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After three weeks of zero tasking, it is finally time to kick off the new year.
We’d like to wish you a very happy 2012 and to share with you some of the stats from the Matusik Missive throughout 2011.
You may already have some sense that the Louvre Museum has 8.5 million visitors per year.  But what you won’t know is that the <a target="_blank" href="https://matusikmissive.wordpress.com/">Matusik Missive</a> was viewed about 89,000 times in 2011, which means that, if it were an exhibit in the Louvre, it would take about four days for that many people to see it.
In 2011, there were 68 new posts, bringing our archived collection to 149.
The busiest day of the year was October 19th with 2,196 views of <a target="_blank" href="https://www.propertyobserver.com.au/residential/overseas-buyers-must-be-encouraged-to-help-our-housing-market/2011101851983">this post</a>.
The top five Missives for the year:
1.  <a target="_blank" href="https://www.propertyobserver.com.au/residential/overseas-buyers-must-be-encouraged-to-help-our-housing-market/2011101851983">Overseas buyers must be encouraged to help our housing market</a>
2.  <a target="_blank" href="https://www.propertyobserver.com.au/developments/a-tale-of-two-queensland-buildings-an-investment-property-s-worth-should-be-determined-by-income/2011111552374">A tale of two Queensland buildings: An investment property's worth should be determined by income</a>
3.  <a target="_blank" href="https://www.propertyobserver.com.au/landlords/investors-should-consider-buying-nras-properties-michael-matusik/2011112252487">Investors should consider buying NRAS properties</a>
4.  <a target="_blank" href="https://matusikmissive.wordpress.com/2011/03/09/the-most-overvalued-in-the-world/">The most overvalued in the world!</a>
5.  <a target="_blank" href="https://matusikmissive.wordpress.com/2011/07/13/the-black-knight/">The Black Knight</a>
Our readers came from near and far.  Most, of course, were from Australia, followed by the United States and New Zealand.
But 2011 also saw readers from:
Asia – Singapore, Hong Kong, Qatar, Malaysia;
The Middle East – United Arab Emirates;
Europe – The United Kingdom, Germany, Russia, Poland and Italy;
Africa – South Africa,Tanzania, Sudan and Algeria;
North America – Canada, Cayman Islands, Mexico and the British Virgin Islands; and
South America – Brazil, Chile, Paraguay and Ecuador.
Proud of us!  We are chuffed – being so bleeding edge and all.  But we must admit that until yesterday, we didn’t know that the British Virgin Islands even existed.
Thanks for following the Matusik Missive.  Please feel free to share it with your friends and colleagues – or send us their contact email addresses and we’ll ask them if they’d like to be added to the Missive list.
We welcome your comments – always!  Just keep them clean (well, somewhat) and be honest.
We’d like to think we can make a difference – and with your readership and support, we will.
Oh… and before we leave you, don’t forget about our <a target="_blank" href="https://www.propertyobserver.com.au/residential/how-to-use-your-second-home-to-secure-a-dream-vacation-michael-matusik/2011120452664">3rd Home offer</a>.  It still applies, but not for much longer.
Now back to our work spasm.
PS Zero-tasking means doing nothing.  Bleeding edge is something even more cutting edge than cutting edge and a work spasm is the productive but short period of time after a holiday.  Two days back today and bring on Easter and quick smart!
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>.
 
 
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A look back over 2011's most successful columns

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In spite of the battering that the residential market has taken of late, many Australians still aspire to own investment property. 
When considering whether to buy new versus older property, price is only ever part of the equation. 
And buying a new dwelling has numerous benefits over buying a second-hand property. 
One important benefit that new homes offer investors is great capital depreciation, with up to 60% of the built cost being tax-deductible over time. 
When considering a brand-new investment property, and in particular, when deciding to build or purchase off the plan, it is wise to obtain advice from a depreciation specialist as early in the planning stages as possible. 
That way, an investor will be aware of the best choices to make in order to maximise depreciation benefits. 
For example, when a property is being built, the selection of fittings and fixtures will determine their dollar value in terms of depreciation deductions. 
And this, in turn, will make a difference to the cash flow potential of a new investment property. 
Let’s look at floor coverings by way of an example – carpet versus timber floorboards versus tiles.   For depreciation purposes, each of these is deemed to have an effective life.  Carpet – 10 years; timber floorboards – 15 years; and tiles – 40 years. 
A $2,000 outlay on floor coverings, for example, would result in the following depreciation benefits in the first year:  Carpet – $400; timber floorboards – $267; and tiles – $50. 
Similarly, for a $2,000 expenditure on lighting, ornamental lights with a five-year effective life would incur an $800 depreciation benefit in the first year, versus down lights with a 40-year effective life and a $50 depreciation benefit in the first year. 
And naturally, depreciation benefits continue in subsequent years until all amounts are exhausted. 
Armed with this sort of knowledge, an investor might find it financially viable to upgrade a level of finish from, say, low to medium or medium to high. 
But it takes an expert in the field to keep up with the machinations and new methodologies of the ATO, and to structure depreciation schedules that will maximise benefits for owners. 
These days, for example, renovating is on the rise.  And what some new or would-be investors may not know is that they can claim deductions for an old property that is scrapped. 
When building a new investment property and tearing down an old home, items that are scrapped or removed, such as carpet, air-conditioning units, stoves, etc, may have left over value that can be claimed as a tax deduction in the year of removal. 
The same applies to the qualifying structural element of the property.  But the important thing is to obtain a tax depreciation report pre-demolition, in order to be eligible for any savings at tax time. 
Depreciation is basically a numbers game, but with a twist.  Broadly speaking, most of a building is claimed at 2.5% per year for 40 years, however, up to 25% of the total construction cost can be written off more quickly. 
Good luck with that investment.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>.
For more advice on investing off the plan, <a href="http://propertyobserver.com.au/ebooks/free-ebook-10-tips-for-investing-off-the-plan" target="_blank">download our free eBook.</a>
 
