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There’s every sign that the property market is on the way up. The interest rate cycle is at its low point, auction clearance rates are up, and median house prices are reaching new highs.  
But I’d like to put something into perspective. Recently, media headlines have been proclaiming the start of this growth phase as a ‘boom’, and this bothers me.  
I’ve never been a big fan of the term ‘boom’. A ‘boom’ implies the existence of its opposite, which is a bust – and ‘boom and bust’ does not accurately describe the nature of the property market.  
Residential property is a real asset, not a paper asset, and it’s the only one that serves a dual purpose by providing a lifestyle and financial investment. Everyone needs somewhere to live, but not everyone needs or wants to invest in shares – so residential property has a widespread and ongoing level of demand that stabilises the market.  
This makes it a relatively stable asset compared with paper-based assets like shares. In Melbourne, as in the vast majority of capital cities and large regional centres, the notion of booms and busts simply doesn’t ring true.  
The only places it might apply are smaller towns based on single industries like mining or tourism, which have a more volatile economy. Bust can also arise in contained over supplied developments such as the Docklands that are dominated by investors.  
The current growth spurt in the residential property market is not a ‘boom’, but rather a natural and logical phase in the overall cycle.  
For the last two years the market has been stagnant or in decline and it was only a matter of time before it moved again. The demand for property is always evolving, as family units get bigger or smaller and there is a need to change living requirements. While many people put these moves on hold the pent up demand has been growing and is now flexing its muscle. While there is no doubt low interest rates are helping, the market is going through a normal part of its cycle.  
I’d like to inject a note of caution here. Another reason I dislike the boom and bust concept is that it’s often used in a blanket fashion, implying that all property grows (or falls) in value at the same rate, at the same time. This is not the case.  
After the current growth phase reaches its peak around the second half of 2014, there will be a noticeable split in growth rates. Some properties will continue to grow strongly in value, albeit at a slightly more moderate rate; whilst others will tail off substantially.  
Properties that will continue to grow strongly will be those in demand from homebuyers and investors alike. These properties will be in areas with high employment rates and reasonably low debt levels. They will be in short supply relative to demand, and will have a high land-to-asset ratio – that is, the bulk of the asset will appreciate, not depreciate.  
As an investor, it’s vital to take a long-term view. So look beyond the exhilarating headlines and choose property that will continue to perform strongly after the current growth spurt.  
 
<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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Let's get some perspective, look beyond the property 'boom': Mark Armstrong

