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<a target="_blank" title="The pitfalls of renting from your self-managed super" href="https://www.propertyobserver.com.au/tools/legal/the-pitfalls-of-renting-from-your-self-managed-super/2011062050544">Yesterday </a>we looked at some of the benefits – and drawbacks – of renting your family business premises from your self-managed super fund. It is a common arrangement, but you should make sure you are protected.
Here are eight key points to consider before a family business decides to rent its premises from the family’s SMSF:

1. Think about what could go wrong before entering the arrangement.
 There would be a natural tendency to concentrate on the positives, but plenty of other problems could arise apart from the family business being unable to pay its rent.

Peter Bobbin, a principal of Argyle Lawyers, emphasises that the SMSF might be forced to sell the premises to pay benefits to members following a marriage break-up, death or disability. Indeed, the marriage of a couple who are both business partners and SMSF members might end in divorce.

In turn, the forced sale of the premises to pay member benefits may damage the family business.

2. Don’t let possible tax advantages dominate your decision-making: “Understand the commercial and legal risks,” advises Bobbin, who describes tax-dominated decisions as “misguided”. Bobbin’s specialties include SMSFs, tax and family businesses.

3. Understand the fund’s obligations to pursue unpaid rent – even from its members’ own business.
 “A fund super fund must use all usual means to collected unpaid rent,” Bobbin says, “and commonly should have personal guarantees for any arrangement with a business.

“If the business fails, the fund will need to press the personal guarantees – even with the members themselves.”

4. Recognise what actions the SMSF regulator could take concerning unpaid rent by the fund members’ business:
Martin Murden, a director of Partners Group, financial services provider to accountants, says possible actions for breaching the Superannuation Industry (Supervision) Act include fines, the trustees being disqualified or the fund being declared non-complying.

The market value of non-complying funds is taxed at the top marginal rate, less any non-concessional or undeducted contributions. In short, this can wipe out almost half a fund’s assets.

5. Understand your fund could lose ownership of geared property.
 Murden says that if your business can’t pay rent to your SMSF, your fund could fail to make instalments on its investment loan. “If your fund can’t meet its loan instalments, the bank will want its money back [plus its costs].”

And Murden says the fund could lose its investment and the family business could lose the use of its premises.

6. Question whether your SMSF can really afford to gear a commercial property – no matter whether your own business will become the tenant. 
Murden says funds should take into account the levels of debt already being carried by the SMSF, the business and the business owners in a personal capacity.

He suggests that funds should consider the effect that the next halving of the standard cap on concessional contributions for super fund members over 50 could have on their fund’s cash flow and ability to make loan repayments. (This cap will fall to an indexed $25,000 from July next year.) Many funds require the cash flow from high concessional contributions to meet all of their loan obligations.

Funds should also assess how impact of future interest rate rises on the ability to make loan repayments, Murden says.

7. Decide whether your business may be better off renting its business premises from an unrelated landlord.
Murden says funds shouldn’t rent business premises to their own businesses simply because it is allowed under superannuation law.

Some SMSFs would be tougher with an unrelated tenant than a related one. And that approach may not be in the fund members’ best interests.

8. Ensure your fund is adequately diversified if possible.
 This will mean that the fund members’ savings are not overly dependent on the profitability of a single costly asset, name your business premises.
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Eight considerations before renting from your SMSF