 
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New property has significant advantages for investors

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It’s just about over – the year of the great Australian house price debate.
If there were a prize for the number of diverse viewpoints on the future of our housing market, 2011 would claim it.
The Super-Pessimists, like Steven King ….oops, Keen, and Harry Dent, predicted prices would plummet 40 to 50%.
The Economist proclaimed the market 56% over-valued, while Money Morning prophesied a nightmare “100-year slump”.
And as if that weren’t enough to put a serious dent in confidence, the Pessimists, like the OECD and Goldman Sachs, did further damage with reports of house prices up to 35% over-valued.
Groups like Morgan Stanley and Rismark – we’ll call them the Stagnationists – indicated we will all be treading water.  They anticipate longer-term flat prices.
SQM Research forecasts little change at all.
But the range of opinions didn’t stop there.
Optimists, like Investment Property Central, focused on the stability of property but ignored any effects from the GFC.
And the Super-Optimists, like QBE/ BIS Shrapnel, forecast faster economic growth and gains of anywhere from 16 to 20% in some of our capitals over the next three years.   We wish!
So, what do we think?
Well, like the Stagnationists, we anticipate very little movement – at least for the immediate future.
In a nutshell, we expect a period of fairly flat growth for the next several years, on the eve of modest improvement.
Prices should rise, but they will be subdued, and they should increase on the back of rents.
One hurdle – our recent drop in population growth – has caused underlying demand for housing to drop by a third across Australia since 2009.  Queensland and Victoria have experienced even greater falls.
Thus 2011-12 will be a slow year for new housing starts – just 135,000 are expected to be built over the next 12 months, a drop of 15% over the previous year.
Assuming stable interest rates for the next six to 12 months, this level of new supply would comfortably cater for the expected increase of about 325,000 in the Australian population next year.
Our forward estimates are for, on average, between 150,000 and 160,000 new housing starts each year over much of the next decade.
A fall in interest rates would have a positive impact on new housing starts, but without a rise in population growth, there is really little need to build more dwellings.
Queensland’s outlook, however, is beginning to look a little sunnier.
The state’s growth is on the rise, boosted by coal output and major resource development.
And the number of full-time jobs is increasing which, ultimately, will translate to higher levels of migration, stronger housing demand and eventually price (and rental) growth.
But patience is crucial.
To recap, we look to some improvement in nominal terms, but in real terms, expect a period of flat growth.
Improvement should follow, within a small positive band of 2% to 4% per year over the next several years.
Wishing you good health, good cheer, and growing confidence throughout the new year.
 Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
 
 
 
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The great house price debate - which side will be proven right in 2012?

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As we look back on 2011, Property Observer is republishing some of our most noteworthy observations of the year. 
 
Population aging in Australia is expected to accelerate.  At present, there are 5 million people over the age of 55 across Australia.  Within the next 40 years, that number is expected to exceed 11.5 million.  This represents a projected growth rate of 150,000 people per annum.
Within a generation, a third of Australians are going to be aged over 55 years old and close to a quarter will be aged over 65.
Assuming that all those aged over 55 years were to move into a new dwelling, there would be a need to create 90,000 new homes across the country each year for this older market segment.  However, most “55-plus” households cannot afford to move into more appropriate accommodation.  The high entry and rental costs of the current retirement products on the market prevent them from doing so.  Many will be forced to age in place.
As a result, the more practical requirement is currently for around 15,000 new retirement dwellings per year, three-quarters of which are needed across the eastern seaboard.  This market is quite undersupplied.  Our estimates suggest that new retirement housing construction has ranged from between 3,500 to 4,250 new starts each year over much of the last decade.
Some relevant statistics
About 80% of “55-plus” households own their home outright, with around 15% either renting or living with relatives.  Most have not moved in the last five or 10 years, while half have not moved in more than 20 years, as the number of times a person moves residence declines considerably with age.
When “55-plus” households do move, it is primarily for lifestyle reasons (35%); followed by affordability grounds (25%) and the want for a smaller and more hassle-free home (20%).  One in 10 moves to be closer to family or friends.
Many in this older market segment are very sensitive to price.  Their new abode must have a strong connection to the local setting.  This market also places a high value on living with others of similar background, age and interests.  This trend also seems to accelerate as one ages.
Whilst many own their principal place of residence, and have done so for some time, many Australians over the age of 55 years are cash-poor.  The latest official data shows that 55% of our older residents live on less than $500 per week and 35% live on less than $350 per week.  Sadly, one-quarter of Australian residents aged over 45 years have no personal income, with 45% largely relying on a government pension or allowance.  A further 25% rely on their investments, including superannuation.
Housing costs
The median house price across our Australian capital cities is now $540,000.  For attached dwellings it is $455,000.
However, older Australians generally own older properties, which in turn generally have lower median values.  In addition, many of the properties held by older Australians need repair, sometimes in a major way, are usually located in middle to outer-ring suburbs and have limited renovation appeal, especially to a younger buying audience.
In short, many properties held by older Australians could be difficult to sell and for a premium.
 