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Property prices are on the move with RP Data reporting the Melbourne and Sydney house prices moving by around 5% in the September quarter. This movement will bread more activity and many new buyers will begin to enter the market.  
One of the major entrants will be home buyers who are looking to upgrade their family home and they will begin to grapple with a major dilemma, should they keep their old home and rent it out or sell it?  
Many people believe that, because residential property can provide solid capital growth over the long term, you should never sell it under any circumstances.  
It’s true that residential property should be held for as long as possible to maximise compound capital growth and minimise the effect of transaction costs like stamp duty and agents’ fees.  
However, a property portfolio (whether it’s your home, a rental property or both) is only effective if it genuinely serves your lifestyle and financial requirements.  
Major life events can alter these requirements, justifying a change in your property portfolio.  
This is no more evident than in the common practice of upgrading to a larger and more expensive family home, whilst holding onto the previous home and renting it out.  
At face value, this seems like a valid decision. Renting out your old home is logistically easier than selling, and you can put the rental income towards the loan repayments.  
But let’s be honest — there’s probably a bit of sentimentality involved. By holding on to your former home, you’re keeping a foothold in a familiar environment. It’s not goodbye; just au revoir.  
Sentimental attachment is fine, but only if the numbers stack up. After all, the property isn’t your home anymore; it’s an investment.  
When you borrow money to buy a property, the Tax Office recognises two kinds of debt. The first kind is debt you take on to purchase a property that produces income in the form of rent. This debt is known as ‘deductible’ because the Tax Office allows you to claim it as a deduction against your taxable income.  
The second kind is debt you take on to purchase a property that doesn’t produce income, i.e. the family home. This debt is known as ‘non-deductible’ because you can’t claim it against your income.  
If you have debt on an investment property and debt on a family home, it makes sense to minimise the proportion of debt that lies with your home, because it’s non-deductible.  
Let’s do a few sums. Say you want to upgrade from your current family home, which is worth $500,000. You’ve worked hard to pay off your loan and the property is debt-free. You don’t know whether to keep it and rent it out, or sell it and put the proceeds towards your new home.  
Option A: rent, then buy. The rental return on a $500,000 property is around 4%, or $20,000 per year. This income will be included in your taxable income and at a 40% tax rate you will loose $8,000 in tax. If you upgrade to a family home worth $700,000, you’ll have to borrow the whole purchase price. At a 5% interest rate, you’ll pay $35,000 in interest each year — none of it tax deductible.  
Option B: sell, then buy. Since you have no debt on your old home, selling it will give you $500,000 cash in hand to put towards your next home. You only need to borrow $200,000. At a rate of 5%, you’ll pay $10,000 per year in non-deductible interest.  
If you then borrow $500,000 at 5% to buy an investment property, you’ll pay $25,000 per year in deductible interest. Take away the $20,000 in rental income and you’re effectively paying $5,000 in interest. Because it’s deductible, you can claim it against your taxable income. At a marginal tax rate of 40 cents in the dollar, you’ll pay interest of $3,000.  
Option A leaves you $23,000 out of pocket while Option B sets you back $13,000. In short, holding your old home will cost you $10,000 per year.  
It’s hard to argue that this makes good investment sense and if interest rate move north it will tighten the noose around your neck.  
Yes, with Option B you’ll pay an additional $30,000 in agent’s fees and stamp duty. But as you’re saving $10,000 per year in interest, it will take around three years before you recoup this cost.  
The prospect of leaving your old home for good may be hard to face. But if you’re getting a case of the wobbles, doing the maths is the only way to make a decision that’s genuinely in your best interests.  

<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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Investment or attachment? Why renting out your former home doesn’t always make sense: Mark Armstrong

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When you look at the two properties below what differences do you see?
<a href="https://www.realestate.com.au/project-ella+apartments-vic-south+yarra-600000699" target="_blank">Ella Apartments, South Yarra</a>
{yoogallery src=[images/stories/2013/09/25/south]}
<a href="https://www.realestate.com.au/property-apartment-vic-hawthorn-114443879" target="_blank">9/2 Hotham Street, Hawthorn</a>
{yoogallery src=[images/stories/2013/09/25/haw]}
On the surface they are obvious in that one is brand new in a high-rise building while the other is old and in a smaller block.
However from a property investors point of view the major differences are not the psychical attributes of the properties but more in the way they are marketed and sold.
During the last investor fuelled property boom incentives such as stamp duty savings, depreciation benefits and rental guarantees were the main marketing tools used to help sell property. However this time around many investors have woken up to these tactics so the marketing has become more imaginative.
Property investors are being lured into buying apartments in the property on the left with<a href="https://www.propertyobserver.com.au/victoria/vespa-offer-to-entice-buyers-to-south-yarra-one-bedroom-apartments/2013071662673" target="_blank"> the offer of a free Vespa</a> or Mini. But these things are not free as they will be paid for in the over all purchase price.
Recently I saw another ad that <a href="https://www.propertyobserver.com.au/news/melbourne-units-sell-with-bonus-qantas-frequent-flyer-points-enough-for-three-return-first-class-flights-to-singapore/2013082864650" target="_blank">offered buyers one Qantas frequent flyer point for every dollar they spent</a> on the property. So if you paid $500,000 on an apartment you would receive 500,000 frequent flyer points, enough to get a couple of people around the world.  For the record you could buy a couple of around the world tickets for around $5,000
While receiving a Vespa or a holiday sounds great the problem with these incentives are they add no ongoing value to the property.
By contrast the Hawthorn property is sold in a completely different way. All the agent had to do was tell people it was available and the market did the rest. When this property went to auction a few weeks ago four bidders attempted to buy it and it sold under the hammer.
The property sold itself because of what it was and where it was and the agents did not have to dress it up with marketing hype.
Alarm bells should be ringing for property investors when they see these kinds of incentives on offer. The value of good investment property is underpinned by psychical attributes such as location, land size, land value and property style.
When looking for an investment it is vital to focus on the things that do not change over time. You cannot lift a house and land up and drop in in a more desirable or handy location a few years after you buy it. Further you cannot change the orientation of the land, the position in the block of apartments or what surrounds the property. Finally you have no control over the supply of new property coming onto the market around you.
Good investment property is often very hard to buy because you are put in a competitive environment, while risky investments are often easy to buy.
My advice? Buy a good property and pay for the toys and holidays yourself.
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 homebuyers.
 
