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This Sunday I am flying out to Thailand to get away from this bloody cold weather. When I booked my trip a few months ago I though my timing was perfect as the Aussie dollar was flying high.
However, just three months later it has fallen back to earth. I don’t tell you this to make you jealous of my trip but to me this is a clear sign fixed rates are at the bottom of the cycle.  
A high Australian dollar is not good for the Australian economy because our exporters products look less appealing to international buyers. This in turn puts pressure on manufacturing industry and unemployment.  
Higher interest rates in Australia in comparison to the rest of the western world makes our dollar an attractive safe haven in uncertain times as it will produce a higher return.  
The RBA really only has one tool at its disposal to put downward pressure on the dollar and that is to lower interest rates and this has been a large part of their thinking in recent times.  
A combination of lower interest rates and the announcement from the US Federal Reserve that they plan to stop quantitative easing (read print more money) has lead to a sharp fall in the Aussie dollar.  
The graph below illustrates how quickly it has slid. The dollar was above $1.05 US dollars less than three months ago and now sits around 91 cents. This means the purchasing power an international buyer of our products has had a 10% boost and in theory this should give our exporters a kick start.        
<img alt="ArmstrongJuly10one" height="208" width="470" src="/images/stories/2013/07/ArmstrongJuly10one.jpg">
On the other hand we do not want to see the Aussie dollar fall to far as this will mean many of our imports, including the laptop I am writing on, will become more expensive.  For the RBA it is like walking a tight rope and it is vital they get the balance right.
The fall in the dollar will take pressure off interest rates and will bring closer the time when the RBA begins to lift the cash rate. It is not a question of if they will lift rates but simply when.  
This is where the banks come into the frame. Their job is to project into the future to determine where rates will be at some future date. The price they pay for money will be based on these projections and this will have an impact on the price they sell it to you and me.  
Last Friday we saw an indication of what they are thinking as the ANZ bank lifted their three-year fixed rate from 4.99% to 5.19%.  This could mean the bank has sold all its cheap money and is now hedging its bets or they are stepping back from these fixed rates.  
While the other major banks are yet to follow I think this is a clear sign that now is the time to lock in.  
Warren Buffet lives by an investment mantra that says ‘I would rather be vaguely right than precisely wrong’. His investment philosophy is to use all the available information at his disposal to make educated decisions that mean he might not get the timing right every time but he is happy to be close enough to work in his favour.  It is now close enough!  
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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Lower Aussie dollar continues to put pressure on interest rates: Mark Armstrong

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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. Although due to the fact the property had never been settled there was no way to confirm this was correct.  On the surface it appeared to this individual 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 him into a position where he would be unable to settle. The real estate mantra of Caveat Emptor, Buyer Beware, meant severe penalties were looming.      
Not all was lost however 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 bank's tolerance for risk and the kind of property they view as being a safe security.  
The Abbotsford apartment had one bedroom and was only 37m2. Although one-bedroom apartments can make great investments if they are under 50m2 alarm bells start ringing at many banks. A small apartment size is a signal the property maybe 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 South Yarra and Port Melbourne are more likely to get the nod. However an apartment under 50m2 in an emerging market like Abbotsford is more likely face harsher lending policies.  
Although the valuation is independent the valuer will have an understanding of the banks policy and 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: Mark Armstrong

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Think about the people you know who’ve bought investment property. Chances are that at least one of them claims to have bought their property ‘below market value’.  
Strictly speaking, it’s impossible to buy below market value, because a property’s market value is ultimately determined by one thing: the price you pay for it. When someone says they’ve bought below market value, what they really mean is that they purchased the asset for a lower price than other properties in the area, or that they bought it at a lower price than would have been possible six or 12 months previously.  
Let’s take the first scenario. If you buy a property for less than others in the area are worth, that doesn’t mean you’ve secured a bargain. It may just mean you’ve bought a second-class asset. For example, if other properties in the area have sold for around $450,000, but you buy one for $400,000, perhaps its value has been compromised by a poor structural condition or noisy main road location.  