<hr class="system-pagebreak">
 
Australia is facing a demographic tsunami.
There are 5.3 million baby boomers (born between 1945 and 1964), and the oldest are now starting to retire.
This dominant market segment makes up 25% of the Australian population; represents 38% of the country’s households; 43% of the paid workforce and holds 49% of our housing assets (in dollar value), split 46% for owner-occupation and 57% for investment housing.  Yet they do have great equity in their properties – 93% for owner-resident stock and 86% for their investments and secondary homes.
Two out of three of their residential properties are held in a middle-ring suburb.
The baby boomer generation has always distorted the market – like a tennis ball through a garden hose – with some studies suggesting that this demographic set, by its very existence alone, generated about a third of the house price growth over the last 40 years.  Some are now predicting the opposite influence, with ageing boomers applying a drag on asset growth of between 20% and 40%, depending on location.
So, what will the boomers do with their residential assets when they start to retire or retread?
Well, five things are possible:
<ul>
<li>They will sell their investment properties.</li>
<li>They will sell their secondary homes.  But the market conditions are soft and are likely to remain so for some time, hence concepts like <a href="https://www.propertyobserver.com.au/residential/how-to-use-your-second-home-to-secure-a-dream-vacation-michael-matusik/2011120452664">3rd Home</a> will gain traction.</li>
<li>They will downsize, rebuy and pocket the difference.  But this might pose some problems as the right stock isn’t readily available.</li>
<li>They will age in place and maybe consider a reverse mortgage.</li>
<li>They will stay put, but retrofit their homes and rent out a proportion to family and/or tenants.</li>
</ul>
Whether or not ageing boomers will cause the market to implode is open for debate, but a couple of things are pretty certain:
<ul>
<li>There is likely to be slower price growth in the next decade than we have seen in the recent past.</li>
<li>There will be fewer housing starts and sales on a per capita basis.</li>
<li>There is going to be more pressure on gentrifying our middle-ring suburbs.  We need to think outside of the square here and start, for example, redeveloping our older shopping precincts into mixed-use centres including age-in-place retirement accommodation.</li>
</ul>
What would help baby boomers and other market segments move (and make housing more affordable) would be to have stamp duty paid by the vendor and not the purchaser.
It is useless banging on about the need to reduce taxation on property.  In a country where about half of the population relies either directly (i.e. employment) or indirectly on the government for its welfare – reminds me of Ayn Rand’s Atlas Shrugged – and we don’t want to increase overseas migration (yet) – we will need to raise taxes, and property is an easy target.
What we could do is change who pays such taxes and when.  Stamp duty paid by the vendor makes sense; so, too, does levying infrastructure charges and development application fees at the time end-buyers settle, rather than at the beginning of the new project.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>.
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Australia's ageing baby boomers will dramatically change the property market

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Housing affordability has been in the headlines again, but this time around some seriously good research is the cause.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">A new <a target="_blank" href="https://www.ahuri.edu.au/themes/housing_affordability/">study</a> for AHURI (Australian Housing and Urban Research Institute) strongly suggests that the traditional method of calculating housing affordability is outdated and should be considered in conjunction with other ways of weighing up whether people can afford their mortgage or rent.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">We have been banging on about this for close to a decade, and this missive pulls together some of our thoughts on this matter.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The most commonly used benchmark to determine whether housing is affordable is if it costs less than 30% of a household’s income.  However, few know that the 30% benchmark was established at the government’s 1992 National Housing Strategy and was intended to apply to lower-income households only.  However, it is more often than not now quoted in reference to all households – even those on higher incomes.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Another point of contention is the source of the “household income” information.  Most commentary on this issue uses median weekly family income.  A family is defined as a married couple with or without dependent children.  Such a definition is quite prescriptive and precludes a large number of home buyers.  No consideration is given to age, for example, which provides a much better basis on which to analyse housing affordability.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Also contentious is that the income data is derived from the ABS census and updated on the basis of movements in average weekly earnings.  We remain sceptical about certain elements of the census and the income data concerns us the most.   One in eight households across Australia do not state their income on their census form, resulting, we believe, in a lower median household income than is really the case.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">In our experience, using income figures sourced from the Australian Tax Office provides a more accurate picture.  And the statistics here don’t lie, with median household income across Queensland, for example, being 21% higher when measured by the ATO against the census.  In short, it is harder to lie to the ATO than it is to the statistical bureau.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Some better measures