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Beware the new breed of property marketing incentives: Mark Armstrong

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Last weekend 832 properties were due to go under the hammer in Melbourne but 120 of them never made it to the line and were sold prior. In Sydney around 30% of advertised auctions were sold before the auctioneer did any work.  
In a strong market many buyers fear the auction process because competition drives prices out of their reach. Auction clearance rates are high so there is no doubt we will continue to see a large number of buyers try and avoid the auction.  
So what happens when you’ve been through a property a few times and you love it? You’re partway through arranging finance, and you’re getting psyched up to bid at the auction in a week or so.  
Then the agent calls. “The vendor has received an acceptable offer. The property will be sold unless we receive a higher offer by five o’clock tomorrow.”  
Your heart sinks. The buyer has probably put in the offer because they don’t want the stress of competing at an auction and they’re worried about being bid out of contention. But if the property doesn’t go to auction, how are you supposed to know who you’re bidding against, and how much they’re prepared to pay?  
When you’re competing with another buyer in this way, you’re forced to make an offer that reflects your spending limit, without the opportunity of testing the market and perhaps buying the property for less.  
It may be frustrating, but inviting buyers to exceed a pre-auction offer is perfectly legitimate. Pre-auction offers are unconditional, so it’s important to approach the situation from a position of strength. If you get the dreaded phone call, here’s how to play your cards:  
<ol start="1">
<li>
Fast track your preparation. Tell your lender about the situation and see if they can rush your pre-approval. Organise the building inspection if relevant, and ask a solicitor or conveyancer to inspect the contract and vendor statement. Many purchasers neglect these steps, only to find after they purchase that the property is structurally unsound, the body corporate has struck a levy for major repair works they didn’t know about — or worse still, that they couldn’t afford to buy the property in the first place.
</li>
</ol>
<ol start="2">
<li>
Determine your spending limit, based on your pre-approved amount. Bear in mind that your spending limit may be different from the property’s market value, which is determined by the level of demand relative to supply. If the market value is more than you can afford, and you can’t find an additional source of finance, you may have to bow out.
</li>
</ol>
<ol start="3">
<li>
Call the agent. Ask for an indication of the other buyer’s offer. The agent can’t disclose the exact amount but may be able to give an idea of the bar you have to clear, e.g. “more than $350,000”. Ask the agent how many other offers are coming in, so you know how much competition there is. The more competition, the higher the likely selling price.
</li>
</ol>
<ol start="4">
<li>
Price isn’t everything. Ask the agent what settlement terms the vendor wants. If they’ve already purchased another property, they may want a quicker settlement than the standard 60 days. If you can meet their preferred settlement terms, and your offer is close or identical to the highest offer, the vendor may accept yours instead.
</li>
</ol>
<ol start="5">
<li>
Submit your offer to the agent. Do this in writing by the required deadline; preferably earlier. Don’t try to be clever by submitting a bid lower than you know the vendor will accept. At this stage in the game, you’re not negotiating with the vendor; you’re simply competing with other purchasers, so you won’t get another chance. Make an offer that you believe is genuinely competitive.
</li>
</ol>
<ol start="6">
<li>
Sit back, bite your nails and wait! It may be nerve wracking, but once the deadline has passed, it won’t be long until you have your answer. If you miss out, at least you’ll know the property’s market value. The more knowledge you have, the stronger your position next time around.
</li>
</ol>
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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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Time waits for no one; six tips for making a pre-auction offer: Mark Armstrong