Under the second scenario, buying a property for less than it would previously have been worth doesn’t necessarily mean that you have bought well. It could simply mean that property values in the area are declining. There are two possible reasons for this. First, there’s less demand than supply. In this situation, vendors are competing strongly for the attention of fewer buyers, so they’re more likely to discount their asking price.  
If you buy into a market like this, it’s vital to ask yourself two questions: how much more will prices fall, and how long will it be until the trend reverses? In other words, how much money will you have to lose, and for how long, until your asset starts working for you?  
The second possible reason for buying a property for less than its previous market value is that the asset has a low land-to-asset ratio – in other words, the building makes up the bulk of the asset’s value.  
Land appreciates (grows) in value, whilst buildings depreciate. If you buy a property for less than its original sale value, chances are that the building’s value is falling faster than the land’s value is growing. The net result? An asset that will continue to lose value after you’ve purchased it, until all the depreciation has been used up. Meanwhile, you’re paying holding costs like interest, rates and maintenance, on a property that’s delivering nothing in return.  
Instead of buying property that is cheap and will remain so because of poor location or high depreciation, focus instead on researching the market to identify properties that represent good investment value. What does this mean?  
First, it refers to the quality of the asset. Properties in established areas with adequate infrastructure like public transport, shopping precincts and leisure facilities tend to have a limited supply of properties in the face of strong demand from investors, homebuyers and tenants alike. This supply–demand ratio increases land value and improves capital growth potential.  
Second, good investment value means researching the local market to find out the recent sale prices for properties of comparable land size, number of bedrooms and degree of renovation. Once you have determined what you believe is the property’s fair value as an investment asset, stick to that limit and walk away if the bidding or negotiation goes beyond it. Overpaying never represents good investment value, no matter how high the asset’s quality.  
It’s true that high quality assets generally cost more than poor ones, so if your research shows that you may be priced out of a certain type of property, it’s better to compromise on the size of the accommodation (e.g. two bedrooms instead of three) rather than the location.
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 it really means to buy below market value: Mark Armstrong

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The property market pessimists are crying capital growth in the Australian property market is dead forever and the only direction prices will go are down. Yet year after year there are properties that prove them wrong.
Much has been spoken about the global property market and that our market will ultimately follow a similar fate and I am always at pains to point out not all property is created equal. This applies to most cities around the world.
Take a look at the two properties below. The property on the left is located in the bluest of blue chip suburb of South Yarra. The one on the right is located in London’s equivalent blue chip area of Kensington.
Click to enlarge
<a href="/images/stories/2013/06/armstrongjune19one.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2013/06/armstrongjune19onethumb.gif"></a>
The apartments are very similar in terms of character and size as the floor plans below illustrate.
Click to enlarge
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The South Yarra property recently sold for $520,000 and the London apartment has a value of a million pounds or $1.7 million. This means a comparable one-bedroom apartment in London is worth more than three times as much as the one in Melbourne.
There is a perception that growth for this London apartment has run out of steam but the statistics suggest otherwise.
In recent years the UK market as a whole has been weak with property prices falling slightly. According to Nationwide property prices have slipped back by 2.76% over the last 12 months. However this is in stark contrast to the market in Kensington that has grown by a whopping 15.8% in the 12 months to March.
I am not suggesting our market is the same as London’s given their population is double ours. In addition their market is much older, more established and on the doorstep of Europe. However our blue chip markets are driven by the same demographic factors and are following a similar path of growth and demand.
When I attend an auction for an apartment like this one in South Yarra I often see the same cross section of buyers competing.
I often see a young people bidding who are being backed up by their parents' wealth. More often than not they have grown up in the area and want to stay close to their family roots. The next group are the baby boomers that are downsizing and again want to stay close to their social networks. The last group are investors who want a safe blue chip investment that will always have strong tenant demand.
These three groups represent the most powerful financial muscle in our economy and they have the capacity to continue to drive growth in these markets.
There is no doubt that properties with these demographics factors driving their value will continue to grow in the coming years and this South Yarra property will be worth close to $1 million or more in the next 10 years or so.
The property pessimists will say I have just picked the eyes out of the market and isolated one example of a property that will preform well in coming years. That is precisely what I have done because identifying the small percentage of good assets in any market is exactly what educated investing is all about.