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The first one looks at income left over after debt servicing.  This approach paints a different picture to that obtained simply by calculating the proportion of income devoted to repayments.  Rising incomes have allowed households to meet rising loan repayments while maintaining, and often increasing, living standards.  Rising household incomes mean that the 30% traditional affordability benchmark is now outdated.  In fact, given higher income levels now, households can devote as much as half of their income to debt servicing, while maintaining the same standard of living.  The AHURI study found similar results.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Another approach recognises the shortcomings of using median incomes of all households (or families) and instead considers the incomes of households in the age bracket of typical first-home buyers.  In this case, this relates to households in the 25 to 39 age bracket.  When looking at the proportion of residential sales by price range and taking into account interest rates and borrowing capacity, the typical first-home buyer could afford to buy one-third of the dwellings for sale across the country.  We estimate that this figure lifts to just under 40% for Queensland.  Now, while this is down on the long-term average of 45%, housing affordability measured by this series appears far less stressed than the traditional measures.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The big problem here is that first-home buyers these days want everything that opens and shuts in their first home.  A recent ABS study shows that three out of four first-home buyers bought either three- or four-bedroom dwellings last year, with 26% buying a property with four or more bedrooms – as their first home!  It probably had fully ducted air, secured off-street parking and a swimming pool, too.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">A third of first-home buyers are couples and another 25% live alone.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The last measure involves taking into account investment assets and income.  Ratios of household debt to assets have been much more stable over recent years than the ratios of debt to income.  It needs to be noted that traditional measures of affordability fail to take into account investment income.  When you do so, affordability measures appear far less stretched.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">These three measures suggest that housing affordability is not as dire as many fear.  This is borne out by Australia’s very low housing loan arrears rate.  While the housing loan arrears rate has risen over the five years, it still remains low by international comparison.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Anecdotal evidence also suggests that housing affordability is not as constrained as some would have us believe.  If you remain sceptical, spend a few hours in a major shopping centre and watch how many potential first-home buyers are spending up – and big.  Or visit your local airport on the weekend and see how many young couples are off for a weekend away.  The same applies when dining in some of our better restaurants.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Housing affordability is at nowhere near crisis level in this country.  Instead of the government giving ‘hand outs’ to first-home buyers – which only lifts price – policy should address structural factors that lead to excessive housing demand and/or inadequate supply.  And please don’t get me started on the baby bonus!

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">In the meantime, some “plain speak” is needed.  Potential first-home buyers need to be told that buying your first property is not easy; it involves sacrifice and compromise to your current lifestyle.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">To renters (and first-home buyers alike) paying 30% of your income for shelter is not outrageous.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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Housing affordability in Australia is not as dire as you think

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So interest rates have fallen again.
Hmmm, my first reaction is to start quoting the “shrinkage” part from “The Hamptons” episode from Seinfeld.
For those who aren’t Seinfeld fans – yes it is hard to believe but they do exist – below is the relevant segment of the script.  I have also included a synopsis of the complete episode for the unenlightened among you.
 
<hr>
 
George: Well I just got back from swimming in the pool.  And the water was cold…
Jerry: Oh… You mean… shrinkage.
George: Yes.  Significant shrinkage!
Jerry: So you feel you were short-changed.
George: Yes! I mean, if she thinks that’s me she’s under a complete misapprehension.  That was not me, Jerry.  That was not me.
Jerry: Well, so what’s the difference?
George: What if she discusses it with Jane?
Jerry: Oh, she’s not gonna tell Jane.
George: How do you know?
Jerry: Women aren’t like us.
George: They’re worse!  They’re much worse than us, they talk about everything!  Couldn’t you at least tell her about the shrinkage factor?
Jerry: No, I’m not gonna tell her about your shrinkage.  Besides, I think women know about shrinkage.
George: How do women know about shrinkage?  (They see Elaine walking down the hall) Elaine! (She enters)  Do women know about shrinkage?
Elaine: What do you mean, like laundry?
George: No.
Jerry: Like when a man goes swimming… afterwards…
Elaine: It shrinks?
Jerry: Like a frightened turtle!
Elaine: Why does it shrink?
George: It just does.
Elaine: I don’t know how you guys walk around with those things.
“The Hamptons” (Episode 85/Season 5):  Jerry and the gang go to the Hamptons for the weekend to see their friend’s baby.  George gets upset when he realizes that his date went topless on the beach.  In exchange for Jerry having seen her breasts, George wants to see Jerry’s date naked.  Instead, Rachel walks in on George undressing after a swim, and she witnesses his post-swim “shrinkage”.  Jerry and Elaine are shocked to discover how ugly the baby is, and Elaine becomes especially confused when the handsome Dr. Pfeiffer describes both her and the baby as “breathtaking.”  Kramer finds a filled lobster trap.
 
