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Recently I was speaking with an investor who was facing a major dilemma. He had bought an apartment in Abbotsford off the plan and now that the property was due to settle he was having problems getting finance approved.
This was causing him significant stress, as the penalties for not settling are significant. They include losing his deposit and the risk of being sued by the vendor to cover any out of pocket expenses.
As we discussed his situation it soon became clear how murky his position had become.
The sales person told him the property had originally been purchased 12 months earlier for $450,000 and was now being on-sold prior to completion. Due to the fact the property had never been settled there was no way to confirm this was correct.  On the surface, to this individual, it appeared  that the asking price of $406,000 was a bargain to good to refuse and he signed a contract to purchase the property.  
Prior to signing the contract he had put in place a loan preapproval so he was confident getting a loan would not be an issue and as a result did not buy subject to finance. The next hurdle to clear was to get unconditionally approved. To do this his bank ordered a valuation and this is where his problems started.  
The valuation came back a long way below the contract price at $340,000 and he was being forced into a position where he would be unable to settle. The real estate mantra of caveat emptor, buyer beware, meant severe penalties were looming.      
However, not all was lost and like going to a doctor for a second opinion, he approached a different bank. Sure enough the valuation came back at the purchase price and his loan was approved.
So how can one bank value a property so much less than another? The answer lies in the individual banks tolerance for risk and the kind of property they view as being a safe security.
The Abbotsford apartment had one bedroom and was only 37 square metres. Although one-bedroom apartments can make great investments if they are under 50 square metres, at many banks alarm bells start ringing. A small apartment size is a signal the property may be a serviced apartment or student accommodation, which most banks approach with trepidation.
In addition, banks have postcode restrictions in place that determine their lending policies and these vary from bank to bank. Established apartment markets such as <a href="/news">South Yarra</a> and <a href="/news">Port Melbourne</a> are more likely to get the nod. However, an apartment under 50 square metres in an emerging market like <a href="/news">Abbotsford</a> is more likely to face harsher lending policies.  
Although the valuation is independent, the valuer will have an understanding of the banks policy and you should take this into account. Remember if a valuation comes in too high and the bank loses money on the loan then the valuer maybe legally liable.
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
       
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The murky waters of bank valuations: Don't get caught out on your finance approval

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I love this image as it tells us so much about the world and how the wealth has been dispersed. The lights illustrate the dominance of the Unites States and Europe, in addition to the emergence of India and China as future super powers.  
<img src="/images/stories/2014/01/29/world_at_night_jan_29.png" width="470" height="235" alt="world_at_night_jan_29">
Photo: C. Mayhew &amp; R. Simmon (NASA/GSFC), NOAA/ NGDC, DMSP Digital Archive
When we look at Australia the image can also tell us a lot about the local property market and gives us an insight into why it has been reasonably solid compared to some other countries.  
Australia is an enormous country with access to significant mineral wealth. However most of the country is not a palatable place to call home. As a result many Australians decide to live in major cities close to the coast with very few venturing into the middle of the country.  
<img src="/images/stories/2014/01/29/oz-at-night.jpg" width="470" height="282" alt="oz-at-night">
In Australia over 70% of our population live in our 10 biggest cities. This means we have a very centralized market with the majority of people competing for scarce land close to major cities where they are more likely to find stable employment.  
Because most of the population wants to live in these defined areas it creates somewhat a housing shortage. But Australia does not have a housing shortage – it only has a shortage of housing in areas where the majority of people want to live.  
This competition for a finite commodity puts pressure on the value of land and results in a more robust property market.  While the overall market has come back a bit from the highs of 2010, some areas are performing better than others. The property markets that are feeling the effects of a softening market most are the outer-lying suburbs where supply of land is not an issue and job stability is less reliable.
By contrast the image shows that much of the United States has been populated. In the US only 13% of Americans live in the 10 largest cites. They obviously have a much larger population than Australia so have to spread out across the country. But if we take it a step further we find that only 25% of Americans live in the 50 most populace cities. The American market has a more decentralized population and as a result the pressure on the value of land is less.  
The US has traditionally had very well established small town communities with schools, transport and entertainment. These small towns often do not have a shortage of land and while this does create more affordable housing it also increases the risk of price volatility.  
Many of these small towns have been smashed by falling property prices and unemployment. With the vast majority of the population living in these areas it has had a catastrophic effect on the overall US property market. As a result it will take the US market significantly longer to drag itself out of the doldrums.  
While the property market in Australia has been through a natural softening phase, and is not out of the woods yet, the demographic make-up of our population will result in less dramatic falls. As a result some assets will hold their ground and weather the storm and be well positioned for future growth while others will languish for a few years to come.  
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
   