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One of the biggest challenges a self-managed super fund can face is when the tenant of a highly valuable, fund-owned commercial property fails to pay the rent.
Much of the fund’s financial wellbeing may depend upon regular payment of rent – particularly if a heavily geared property is the fund’s sole or dominant asset.
The fund, of course, would be expected to take all necessary action to try to recover the overdue rent and, if necessary, remove the financially troubled tenant from the premises.
But imagine how the difficulties for your fund could escalate if the wayward tenant were your family business.
Be warned, many family SMSFs and family businesses are at risk of becoming embroiled in such inter-family disputes.
“Many of the businesses we see now see are struggling,” says Martin Murden, a director of Partners Group, financial services provider to accountants. He is the author of How to Invest in Property Through your Self-Managed Super Fund, recently released by Major Street Publishing.
Before entering a landlord-and-tenant arrangement between your business and your super fund, Murden, an SMSF specialist, urges his clients to think about what could go wrong.
It is a common practice for a family SMSF to own the premises of the family business in order to gain a range of retirement, tax, business, and asset-protection advantages.
Your family business pays a commercial rent to your family SMSF. And your fund claims tax deductions for interest on the loan to buy a typically geared property.
Further, the property is generally out of the reach of creditors if individual fund members are declared bankrupt – subject to claw-back provisions in the Bankruptcy Act.
And if your SMSF sells the property once fund assets are backing the payment of a pension, no capital gains tax is payable on the sale.
It can, however, be a matter of conflicting loyalties and pressures if your business encounters financial problems and fails to pay its rent.
On one side, the family business may require those premises to keep operating in the hope that profits will return. (In a many cases, a business than cannot pay rent to its own SMSF will struggle to pay rent to another landlord – even for poorer-quality premises.)
Yet on the other side, the fund’s trustees – who are the same people as the business owners in these circumstances – are legally obliged to maintain the fund with the sole purpose of providing member retirement benefits.
In any case, Murden says SMSFs with commercial properties generally have to borrow to buy and require regular rent to meet their loan repayments.
Businesses experiencing financial difficulties usually become slower to pay their creditors. And Murden says a decision is sometimes made, consciously or unconsciously, that the last creditor to pay is their owner’s self-managed super fund.
He stresses that if a member’s business is not paying its rent to the family SMSF, the retirement savings of the members are being jeopardised.
Murden’s firm is currently advising an accountant regarding a business that cannot pay its rent to the business owners’ SMSF. He has raised such questions with the accountant as: How good is the business? Should the business move into cheaper premises to enable the SMSF to find another tenant?
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The pitfalls of renting from your self-managed super

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In <a target="_blank" title='Read "Why invest in US housing"' href="https://www.propertyobserver.com.au/trends/international/american-dream-or-nightmare/2011060550324">part one</a> of our series on investing in the depressed US property market, Property Observer talked about who was buying up US housing stock, how and why. In the second part of the series, we discuss the pitfalls of investing in the US property, which might be cheap for a reason.
 
What are the traps?
Australian buyer’s agents point to underhand methods allegedly adopted by some of their competitors.
Hidden commissions: “Every day I am offered upwards of 10 per cent commission ‘if you sell this property to one of your clients’,” says Redman. “We don’t work that way.” He agrees that buyer’s agents who accept such commissions are ripping off their clients.
Redman says some Australian companies have arrangements with American companies to earn a 20 per cent sales commission or to load the price of a property by 20 per cent.
 Two-tier pricing: Redman says it is common practice for agents to list one price for Americans and a much higher price for Australians.
“We have one property for $42,000 and they [another Australian-based company] are charging $62,500 for the same property,” Selleck says.
 Redman claims some Australian companies take an option to buy a <country-region><place>US</place></country-region> property for, say, $30,000 and then market it in <country-region><place>Australia</place></country-region> for $60,000.
"Flipping": US-based “flippers” buy a US property and “flip” it a short time later to Australian buyers at much higher prices. The flippers add little or no value before reselling a property.
“Some Australian companies buy a US property very cheaply, whack a bit of paint on it and then sell it for triple what they paid for it,” Redman says.
 Misleading rental yields: Promoters of US properties quote net annual yields of 10% and more. But such yields, unless sustainable, can give buyers a misleading impression of a property’s value.
 A buyer’s agent told Property Observer that some operators place a tenant in a property for an exorbitant rent that would produce yields of up to 25% if sustained and then sell the property to an Australian. But within a few months, the tenant has often moved elsewhere and the property falls into disrepair.
Jenman says low <country-region><place>US</place></country-region> interest rates mean that if an American can obtain a housing loan, it would be much cheaper to buy than pay high rents.
Unfamiliar markets: We all know parts of our local city or state that astute property investors wouldn’t go near. Of course, it’s the same story in the US. “Some areas are ghettoes that resemble war zones,” Jenman says. Investing away from home is often a high-risk strategy.
What is the outlook for US housing?
Based on just a sample of the economic and sales data available, the outlook for <country-region><place>US</place></country-region> property is far from promising.
US Federal Reserve chairman Ben Bernanke said in a recent address that the poor state of the <country-region><place>US</place></country-region> housing market was holding back the <country-region><place>US</place></country-region> economic recovery.
 Bernanke stressed that foreclosure rates remained very high and many “underwater” homeowners avoided foreclosure by holding on to their homes even though the size of their mortgages exceeded their homes’ value. Additionally, long-term unemployment remained at a historic high, he said.
RealtyTrac, the US online marketplace for foreclosure properties, reports that there were almost 700,000 foreclosures in the first quarter of 2011, a 15 per cent decrease on the previous quarter. But it seems that fall is largely attributable to a backlog of thousands of foreclosures as lenders address improperly prepared mortgage documents.
 RealtyTrac warns of weak demand, declining home prices, lack of credit and the threat caused by the “looming shadow inventory of distressed properties” that are yet to reach foreclosure stage. In short, RealtyTrac expects the foreclosure rate to rise.
 Is investing in US a good idea?
The risks appear excessively high.
For example, Jenman knows an Australian who lost most of her money after the three properties she bought in upstate New York failed to rise in value. She bought one property for $US34,900 and sold it four years later for $US12,000. Another she bought at the same time for $US51,900 she sold years later for $US25,000. The third remains unsold.
I believe if you go over to America, hire a car, drive around and research the areas properly, you might be able to find yourself a good buy,” Jenman says. “But I believe with all of my heart if you go through an Australian company that is flogging American real estate here in <country-region><place>Australia</place></country-region>, you will almost certainly lose a great deal of money.”
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America: buyer beware