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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Still room for growth in blue chip suburbs so long as you make good decisions: Mark Armstrong

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I often get asked can the property market continue to grow from its current levels and reach new heights.
While I do not believe every property in the market will show the same level of growth, there is a tidal wave of money on the horizon that will have an enormous impact on property value in years to come.  
For many years the primary reason to buy property was to provide a roof over your head. As time went by, however, another driver entered the market. Investors started to look at the property as a money-making venture to help fund their retirement.
This really gathered momentum in the 1980s to the point now where over 1 million Australians own investment property.  
We are now at the very early stages of a new and very powerful player entering the property market – superannuation investors.  
Compulsory superannuation has only been around for 20 years and is in its infancy. Today there is over $1.4 trillion sloshing around in superannuation locked up until retirement and this is growing.  
In the early years of superannuation all funds were managed by professional fund managers to maximize returns and the vast majority was tied up in the sharemarket.  
Unfortunately sharemarket performance has not lived up to investor expectations in recent years. This year the share market has taken two steps forward and two steps back. On December 31 last year the All Ordinaries was at 4664 and peaked at 5200.
However, it has now lost all its gains and yesterday closed at yesterday it closed at 4748.
<img alt="armstrongjune12one" height="323" width="470" src="/images/stories/2013/06/armstrongjune12one.gif">
Even if we project back a few more years we find the market is sitting below 2010 levels.
<img src="/images/stories/2013/06/armstrongjune12two.jpg" width="470" height="324" alt="armstrongjune12two">
The share market has been a great place for investors who trade regularly to make a lot of money. However for the investor that just wants a ‘set and forget’ strategy it has proved disappointing.
While I do not think that investors will turn their back on the sharemarket completely they will certainly look around for other options to diversify their investments. It is cycles like this that will make more people look towards the property market.  
The desire for people to take control over their superannuation has seen an explosion in self-managed superannuation funds (SMSF’s). According to the Australian Prudential Regulation Authority, which oversees our superannuation system, thousands of self-managed super funds are set up each year. Traditionally, SMSFs have been the province of the self-employed an increasing number of salaried employees are now setting them up too. There is now $439 billion held in SMSFs and that figure is growing.
However, to date only a small fraction of people have elected to add direct property to their super fund. This is mainly due to a lack of funds in their super and uncertainty and complexity around the structure.    
These investors have the opportunity to include residential property as part of the asset mix in their self-managed funds, thanks to regulatory changes in 2010 that enable gearing into super funds. Residential property is primarily a capital growth-based asset, and because of its stability relative to shares, it can provide a solid long-term way to boost the value of SMSFs.
Provided they choose high quality assets, investors with residential property in their SMSFs will be able to enjoy the best of both worlds when they retire. Residential property will give them geared growth assets, whilst shares will produce income in the form of dividends. They can draw down on the dividend income tax-free and use it for living expenses, whilst taking advantage of gearing to increase the capital value of their super fund.  
This mix of residential property and shares is an ideal strategy for SMSF investors - it reduces the possibility of running out of retirement savings, by maximising capital growth as well as income.  
Generally speaking, most people who borrow to purchase residential property for their super fund tend to adopt a conservative investment approach, and may gear at around 50% of the property’s value. This is a significant contrast from buying residential property outside super, where the gearing level is usually 80% or higher.  
Even so, a 50% gearing level means the amount of money flowing into residential property from superannuation will explode in years to come.  
Buying property needs to be viewed as a long-term play. The flow of superannuation money entering the market will be slow wheel to turn but it will gather momentum in coming years and push the property market to new highs.
Mark Armstrong is a director of <a rel="nofollow" target="_blank" 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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SMSFs set to fuel surge in residential property prices: Mark Armstrong

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They don’t use land like they used to.  
Last Saturday a large crowd turned out for the auction of a two-bedroom unit at <a href="https://www.realestate.com.au/property-apartment-vic-hawthorn-113751283" target="_blank">5/52-54 Grove Road, Hawthorn</a> (pictured below).
