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Hi Margaret,
I am currently looking at purchasing an investment property in Sydney.  I am considering the purchase of an established one or two bedroom apartment in the inner west. Do you believe this is the right option and that the Sydney market will continue to have good capital growth? I hope I would not be buying at the peak of the property cycle in Sydney.
Also, can you have your investment property transaction account offset against a personal home loan and not the investment home loan? I presume that it is more advantageous to have this arrangement as the interest on the investment property is tax deductable, where my personal home loan interest is not?  I just want to ensure that I would not be breaking any tax rules by having this loan structure.
Thank you
Darren
Margaret's answer on next page. Please click below.
                        
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Hi Darren,
Some experts are saying that the Sydney market will continue to boom during 2014, but I believe it will be headed for a distinct slowdown toward the middle of the year.  Even so, I truly believe the best Sydney buying opportunity is now behind you and it may be better to seek out an emerging market, like the mid-ring suburbs of Brisbane, and get in on the start of that boom.
When you refer to your ‘investment property transaction account’, I am going to assume you mean that you have a savings account set up, into which you pay money which covers your investment property expenses, which is also able to offset loan interest.  You can have this offsetting interest on any loan and the tax office does not prescribe where you choose to offset interest.  They can only prescribe which interest is deductible and they have made it clear how they feel about capitalising interest.
Having sad that, remember that you can have your rental income paid straight into your home loan (or home loan offset account) and as long as you meet the interest payment on your investment loans as and when it falls due, this is acceptable. 
Some accountants also say that you can redraw from an investment loan to meet investment property expenses such as rates and repairs, or keep a separate, smaller line of credit style loan which you use to pay investment property related expenses, ensuring you also pay its interest bill each month too.  I’d always seek a private ruling form the tax office before putting any of these unusual arrangements in place.
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? <a target="_blank" href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
                                      
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mlomas-KC9MUPZ6Ca

Is it still a good time to buy in Sydney and how can I structure my personal and investment loans?

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Hi Margaret,
I got a question regarding buying off the plan in Bungarribee region close to <a target="_blank" href="/news">Doonside</a> in NSW.
The off the plan property will cost somewhere between $550,000 to $600,000 after construction, whereas the ready to move houses in the Doonside region are in the range of $480,000 to $500,000, albiet without the first home buyer grant and without stamp duty exemption.
Is it an attractive buy from a first home buyer perspective? Does it makes sense to buy property which is valued at least $50,000 to $60,000 higher than the ready to move, relatively new houses.
And what sort of growth is expected in Doonside and the surrouding region? Additional things I am considering are affordability, community, proximity to transport, schooling and resale value after five to seven years.
Regards,
Rajesh
Margaret's answer on the next page. Please click below.
                
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Hi Rajesh,
When off the plan marketing was first established, it was a great chance for buyers to obtain under- market value properties. Developers needed to get a proportion of pre-sales in order to qualify for development finance and so they offered up to 25% of the development as pre sales, usually at the prices of the day, or less. 
Lucky buyers committed to buy and years later, when finally finished, often found they were paying a lower price for property which due to market movements was now worth more.  The developer got his finance as the bank happily provided the money on the basis of the pre-sales.
These days developers are much greedier, trying to sell entire developments off the plan at tomorrow’s prices.  The entire risk sits with the buyer who is fully exposed to many drawbacks.
These include:
<ul>
<li>
Their commitment to the sale can often mean that, while they wait for completion, a bank won’t lend to them for additional purchases, as this off the plan purchase is a commitment with no income as yet.
</li>
<li>
The market may plateau or even fall after the commitment is made, making the property worth less at settlement than is being paid (and this is actually very common)
</li>
<li>
If the property is worth more than is being paid, there is often a clause deep in the contract allowing the developer to pull out for any reason, but no such clause for the buyer, whose commitment is irreversible
</li>
<li>
On delivery, the property is often quite different in appearance than it appeared in the brochures – developers can make changes of up to 10% without voiding the contract.  You cannot be assured of exactly what you are getting.
</li>
<li>
Though the lender may approve a loan to buy the property, on completion of the building they will reassess the borrower and value the property.  If the buyer’s financial circumstances have changed they may no longer qualify for the loan, and if the valuation is less than purchase price the buyer may not be able to borrow enough to proceed.  They will not, however, be able to get out of the contact and will be sued by the developer to complete.
</li>
</ul>
There are many more drawbacks than this, and a few positives, but as far as investing goes, off the plan can be a poor choice.
While I expect that Doonside will grow at slightly above average, you’ve already established that these off the plan properties are well above current market value, up to 25%.  The market will need to grow by at last that amount in the coming two to three years for you to at least be even, and even then it will be a wasted exercise, as you are tying your money up and there should be some upside to that.
If you would like to buy in Doonside, check out what else is available first in an already established, possibly near new property.  That way, by the time these off the plan properties are completed, you may well have a few existing properties already under your belt and growing!
Kind regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? Ask Margaret!
                