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The website of Byron Bay-based buyer’s agent 888 US Real Estate features principal Vincent Selleck proudly planting the Australian flag on the White House lawn. The image conveys a conquering Australian, dressed in shorts.
 The Huffington Post presents another picture of US property. The news website asks for readers’ photographs of “America’s foreclosure ghost towns”. Photograph upon photograph shows boarded-up wrecks of houses, covered in graffiti and decay.
 Looking at <a target="_blank" title="Huffington Post" href="https://www.huffingtonpost.com/2011/04/13/americas-foreclosure-ghost-towns_n_848715#s264053&amp;title=Chicago_Englewood_Neighborhood">these photographs</a>, it would take a truly brave Australian investor to try to take advantage of <country-region><place>America</place></country-region>’s property troubles. 
 However, Selleck says the growth in the number of Australians investing in <country-region><place>US</place></country-region> property is “enormous”, particularly over the past six months. And he says that the US market offers “insane” value.
 Property consumer advocate Neil Jenman puts it another way: “You would be insane to buy it.”
 Jenman says thousands of Australians are pouring money into US properties as countless companies target Australian buyers. He is convinced that almost all Australian investors will suffer huge losses when their properties are eventually sold. But Selleck says US property is a smart investment, and Australians are “moving to where the market opportunity is at the moment”.
 Property Observer spoke to those on both sides of this debate and examined the outlook for the US housing market. Over a two-part series we attempt to answer the question: Does US property present a money-making opportunity or looming disaster for Australian investors?
 What’s attracting buyers?
According to the proponents of US residential property, the combination of homes selling at way below replacement value, claimed double-digit net rental yields and the high Australian dollar are creating amazing bargains for Australians.
 For instance, Selleck has just listed a freestanding five-year-old, three-bedroom house in Phoenix, Arizona, for $US52,000 (about $A48,800). “It rents for $US900 a week, and the replacement value is anywhere from $US120,000 to $US180,000,” he says.
 “So you are buying real assets for a fraction of their real value. You can’t do that anywhere else in the world; it’s a once-in-a-lifetime opportunity.”
 Before the GFC, the Phoenix house had sold for $US167,000.
 Who’s investing in America?
Cashed-up individual investors and self-managed super funds are reportedly the main buyers of US housing stock, as Selleck says Australian banks won’t accept US property as security for a loan. His firm has found only private lenders in the US, which charge high interest rates, willing to lend to Australians.
 Selleck says Australian buyers – apart from self-managed super funds – either use Australian properties as loan security or finance their purchases with the proceeds from the sale of investments.
 Daniel Redman, managing director of Melbourne-based buyer’s agent US Property Direct, says many Australian buyers have borrowed against the equity in their homes.
 How are they investing?
Many Australian investors buy through Australian-based buyer’s agents who have contacts with US real-estate agents or US property wholesalers that purchase foreclosed properties in bulk from banks.
 Jenman says some Australian property spruikers hold joint Australian seminars with their visiting US associates to promote US property.
 Selleck explains that US wholesalers might buy 100 properties at a time from banks, sight unseen. “They might find that 90 of the 100 properties are worth something and the remaining 10 are throwaway,” he says.
 Wholesalers, Selleck says, renovate the properties and find tenants. “We won’t close on a property until a lease is taken out, generally for 12 months at the agreed price.”
 Selleck says he charges a flat $3800 fee to his clients. “We don’t take any commissions.” The buyers pay all costs such as for legal work and building inspections. Redman of US Property Direct says his firm charges $3495 to clients; it also did not accept commissions from vendors or their agents.
 
