<html><body>
<div>
 Hi Margaret,
I was looking at getting into property investment this year and my mother is retiring and plans to sell her older place for something easier living.
She currently likes where she lives so we are considering an option, if feasible, of me buying her current place to rent out and then she could build a modest seperate house at the rear of the property.
Apparently the zoning allows for this but not for a full subdivision (only 790m2) in Queanbeyan, NSW.
My question/s are, would setting up a strata be the best option? I still want an option of being able to sell one property in the future if needed. Who would I speak to and how do I go about setting something like this up? Or is it just too complicated (tax/titles, etc) for everyone involved.
Thanks
Kris
  
Hi Kris,
There is certainly a lot to consider when thinking about not only buying an investment property, but also carrying out a subdivision. So, let me tackle your question one section at a time:
1. You buying your mum's house.
While I think it is a very noble thought assisting your elderly parents in this way, I want to be sure that your own personal circumstances are well take care of first. If you have a sound retirement plan and feel that you are set up for your own retirement (so that you can make choices in retirement without depending upon your own dependents to assist you), then by all means, take this step to assist your mother.
However, if you are not, then you must seriously consider whether you would otherwise purchase a property like this one as part of your own investing strategy.  Thinking that any property, anywhere is suitable to start an investment portfolio is a trap which leads many to owning property which does not perform over the long term and which provides lackluster rental return.
So, to start off with, ask yourself the question "If this were a property advertised on a real estate website, would I be interested in buying it?'. To answer that question, you will need to carry out the same extensive research that you would on any area to ascertain the existence, or absence of suitable growth drivers. You also need to consider opportunity cost - if you bought this property, what is the opportunity cost of having bought somewhere which may have a better short term prognosis for growth than this area.
2. Subdividing
You say that this property is not eligible for 'full' subdivision, but a strata titled subdivision is a full subdivision. When you subdivide, you will do so either as a Torrens title (Green title in WA), a strata title or any number of other titles such as community title etc. All of them are full subdivisions and must satisfy both state planning rules and local authority subdivision requirements. Very often property investors underestimate the financial and time costs of subdivision – you will face architects fees, planning fees, engineers costs, labour costs if the subdivision requires any works, council contributions, fees and charges, titles office fees – the list goes on and on.  Far from gaining a free block of land when you subdivide, very often costs can run to tens of thousands of dollars and sometimes hundreds of thousands. You must be able to come up with these funds up front, since they are costs which cannot be financed unless you have other property elsewhere to offer as security. Often investors so underestimate these costs, and the time involved, that they are left disillusioned, exhausted and out of pocket by the end of the process.
If this property does not qualify for actual subdivision, you may be talking about the ‘Granny flat’ option available in NSW. This means that as, as long as the property is more than 450 sqm you may add a second dwelling to the property and this can be rented to anyone. Permission to add a granny flat bypasses normal planning rules and is approved within 10 days. The only issue here is that there is still only a single title, and so you cannot sell one property without selling the other. The decision to add a granny flat to any property brings its own issue – will it add or subtract value? Will it make it harder or easier to selling the future? Will it be harder to rent out the main house with a second dwelling in the backyard?
3. The Financials
When your mum sells the property to you, she wont pay any tax as it’s her own home.  When you buy it, you must pay stamp duty on its full market value, even if she sells it to you for less than that. When you rent it to your mum, you must rent it for the full market rent or you may not be able to claim full deductions, although you can give her a discount if you don’t have to pay a property manager or do some of the other things nornally associated with earning a rental income. 
Your first port of call should be to a local town planner. They should be able to give you an idea of what kind of sub division is allowed and also outline the kinds of costs you would be looking at.  Then ask a builder to quote you for the new build – complete to occupancy so you get the full idea of the costs involved.  Make sure the town planner you use has previously worked with council or otherwise is fully conversant with local government and state planning rules. Once you have a fair idea of the costs, add 20%, because in my experience this is the amount that the budget of a development usually blows out by.  And lastly, compare all of this to what it would cost for your mum to simply sell it to someone else, buy a unit somewhere which is ready to move into, while you look all over Australia for the next hotspot and invest there.
</div>
<div>Have a property question?    <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a></div>
</body></html>

mlomas-KC9MUPZ6Ca

Ask Margaret: Can subdividing make for easy retirement living?