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The federal election has be run and won and with the Liberals getting a clear majority the uncertain political outlook has been put to bed. Property investors are timid beasts by nature and they want to know everything is safe before they make a move and a stable government will help with this psychology.  
Also helping investors feel comfortable is the fact ME Bank announced yesterday their three year fixed rate has been cut to 4.69%, the lowest level for 23 years.  
Property investors have already begun to re-enter the property market but these two events are only going to add to the momentum. They will begin to change their thinking from ‘if’ they should buy property to ‘what’ they should buy and will be torn between the logic of two radically different investment strategies.  
One says it’s always best to buy property that’s positively geared. This means that holding costs like council rates, insurance, maintenance and interest on the loan are less than the rental income received.  
The second argument says it’s better to buy property that’s negatively geared, meaning that holding costs are greater than the rental income received. You fund the shortfall from your own pocket, giving you a negative income which you then claim as a tax deduction.  
In reality, these arguments are doomed to go around in circles. There’s no one right or wrong answer that applies to every investor. Each purchasing strategy has its upside and downside; both of which should be considered before making a decision.  
Let’s start by looking at positively geared property. Generally speaking, the high-buy in price of most properties in capital cities means that to buy a positively geared asset, you must purchase in a regional or rural area where prices are lower. This may leave you with a relatively modest mortgage, making it easier to enter the property market, and easier to fund the holding costs from rental income alone.  
The downside, however, is that positively geared property may have a lower capital growth rate. Every property’s value is determined by the ratio of two components: the land and the building. Land appreciates, or grows in value, whilst buildings depreciate or fall in value.  
In regional and rural areas, land values per square metre tend to be low because there’s plenty of land available compared with the level of buyer demand. This means the building accounts for most of the asset’s value. The building may lose value faster than the land can gain value—hampering long-term capital growth.  
Let’s compare this with buying negatively geared property. When the buy in price is high, the land value probably is. This is the upside of negative gearing; you’re more likely to have purchased in an area with a limited supply of land relative to buyer demand. The land component makes up a higher proportion of the property’s overall value, giving the asset strong capital growth potential.  
On the downside, buying a negatively geared asset means that whilst your long-term risk may be lower, your short-term risk may be higher because you have to find a way to fund the difference between holding costs and rental income from your own pocket. This can create cash flow pressure, particularly if you incur an unexpected expense such as an interest rate rise or urgent repair.  
In short, it’s a case of short-term gain and possible long-term pain (positively geared property) versus short-term pain for possible long-term gain (negatively geared property). To decide which is right for you, it’s important to assess your financial circumstances.  
First, consider your level of disposable income. If you have spare cash to cover the difference between your holding costs and rental income, buying a negatively geared property may be appropriate. On the other hand, if your budget is tight, negative gearing may be too hard an ask and a positively geared property may be a better way to go. The capital growth won’t be as strong, but at least you’ll be in the market.  
Second, consider how long you’ll be earning a good income. To ride out market fluctuations and recoup purchasing costs, property should be viewed as a long-term investment; at least seven to 10 years. If you’re close to retirement and a substantial drop in income isn’t far away, adopting a negatively geared strategy may not be viable. In this case, you should consider investment options that don’t require you to contribute funds from your own pocket. By contrast, if you’re many years away from retirement, you may have enough income over the long-term to fund the shortfall from your wage or salary.  
Whichever gearing strategy you choose, go into it with your eyes open.  
 
<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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What’s the best investment strategy: positively or negatively geared property? Mark Armstrong

