supply in a highly accessible location close to major transport, employment and retail infrastructure.

The application follows FiveX's plans for a 39-storey tower at <a href="https://www.apartments.com.au/new-apartments/275-alfred-street-north-north-sydney-nsw-2060">275 Alfred Street</a>, which it <a href="https://www.apartments.com.au/new-apartments/275-alfred-street-north-north-sydney-nsw-2060">submitted through the same NSW Government pathway</a> in December. That's for 184 apartments.

Recent activity in Chatswood includes Hyecorp launching its Archer Street project, Celine, and Develotek securing approval for a 34-storey tower.

Larry Schlesinger

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