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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>
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<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>
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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

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

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One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more internation and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

Michael Laurence

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