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American dream or nightmare?

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A drastic undersupply of housing to accommodate Australia’s growing population has led to extremely low rental vacancy rates. The national vacancy rate is hovering around 1%, and in some places it is even lower.
Investors are beginning to come back into residential property, believing it to be a landlord’s market. But experts are urging caution, as house prices are expected to fall this year, particularly at the lower end of the market.
Here are some points to consider before diving into the residential housing market.
1. Understand that the undersupply is not going to be addressed quickly.
Angie Zigomanis, industry analyst and economic forecaster for BIS Shrapnel, says there are simply not enough properties for rent, which is forcing up rents and yields.
“There is a deficiency of stock in most capital cities," he says, "with Sydney most of all."
Despite strong construction in capital cities such as Melbourne, developers have still not been able to meet demand caused by Australia’s fastest population growth since the baby boom of the 1950s and ‘60s.
2. Understand that the best buying time has passed
Matthew Bell, economist for Australian Property Monitors (APM), says the best time to buy was a few years ago, when interest rates and prices were at their lowest. 
Louis Christopher, managing director of property adviser and forecaster SQM Research, agrees now is probably not the best time to get into the market, especially as prices aree likely to level out or fall over the next year.
3. Think about the movement of interest rates
With interest rates at 4.75% and many experts predicting they will rise even further, investors should be wary of biting off more than they can chew.
4. Check relative yields
While yields on rental properties are high, Christopher suggests would-be investors compare the higher yields on such alternative investments such as fully franked shares.
5. Realise that vacancy levels are not low across the board
“There are significant areas where vacancies are rising," warns Christopher. Do your research, because if you buy an investment property in an area with a vacancy rate of more than 3% it will be almost impossible to raise the rent.
6. Consider impact of banks requiring higher loan-to-valuation ratios
"By default, this will reduce the number of borrowers [in the lower end of the market]," Christopher says. In turn, this could be detrimental for prices.
However, although Bright says higher loan-to-valuation ratios will prevent many first home buyers from entering the market, that could strengthen the property market because there would be fewer forced sales.
7. Don't overlook the effect of the cutting of concessional super contribution caps.
The reduction of the caps on these contributions, which include salary-sacrificed, SG and tax-deductible contributions by the self-employed, is expected by some financial planners to encourage more investors to gear non-superannuation investments including residential property.
8. Choose your investment buy carefully
Bright says the best buys for investors are a step up from first-home buyer points. For example, he says the best buys in Sydney are those of $750,000 and above, in particular the $1 million to $2 million bracket.
9. Think about what will appeal most to tenants
Bright says in general, quality properties are near transport, activity centres, shops, entertainment centres and business centres, particularly in cities.
"Other factors such as a secure building, pleasant outlook and a balcony are highly desirable," he says, "while off-street parking can be a deal-maker or breaker, particularly in the very busy suburbs close to the city centres."
He warns investors to stay away from areas with an oversupply of properties for rent, unless they can secure sites with a point of difference, like a penthouse with knockout views.
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9 things to consider before buying investment property