<img alt="armstrongjune5one" src="/images/stories/2013/06/armstrongjune5one.jpg" width="470" height="347">
After spirited bidding the property sold for $741,000 illustrating strength in this sector. However, when we compare this price with the wider market it soon becomes clear this was an extraordinary result.
The property was held for less than four years after being purchased in October 2009 for $585,000. Based on this purchase price it has been growing by almost 7% compounding each year.
I think this level of growth means the property has performed well as an investment but considering we experienced a slump in 2011 and 2012 the result seems to defy the market.
To put this into context the median value of apartments in Melbourne over the same time frame has grown from $410,000 to $451,000, a compound growth rate of less than 3%. The Grove Road property has more than doubled the growth rate of the wider market for apartments.
In addition it has also proved to be a better investment than houses with the median value growing by only 4.12% from $470,000 to 545,000.
The Grove Road property was built more than 50 years ago at a time when skilled labour was relatively cheap and developer did not have to cram as many apartments onto the block. The property sits on 1500sqm of land yet there are only seven apartments in the development.
If a vacant block of land this size was to come onto the market in this location it would sell for around $3 million. This means each apartment has a notional land value of around $450,000. The vast majority of what the buyer is paying for is the land and this will underpin the capital growth potential because land is an appreciating asset.
There is just no way a developer would do this today.  The aim of a developer is to build as many apartments as town planning will allow.
Take for example this development on <a href="https://www.realestate.com.au/property-apartment-vic-hawthorn-113563607" target="_blank">Riversdale Road, Hawthorn</a>.
<img alt="armstrongjune5two" src="/images/stories/2013/06/armstrongjune5two.jpg" width="470" height="328">
The block of land is a similar size at 1400sqm yet the developer has crammed on 31 apartments that are selling for a similar price to the Grove Road apartment. The notional land value attributed to each apartment in this example is around $100,000. This means the cost of land to the developer for each unit is only $100,000.
When an investor purchasers this property the vast majority of what they are paying for is the construction of the building and the developer's profit.
The notional land value attributed to each unit is a great guide to assist us with the prediction of likely future capital growth. While it does not give an ironclad guarantee of investment potential it should not be ignored.
Properties like Grove Road will continue to defy and out perform the wider market because they are such a unique product. It is just not feasible to produce this product anymore and as a result the supply will never ever grow. Demand on the other hand is only getting stronger and stronger.  
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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Older apartments will defy pricing trends as developers change land use habits: Mark Armstrong

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A key benefit of residential property as an investment asset is its stability relative to other asset classes, such as shares.
Sharemarket values are subject to variations in investor sentiment, fuelled by the actual or predicted performance of companies. When investor sentiment is strong, the sharemarket rises. When it’s shaky, the market falls.
The share market is a daily rollercoaster driven by everyone from mum and dads to professional day traders. I am no share market expert but I know it is no place for the inexperienced or faint hearted. Just look at how volatile one day of trading can be:
<img src="/images/stories/2013/05/armstrongmay29two.jpg" width="470" height="291" alt="armstrongmay29two">
Shares only exist on paper, so they can be created and issued quickly when companies need to raise capital. Investors can also sell them quickly when they need cash flow.  
By contrast, residential property is a physical asset, so it can’t be bought and sold easily. It can take weeks or months to sell a property, and even longer to build one because of land supply and planning restrictions. As a result, there are fewer residential property transactions and more stability in the overall residential market.  
However, the fact that the residential property market is more stable than the sharemarket does not mean you can buy a property in any sector of the market and expect it to show the same level of resilience.  
The proportion of debt relative to the number of owners, and the proportion of tenanted property relative to the proportion of owner-occupied homes, can both influence the stability of the market in particular locations. The more stable the market, the better the prospects for property investment.  
First, let’s look at the issue of debt levels, as illustrated by two Melbourne suburbs. According to the Bureau of Statistics, 76.8% of all owners in the relatively new outer south-eastern suburb of Lyndhurst are paying off debt on their properties. Only 7.6% own their properties outright (the remainder of residents are tenants.)  