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Why Australia's population dispersal creates stability in the property market

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It is that time of year again when Australians pack their bags and head off to their favourite holiday spot for the summer. As you do this, chances are you’ll flirt with the idea of going one step further and buying your own slice of paradise.  
A holiday home can either be a great getaway for your family and friends, or a constant drain on your finances. It all comes down to the type of asset you buy and whether you can truly afford it.  
Many people buy a holiday home when they’re feeling flush, only to run into trouble when things get tight. Often, they already have a substantial mortgage on the family home and take out a second mortgage to buy the holiday home. They tell themselves that the holiday home is an investment because they can rent it out when they’re not using it, and put the rental income towards paying the mortgage.  
Don’t be fooled. To be a true investment, a property must produce a consistent level of income.  
Holiday homes can produce considerable income at peak periods such as school holidays, Christmas and Easter when demand is strong, but far less at other times.  
This inconsistency can make it hard to plan your finances, meaning you’ll probably have to pay most of the mortgage from your own pocket. You’ll also have to find money to furnish the property and fund ongoing costs like council rates, property management fees, insurance and maintenance.  
What’s more, being reliant on peak rental periods to help pay the mortgage will limit your own use of the property to non-holiday periods when the weather is less than ideal and you’re less inclined to go there.  
If you borrow to buy a holiday home while you’re still paying off your family home, you’ll be more vulnerable to the effects of changes in your finances. For example, if your household income drops because of a job loss or unpaid parental leave, you may be unable to meet the costs of holding two properties and be forced to sell the holiday home.  
If the change is one that affects the wider property market, like an interest rate rise, it may be difficult to sell your holiday home because potential buyers will be feeling the squeeze too. You may have to sell it for a substantially reduced price, or worse still, be unable to sell it at all.  
In short, it’s sensible to treat a holiday home like a second home, not an investment. If you’re going to buy one, it’s probably best not to do it until you’ve paid off your family home so that you only have one mortgage at a time.  
If you can genuinely afford to buy a holiday home, it’s vital to choose the right kind of asset. When economic times tighten, your property stands a better chance of holding its value if it is located somewhere that’s readily accessible from a major CBD. Try to buy something within two hours’ drive of the city and easily accessible via major highways.  
Select a location with a distinctive natural attraction such as a lake or beach; something that gives people a specific reason to go there. The property should also be close to amenities such as shops, cafes, pub or golf course.  
And yes, views really do count. A good view of a natural attraction can add considerably to your property’s value because potential buyers feel that they’re buying a slice of exclusivity.  

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Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
       
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'Tis the season to be jolly, and smart about buying a holiday home

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When Australia’s biggest underwriter of lenders mortgage insurance rules a line through an entire asset class of property then investors should take note.  
Recently Genworth announced that from December 19, 2013 they would no longer accept off-the-plan or new properties as security when purchased in self-managed super funds. The announcement reads:
“Off-the-plan purchases and new properties that have been completed for less than 12 months are no longer acceptable. A “new property” is defined as being any property (including any house, unit, villa or townhouse) that has been fully completed for less than 12 months and/or has not been previously sold since construction (i.e. the vendor is a developer/builder or a related party of the developer/builder).”
Genworths’ role in the finance world is to ensure a bank does not lose any money if a borrower cannot meet their loan repayments. If the bank is forced to sell the property and is still left short the mortgage insurer fills the gap.  
Lenders mortgage insurers are very conservative by nature and they are sending a clear signal that they do not see a positive capital growth outlook for these types of properties.  
Genworth is looking to protect its own bottom line and are ruling out allowing their SMSF clients to invest in properties they think are risky investments. While the main reason for this is self-preservation it does provide a level of protection for these investors.  
At the same time that Genworth is waving a red warning flag to wealthy SMSF investors the government is still encouraging first homebuyers to buy this exact kind of property.  
Our government knows how important the building industry is to our economy so they are making it appealing for first homebuyers to invest in new properties only.  
For example a payment of up to $10,000 is available for eligible first home owners in Victoria for contracts entered into on or after July 1, 2013 to build or purchase a new home valued at up to $750,000.  In NSW the grant is currently $15,000 for first home buyers who build or buy new property.  
The government is leading first home buyers to focus on one particular type of property. Again the focus is to underpin the building industry but the byproduct is many first home buyers are in danger of being placed in a dangerous position.  
This is because new properties tend to have a low land to asset ratio meaning most of the value is tied up in the building not the land. It is land that appreciates in value and buildings depreciate. The result is capital growth that is more likely to fall behind the rest of the market. In addition new homes and apartments tend to be clustered together and can often be located in areas where there is an over supply of similar property.  
The current first home buyer policy solves a short-term problem by creating jobs in the building sector. However in the long run it is likely to place young first home buyers under financial pressure. The policy fails to acknowledge the dynamics of the property market and lures them into buying properties that well educated investors are avoiding.    
 