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If only we had the proverbial dollar for every time someone has asked us ‘which property should I buy?’  
The mistake most buyers make is that they ask this question first, when it should be the last in a long line of others. They choose a property and build their purchasing strategy around it, rather than developing a strategy and then finding a property to suit it.  
In doing so, they run a higher risk of choosing a property that won’t deliver the lifestyle or financial benefits they need. It may even put them behind the eight-ball, making it much harder to play catch-up down the track.  
To choose the property that really is right for you, you need to start with the most basic question first: Do you want a property to live in as your family home, or purely as an investment to rent out?  
If a home to live in is what you’re after, it’s important to choose one that will cater for the way you live—not just now, but for the medium to long term. Property is expensive to buy and expensive to sell, so why spend thousands on stamp duty and agents’ fees until you absolutely have to? By holding the property for seven to 10 years, you’ll also give capital growth a chance to do its work; an important consideration even when you’re buying primarily for lifestyle purposes.  
Take a close look at your lifestyle. How many people will be living in the property? Are you intending to start a family during the time you live in the property? Do you already have children? How old are they now, and how old will they be in seven to 10 years’ time? Will they need a lot of outdoor space to run around, or is their indoor space more important? If you buy a smaller property now, will you need to extend it as your family’s needs change?  
Do you want to live in a certain area to access your preferred schools or tertiary institutions? What about your working life? If you work in an office, can you commute by public transport, or do you prefer to drive? If you’re planning to work at home, what kind of floorplan might you need to separate your working life from your home environment?  
If you want to buy a property purely as an investment, your lifestyle requirements and personal preferences must take a back seat. Too many investors evaluate properties based on what they would like to live in. It doesn’t matter if you don’t like the property and wouldn’t live in it yourself. The important factor is whether it will deliver the right financial outcomes.  
This is where the next question comes in. What’s more important to you—capital growth or income flow?  
If you’re in your working years it’s generally best to focus on capital growth, because that’s what will build your equity, or wealth base. You can use your working salary to fund the purchase and pay the mortgage. As time goes by and your equity increases, you can borrow against the equity to buy further wealth building assets.  
As you approach retirement, however, and the prospect of 20 or 30 years without a salary looms large, it’s more important to focus on property that will deliver enough rental income for you to live on.  
As a rule, residential property is best for capital growth because its chief value lies in the land it sits on, not in the building. Look in areas with a limited supply of properties but considerable demand from buyers. This will drive land values and maximise capital growth.  
By contrast, commercial property is your best bet for income replacement, because the main value of the property lies in the building and the rental income commercial tenants can generate. Focus on fast growing population corridors with increasing demand for services like petrol stations and convenience stores. The more people who spend money on these services, the higher your tenant’s turnover and the more rent you can charge.  
Can’t afford to buy commercial property or want to diversify and spread risk? Consider a commercial property trust instead.  
By asking the right questions from the start, you’ll boost your chances of choosing the most appropriate property—maximising your financial position and lifestyle choices in the years ahead.  
 
<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 homebuyers.
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Before asking which property to buy, ask yourself what kind of property is right for you: Mark Armstrong

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According to Robert Gottliebsen and Saul Eslake, an investor led property resurgence is on the cards.
Low interest rates are driving demand and the lack of development funding is restricting supply and this will create “<a target="_blank" href="https://www.propertyobserver.com.au/news/robert-gottliebsen-forecasts-mother-of-all-dwelling-booms-driven-by-property-investors/2013081864307">the mother of all dwelling booms</a>”.  
There is no doubt the property market is on the move with clearance rates now above 70% in Melbourne and cracking 80% in Sydney.
But the fact that the overall residential market is growing doesn’t mean you can expect to buy any old property and achieve the same result.
When a market is hot there is a perception that every asset will work; you just need to jump in and hold on for the ride.  
Investor driven property booms can cause dramatic spikes in the market because of the kinds of property most investors want to buy.
Investors have different criteria to that of homebuyers. They want low maintenance, good tax breaks and stable rental income.
Home buyers on the other hand usually want space, location and affordability.  
Well-educated property investors tend to buy established properties in high demand areas where they will get consistent rental return and capital growth.
However as the wave of investors hit the market they will be in danger of getting caught up in the heat of the market and make impulse decisions that make sense at the time.  
To minimise risk, investors will need to take heed of the mistakes investors made during the last “mother of all dwelling booms.”
Property prices surged by around 20% each year from 2001 to 2003, when investor-fuelled demand ratcheted up the Melbourne median house price.  
Many of these investors bought property that looked good at the time, rather than property that would still be performing well five or 10 years later.
Some bought into multi-unit developments in the CBD/Docklands precinct, reasoning that a surge in construction corresponded with a swell in demand from tenants and sure-fire prospects for capital growth. 
In fact, the opposite happened.
The majority of other purchasers in these developments were also investors, so by the time the plethora of construction finished, demand from purchasers had run its course.
Without a significant number of home buyers to fuel ongoing demand, the CBD/Docklands market languished in an oversupplied state. Property values stagnated, and in some cases, fell.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="armstrong_aug_21_one" height="300" width="400" src="/images/stories/2013/08/armstrong_aug_21_one.jpg">
For example, the property pictured above in the Docklands was purchased for $582,000 in 2001. Five years later the investors had abandoned the property market and the best price offered was $455,000. The investor had no choice but to take the loss and move on.            
Property investors make up around 30% of the market and although this can drive markets to new heights, it is home buyer demand that really maintains property values over the longer term.
As we move further into the next phase of the market cycle, property investors will be wise to steer clear of assets that primarily have demand from other property investors.  
 