<hr>
 
 
So I guess I have three things to say.
Firstly, beware of what you are doing, RBA, you just might frighten us into economic “‘shrinkage”.  You know, the “paradox of thrift” and all that jazz.
Secondly, despite what some economists think, confidence will not be restored by a few interest rate tweaks.  We need to go to an election (and two in Queensland) before we get our pep back.
And finally, at least this interest rate commentary is half interesting!
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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The RBA should be wary of economic 'shrinkage'

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Apparently – well according to Luke or Matthew (I get so confused as to who said what in the Bible these days) – Jesus said to Satan, “Man does not live by bread alone, but by every word that proceeds out of the mouth of God!”  Well, I don’t really know about the words from God either, but living on nothing much rings true.
So in the spirit of the season, I bring you Missive Monday.  From now on and on a semi-regular basis – and yes, on Mondays – we will feature a property-related product or service that we think offers real value for money.  Of course, we have done a bit of a deal, so we get some coin – note coin and not dollars – for helping out with promotion.
We have resisted placing advertising on the Matusik Missive site but instead – and let’s face it, we all need to earn a crust – Missive Mondays will bring you legitimate offers than we think provide real value for money.
This Monday will bring you <a href="https://www.3rdhome.com/">3rd Home</a>.
3rd Home is easy to join, is affordable, is a quality product and offer, and is extremely timely given the current and emerging market conditions.
Australia is facing a demographic tsunami.  It is named “baby boomers approaching retirement”.  There are 5.3 million baby boomers (born between 1945 and 1964), and the oldest are now starting to retire.  This dominant market segment makes up 25% of the Australian population; represents 38% of the country’s households; comprises 43% of the paid workforce and holds 49% of our housing assets (in dollar value), split 46% for owner-occupation and 57% for investment housing.
Two-thirds of 800,000 unoccupied second homes (yes, there are that many) dotted around the country are also held by baby boomers.
So what will the boomers do with their residential assets when they start to retire or retread?  Now while they, on average, have great equity in their properties – 93% for owner-resident stock and 86% for their investments and secondary homes, they might want to sell some or all of these assets.
But if the market for such assets remains soft, what can boomers do instead of selling off quality assets in a buyer’s market?
One answer is to check out 3RD Home.
What is 3rdHome?
3rd Home is a “members only” luxury second home global property exchange program. Membership allows second-home owners to exchange weeks in their second homes for vacations at hundreds of international destinations.  At last look today, there are over 800 properties in the program and over 1,000 weeks currently available! By depositing unused weeks in your property into the club system, you earn “keys” that can be immediately used to stay at a whole host of other fabulous places.
<img src="/images/stories/matusik2.jpg">
Pictured above and below are actual 3rd Home members’ properties in Greece and in Noosa.  Both are valued at five “keys” in the 3rd Home system, and members can stay in either property (I for one would pick Greece) for just $495 per week.  Amazing, hey!
<img src="/images/stories/matusik3.jpg">
3rd Home was created to fill a need expressed by second-home owners who wanted to hold their assets but also experience a different getaway experience.  In short, the benefits of owning a second home can be magnified by sharing your vacation home with other 3rd Home members around the world.
As a 3rd Home member you stay in a home that meets your standards.  All 3rd Home properties are part of a private club that comprises affluent travel-minded members who own a second home.  All 3rd Home members have their own properties in the program.
Regardless of whether you rent your second home out or just keep it for family and friends, there is a certain amount of value that can be unlocked with 3rd Home membership.
As a program based on reciprocal benefits, 3rd Home members get out what they put in.
<ul>
<li>Just deposit the number of weeks that you are willing to let others use your property.</li>
<li>Instantly receive “keys” for your deposited weeks.</li>
<li>Find the property you want at the time you want it and use your “keys” to secure it.</li>
</ul>
The 3rd Home platform allows members to make their plans in real time.  No waiting for any replies, if the property you want is available and providing you have enough “keys” in your account, you simply pay a $495 booking fee and it is yours. Once a booking has been made, the 3rd Home system allows both members to converse on the arrangements and details.
3rd Home ensures that each property meets the highest levels of quality, and the site provides detailed information about each member’s property, so everyone can make informed decisions before they book another second home for themselves.
3rd Home has also introduced a feedback system, which provides added peace of mind and allows guest and host members to comment on each exchange experience.
The 3rd Home reciprocal benefits system is built on platform that uses a simple “credit” and “debit” arrangement based on the use of “keys”.  “Keys” have a 15-month life span, providing members with plenty of time to take a dream vacation or two.
Do you want to find out more?  Remember this isn’t time share!  I have arranged for Matusik Missive subscribers to receive a two-year free 3rd Home membership, valued at $495. Click <a href="https://www.3rdhome.com.au/matusik/" target="_blank">here</a> to find out more.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>. 
 
 
 
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How to use your second home to secure a dream vacation: Michael Matusik