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 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
 
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The first home buyer policy is luring people into properties investors know to avoid

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When it comes to owning an investment property, investors tend to put most of their efforts towards selecting the asset, financing it and negotiating the purchase. After they buy, they attend to day-to-day issues like tenant selection and property maintenance, but seldom take the time to review the performance of their asset and assess whether it’s doing the job they need it to do.
Ideally, residential investment property should be held for at least seven to 10 years to ride out market fluctuations and maximise compound capital growth. However, each property performs differently—and not all of them perform at a rate that justifies their long-term inclusion in your portfolio. For this reason, it’s essential to review your property’s performance every two or three years and make the necessary adjustments if it falls short of the mark.
How do you evaluate whether your property is producing the goods—and what should you do if it isn’t?
The best way to find out whether your asset is up to scratch is to determine whether it is growing in value at a faster or slower rate than the median. To do this, ask a couple of local real estate agents for an appraisal of the property’s current market value. Divide this figure by the purchase price and subtract one to work out the percentage increase for the total holding period.
Then, find out the current median value in the city the property is located, along with the median for the year you bought the property. Divide the current median by the older median and subtract one to work out the percentage increase for the holding period.
If you want to take things a step further, you can compare your property’s growth rate with the growth rate for your suburb. Be aware that the small number of properties sold in some suburbs means that a few exceptionally strong sales results can skew the median figure. For this reason, the city wide median should be your primary benchmark.
If its growth rate is higher than the median growth rate, you know it’s earning its place in your portfolio. Sit tight and review its performance again in two or three years’ time.
If its growth rate is lower than the median, there’s a reasonable chance that this trend will continue. At this point, you need to put emotion aside and look at your investment with a critical eye. Is it worth holding on to your asset in the faint hope that ‘things will turn around’, or are you better off selling it and putting the proceeds into something that will work harder over the long term?
If your property’s performance is pretty much level pegging with the median, you’re in somewhat of a grey area. Here, it may be helpful to consider how much longer you’re intending to hold the property. If you’ve already held it for seven to 10 years and only plan to hold it for a couple more, time is working against you because transaction costs like agent’s fees, advertising expenses, capital gains tax and stamp duty will eat substantially into your profits. In this case, it’s probably appropriate to sell it in two years’ time as planned.
On the other hand, if you’ve only owned the property for a few years and plan to hold it for the long term, time is on your side. It may be best to sell it now and reinvest your money in an asset that will work harder for you.
When you’re assessing your investment property’s performance, it’s also a good opportunity to evaluate your financing arrangements. The residential loan market changes constantly, so reviewing your loan structure, interest rate and fees could save you a substantial amount of money, freeing up funds which you can put towards reducing your debt.
By taking the time to crunch the numbers every so often, you’ll be in a better position to make an objective assessment about whether your property is holding its own, or whether it’s best to sell up and put your investment dollars into something that will truly deliver.
 