There is a stark difference in more established suburbs. In Glen Iris for example only 33% of all owners are paying off a mortgage, whilst 38% of owners have no debt on their properties. The remainder of residents are tenants. With fewer Glen Iris owners paying off a mortgage, they are less vulnerable to interest rate movements than their Lyndhurst counterparts.
Glen Iris and suburbs with similar debt levels represent markets with significant equity. They are a more stable and viable market for property investment even though they represent a much higher price point and they continue to drive property market growth.  
As a result we are seeing massive crowds at auctions for houses in Glen Iris as I experienced on the weekend at <a target="_blank" href="https://www.realestate.com.au/property-house-vic-glen+iris-113684891">14 Madeline Street</a>.
<img alt="armstrongmay29one" height="351" width="470" src="/images/stories/2013/05/armstrongmay29one.jpg">
The property was quoted to sell for over $900,000 and was declared on the market at $1 million. Five bidders were still in the hunt above this level and the property sold for $1.71 million.  
Off the back of this sale a property around the corner in <a target="_blank" href="https://www.realestate.com.au/property-house-vic-glen+iris-113807399">Pascoe Street, Glen Iris</a> that was due to go to auction in a couple of weeks has been sold prior.  
It was expected to sell in excess of $900,000 but with an offer over $1.2 million the owners are taking the money and bolting! 
In the middle of last year I wrote that these areas were the first to bounce back from the property market slump. We are now seeing competition intensify a taking this market to new highs.  
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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Residential property is usually a more stable investment than shares: Mark Armstrong

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A four-bedroom Californian bungalow in Balwyn will go to auction this weekend, with its agent suggesting there has been plenty of interest from potential buyers.
The property is featured in this week's Property Tycoon auction tipping competition, which is entering its final round.
It's the website, <a target="_blank" rel="nofollow" href="https://www.propertytycoon.com.au/">www.propertytycoon.com.au</a>, where punters can guess five auction results in Melbourne and Sydney, with no outlay. It's mostly about testing your market knowledge with a small cash prize as a sweetener.
<img alt="propertytycoonmay24one" height="289" width="470" src="/images/stories/2013/05/propertytycoonmay24one.jpg">
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Californian bungalow in Balwyn featured in final round of Property Tycoon auction tipping

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Property prices are on the move in the inner suburbs and as a result more and more buyers are going to find themselves priced out of the house market.
Instead, they will turn to townhouses and apartments as a more affordable alternative. In many cases, they are not just buying the title to a property; they are also taking on a wider responsibility to other owners in the development, by joining an owners' corporation (formerly known as a body corporate in Victoria).
Before you buy a property in a development with an owners' corporation, it’s essential to understand your potential financial liabilities and other responsibilities as a member.  
An owners' corporation is made up of the owners of all the properties in a particular development, and is responsible for insuring, maintaining and improving the common property (that is, any part of the building and grounds that is shared by other owners).  
Many corporations engage professional managers to run the organisation’s day-to-day affairs on their behalf, and pay them a management fee to do so. However, the manager is not legally responsible for the decisions and activities of the corporation.  
Common property may include, among other things, external walls, roofing, fencing, rubbish bin corrals, driveways, shared courtyards and shared laundries. To pay for the upkeep of common property, members of an owners' corporation are generally required to pay regular contributions. They may vote to strike additional levies to fund expensive one-off outlays such as repainting the building’s exterior, repairing the roof or replacing the windows.  
Before bidding at auction or negotiating a private sale, you or your legal representative should obtain an owners' corporation certificate which should form part of the vendor’s statement and tell you whether the corporation is planning any cosmetic or structural works, along with their estimated cost. Even when the cost is divided amongst a large number of other owners, your share may be quite high in dollar terms.  
Given that you’re already spending hundreds of thousands to buy the property and pay associated costs like stamp duty, the cost of works to common property may be the straw that breaks the camel’s back—so it’s important that you consider them before going any further.  
The certificate should also detail your share of ongoing owners' corporation fees (usually payable quarterly), which will help you budget for your holding costs over the long term.  
Once you’ve purchased, it’s essential to take out appropriate insurance. Whilst the owners' corporation is responsible for taking out and maintain adequate insurance to the common property, that’s as far as their liability extends.  
