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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/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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“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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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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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Mark Armstrong

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