<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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Be wary of the investor driven property boom: Mark Armstrong

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When I first started analyzing the property market more than 20 years ago the poor old villa unit was viewed as the ugly duckling of property. The drab 1970’s units were primarily the domain of old people who were one step away from a nursing home.
But this opinion has well and truly changed as many buyers now view them as a highly prized investment.
There was an extraordinary result last weekend when a villa unit at <a href="https://www.realestate.com.au/property-villa-vic-hawthorn+east-114319547" target="_blank">15 Grandview Grove Hawthorn East</a> (pictured below) sold for $676,000.
 
<a href="https://www.realestate.com.au/property-villa-vic-hawthorn+east-114319547"></a><img src="/images/stories/2013/08/hawthorn_east_aug_14.jpg" alt="hawthorn_east_aug_14" width="470" height="353">
The last sale in the block sold just 5 months ago for $595,000. <a href="https://www.realestate.com.au/property-unit-vic-hawthorn+east-113123267" target="_blank">This property</a> (pictured below) was virtually identical and has achieved almost 14% growth in less than 6 months.  
<a href="https://www.realestate.com.au/property-unit-vic-hawthorn+east-113123267"></a><img src="/images/stories/2013/08/hawthorn_east_aug_14_two.jpg" alt="hawthorn_east_aug_14_two" width="470" height="353">
A huge crowd turned up to the auction and given the previous sale the reserve was correctly set at $600,000 on the day. Once this price was reached the property was announced on the market and the bidders did the rest.  
Sometimes you see an auction result that is a spike in the market meaning two buyers get emotional and bid to irrational levels. In this case however the property was extremely well supported with around 10 bidders in total putting their hands up throughout the auction. In fact there were still multiple bidders competing in excess of $650,000.  
Many buyers walked away from this auction shaking their heads and I am sure a few of them cursed the agent for under quoting but when a market begins to move it is very hard for anybody to pick where it will stop.  
In this case it was the diversity of the buyers that pushed up the price and there were three kinds of buyers in the crowd:
 
Baby boomers - The oldest baby boomer’s turn 67 this year and the majority of them started their families when they were around 24 years old which means their children have now well and truly left home. Many baby boomers are now empty nesters looking to downsize.  
These buyers are cashed up from the sale of their family homes and the villa units in Grandview Grove are exactly what they are looking for. Low maintenance, ground floor units close to family and friends.  
Investors - Savvy investors view these properties as solid investments. The location is within walking distance to shops, transport and restaurants, which means they are highly sort after by tenants.  
Further these properties have very good underpinning land value. This property sits on a block of land of around 1500 m2 yet only has 8 units on the block. This ensures the investor with more reliable capital growth outlook.  
Home investors – These guys are a relatively new breed of property buyer. Traditional homebuyers searched for their dream home right from the outset and stayed there until their kids were grew up.  
Today home investors see things a bit differently. They focus on property that will give them the lifestyle they need now but will also be a springboard onto bigger and better things. They compromise on the size of a property to ensure they get into a better investment location. Although these guys tend to be equity poor they are cash flow rich and want to use this cash flow to generate tax-free wealth.  
The culmination of these buyers has created a very powerful property market force. Properties that appeal to all these groups will continue to be star investment performers in years to come.  
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/" target="_blank">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and homebuyers.
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How the single storey villa unit became a highly prized investment: Mark Armstrong