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I'm a first home buyer, is off the plan a good investment? Ask Margaret

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Hello Margaret,
My husband and I, both 50, are considering purchasing an investment property to potentially provide us with an income for our retirement. We have two dependent children, aged 19 and 16, a combined annual income of around $200,000, a mortgage of $320,000 and our home, recently appraised, is worth about $1 million. We are paying off our mortgage at $2,200 per fortnight at 5.1%. We always clear credit card debts before interest is incurred. We have no other loans.
We both have frozen pension overseas, seven and 12 years, and both have had workplace super since returning to Australia in 2006, contributing an extra $100 per fortnight each. We have savings and shares to totaling about $10,000.
I am concerned we will need to sell the family home and downsize, in order to adequately fund our retirement. We would prefer to leave an inheritance for our two children, to enable them to each get on the property ladder before real estate eventually becomes too pricey.
I have been reading your articles over the past year and I'm not sure if we are in a position to purchase a second home, or if this is the way forward for us?
We used 10 years of (cashed in) super, to purchase and develop our first property, at the ripe age of 38 and 35, overseas, giving us a significant profit over the seven years we lived there. Ultimately, this enabled us to return to Australia and purchase our first home here in a good suburb.
Hope you can help us with some independent advice.
Kind regards,
Maria
Margaret's answer on the next page. Please click below.
 
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Hi Maria,
I'm glad you wrote to me before rushing ahead and making any major mistakes.
Firstly, I think it is imperative that you think about planning for your own retirement before you think about planning for your children's inheritance!  You are a lot older and closer to retirement than they are, and the best inheritance you can give them is parents who are financially independent and who lead by example.  Teach them how to be good investors by becoming one yourself and they won't need to inherit.
You are in an excellent position to begin investing, in fact you have been for some time so there's no time to waste.  I've done some quick calculations based upon your equity of around $700,000 and your incomes of $200,000 and, along with projected rental incomes which buying property would bring, there is no reason why you could not in fact borrow enough to buy total property to the value of around $2 million.
Now, don't rush out and do that  - just because you qualify doesn't mean you should do it! 
You must start with a strategy, an assessment of your risk profile, a plan which matches your personal circumstances, then some good quality education to enable you to become a skilled investor before you start.  If you do not follow this sequence you will be setting  yourself up as fodder for every dodgy property spruiker that you are bound to find lurking in every corner - waiting to part you with your money on property which might be right for them (due to their large commissions) but possibly wrong for you. 
Here are some things to be wary of:
<img src="/images/stories/2014/02/21/number-1.jpg" width="20" height="30" alt="number-1" style="float: left;"> Mortgage brokers giving you 'property advice' - they are licenced to give you loan advice only and largely have no qualifications or skills to assist you to invest well.  Their property recommendations are most likely being made because they will be receiving commissions from developers for anything you buy.
<img src="/images/stories/2014/02/21/number-2.jpg" width="26" height="30" alt="number-2" style="float: left;">Financial advisers giving property advice - recent changes to the law means financial advisers no longer make money from commissions, instead they must charge the client.  Some are turning to developer stock to sell to their clients, for which they receive large commissions, with no requirement in the legislation to tell you about them.
<img src="/images/stories/2014/02/21/number-3.jpg" width="22" height="30" alt="number-3" style="float: left;">Glossy brochures advertising fabulous property in areas that you cannot confirm is really a hotspot.
<img src="/images/stories/2014/02/21/number-4.jpg" width="22" height="30" alt="number-4" style="float: left;">Anyone giving you 'property advice' and selling you a property as well - it's impossible to be independent if there are commissions to be made, and these people cannot possibly have properties to sell you in a hotspot which also just happens to be perfectly matched to your own financial circumstances.
Now that I've provided all the warnings, get going!  Read some good property books and look for an adviser who offers a pure advice model.  Get educated too, but beware the spruiker seminar with the high price tag!
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? <a target="_blank" href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
 
      
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Am I in a good position to become a property investor? Ask Margaret

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Hi Margaret,

I have a duplex approved vacant block in Queensland. The block size is 928 square metres. I don't want to build two houses/units that are attached. I have checked with the local council (Logan City Council), they have informed me that it is possible to have two detached houses build on that block (which we will have to apply for).