<html><body>
Hi Margaret,
If I put a deposit to buy a house before the new financial year, can I claim it this year tax time or is it to late to buy? Also, is it greedy to buy our 4th house in 7 months?
Regards,
Thor
 
Hi Thor,
To answer this question we must first work out what can and cannot be claimed against your tax. The deposit on a house is not a claimable item. The costs you incur when you buy a property are able to be claimed, but each item is treated differently.  For example, all buying costs such as legal fees and inspections form part of your cost base, and serve to essentially reduce your payable capital gains tax when you sell, rather than provide an immediate deduction.  Borrowing costs are divided up over 5 years (or the length of time you own the property if less than 5 years) and claimed at the end of the year. I think you are really asking me whether the interest on the deposit is claimable, and the answer is no, for two reasons.  The first one is that any deduction you claim against your income is only available on an 'income producing asset', an at the stage where you pay a deposit, this property does not produce income, for you.  The second one is that the deposit does not denote a transfer of ownership, and so you don't legally own an income producing  asset against which you are allowed to make these claims - the present owner does however, and they are allowed to make those claims right up until you settle the property. As to your second question, it's not greedy to buy your fourth property in seven months, but whether it is wise to do so is an entirely different thing.  You need to ask the following questions: 
<ul>
<li>Do you know your personal risk profile and whether this number of properties is consistent with that?</li>
<li>Have you had an independent, professional investment plan prepared for you by someone who is not trying to sell property to you?</li>
<li>Have you analysed your capacity to meet your current debts and property costs should interest rates rise?</li>
<li>Have you ensured that you have diversified your property portfolio across a number of markets? Some of our markets (namely, Sydney) will likely enter a protracted period of stagnation after this present frenzy, so you don't want all of your properties to be in such a market?</li>
<li>Have you considered your financial future - is there any upcoming changes which may make a larger portfolio create extra stress on your finances?</li>
</ul>
You should not simply buy a property every time you feel like it, or each time the bank offers you more money - instead, your acquisition of property should be part of a carefully articulated plan which considers all of your personal financial circumstances, investing time horizon and risk profile.
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
</body></html>

Ask Margaret: Is it greedy to buy our 4th house in 7 months?

<html><body>
Hi Margaret,
With banks now restricted to only 80% LVR do you think this will significantly affect prices? I have two properties in Sydney. Both are renting for $450 per week
Before this announcement one was probably worth at least 800K (house on land 873sqm) and the other at least $500,000.
Do you think it's worthwhile seeing the yield is so low for my Canley vale property to sell it and buy 2 properties in Brisbane where the yield could be higher and I'll have two more properties despite losing 1?
Would this be still worthwhile seeing I have to pay capital gains tax (purchased 7 years ago for 446K) and taking into account all buying and selling fees.
I have considered more on using buyers agents as maybe they are not all spruikers.
Regards,
Allen
 
Hi Allen, 
Firstly we must make clear that the banks are not technically restricted to only lending 80% (it's not law), and the new, tougher criteria being set by some banks is only targeting investors, with owner occupiers mostly not affected. In response to The Australia Prudential Regulatory Authority's (APRA) calls for stricter controls around investment lending, banks like NAB and CBA have announced an end to pricing discounts for investors. ANZ have done the same, unless you have a PPR mortgage with them as well. Many lenders are also changing the maximum Loan to Valuation ratios (LVR) that they will allow for investors. As an example, BankWest will now apply a maximum LVR of 80% for all investment purposes (property and shares). This means that you will still be able to access funding at higher LVRs if you're an investor, you'll just have to pay for it with an increased interest rate, or, more to the point, no access to the discounts which can usually be obtained if you negotiate well enough. It's my opinion that this won't have a big impact on property prices, instead landlords will simply raise their rents to make up for the difference in their cash flows which the loss of these discounts will cause. We have to remember also that it's simply not suitable to say we are in a boom in the property market - I am sure the people of Adelaide and Perth would be quite surprised to hear they are in a boom, which making such sweeping claims infers.  We should hope that this inappropriate move by lenders doesn't impact the property market, as many areas can ill afford anything else to stunt growth. In terms of your property, I believe that, with or without these moves, people holding Sydney property may well find that the values stall a little in the coming 18 months anyway.  The market has overshot the mark, with frenzied buying pushing prices up well over the intrinsic value of properties in many areas. When that happens and the market cools, as it always does, the values seen in the last phase of that boom often suffer and fall back a little.  In your case you'll still be fine, as even with an adjustment in values, you've still made a really good gain. While I believe that the Brisbane market is likely to run soon, that's not advice to sell what you have in Sydney.  You could be up for a hefty capital gains tax bill which will eat into the returns.  It can be better to instead leverage against the equity and hang on to property you already have, choosing to sell it at times when you know you will be in a lower tax bracket, such as when you have left the paid workforce. 
As you have bought in to these areas while prices were a lot lower, I'm sure that your yields are pretty good, for you.  Yield relates to what you paid for the property, not what it is worth, and as the property has gained so much value, you should be seeing a pretty good return on that initial investment. In terms of a buyer's agent, just make sure that, if you choose to use one, they are a Qualified Property Investment Adviser (with the Property Investment Professionals of Australia) and that they have a broad based knowledge of all markets in Australia. 
You want your adviser to be helping you to buy property in the best area at that moment in time, not just in the area where they personally happen to be active. You should also become as educated as you can about everything to do with investing (not just where to buy) before going any further. In my experience, those who take the time to become suitably educated first usually make better and more lasting choices and build stronger, better performing portfolios.
Have a property question?   <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
</body></html>