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In reply to the many emails we received from yesterday’s missive (posted below), here are some of the design-related things that buyers should consider when buying an apartment (and other attached product like townhouses) before construction has begun.
•             The fewer apartments in a complex the better.  This reduces the number of stock for resale at any given time.  For larger developments, select a project with a wide variety of apartment designs.  This, too, helps when it comes to resale.  It is quite common to have one in every 10 to 12 apartments or townhouses in a complex up for resale at the same time.
•             Beware of all the shiny new toys.  A good foyer or useable public gathering space is important, as such space doesn’t often exist on individual floors or in the apartments themselves.  And apart from anything else, allowing guests and others to gather in the complex proper might annoy other residents and could become a security issue.  On that note, it is important to have a functional security system and good phone/internet access.  But the other things that are often included in new medium- and high-density projects – the pools, spas, saunas, gymnasiums, theatrettes and party rooms – catch buyers but not necessarily more rent.
Some things work well, such as snooker tables in student accommodation, but most amenities end up costing the owner money, and often lots of it.  Ask yourself: Will the target tenants actually use the facilities?  Our experience is that most won’t.  And they won’t fork out more rent for them either.
•             The way to get more rent and a better return in an apartment or townhouse complex is to buy product that can be more easily shared and has some half-decent storage.  The key to sharing is equally sized and positioned bedrooms, each with its own ensuite.  One-bedroom apartments need to be designed so that a couple can comfortably live in them.  Secure basement storage is often not supplied but can be in most new projects.  Tenants will pay up to 5% more per week for such storage.
•             Often the best-designed apartments or townhouses are simply a square or rectangle.  This allows each room to get as much natural light as possible.  This, in turn, increases the perception of space – remember, apartments and townhouses in general are tight in terms of floor area – so buying a design that makes the dwelling look larger than it actually is pays dividends.  This can be done when the ratio of glass to solid wall is high; the ceilings are higher than standard issue; the bedrooms are sized to accommodate a queen-sized bed and there is little dead space, such as long hallways.  Alfresco areas (enclosable balconies for all of us plebs) also make apartments more usable and spacious.  So too, somewhat ironically, does a framed view rather than an expansive one.
One of best ways to get more space in an apartment is to get in early and buy the product immediately below a change in the apartment floor plan – say at level eight, for example, which might have 10 apartments per floor whereas level nine drops down to six apartments per floor.  Why? Because the apartments on level eight will have higher ceilings to allow for the change in blockheads.  I know of many repeat investors who have made tidy profits from this buying strategy alone.
•             Finally, it pays to have a separate laundry, a galley kitchen (even if it is small) and some secure off-street parking.  Also, and although it costs more initially (and remember it can be depreciated too), furnished apartments these days are popular with tenants and the rental premiums can be very good.
It also goes without saying that density needs to be off-set – so medium- and high-density developments are best located near public transport and places of work, and also within close distance to leisure precincts and quality public open space.
For more advice on buying off the plan, <a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-10-tips-for-investing-off-the-plan">download our free eBook</a>.
Three risks buyers take when buying off the plan – and how to avoid them
There have been several short reports for public consumption of late discussing off-the-plan buying.  Most have been masquerading as buyer tips or advice, but they take a very pro-developer side of things.
Now, without wanting to peeve too many of our developer clients – we have helped, after all, over 550 new residential developments (nearly all of which involved pre-selling) come to fruition over the past 15 years – below are my thoughts as to what a buyer should be asking when considering buying a dwelling before it has started construction.
I haven’t bothered to comment on the obvious here – stamp duty concessions; building depreciation; potential for growth before settlement (don’t we all wish!); time to sell your house or other investments or even the need to match the dwelling type to demographic/economic demand – but have touched on some less covered ground.
There can be great benefits to buying off the plan, but inherent in such purchases is risk.
One of the biggest risks is that the project is cancelled – or that the completion date will be delayed for lengthy periods of time, during which you may be required to commence paying fees without the ability to live in or rent out the property.
Another risk is that the development will not be built to a high enough standard to reflect the price you paid.
A third risk – which applies to investors – is that your property won’t attract the actual rent and yield you were told it would.
It is important to do your own homework in order to limit your risks – ascertain information regarding the property you are interested in and comparable sales/rents in the area.   It is also important to seek legal advice regarding the terms of any contract.  OK, now that the basic caveats are out of the way, here we go.
Risk 1 – the building is late or doesn’t happen
Right off the bat, a buyer should question the number of sales being reported.  A fast sales rate, with only a few remaining for sale, is one of the oldest spruiks in the book – it’s project marketing 101.
It used to be that a new off-the-plan dwelling sale was only reported as “sold” when a contract went unconditional, the full deposit was paid and all the necessary documentation was signed by both parties.  Too often today a “sale” is reported based on a holding deposit only – sometimes as little as $1,000.
One service my business conducts is “mystery shopping”.  We send buyers to new projects to critique sales techniques and to ascertain the real sales status.  Often, and increasingly of late, our mystery shoppers have been able to purchase “sold” stock.  Sometimes up to a third of the sales claimed to be made had not really occurred at all.
In addition to challenging the number of reported sales, a buyer should also ask if the proposed project has all the necessary development and building approvals to go ahead.
Another good thing to query relates to multiple sales being made to the same buyer.  Also, ask if any sales have been made internally, i.e. to people directly associated with the development, and whether any of the reported sales actually reflect unsold stock taken off the market.
A buyer should also question the time period for the reported sales.  Often developers will “soft” launch their new project to interested buyer groups many months before going to the open market.  Many of the sales might have been made during this period, yet the sales spruiking is often based on the public launch date.  Don’t always believe the “50 sales made in the first two weeks” or similar headlines.  Fifty sales might have been made, but our experience is that they took many months, if not up to a year, to make.
Finally, in relation to this first risk, a buyer should ask about the financial conditions needed to be met before start of construction.  And although somewhat obvious, too few ask about the exact planned start and finishing dates.
Risk 2 – building standard
First and foremost, make sure you know the answers to these questions:  Who is the developer and/or builder?  What are their track records?  Have they developed/built buildings before, and do they have any history of being sued over defects?
Also important is to check that the three-Fs (fixtures, fittings and finishings) in the display and printed material are guaranteed.  Beware of glossy leaflets with annotations along the lines of “artist impression” and “subject to change or availability”.
Ask, too, whether the construction will merely meet Australian standards.  These standards are, in the main, inadequate for the realities of modern urban living; and in particular, for those residing in large apartment complexes.  You are better off paying for higher than the prescribed building standard.
Risk 3 – rent and return
Paramount questions when building an off-the-plan apartment or townhouse are: Who will manage the complex?  What is their track record?  And under what circumstances could these arrangements change?
Sometimes the management rights are sold early in the piece.  That is OK, as selling the rights to manage a complex forms an integral part of a developer’s income stream.  But you should be told who they are and make sure that you have full voting rights at the first AGM.
While many buyers ask how much the body corporate fees are, like they do with council rates, too few ask for a breakdown of the body corporate costs.  Nor do they ask about cost projections.
Also, make sure that your view – for which you will pay a premium – is unlikely to be blocked by any future development.  And also ask an independent agent for their opinion on the suggested rent.
In most cases, you will receive honest and satisfactory answers to these questions.  But in those rare examples that you don’t, our experience is that it might be best to move on.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>.
 