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 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
 
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Knowing when to sell your investment property

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Congratulations — you’re having a baby! Your head will be full of plans for medical check ups, baby names, cots and prams.
In the midst of all the excitement, there’s one issue many expectant parents overlook. If you’re taking leave from paid employment to be with your child, how will this affect your finances? Will you be able to afford your mortgage and other living expenses, or will you need to reshuffle the deckchairs?
All too often, parents leave these considerations until after the baby is born, their income is significantly lower, and they’re struggling to meet their commitments.
That’s why, after you’ve called your family and friends to break the good news, it’s important to contact your lender, broker or financial adviser and put plans in place to ensure you can fund your new lifestyle.
If you have a mortgage and think your finances may be stretched, speak with your adviser about reducing your repayment amount. It’s particularly important to do this well ahead of your baby’s birth, because — regardless of whether you’re varying the terms of an existing loan or changing to a different one — lenders use a ‘snapshot’ approach when assessing your application.
This means you must present yourself and your finances in the best possible light — which is why the best time to apply is when you’re still earning the maximum possible income, not after the birth when your income has dropped substantially. The last thing you need on top of sleep deprivation and wet nappies is to be forced back to work early because of financial pressure!
There are several ways to reduce your repayment amount.
Extend your loan term.
Let’s say you have 23 years left on a 30-year principal and interest loan of $300,000 at the standard variable rate of 5.9%. Your minimum monthly repayment will be $1,989. By extending your loan term back to 30 years, the amount would drop to $1,779.
 
Change from principal and interest to interest only.
Loans for owner occupiers are usually structured so that you pay off a small amount of principal alongside the interest. This helps reduce your loan balance faster than if paying interest alone. However, when your income drops after having a child, changing to interest only can ease the squeeze. Using the example above, the borrower’s new repayment would be $1,475 — a saving of a further $304 per month.
 
Renegotiate your interest rate.
The home loan market is constantly changing so if you’ve had your loan for more than two years, there may be a better option out there. For example, many lenders will offer a discount of 0.7% or more off the standard variable rate.
By extending their loan term, changing to to interest only and negotiating a discounted rate, our $300,000 borrower will pay $1,300 per month — freeing up a massive $689 to help meet expenses while their income is reduced.
Find your safety net.
Make sure your loan includes a redraw facility. If your property has increased substantially in value since you bought it and/or you’ve made extra repayments, a redraw facility can help you access these funds. Alternatively, you may be able to establish a line of credit, enabling you to draw on some of your equity to fund living expenses if required.
By planning your property and loan commitments well ahead of time, you can stop worrying about your finances and concentrate on something far more important — your new son or daughter.
 
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 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
 
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Great expectations: How to stop your bundle of joy burning a hole in your pocket

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It’s a common misconception amongst property investors: “never sell your property.” Although residential property investment requires a long-term outlook to ride out market fluctuations and maximise the effects of compound capital growth, even the best quality investment asset has a use-by date.  
The whole point of investing is to improve your quality of life. At some stage, you’re likely to reach the point where selling a property is the only way to help achieve further investment or lifestyle goals. Here, we look at four situations in which it may be appropriate to sell.
 1. Making room to move.
If you have a growing family, you may need to renovate or extend the family home. If you take out a loan to meet these expenses, you’ll pay the full amount of interest, because expenses associated with the family home are not tax deductible. By contrast, if you sell your investment property, you can use the proceeds to pay for the home improvements outright. 
When you’ve completed the renovations, focus on paying down the remaining debt on your home so that you’ll be well positioned to buy another investment property later down the track. 
2. Hanging up your hat
If you’re nearing retirement and you have an investment property that you’ve held for many years, it may be worth selling it and transferring the equity into a more tax effective structure. When you’re working, your aim is to generate income through a wage or salary and purchase assets that will create capital growth.
Once you retire, however, it’s the job of your investment assets to generate the income for you. To maximise the available income, you need to minimise the tax payable. If you sell your investment property and put the proceeds into a superannuation account, the income generated will be tax-free when you draw on it in years to come. 
3. Ditching an underperforming asset
Regardless of your stage of life, there’s little point in holding on to an investment property if it’s not performing to an acceptable standard. It’s important to review your property’s capital growth performance each year, relative to the wider market. If it fails to outstrip the median increase for a couple of years running, chances are this situation won’t change anytime soon. It may be better to sell the asset and move on to something more productive. 
4. Getting away from it all
 Many people who are reaching the peak of their careers like to escape to the coast or country on weekends and recharge the batteries. If you’ve held an investment property for 10 years or more and it has achieved significant capital growth, it may be appropriate to sell the property and use the proceeds to buy a holiday home outright. 
Generally speaking, properties in holiday areas have a more volatile capital growth pattern, and should not be regarded as prime financial investment prospects. They’re really an investment in lifestyle.
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Remember the decision to sell an investment property should never be undertaken lightly. Regardless of your personal and financial situation, seek independent personalised advice before you make a decision.  
 