Ask Margaret: Will bank LVR restrictions affect prices?

<html><body>
Dear Margaret,
While Kingston in Logan, Queensland still offers good returns, I have dealt with a number of real estate agents in the area (I have four properties there) and I've noticed they tend to accept the first offer if it is close to the asking price even, if it is the first listing day and the market is hot. I think that potentially they could get more for the vendor by waiting a little longer for multiple offers to come in. 
Each property I own I have bought through a different real estate agent and they all do the same thing. Is my fear founded that this keeps a lid on property price growth in the area?
Cheers,
Helen
Dear Helen.
One of the things that all investors must know is that the process of listing, taking offers and then conveying property from one party to another is very different in every state.  For example, in Victoria, where there is a lot of interest in a property, a vendor may call for multiple written offers from buyers and then decide on one, but this is not necessarily the case in other states.
In QLD, a real estate agent appointed to sell property for a client must keep the client informed of any significant development or issue in relation to the property(and) must immediately communicate to the client each expression of interest, whether written or oral(unless) the client has directed otherwise in writing.
This means that, as soon as an offer comes in, agents are obliged by law to present this offer to the vendor, and the vendor then decides if they will take it.  And so, it is not the agent who is 'taking' the first offer - they are merely presenting all offers to the vendor, and it is the vendor accepting them.
As all agents also have an obligation to achieve the best sales price possible for their vendor, then if you know of agents who are indeed convincing the vendor to take the first offer on the table when there is clearly the potential for further interest (as indicated by a hot market) then they are not satisfying their obligations under the terms of their contract with the vendor.  Where you have evidence that this is indeed happening with a particular agent, I advise you to approach the Department of Fair Trading in that state, with the evidence, so that it can be acted upon.  
On another note, I am a little concerned that you already own four properties in that area and seem to be seeking a fifth.  It can be common for an investor, having successfully invested in an area, to want to repeat that positive experience.  But I caution you to realise that if you own too many properties in a single market, when that market cools, as it will, everything you own will stagnate. You will also face a looming land tax bill, as once your land values in any one state exceed a certain threshold, land tax becomes payable on all other properties acquired in that state, and this can be expensive.  Diversification is a critical component of all investing strategies, and I urge you to look around for areas in other states which have future growth drivers, so that you can add some geographical diversity and also minimise your exposure to land tax as well.
Kind regards,
Margaret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
Please not that due to the number of requests, Margaret may not be able to answer every question.
Picture: Wikimedia Commons.
</body></html>