 
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What to look for design-wise if you are buying off the plan

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There have been several short reports for public consumption of late discussing off-the-plan buying.  Most have been masquerading as buyer tips or advice, but they take a very pro-developer side of things.
Now, without wanting to peeve too many of our developer clients – we have helped, after all, over 550 new residential developments (nearly all of which involved pre-selling) come to fruition over the past 15 years – below are my thoughts as to what a buyer should be asking when considering buying a dwelling before it has started construction.
I haven’t bothered to comment on the obvious here – stamp duty concessions; building depreciation; potential for growth before settlement (don’t we all wish!); time to sell your house or other investments or even the need to match the dwelling type to demographic/economic demand – but have touched on some less covered ground.
There can be great benefits to buying off the plan, but inherent in such purchases is risk.
One of the biggest risks is that the project is cancelled – or that the completion date will be delayed for lengthy periods of time, during which you may be required to commence paying fees without the ability to live in or rent out the property.
Another risk is that the development will not be built to a high enough standard to reflect the price you paid.
A third risk – which applies to investors – is that your property won’t attract the actual rent and yield you were told it would.
It is important to do your own homework in order to limit your risks – ascertain information regarding the property you are interested in and comparable sales/rents in the area.   It is also important to seek legal advice regarding the terms of any contract.  OK, now that the basic caveats are out of the way, here we go.
Risk 1 – the building is late or doesn’t happen
Right off the bat, a buyer should question the number of sales being reported.  A fast sales rate, with only a few remaining for sale, is one of the oldest spruiks in the book – it’s project marketing 101.
It used to be that a new off-the-plan dwelling sale was only reported as “sold” when a contract went unconditional, the full deposit was paid and all the necessary documentation was signed by both parties.  Too often today a “sale” is reported based on a holding deposit only – sometimes as little as $1,000.
One service my business conducts is “mystery shopping”.  We send buyers to new projects to critique sales techniques and to ascertain the real sales status.  Often, and increasingly of late, our mystery shoppers have been able to purchase “sold” stock.  Sometimes up to a third of the sales claimed to be made had not really occurred at all.
In addition to challenging the number of reported sales, a buyer should also ask if the proposed project has all the necessary development and building approvals to go ahead.
Another good thing to query relates to multiple sales being made to the same buyer.  Also, ask if any sales have been made internally, i.e. to people directly associated with the development, and whether any of the reported sales actually reflect unsold stock taken off the market.
A buyer should also question the time period for the reported sales.  Often developers will “soft” launch their new project to interested buyer groups many months before going to the open market.  Many of the sales might have been made during this period, yet the sales spruiking is often based on the public launch date.  Don’t always believe the “50 sales made in the first two weeks” or similar headlines.  Fifty sales might have been made, but our experience is that they took many months, if not up to a year, to make.
Finally, in relation to this first risk, a buyer should ask about the financial conditions needed to be met before start of construction.  And although somewhat obvious, too few ask about the exact planned start and finishing dates.
Risk 2 – building standard
First and foremost, make sure you know the answers to these questions:  Who is the developer and/or builder?  What are their track records?  Have they developed/built buildings before, and do they have any history of being sued over defects?
Also important is to check that the three-Fs (fixtures, fittings and finishings) in the display and printed material are guaranteed.  Beware of glossy leaflets with annotations along the lines of “artist impression” and “subject to change or availability”.
Ask, too, whether the construction will merely meet Australian standards.  These standards are, in the main, inadequate for the realities of modern urban living; and in particular, for those residing in large apartment complexes.  You are better off paying for higher than the prescribed building standard.
Risk 3 – rent and return
Paramount questions when building an off-the-plan apartment or townhouse are: Who will manage the complex?  What is their track record?  And under what circumstances could these arrangements change?
Sometimes the management rights are sold early in the piece.  That is OK, as selling the rights to manage a complex forms an integral part of a developer’s income stream.  But you should be told who they are and make sure that you have full voting rights at the first AGM.
While many buyers ask how much the body corporate fees are, like they do with council rates, too few ask for a breakdown of the body corporate costs.  Nor do they ask about cost projections.
Also, make sure that your view – for which you will pay a premium – is unlikely to be blocked by any future development.  And also ask an independent agent for their opinion on the suggested rent.
In most cases, you will receive honest and satisfactory answers to these questions.  But in those rare examples that you don’t, our experience is that it might be best to move on.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
 