As an individual owner, it’s highly advisable to take out insurance that will cover the contents inside your apartment (if you’re an owner occupier) and include a public liability element in case a third party is injured on your premises. If you’re a landlord, it’s a good idea to take out landlord protection insurance to cover you in the unlikely event that your tenant maliciously damages your property or leaves without paying the rent.  
The owners' corporation is also responsible for setting and administering rules which govern the activities of residents in relation to the common property. Depending on the corporation in question, these rules may govern issues such as affixing external air conditioning and hot water units, colours to be used in external repainting, acceptable uses for balconies, covering floorboards to minimise disturbance to residents below, and pet ownership.  
The greater the number of apartments in a development, the more owners' corporation members there are, and the harder it can be to reach agreement on issues regarding the common property. Some owners are highly motivated, whilst others prefer to keep a lower profile and may deal with the corporation via their property managers.  
Whilst every owner is responsible for decisions made by the corporation, most organisations appoint a Committee to co-ordinate the views of the wider membership and liaise with the manager. Whilst joining your committee is no guarantee that your views on a particular issue will win the day, it can provide a greater sense of participation in matters that affect you and your fellow owners.  
By knowing your financial liabilities and ongoing responsibilities to the corporation before you sign on the dotted line, you’ll be well poised to enjoy the benefits of owning your townhouse or apartment right from the start.    
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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Do your research before buying a property within a residential owners' corporation: Mark Armstrong

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There is no doubt that a heap of overseas investors buying new property in Australia is great for our economy.
It provides thousands of jobs in the construction industry and flows international cash into our coffers.
However, there can be a downside for local investors who get caught up in the hype.
International investors are largely uneducated to the ways and value of the Australian property market. They rely heavily on the advice from sales people who use slick marketing techniques to sell their wares.
Overseas buyers can and often do pay too much for property because they do not fully understand the market they are entering.
In addition, the motivation of overseas buyers may be at odds with their local counterparts. As a rule Australian buyers purchase property to provide a roof over their heads and to make money.
While most overseas investors want to make money they also buy property in Australia to assist with plans of migration into the country. They are often also motivated by the need to get their money out of the country they live in because the economy may be too unstable. Australia has a very well established system of property ownership and for foreigners, so even if their property loses value, at least they can be certain they will maintain control of their asset.
From afar they view the Australian property market as a safe haven that has held its feet while global property markets have faltered.
Australia has traditionally had stringent foreign investment laws and although these have been relaxed in recent years buying into new developments is an easy way for foreigners to get a foothold in the market.
Take for example this development (pictured below) on Mt Alexander Road, Flemington in Melbourne’s inner north.
<img alt="armstrongmay15one" height="342" width="456" src="/images/stories/2013/05/armstrongmay15one.png">
These properties have been marketed to international buyers fetching prices well in excess of $500,000. Once a number of properties have been sold this sets a precedent to determine value of the remaining properties and gives the sales team very powerful tools to market the remaining apartments.
From here the valuers now have data to justify their valuations to the banks to allow funds to be lent against the apartments. The main concern is the valuations have been based on sales to players that are operating under different rules with a range of motivations.
As resales of these apartments begin to hit the market we start to see the impact on the investor. The problem is the foreign buyers who are lining up to buy Australian property are not able to compete in the secondary market due to foreign investment restrictions. Further the marketing incentives such as stamp duty savings and rental guarantees are no longer there. As a result the demand is significantly dampened.
The greatest danger an investor faces is the resale of a new property the first time around because the property value must adjust to a true market value.
For example, <a target="_blank" href="https://www.realestate.com.au/sold/in-18+mt+alexander+rd+/list-1">unit 1213 in this development</a> was purchased in 2010 for $582,500 and while the market conditions where very strong at the time the recent resale price is out of whack with what happened in the broader market.  The property sold in late 2012 for $476,000, taking almost a 20% hit on its original sale price.
The lesson here is developments where the sales are heavily skewed towards international buyers should set alarm bells ringing for local buyers.
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Local buyers should beware the hype caused by foreign investment in the Australian property market: 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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