Now I also asked them if I could subdivide that block into two lots. They said that was possible as well with application of subdivision costing $1,095 plus $520 per lot which comes to a total of $2,135. They said that the headworks charges would come to approx $28,000. This $28,000 is for one block as there will only be one additional block.

I asked them if there is any other charges that I may come across. They said there would be a water meter connection (which a different department of the council informed would be $1,414.41).

They said that I will also need to hire a surveyor, at least for official drawings for sealing. I estimate the total cost of subdivision to be around $40,000 (including some contingencies). the subdivision is on a corner block so roadworks will not be required. The duplex block is part of a subdivision that happened approx 1 year ago and therefore the infrastructure and all services are all new.

Now I am trying to figure out whether it is better to have the block subdivided into two lots and then build a house each on it or build two detached houses on it without subdividing. If I subdivide, I think the bank valuation would be higher but the rental income would be the same for both scenarios. But if I subdivide, then the return on investment through rent would be less.

Can you please shine some light on things or views that I am missing out on. What do you think I should do?  Should I spend to subdivide (while the extra money spent for subdivision may turn out to be the same valuation that the two blocks combine will generate), or should I build detached houses without subdividing and let the subdividing idea sit for future.

Kind regards,

Chetan

Margaret's answer on the next page. Please click below.

 

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Hi Chetan,

It seems like you have already  done a lot of the due diligence in considering the true costs of this subdivision, so well done.  Often people don’t consider this big picture and instead rush ahead, only to find out too late that the costs exceed the benefits.

It is true that, most often, two separately titled blocks can fetch a better valuation than a single-titled, two dwelling lot.  In my experience the difference is between $30,000 and $50,000, depending upon where the block is.  However, usually the rental return remains the same – tenants are rarely aware of the title arrangements and won’t know whether they are on a separately titled dwelling or not.

You need to consider your personal circumstances before working out if it’s worthwhile spending this money now, or later.

If you will be relying on equity to allow you to leverage into more property, you will want every cent of equity that you can get.  It’s possible that subdividing now will allow each individual block to gain value at a greater rate, giving you more overall equity and allowing you to leverage into more property sooner.  That extra $10 - $20,000 in equity might add up to $100,000 in borrowing capacity (subject to your qualifying), and you could then acquire more property now.

On the other hand, if you have plenty of equity elsewhere in other property and are not stopped from further leverage, I cannot see the point in subdividing at this stage.  Keep the money and use it to pay down debt, which in itself will provide some more leveraging power.

Down the track, when you wish to liquidate your portfolio to access retirement funds, you will probably want to subdivide then, as it will be easier to sell two separate blocks and you should fetch a higher price for each than you could get for the two combined.

Regards,

Margaret

Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.

She is the founder of <a href="https://destiny.com.au/dotnetnuke/en-au/home.aspx" rel="nofollow" target="_blank">Destiny</a>.

Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>

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I want to build two houses on one block; should I subdivide now or later? 

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Hi Margaret, 
Can you tell me what has happened to unit rentals in Sydney over the past two years? 
Your advice is appreciated.
Kind regards, 
Peter
 
Hi Peter,
This is almost like asking ‘how long is a piece of string!
‘Sydney’ is a very large place and unit rentals can vary greatly from area to area, depending on many things including current demand, current and future supply, housing affordability, demographics and population growth.
For example, rents in <a href="/news">Double Bay</a> are 15% higher than last year while those in <a href="/news">Mosman</a> are 2% lower.  <a href="/news">Cronulla</a> sits 1% lower than last year while <a href="/news">Alexandria</a> sits 3% higher.  <a href="/news">Woolloomooloo</a> is 7% lower while <a href="/news">Parramatta</a> is 4% higher.
As an investor, it's crucial that you have a wider view of what you are buying and you must consider many aspects alongside potential rental yield. Look at areas where the population is growing faster than average but relatively few new developments are planned.
Consider buying in suburbs which have a lot of future infrastructure plans and where it seems that the services required by the demographics of the area are considered and being supplied.
And, more importantly, don’t buy a unit just because it seems to have a good yield, or it feels like a ‘cheaper’ way to get into the market.  In some areas the units grow better than the houses and in others the reverse is true. 
This is related to the kinds of people who live there – in family oriented areas houses will always get better growth and better yields, while in areas targeting couples or singles it will most likely be the units which present the better buy. 
Buying the wrong property type for the demographics could lead to a bad investment in an area which otherwise might have presented a good opportunity.
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? <a target="_blank" href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
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What has been happening with Sydney unit rentals recently?