Logan, Queensland investment overload is a concern: Ask Margaret

<html><body>
Hi Margaret,
I have had an investment property for the past seven years that is negatively geared in the inner Melbourne Inner East. 
The house is very old and has had numerous problems due to its age. We are looking at demolishing this house and rebuilding a new home.
 On completion of construction, our intent is to either rent it out or making this our principle place of residence (PPOR) if we can't rent it out. 
Could you please advise, if we decide to sell it in a few years' time (after we have used it as a PPOR), would we be liable for capital gains tax (CGT) or is there a sunset clause after which CGT does not apply? 
Regards,
David
Hi David
It would seem that CGT, when it applies and whether there are time limits or statutes on it, is one of the most misunderstood areas of our tax law that there is.
In your case, the property you refer to has been your investment property since around 2008, and therefore it is well within the era that CGT is charged on any property which is not your PPOR.
Being rented out is not a criteria which must apply. Whether it is rented or not, if it isn't your own home, CGT applies (unless it started out as being your own home and then you moved out). 
Under these circumstances you may qualify for the six year rule exemption, which allows you to move out for a period of up to six years and not incur any CGT if you subsequently move back in or sell.  This of course depends upon you not claiming this exemption on any other property - you can only have one exempted property at a time.
If you were to move in to this property, and had only this property on which your principal place of residence exemption was placed, it would not matter how long you stayed in it, there would still be some assessable gain for the period of time it was not your PPOR.  This is because it was an investment when you bought it and no amount of living in it can wipe this fact away.
If you go down this pathway you must keep accurate records of your purchase price and everything you spend on the property, so that pro-rated capital gains tax can be established when the time come for you to finally sell the property.
Regards,
Maragret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
Please not that due to the number of requests, Margaret may not be able to answer every question.
</body></html>

Ask Margaret: Will CGT still apply if I move into my investment property?

<html><body>
Hi Margaret,
I have just purchased a house as a principle place of residence for $295,000 with $235,000 left in the mortgage and $225,000 in an offset account. 
We are using the money in the offset account (approximately $30,000) for renovations, and are looking to spend the rest on the purchase in (hopefully two) investment properties.   Do you think this is a good plan of attack or should I keep the money in the offset account and use the equity in the principle place of residence as a deposit on an investment property? 
With $30,000 on renovations hopefully I can have the house re-evaluated for $350,000. 
Kind regards,
Dave
Hi Dave, 
When investors come to my company Destiny for assistance, around 80% of them have finance structures in place that are not well thought through and which are potentially costing them some good tax deductions.
Around 20% of them are straight out incorrect, some of them using strategies which may contravene the spirit of the tax act or in other ways be a potential issue going forward.
When you buy any kind of property, be it for investment or as a principle place of residence (PPOR), you should be thinking with an holistic view – and considering what you may be wishing to achieve financially over many years, rather than just what you need at that moment in time. 
You should have a forward plan and know what level of financial independence you wish to achieve and over what time, as well as many other things such as your risk profile and current and future cash flow needs.
Then you must consult with a professional who can also assist you from a property investment advice perspective as well as getting you the loans you need – and to do this they must have some kind of qualification such as the Qualified Property Investment Advising qualification offered through <a href="https://www.pipa.asn.au">www.pipa.asn.au</a>.
Before you use the $195,000 which will remain in offset after your renovations to invest, you should first clear away all and any personal debt.  This is because such debt is non- deductible, and to use cash as a deposit for a deductible investment while you still have non- deductible debt can be a mistake. 
Then you need to be very sure that you plan to remain in your current PPOR for the duration – if you think there may be any chance that the future may bring a  desire to upgrade into a larger and more expensive home of your own, you will want to preserve your cash to use for that time. 
If you use up your available cash on an investment or two, while you can draw this back to use to buy a bigger home of your own, doing so would create a non- deductible, or personal debt which carries no deductibility.
If this all sounds confusing, this is because it is!  And so you need good guidance which considers a holistic approach to your entire financial future, not just this current home, or the immediate few properties you are ready to buy.  
Regards,
Maragret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
Please not that due to the number of requests, Margaret may not be able to answer every question.
</body></html>

Ask Margaret: Should I invest or keep in offset account?