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With rumblings in the media about the Australian property bubble bursting and prices starting to come down, it might seem like the time to find yourself a property bargain. But property forecaster Louis Christopher says bargains are thin on the ground.
Christopher, managing director of property adviser and forecaster SQM Research, says even though it is slowing down, the Australian property market is not ripe for bargain-hunters. Many segments of the market are overvalued, and the withdrawal of the first-home buyer’s grant combined with higher interest rates are likely to result in a lacklustre 2011. However, that doesn’t mean there is not good value anywhere.
Potential bargains now on the market include these three examples, taken from the Home Discounts Report, published by <a href="https://www.sqmresearch.com.au/homediscounts/">SQM Research</a>.
<ul>
<li>A three-bedroom house in the Adelaide suburb of Elizabeth Grove with a huge backyard, on the market for $159,950. This is 53% less than its asking price when it first came on the market more than 500 days ago.</li>
</ul>
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<li>A five-bedroom house in good condition in Dunalley, Tasmania, with water views, beautiful gardens and a dam on a 7.37-hectare site is listed at $395,000. The price was cut by 47% during its more than 800 days on the market.</li>
</ul>
<ul>
<li>A four-bedroom waterfront property on Russell Island in Queensland is selling for $449,000. The property, which has a huge backyard with mature trees, has been on the market for more than 900 days and the price has come down 39%.</li>
</ul>
Here are eight top tips for bargain-hunters:
1. Only fools rush in: “Look now, don’t rush,” Christopher suggests. “The only trouble in trying to theoretically work out whether you have a bargain is that it may be a bigger bargain tomorrow because the market continues to fall.
2. Time it right: The best time to buy is at the bottom of a market trough, just before prices start to rise again. But as Christopher rightly points out: “No one rings a bell at the bottom of the market.”
However, that does not mean it is impossible to know when the right time is to buy. “Potentially, there could be bargains towards the end of this year [if most national markets have stopped falling by then],” Christopher says.
Buyers should study the market closely now to be ready to buy when the time is right and they have found the right property to suit their needs.
3. Be especially wary in over-priced areas: Darwin is “massively over-valued,” according to SQM, and properties in south-east Queensland and Perth are selling for far more than they should. Christopher says housing markets in these and other over-valued regions will remain sluggish or will continue to correct. If interest rates rise again this year, that could cause prices to fall further.
4. Everything is harder in Sydney – but that does not mean impossible: Sydney prices are rising, making bargains even more difficult to find. “In the next three years, I am not expecting any dramatic falls in Sydney,” Christopher says.
But that does not mean it is impossible to buy in Sydney. There are fewer bargains than in other capitals, but there is also much less risk that the price of an apparent bargain will fall after purchase – provided that you buy into a sought-after suburb.
“When a market is on the move, what someone paid for a very similar property a month or two ago can look like a bargain,” Patrick Bright, chief executive of buyers’ agent EPS Property Search in Sydney, says.
Bright says most deals that seem too good to be true usually are. He warns that buyers of properties with “something that’s not good about them” will either have to fix the fault or flaw or will have to sell the property at below market rates for the area.
However, some properties are listed at below market value because owners had initially asked too much and have cut the price out of desperation to sell.
What types of properties should savvy Sydney bargain-hunters look out for? “Stick to the inner ring, three to 15 kilometres from the CBD,” Bright says. He says buyers should look for properties close to beaches or those with harbour views.
“Correct property selection for the particular suburb is critical,” says Bright, “if you want to achieve a better-than-average return.”
Dennis Kalofonos, director of Sydney Property Finders, urges caution. “It is too early [in the year] to predict whether a property is a bargain or not,” he says.
“I think there needs to be a few more weeks and a couple more auction phases to go through to get a really good idea of where the pulse of the market and the direction it’s going.”
Kalofonos says suburbs with houses with large gardens that are still close to the city could be good value. He says these markets have risen dramatically as couples with young children move out of the inner city and into the closest suburbs to the CBD with big backyards.
“There’s no lawn in Paddington and Queens Park [inner eastern Sydney suburbs] and those suburbs are so expensive,” Kalofonos adds.
5. Watch for desperate vendors: Christopher says some vendors in areas with falling prices become desperate to sell and lower their prices below market rates.
6. Look for properties on the market a long time: Prices will sometimes fall on properties that have been on the market for more than two months.
Marketing of these properties often follows a pattern: vendors start off asking too much; agents lose interest, sometimes even warning prospective buyers that the house is overpriced and the vendor is difficult; vendors become desperate to sell; vendors cut the price heavily, sometimes below market value.
7. Monitor housing supply levels: When the supply of housing is rising sharply, buyers are in a much stronger position to negotiate for good deals.
According to figures compiled by SQM Research, the number of listings in Australia rose by more than 40% last year. Sydney had the lowest rise in housing supply, at 19.5%.
8. Future rezoning can increase value: Kalofonos says that housing with views over industrial areas could be worth buying, as they will be much more expensive if the land is rezoned to residential and new housing is built on former factory land.
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How to find property bargains 