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Hi Margaret,
We are looking to buy an investment property in the next couple of months, preferably a house on the Gold Coast, because we've lived there before and it's affordable.
 We have a house in Penrith, but Sydney is too expensive for what we're after at present.
 Do you think the Gold Coast would be a wise move?
Kind regards and many thanks,
Stacey
 
Hi Stacey,
You sound like you are about to make some of the classic first time investor mistakes, so well done for writing to me first so that we can make sure that you don't!
You have said "preferably a house on the Gold Coast" and then quoted two reasons - that you lived there before and that it's affordable.
Living in an area doesn't turn it into a viable place to invest!  In addition, while investors always state that they have lived in an area, and so 'know it well'  as a reason for choosing it, it's highly unlikely that you 'know' the investment fundamentals about that area.
For example, can you quote the current vacancy rate?  Population growth statistics?  Median household income?  Council plans for infrastructure? Employment stats and industry spread?  I'd say no, and unless you start at least with those basic questions then you might as well throw a dart at a map of Australia and invest where it lands. You have the same chances of success using that method as you do using the 'we know it' method.
Investors must take care not to fall into the trap of believing that living in an area gives them special knowledge, and also that unless you live somewhere you cannot know it well.  There's absolutely no added safety investing in a market you've previously lived in.
In fact, there is often added danger as your familiarity makes you careless and you fail to adequately perform the due diligence needed to make sure that, at that moment in time, you are choosing the very best area to invest in.  Contrary to the rubbish that property spruikers spout, property investment can, and does, fail dismally and until you have learned how to recognise a viable investing area, you shouldn't be buying at all.
The second mistake you are about to make is that your decision making process is being 'price driven'.  This is common and is a situation where an investor uses a price range or price point to determine where they buy.  The reality is that it is never price which determines how well an area will grow. If you are driven by price you may well end up in an area where the returns you see mean that keeping your money in the bank would have been a more profitable venture.
Instead, you should learn how to select an area by doing the research first, and then, if properties in your price range are not available in that area, go looking again for another area which also shows the growth drivers.  I can assure you this 'Sydney' obsession will soon end and those buying there may land quite disappointed with the overall results.  There are many, many areas today with significant growth drivers, showing great promise and with affordable property - you just have to learn how to find it!
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a href="https://destiny.com.au/dotnetnuke/en-au/home.aspx" target="_blank" rel="nofollow">Destiny</a>.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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A couple of classic first time investor mistakes

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Hi Margaret,
I am from Sydney and I have a property that is one acre, well it's around 4,375 square metres. 
Originally it was all farm land, but there's been a new development and now I have one of the only acres left. Now have homes all around me and my land has roads at the back and front of me.
I don't think there is much else that I can do to my acre. I would like to subdivide it and I need to do it the right way so I don't make any costly errors. 
I gave spoken with local council and the lot sizes I am allowed to do is 550 square metres. 
If you could push me in the right direction I would really be grateful.
Thanks, 
Shane
 
Hi Shane
It sounds like you have your one acre available to subdivide into around eight lots, depending upon what your council will allow. That should be fairly straightforward, though not without cost.
You must be aware that all councils will have different rules, regulations and processes even though they all fall under the one state government planning department rules.  It's important that you know and understand all of the requirements before you get started.
You should start by going to your local council website and looking up the town plan.  Here you will find the minimum lot size according to the incline of the land, and you can work out how many you can do.
After this it would be wise to contract a local town planner who should be able to have the required surveys, site and engineering plans drawn up for you.  While there is a cost involved in having a town planner involved, it can save you a lot of time and effort and often the risk of getting rejected after you've spent a lot of money.  Town planners usually know the rules intimately, and many have previously worked for council, so they are in the best position to develop a proposal with the greatest chances of success.
You will incur a large amount of cost before you even get to the point where these could be sold. These include, but are not limited to: roads (if required), drainage and sewerage, connection of services, access driveways, cutting and levelling, retaining walls, tree removal and more.  On top of this will be planner fees, council contributions, application fees, drafting fees, engineers costs and surveys.  You will need to fund all of these costs yourself, as until the final approval is in place and a 'construction certificate' is issued, you won't be able to sell them. 
My advice is to make very sure that someone has adequately estimated these costs and that you can afford to meet them before you get started, or you may find yourself in a situation where you run out of money before you are done.
Another option is to either sell to a developer before you even begin, or do the initial work in designing the subdivision but place the acre on the market as a 'pre DA approved' lot. This may then get you a bit more money if you can show the potential subdivision allowed.
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a href="https://destiny.com.au/dotnetnuke/en-au/home.aspx" target="_blank" rel="nofollow">Destiny</a>.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
 
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I want to subdivide but how do I avoid costly mistakes?