<html><body>
Dear Margaret,
I was considering buying a two bedroom, two bathroom apartment off the plan in Newstand, Brisbane for about $650,000.  
However, there are mixed opinions about supply and demand there. Some says it is already oversupply, while others say say there is a shortage.
Do you think this is a worthwhile investment?
Regards, 
Ming
Hi Ming,
It would seem that at the moment most property investors want someone to simply tell them if they should buy a property they have seen, or not, or even just tell them where and what to buy. In asking such a question, it assumes that all investment properties are right for all investors, and nothing could be further from the truth.
Property investing is actually a very personalised thing, and what is right for one investor, may not be right for another.  While some properties simply should not be purchased at all, and some areas will never deliver anything in terms of growth, when it comes to buying property in what is thought to be an area which may have potential, there are a number of things to consider:
<ul>
<li>Risk</li>
</ul>
All property types will carry different levels of risk to each other and each investor should consider whether their own risk profile matches the level of risk each property type presents to them. 
For example, a serviced apartment in a tourist destination would be considered to carry a lot more risk than a three bed house in the Brisbane suburbs. Further, that serviced apartment would present a lower risk to a person with a large portfolio of properties, and plenty of personal cash flow than it would to the one who has a tight personal budget, and a complete reliance on that property delivering weekly income, and growing. 
The investor with the large portfolio can afford for it not to work out, while the other investor might have their entire financial future changed by just this one property if it works out badly.
<ul>
<li>Cash Flow</li>
</ul>
Some properties deliver better cash flow than others, and some investors can withstand higher levels of negative cash flow than others can.
The cash flow of any property you buy must be one which you have established you can manage – and you must build in a margin for lower than expected cash flows to cover times when vacancies may be higher than anticipated.
<ul>
<li>Capital Growth</li>
</ul>
The investor with the large portfolio can afford it if one or two properties stagnate and do not grow, while the newer investor, particularly if they have low equity in their own home, must have a property with more assurance of growth.  While there are no guarantees of growth anywhere, it’s commonly known that some areas have characteristics which assure at least some growth over time (like suburbs of a capital city) while others may experience fabulous growth, or none at all (or even a loss, such as in some mining towns).
And so, in direct answer to your question, while Newstead definitely possesses characteristics which demonstrate that it has what it takes to grow and deliver a decent cash flow, there are concerns over the short term supply factor.
In the event that the developments keep being approved, the supply will grow faster than the demand, and, in the short-term at least, prices may stagnate.  Given the strong fundamentals of the area, this oversupply will eventually work its way out, but no one can tell you with any certainty when this will happen – and so you must determine the level of risk that this presents, to you.
Kind regards,
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
Please not that due to the number of requests, Margaret may not be able to answer every question.
</body></html>

Ask Margaret: Will buying off the plan in Brisbane be a worthwhile investment?

<html><body>
Hi Margaret,
I’m looking to buy my first investment property. I already have my own home which we have a fair bit of equity in. We will use that equity to finance the next deposit. 
Do we have to have access to that equity to put down as a deposit at contract signing? Or can we sign a contract with 100% of the purchase value subject to finance?
Regards,
Samuel
Hi Samuel,
First of all, congratulations on being ready to take this first step!  As it is likely you may be looking for an investment property anywhere in Australia, its important that you understand the differences which exist in every state in terms of how a property is transacted and the procedure for deposits.
First of all, the deposit required in every state, and when it is paid, is different. For example, in NSW, the deposit is either made in the form of a non-refundable 0.25% of the purchase price upon acceptance of the offer (to secure it and protect you from being gazumped), with the balance of 10% of the purchase price being required five days later (at which time the contract becomes unconditional), or as a straight 10% when you are ready make your contract unconditional (but in the meantime someone else can buy it).
In complete contrast, a QLD purchase attracts an initial deposit of whatever you can negotiate (I always suggest $1,000 and this is refundable)  with a ‘balance deposit’ (again I suggest a further $9,000) to be paid upon the contract becoming unconditional.  In between those two extremes falls the other states, and you must become familiar with each state’s individual process before you even begin to find your investment.
In any event, a deposit of some type is usually paid, and in your case, the entire amount of your deposit is tied up as equity in other property.  While you can use your own cash to make a deposit, this is not advised.  This is because if you use your own cash, you cannot subsequently ‘repay’ yourself from the loan you get to buy the property, as this payment to you is considered by the tax office to be a personal payment.  It then loses the ability for the interest incurred on this amount to be claimed as a deduction.  It’s important to preserve the nexus between a payment and the property, and the only way to do that is to ensure loan funds are spent directly on the property or its expenses.
You have two ways that you can get to this deposit and still maintain full deductibility without using your own cash:
<img src="/images/2014/07/04/yellow-one.jpg" alt="">You can approach the lender even before you find a property and set up a ‘line of credit’ loan using your current property equity.  This line of credit loan then sits undrawn, and the moment you find a property it is available for you to draw from to make the deposit.  As long as the funds from this debt are only ever used for, and connected to, an investment property, they are fully deductible.  There is a multitude of ways you can do this:
<ul>
<li>you can make it as large as your equity allows, use it for deposits every time you buy a new property, obtaining an 80% loan against any new property when you settle it (and so your 20% and costs comes from the line of credit to add to this 80% loan), 
</li>
<li>you can apply for only enough for the deposit, and then apply for a loan increase to be effected when the property settles and can be taken as security, or, 
</li>
<li>if you have enough equity in your own home, you can just put in place a loan big enough to buy the whole property – drawing the funds up as needed to pay deposits, costs and the final payment.</li>
</ul>
<img src="/images/2014/07/04/yellow-two.jpg" alt="">You can instead get a deposit bond.  This is an insurance policy of sorts, which guarantees to the vendor that, if you renege and do not proceed with the purchase, your forfeited deposit will be paid by them.  A deposit bond has a fee which is often less than the interest on the deposit would be if you were to use loan funds, but be warned – while the insurance company pays the forfeited deposit they still chase you to get it back!  This is only of concern if you withdraw from the purchase after your contract has become unconditional.
Whatever you decide, it’s important to get guidance from a qualified person who can be sure you structure this correctly, as getting it wrong can be a tax nightmare.  It’s also important that, before you even get started, you become educated – do a lot of reading and find a great property investment course to do first!
Have a property question?   <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
</body></html>