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Three risks buyers take when they buy off the plan – and how to avoid them

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To my surprise, very few investors (and sadly fewer property gate-keepers) know about the National Rental Affordability Scheme.  And if they know something about it, then they are dismissive of it.  And mostly – I feel – out of fear and/or ignorance.
Yes, like most government schemes, what NRAS is and its merits have been poorly communicated.  And in some instances, its application further entrenches its incorrect “welfare housing” persona.  But overall, it is a great scheme and too few investors (and developers) are taking the $10,000 annual rental subsidy seriously.
So what exactly is NRAS?
The National Rental Affordability Scheme or NRAS is a federal government initiative designed to tackle the issue of affordable housing.
NRAS is not a public or social housing program, but rather a tax incentive to provide quality housing at below market rental rates.
Run in conjunction with state governments, NRAS aims to induce more investment in the lower price range of the residential construction and rental market by offering inducements to investors who participate in the scheme.
NRAS offers property investors a tax-free incentive for each property for a maximum of 10 years.
Currently, this incentive is $9,524 per year for every NRAS dwelling an investor owns, comprising a federal government contribution of $7,143 per dwelling, available as a refundable tax offset; plus a state or territory contribution of $2,381 per dwelling per year, as a cash payment or in-kind financial support.
In return, rents for NRAS dwellings must be charged at no more than 80% of the market rent valuation and there is to be a maximum of one rent increase for each dwelling each year.
In Queensland for example, the state government maintains a list of NRAS-approved tenants, who must meet strict eligibility requirements.
When a vacancy occurs, eligible rental applicants are referred to approved tenancy managers who manage NRAS properties on behalf of owners.
Standard residential tenancy laws apply to NRAS properties just as they do for any private residential investment.
In other words, the same rules regarding evictions, maintenance obligations and responsibilities of tenants apply to NRAS tenants as they do to other tenants in the private sector.
Rents are indexed annually in line with the percentage change in the rental CPI component, except in years four and seven, when independent valuations are required.
And importantly, investors may exit the scheme at any time with appropriate notice and without any financial penalties.
In general, NRAS projects are well-located in terms of jobs, amenities and public transport.  And in general, the design and quality of NRAS dwellings compares favourably with any private non-NRAS dwelling.
NRAS properties often co-exist within developments with other non-NRAS product.
Some of the points of difference that NRAS offers to property investors are:
•             all the benefits of a normal investment property with added annual tax-free government incentives
•             investors can apply property expenses, non-cash deductions and allowances against a lower assessable rental income, increasing the gearing benefit
•             more than 1.5 million Australian households are eligible to rent NRAS properties, hence vacancy risk is negligible
•             tenants are selected on their potential to be good tenants and their capacity to meet strict eligibility requirements
•             in many markets, NRAS properties often deliver a cash flow-positive investment
•             importantly, self-managed super funds can purchase these properties
•             NRAS dwellings are private property – no government holds or caveats.
So here we have a scheme that shows many investment properties as cash-flow positive in the first year – and these are more often than not backed up by impressive (well by residential property standards) independent financial analysis.
What’s not to like here?  You are making money from day one; providing affordable rent for those that are finding it a bit hard; have a 10-year rental guarantee (assuming the government doesn’t water down or scrap the scheme); hassle free-management (on paper at least); and a box of chocolates from the government every year.
It appears to tick all the boxes.
Several of our developer clients inform us that their NRAS product is now the first to sell to investors.
Yet the banks are scared of it and will only finance 70% of the purchase price.  Some banks flatly refuse to be involved.  So, too, do too many solicitors, accountants, loan brokers and real estate agents.
True to form, valuers are discounting end prices by 20% – one assumes because the owner can only charge 80% of market rent and most valuers won’t include a subsidy when determining value, despite it coming from the government and being a 10-year program.
Yes, NRAS is somewhat new; it hasn’t been that well communicated and it is a government-funded subsidy.  But welfare housing it isn’t and gone are the days where one’s residential investment strategy was as simple as “buy and forget”.
Our mindset is that property investors will need to look for every break they can get.
NRAS is a break worth considering.
<a target="_blank" href="https://www.propertyobserver.com.au/residential/national-rental-affordability-scheme-opportunities-for-nsw-and-queensland-investors/2011112252029">Queensland and NSW have received more than half of the 17,000 incentives in the latest round of funding, </a>including for properties to be built in areas impacted by floods.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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Investors should consider buying NRAS properties: Michael Matusik

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

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" />

&nbsp;

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.

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]

Michael Matusik

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