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 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
   
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Knowing when it’s OK to sell your investment property

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The spring property market is in full flight with a record number of properties changing hands. But Christmas is approaching fast and many buyers may start to feel the pressure to buy before the market goes into the summer recess.  
I have seen this happen to many buyers in the past. They get tired of looking for a property and they just want to get it over and done with. They end up taking short cuts and make decisions without getting all the facts.  
By finding out as much about the property as possible, you can make an informed decision about whether to bid or negotiate for the property.  
There are three stages of due diligence you should carry out (preferably assisted by a solicitor or conveyance who specialises in property transactions).  
The first concerns structural integrity. There’s little point in spending hundreds of thousands of dollars on a property, only to find after the purchase that you need to spend thousands more rectifying structural problems in the roof, walls, floor or sub-floor space.  
If you’re buying a house that isn’t brand new, obtain a building inspection from an architect or registered builder who can reveal any problems you aren’t aware of. If you’re buying a unit that’s part of a building with an owners corporation, it’s the owners corporation’s responsibility to maintain the building in good structural order. You can find out about the building’s structural integrity through the vendor’s statement (also known as a ‘section 32’ statement).  
This is where the next stage of due diligence comes in. Under Victoria’s property laws, the vendor is responsible for providing you with a statement providing important technical information about the property and its immediate surroundings. The vendor’s statement should have a copy of the title to the property including the main buildings and any ‘accessory units’ such as garages or car spaces. This will tell you exactly what you’re buying for your money.  
The statement should provide documents from the local council indicating whether any works are planned on adjoining properties which could affect your use and enjoyment of the land. For example, if you’re buying a single level house and the owner of the property next door has plans to put on a second story, knowing this in advance means you can consider how it may impact on your privacy and light levels.  
The vendor’s statement should include documents from utility providers such as electricity and water suppliers regarding the presence of any ‘easements’ over your land. An easement is a portion of land that you legally own but which must remain accessible to the utility provider if they have to undertake repairs to storm water drains or overhead power lines. This may affect your use of that portion of the land, including whether you can build on it.  
The last, but by no means least important stage of your due diligence is to make sure that, when you sign a contract to buy the property, you will have sufficient funds available to meet settlement on the agreed date. If you can’t meet your obligations under the contract, the vendor is legally entitled to keep your deposit. If they re-sell the property for a lesser amount than they sold it to you, they can sue you for the difference.  
Undertaking all this legwork may sound daunting, but it’s infinitely better than buying in haste and discovering major issues when it is too late.
 
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 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.  
 
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The three stages of due diligence to conduct before buying an investment property