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Hi Margaret, 
 We own a five acre block near Darwin with a four-bedroom house under renovation. 
 My hubby is a 65 year-old self-employed tradesman and as we are not overly endowed with super, had the idea that if he built a small residence (granny flat) on same block with separate power, water etc, we could base ourselves there and rent out the main dwelling for income.
We would also caretake the block, e.g. mow lawns, remove palm frond,s etc. (There are a lot of properties this size in this area which build granny flats /dependant units and rent those out seemingly with no trouble planning-wise it seems.) We can’t subdivide five acres here. 
 Can you please advise if our idea is even feasible tax wise before we look into it further? I realise it is a pretty broad query! 
 Many thanks, 
 Jane 
 
Dear Jane,
This is an interesting question and one which is not often asked, and so I referred to Julia Hartman, a great expert on these more obscure scenarios.
She has said that there are many things to consider, the main one being the capital gains tax exemption for your principal place of residence. Once the granny flat is built, if you moved into it immediately, then from a tax point of view this would be treated as two separate properties. Once you rent out the former family home, the cost base of that property is considered to be the market value at the time. The granny flat and the land underneath it would also be given a market value.
At this point you would have to choose which one you wanted covered by the main residence capital gains tax (CGT) exemption – and ahead of time it can be really hard to work out which of the two is likely to have the greatest amount of growth.  If you choose the former family home to have the exemption, then the granny flat and its land will have CGT from its determined market value, and if you choose the granny flat, then the family home will attract CGT from the market value established upon you moving out.
If you don’t want  the property to be treated like two separate assets,  then you need to live in both the granny flat and the house, combined as your home, for the first three months at least.  This way, the two houses are seen as one dwelling,  and for CGT purposes the treatment would be just the same as if you were renting out rooms or part of your home.  This of course exposes the whole property to CGT from the market value of the whole property at the time the granny flat is built, but only for the portion of the home which was rented out – and so it’s done on a pro rata basis.
As you can see – its complex! It’s going to be really hard to actually work out which pathway is the best one to take, since you can’t really estimate future values.  Make sure that you have an accountant who can help you work out some ballpark figures and don’t make any decisions until you have a clear understanding of what could potentially happen in the future.
Regards,
Margaret.
<hr>
Margaret Lomas is a best-selling author and writes and hosts the popular Property Success With Margaret Lomas and heads up the panel on Your Money, Your Call, both on Sky News.
She is the founder of <a href="https://destiny.com.au/dotnetnuke/en-au/home.aspx" target="_blank" rel="nofollow">Destiny</a>.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
 
 
 
 
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How will building a granny flat work out tax wise?

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Hi Margaret,
I'm a new investor and I'm about to invest in a property in Broken Hill. The property is vacant at the moment but the real estate has advised a potential rent of $200.
I'm also yet to do a building and pest inspection. 
Would you be able to give me some advice?
Kind regards,

Ashis
 

When new investors begin the process of choosing their very first investment property, usually they are motivated and guided by the desire to get something as affordable as possible.  In doing so, they consider a price range within their budget, and then go looking for a house to match.  Next, they usually find out the rent return and if it seems as if it will provide a reasonable cash flow, they believe they have a good buy on their hands.
The problem with this approach is that, while it means that you will buy something within your comfort zone in terms of price, with a rent return likely to cover most costs so that your weekly personal cash flows are not too badly impacted, it completely ignores one of the most important features of successful investing – and that is buying a property which will grow and so increase your net worth.  While getting a neutral or positive cash flow is indeed of considerable importance (as highly negative cash flows can cause financial distress and potential early exit), owning property which never grows (or grows very little) will do no more for you than never owning property at all!.
Broken Hill, in my opinion, falls within the category of an area which has affordable housing  and rental yields of over 6%.  However, it has a population which is only not growing; in 2011 it lost 80 people!  There are over 500 properties currently listed, with only four people looking per property available, as compared to a state average of 20.  Combined with a lack of employment opportunities, these facts indicate that there are simply no drivers for property price growth and you’re likely to be left with a property which does nothing in the short and medium term, and likely in the long term too.  You will essentially buy yourself a headache (which most properties are, at some time), with no capacity for a reward at the end!
While I am definitely not a proponent of spending up big when it comes to buying investment property, I believe there is far more risk in buying a cheap property with no demand drivers than there is in buying a more expensive property in an area where you have confirmed employment opportunities, population growth and suitable provision of infrastructure.  Such an area can still have a rental yield sufficient to cover your costs and not stress your budget today,  and in addition to this it can provide growth of your asset and the capacity to leverage into more properties, and thus build a larger portfolio.
Regards,
Margaret
 