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A prospective tenant of a Melbourne house recently offered management agent Melanie Dennis $50 a week more than the $400/week rent being asked at the property to try to secure the tenancy.
Dennis, the managing director of real-estate agency Domain Property Advocates, says offers of this kind are not unusual in the cutthroat under-$600/week rental market. With vacancy rates hovering around 1% across Australia and rents expected to rise by about 7% this year in capital cities, some renters are desperate to get a toehold in.
But despite a market that favours landlords, Dennis says she does not recommend a property owner necessarily accept the highest rental bidder. She says she always checks references carefully to ensure quality tenants. Additionally, bidding above the advertised rent levels could be illegal in some states.
Property Observer offers eight strategies to make the most of increasing rents – without losing highly prized, reliable tenants.
1. Give tenants notice of rent increases far in advance
Landlords in Victoria and NSW are required by law to give tenants 60 days’ notice before a rent increase. Landlords are also not allowed to increase rents during a lease.
Gary Triganza, senior property manager for inner-city Sydney agency Kelly &amp; Sons, says it could be beneficial to a landlord to give 60 days’ notice of a rent hike well before a lease expires.
Dennis suggests that landlords begin to think about increasing the rent three months before the lease expires in order to give them time to check market rents and get advice from agents on current market values. This all takes time.
“You will want any rent increase to lock in from the first day that the lease expires,” Dennis says.
2. Sometimes keeping good tenants is more important than getting the highest possible rent
Triganza says landlords should think about keeping rent slightly below market rate in order to keep a really good tenant. “Landlords can then go to the full market rent with the next tenant,” he says.
This strategy could actually save landlords money in the long term. “If a tenant looks after a property, it might need painting, say, every nine or 10 years instead of every, say, five years,” Triganza says.
Dennis says charging a tenant, say, $10 a week less than the market rate amounts to a valuable saving of $520 for the tenant, which might keep him or her in your property for longer. This in turn saves the landlord money, as rental income is not lost while searching for another tenant and the property is not being damaged with furniture being moved in and out.
3. Don’t charge rents above what the market will allow
Rents that are too high will scare off prospective tenants, leaving the landlord with no source of income, Triganza warns.
Dennis adds: “Every week that a property with a market rent of $350 a week, for example, sits vacant, the landlord is losing $350 a week.”
She also warns that tenants who are willing to pay above-market rates may be offering more because they have a poor tenancy history.
4. Make sure the agent checks all references
“Don’t take it for granted that your agent has checked the references of people who want to rent your property,” warns Dennis.
“I check a minimum of five references for each property. I won’t put a bad tenant into a property; I have to manage it.”
5. Insist on a rent-rise clause in leases longer than a year
Dennis says rent-rise clauses are especially crucial in markets when rents are increasing rapidly.
Triganza says in such tight rental markets landlords should consider offering six-month leases. Shorter leases enable landlords to raise rents more quickly. However, he says some landlords prefer the security of a long-term lease to the potential extra income from being able to raise rents frequently.
6. Let go of bad tenants
Due to the shortage of rental units and competitive rental market, Dennis says you do not have to put up with a tenant who is late paying rent, fails to keep the property clean or causes damage.
She suggests landlords tell tenants about any problems with their conduct, and if necessary, give them notice to vacate, even if the lease is not yet up.
However, she recommends that landlords try to maintain good relations with tenants by ensuring properties are in good condition. Tenants are more likely to look after properties that are well-maintained.
A well-maintained property is also more lucrative than a neglected one, as it can bring in hither rent. “Keep the property up to scratch, but I am not suggesting major renovations such as extensions,” Dennis says.
7. Review rents regularly
Fitzpatricks Real Estate property manager Lynette Kimball, who works in the regional NSW city of Wagga Wagga, suggests landlords review rent levels ever six months and try to keep rents at market rates.
8. Be aware of the effect of below-market rent on capital values
Kimball, who is chairwoman of the property management chapter of the Real Estate Institute of NSW, says keeping rents significantly below market rates for four or five years can backfire, because although it may ensure good tenants stay in the property, it can damage the resale value.
Kimball says she has seen instances when properties did not sell for expected prices because landlords were not able to show a history of satisfactory rents. “Consider not just today but the capital growth in the future,” she advises.
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How to keep good tenants

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

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After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

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Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

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Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

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For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

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Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

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Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

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Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

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The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

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The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Michael Laurence

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