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The debate around underquoting is never ending because the focus is on the vendor’s reserve price.
Many people have suggested that vendors should be made to disclose the reserve prior to auction. However this would fly in the face of very robust auction laws that state a vendor has the right to withdraw a property from sale at anytime.  
Legislating what the agent must do is one thing but making a law that binds the vendor is fraught with danger.
The vendor is in complete control of the reserve and agents who do underquote are able to hide behind their vendor’s instructions. This makes the current laws around underquoting very difficult and costly to implement. They are in the best case weak and at worst they are unenforceable.
I believe the solution to the underquoting does not lie in using the stick of law but rather the empowerment of knowledge.
The benefit of a public auction for a vendor is they give themselves the best opportunity to maximize the sale price.
The trade-off should be vendors loose their right to privacy. All results should be in the public domain so future buyers can gauge where the market is.
However vendors currently have the right to not disclose the result. This means they can have their cake and eat it too while purchasers are left in the dark.
Take for example the sale of this one-bedroom apartment at <a target="_blank" href="https://www.realestate.com.au/property-apartment-vic-hawthorn+east-115013031">3/1 Brookfield Court, Hawthorn East</a> that went to auction on Saturday.
{yoogallery src=[images/stories/2013/10/30/haw]}
The property was advertised to sell for between $300,000 to $320,000 and as the auction progressed multiple bidders competed. It sold under the hammer in a public forum but when the auction results were released the following day it was reported as undisclosed.
<img alt="hawthorn_oct_30_chart" height="295" width="470" src="/images/stories/2013/10/30/hawthorn_oct_30_chart.png">
If you were able to attend this public auction you would know the property sold for $408,000. However if you were not there this information would be locked away and only available to licensed real estate agents.  
The next time a comparable one-bedroom apartment comes onto the market and is advertised at $300,000 to $320,000 purchases will not be able to source this valuable information.
The logic behind this bizarre state of affairs is due to privacy laws that allow vendors to keep the result out of the public domain. However if a vendor decides to sell their property by public auction I think they have should have waived their rights to privacy.
In some cases it is the agent that keeps auction results under wraps because it means people who want to know what it sold for will call them. This is a lead generation tool for agents as the first thing they ask is ‘are you looking to sell a property?’
If the real estate industry really wants to stamp out the negative effects of underquoting, either real or perceived, they need to be more transparent.
The answer to underquoting is simple. Make agents disclose all results within 24 hours of the auction and make this information either freely or cost effectively available to purchasers.
This will give purchasers the knowledge they need and make price quotes redundant.

<hr>
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.              
 
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Underquoting: the clear and transparent solution

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Ever wondered why agents underquote? The simple answer is because it works. This may not be a popular view of underquoting and as frustrating as it may be, underquoting is a necessary evil in Melbourne’s auction system.  
Growth in property prices this year has highlighted the widespread practice of underquoting and the frustration of buyers who miss out when properties sell for much more than the advertised estimate.  
Ironically, the practice that frustrates buyers is the same one that enables the auction system to work in the first place.  
When a real estate agent auctions a property, the vendor is paying them a fee to achieve the highest possible price in the prevailing market conditions. To achieve this, the agent must do their utmost to maximise the intensity of competition on auction day.  
At any given auction the bidders will have a range of spending limits. Some limits may be close to the advertised sale price estimate, whilst others may be much higher. By competing in the auction up to their respective price limits, each underbidder plays a vital role by increasing the intensity of competition.  
Although some buyers fall by the wayside when bidding goes beyond their limit, each one plays a part in pushing the bidding higher and, ultimately, determining the final sale price.  
Even if the agent researches the sales results of comparable properties and advertises a price estimate that they genuinely believe is realistic, there’s no guarantee that the property at hand will sell within that range.  
Therefore, in a free market economy, advertised price estimates and sales results for comparable properties should be taken as guides, not ironclad predictors, of the actual sale price a particular property will achieve. Ultimately, it’s the different spending limits of each bidder and the intensity of competition that count on auction day.  
As I see it, the real problem isn’t underquoting per se, but the public’s (understandable) misconception that an advertised price estimate is the level at which the property is likely to sell. In fact, the advertised estimate is a marketing tool; a way of drumming up interest from a wide range of buyers to create competition on auction day and maximise the eventual sale price.  
It’s the old adage: “Quote ‘em high, watch them die. Quote ‘em low, watch ‘em go.”  
The rationale behind taking an asset to auction — whether it’s a property, a work of art or even a consumer item on humble old eBay — is to test the market. Unlike a private sale, where the vendor advertises a clear price at which they’re prepared to negotiate, auctions put the onus on the purchaser. They’re the vendor’s way of saying, “Sure, I know the price I’d like to achieve, but I want you to tell me what you think it is worth.”  
The public’s misconception about the purpose of advertised price estimates highlights another equally important issue — the shortage of supply relative to demand, particularly in the inner suburbs where most auctions take place. Buyers who bid there encounter the lowest ratio of supply relative to demand, and therefore the strongest competition from other bidders. In this situation, they must accept that a greater possibility of failure is a by-product of their participation.  
In a perverse way, underquoting works because it brings in bidders who can’t afford the property — encouraging competition and driving up the eventual sale price. When transacting a privately owned asset in a free market economy, the highest bidder wins. The fact that some buyers will miss out is an unfortunate fact of life.  
 
<hr>
 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.  
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Underquoting - the auction system’s necessary evil: Mark Armstrong

<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Mark Armstrong

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