<hr>
Margaret Lomas is a best-selling author and writes and hosts the popular Property Success With Margaret Lomas and heads up the panel onYour Money, Your Call, both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? <a target="_blank" href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
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Should I buy my first investment property in Broken Hill?

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Hi Margaret,  
I need your help. Currently I have an old house on a piece of land in Longanlea. I would like to look into subdiving the property. Where do I start?
Appreciate your help and knowledge.  
Thanks  and kind regards,
Stacey
 
Hi Stacey,
Many investors write to me eager to begin a subdivision, as they see it as the chance to make quick profits, easily.  Sometimes it is, but more often than not subdividing ends up being costly, time consuming and very stressful, with the profits made disappointing and sometimes not commensurate with the effort which has been made.  
Before you subdivide, it is critical that you establish the likelihood of being able to make a considerable profit from the exercise, both in terms of the final value of the subdivided property and the improved rental yield.  If you are able to subdivide a property while keeping the existing property (with or without a renovation) then this will always be preferable.  In this case you can essentially end up with a free piece of land, which, if developed, will more than likely be worth more than it was before the subdivision.  While you subdivide you can at least be earning  rental yield from the existing property.
On the other hand, if subdivision requires demolition of the existing property, you really must do your numbers to establish if this is a worthwhile exercise.  Demolition can run to tens of thousands of dollars, and along with the costs of subdivision, which in itself can be up to $50,000, you should be sure that the resulting two blocks, considering any loss of value once they no longer have a dwelling on them (or the improved value once you spend money on erecting two new dwellings) is worth it. 
When establishing this, do be sure to take into account the accruing interest on any loan on the property (which you must pay without the benefit of rental income), and the interest on any loan you need to create the subdivision and/or build new dwellings, all which add to your cost base.  
If you have done the exercise and still feel that there is a chance for profit, the next step would be to consult with a local town planner.  Town planners can guide you and help to establish if the proposed subdivision falls within the council’s development application (DA) requirements.  If it does not, they can also advise what they believe to be the chances that you can be granted an approval under an exemption of some sort, which can happen.  The costs of a town planner, which can be anything from $2,000 - $5,000 should be considered in your subdivision costs.  
The town planner should be able to arrange for you any surveys, engineer’s drawings for driveways, drainage and easements and even prepare the submission for you.  Remember that at this stage you must pay all of these costs prior to even knowing if the subdivision will be approved.  Some councils have good pre- DA processes in place designed to minimise costs and save you submitting a DA application which they would never approve in the first place, while others don’t.  I personally have spent $10,000 in an area in Queensland for a DA which is now dead in the water due to a constantly changing opinion about what can and cannot be done, so there is a very real possibility that you will lose money unless you are sure that your subdivision is straight forward.  
Your DA approval will come with a list of requirements which must be attended before the final subdivision is cleared (such as access-way construction, and any sewer and drainage requirements) and, once done, your subdivision is complete.  Depending upon the council and their policy, this can take three months or it can take 12 months – there seems to be no standard here, and however long it takes you’ll have money on the table not getting a return and essentially adding to your costs.
Regards,
Margaret
 
<hr>
Margaret Lomas is a best-selling author and writes and hosts the popular Property Success With Margaret Lomas and heads up the panel on Your Money, Your Call, both on Sky News.
She is the founder of <a rel="nofollow" target="_blank" href="https://destiny.com.au/dotnetnuke/en-au/home.aspx">Destiny</a>.
Have a property question? <a target="_blank" href="mailto:askmargaret@propertyobserver.com.au">Ask Margaret!</a>
 
 
     
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I want to subdivide, but where do I start?

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

Joel Robinson

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

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

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

Maréa Residences brings parkside apartments to Coolangatta

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

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

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

Margaret Lomas

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