Ask Margaret: How can I use my house's equity to finance my first investment?

<html><body>
Hi Margaret,
My name is John and I am first home buyer living in Sydney's west.
I am very confused about buying property because of high rates. We are newly married young couple and We can't afford $600,000 property but we don't see any good property in our area under this price. I
I am very confused; for some time I have been considering moving to Melbourne - we can buy a new house there for $400,000.
Can you suggest something what should we do? Do you think moving to Melbourne is going to be a good move or not? Regards,
John
Hi John,
It’s understandable that you feel that prices have risen so much that you are now priced out of the market. 
I’m guessing that, in order for you to live in an area that you see as suitable in terms of its proximity to your work, family and friends, you have to pay $600,000 and so are not willing to consider starting smaller, with say a unit in an area which may require some commute.
At $600,00 plus fees and buying costs, with a 5% deposit, you would be looking at around $690 a week in repayments.
If this is out of your price range and considerably more than you are paying in rent payments, what may be needed is a change of thinking.  While the 'Great Australian Dream' is to own your own home, I feel it is time that young people have a considerable paradigm shift and begin to think differently.
For the older generation, home ownership was crucial as their parents suffered through the unsure times of the Great Depression, where no one could really afford their own homes.  To avoid the same fate, this generation bought their own homes, paid them off over 25 years and then waited for the gold watch upon retirement and lived on the aged pension.
Today we are far more informed and many understand the important need to consider more than just home ownership.  As such, many also invest, in a variety of assets, with residential property being very popular.
What I am now suggesting to you is that, rather than think of property ownership as meaning that you must buy a property in which to live, why not consider the more achievable prospect of jumping on the property ladder by becoming a landlord? 
There are many benefits to this, including:
<ul>
<li>You are free to buy property anywhere in Australia, and can access some great, affordable markets where property is still under $300,000.  These markets have great growth drivers and will appreciate over time, adding to your net worth and, in a sense, boosting your savings through equity growth; 
</li>
<li>Many of these markets have high rental yields – often over 6%, and with rates so low, the rent, plus your tax breaks, is highly likely to cover all costs and loan interest payments; 
</li>
<li>You can buy as many investment properties as you like and, as long as you do not live in them, still have access to any future government First Home Owner’s Grant (at the time of writing), and 
</li>
<li>You can rent where you want to live – and in a market like Sydney, where rental yields are relatively low, renting can often be almost half the cost of making a mortgage repayment.</li>
</ul>
There is little to criticise about this strategy, which is one which allows you to stay living where your family and work are, but still create wealth with property by buying elsewhere. 
To get started, you must learn more about how to buy well, by completing a good course (offered by someone who doesn’t have the <a href="/news/property-experts-warn-that-spruikers-out-in-force-in-hot-market">agenda to also sell property to you</a>) and read as much as you can to ensure you know how to chase down those strong yield, good growth, affordable markets!
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
</body></html>

Ask Margaret: How can I get on the property ladder?