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The RBA lowered interest rates yesterday to a record 2.5% and this will no doubt send the banking world into a hyper competitive frenzy as each lender competes for market share.  
Banks love it when borrowers lock in their debt because it means they are tied to them for a fixed period so fixed rate loans will hot bed of competition in the coming months.  
When the banks promote their loan products the focus is almost entirely on the headline rate but you really need to look through these numbers and determine the right loan for you.  
All the major banks have very competitive fixed rate loans at the moment with the three-year rates ranging from 4.99% to 5.19%. While it is great to have certainty over your interest payments you also need to consider the rate you pay once the fixed term ends.  
In some cases the interest rate at the end of the loan term will revert to the standard variable. While other packages will provide with an ongoing discount of up to 1% off the standard variable for the life of the loan. 
Although you will be in a position to renegotiate your loan at the end of the fixed term many people are busy and neglect this part of their strategy. It is not in the banks interest to let you know you are being ripped off so make sure you negotiate your discount before you lock in your loan.  
One of the most competitive three year fixed rate loans at the moment has a headline interest rate of 4.82%. While this looks very enticing on the surface it does come with restrictions.
First you are only able to lock in 50% of the loan amount and the other half must stay variable. With this loan you may get some benefit from the lower fixed rate component but then lose this with a higher variable component.  
Also the gearing on this loan offering is limited to 75% of the property value. For first homebuyers or borrowers with a small amount of equity this loan will not be suitable.    
While locking in you debt will provide you with some level of comfort, paying off your debt should be the ultimate focus.  
Some loans do not allow you to make any additional repayments over and above the interest repayments. This means you will be running on the spot and not paying off any principle during the fixed term period.  
Many banks allow you to pay off some principle each year but this is usually capped at $5,000 to $10,000. However, at least you will be chipping away at the loan and reducing the amount of interest you pay.  
Further no fixed rate loans allow you to harness the benefits of an offset account which reduces you loan amount on a daily basis depending on how much money you have in your day to day banking account. It maybe a better option to lock in part of your loan on a fixed rate and leave the other variable. This will allow you to use an offset account and make unlimited repayments.  
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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Is it the right time to lock in a fixed interest rate on your home loan?

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The transition from market observers to market participants has begun as clearance rates jump by around 10% from where there were this time last year.
The property market recovery appears to be now entering a new stronger phase but clearance rates above 70% in Melbourne and Sydney should not come as any great surprise as we first saw signs of this recovery almost 12 months ago.
The property market is cyclical and buyers will only stay out of it for so long. Many have been sitting on the sidelines watching proceedings and waiting for the right time to move.
When we look at the broader financial factors that drive consumer confidence in the property market there were clear signs that it was not a question of if the market would bounce back, but just a matter of when.
There were a number of factors that indicated a market recovery.
Affordability – a high Aussie dollar has put pressure on our manufacturing sector and this has been on the RBA’s radar. As a result the RBA has lowered the cash rate by 75 basis points in the last financial year.
Falling interest rates instantly increases affordability. Buyers rushed back to the market in 2001 and 2009 mainly due to falling interest rates. The main difference this time around is it has not come packaged up with increased first-home buyer incentives. This means that the first-home buyers markets will lag behind the broader market.
Capacity – The graph below shows many Australian households have continued to save their disposable income. Many borrowers have been using these funds to make substantial excess principal repayments and this has increased their equity and cash flow positions.
<img src="/images/stories/2013/07/armstronggraphjuly31.png" width="400" height="353" alt="armstronggraphjuly31" style="display: block; margin-left: auto; margin-right: auto;">
Many buyers are now coming to the realisation that they cannot stand around watching the market forever and they now have the financial capacity to act.
Demand – Home ownership in Australia is very high with around 70% of people living in a property with their name on the title. The needs of a homeowner change over time whether it be the need to upsize or down size. Although many owners have put these plans on hold the necessity to change is forcing them to make their move.
Further property is a great Australian past time and this continues to be the case.
Web statistics show that, although competition from buyers was relatively soft in 2012, web browsing continues to be very high.
Nielsen’s online analysis of real estate portals suggests more that 3 million Australian’s search for property every month. That means around 15% of the entire Australian population are actively looking at property at any one time.
This activity is now flowing into the physical market and is driving up clearance rates.
The gestation period from market watcher to market participant is moving into the next phase as the broader market catches on that prices have bottomed out and there is only one way they will move from here.
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/" target="_blank" rel="nofollow">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
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Melbourne and Sydney clearance rates are the result of returning buyer confidence: Mark Armstrong

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

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[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

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[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

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.

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.

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[smartcode_project_cta:default project_id=152737]

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Mark Armstrong

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