<html><body>
It's no secret that I have a preference for obtaining a positive cash flow (or as close to it) from my property purchases.  I've written a lot about it over the years and have successfully added many such properties to my portfolio.
However, I can't help but notice that, somewhere along the line my message has been taken in a shortened form – leading investors to consider only cash flow when choosing their next property. This, in turn, results in the acquisition of property which might have good rent returns, but is in danger of not growing due to an absence of important growth drivers.
In choosing property for cash flow alone, many investors are inevitably led toward towns with a single industry.  Such towns tend to get a higher than usual rental yield for many reasons, including:
<ul>
<li>They are often well outside of major urban areas, and so the property values are low, creating a higher relative yield. 
</li>
<li>Where the industry in question is experiencing a robust period and demand for its product, extra workers are usually employed.  
</li>
<li>These workers often cannot be sourced from within town and so they are recruited from elsewhere, and move to the area, and as many of these workers are itinerant, at least until it can be confirmed that their continued employment is assured, they do not usually buy.  So, although the industry is doing well, the expanding population are not property buyers, and pressure is not brought to bear on values.  They are, however, renters and this is why rental yields often soar.</li>
</ul>
Property in such areas then becomes an attractive proposition, because, initially, the cash flows look fabulous.  This in turn attracts more investors and property prices do begin to move.  Pretty soon we see an artificial property boom, brought on purely by the existence of the single industry and the resulting hoards of hungry investors seeking, at first, good cash flows, and then the spin-off gain.
And while many experts may say that, where property in concerned 'time in market' is the key, in fact these towns require precise 'market timing' if the strategy is going to work.  You need to get in at the right time (before values move), and you need to exit the investment just before the fall that is often seen in such areas when the single industry falters, or the economy changes.  And if an investment requires precise market timing to pay off, then it also requires the investor to have a higher appetite for risk.
There is no question that, particularly while we are experiencing strong economic times and low interest rates, a property in a single industry town can provide a great return.  However, these properties must be considered to be a higher risk investment. 
As with any investment, the higher the potential return, the higher the risk, and property in single industry towns have more than their fair share of risks.
These include:
<ul>
<li>The lack of diversity of industry means the entire workforce's reliance on a single industry places the security of the whole town at risk, should something adverse happen to that one industry; 
</li>
<li>The prevalence of itinerant workers results in a weak underlying economy. Workers often take their earnings out of town and, if that industry's vibrancy is reduced, respond to economic changes, leave town altogether. This creates high vacancy rates, rapidly reversing the upward climb that property values were enjoying; 
</li>
<li>That same economic weakness means most councils lack the financial resources to provide infrastructure to the community, meaning that the towns are often severely under-resourced; 
</li>
<li>The entire town is highly exposed to 'hidden risk' – the risk that an unforeseen event, government decision or world economic turmoil impacts directly back on the only industry supporting the area.  This is a risk which cannot be mitigated as it most often cannot be foreseen, and in some cases has never actually happened before; 
</li>
<li>Even if that single industry continues on, the lack of diversity in industry usually means that the population grows very slowly – the town can only expand at the rate that the industry expands.  This can mean that, even though cash flow might be good, growth to the underlying asset (the property) is well below par. A sound property strategy requires both cash flow and growth.</li>
</ul>
If an your risk profile is such that you have plenty of capital and loss would not cripple you, or you have ample time available as an income earner within which you could replace lost capital, then the potential for good yields and possible capital gains may well make these risks worth taking.
However, if you are buying in order to create a retirement income, and each purchase must perform well, you may be gambling with what may become one of your only income sources, one which needs to last a significant length of time and will not be easily replaced if you are already close to retirement.  The surety of a house in an area with a growing population, diversity of industry and abundant infrastructure development is more likely to be the appropriate investment.  You may not have quite as much cash flow, but the chances of you having both the capital and a reasonable amount of yield and growth available to use for all of your retirement years are usually greater than these higher risk, single industry town investments.
</body></html>

Buying in a single-industry town - how to negotiate the risks: Margaret Lomas

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

Joel Robinson

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

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

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

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

Maréa Residences brings parkside apartments to Coolangatta

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

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

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

Margaret Lomas

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News