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One of the current social themes is that the consumer is to blame for wanting a big home.  The new social order – excuse me if I get on my hobby-horse (again, you all say) for a second or two – wants us to buy something smaller and magically make our housing problems disappear.  Sadly, too many who clog up the blogosphere with urban commentary don’t understand the economics of new housing nor a rational buyer’s decision-making process.
Recent statistics published by the CBA show that Australia has the largest homes in the world, with the average floor area of a new dwelling (including townhouses but excluding apartments) topping 214 square metres, up from 150 square metres just 25 years ago.  The average floor area of new free-standing houses also set a record at 245 square metres.  Our homes are much larger than those within Europe and even many American cities.
Why has this occurred?
It is simply economics.  The actual land component of a new house-and-land package is very high and fixed.  The land usually costs about two-thirds of the total purchase price.  This is particularly the case for basic or entry-level new housing.  For example, the land component of a basic $375,000 house-and-land package in Queensland could cost as much as $250,000.
In contrast, a 150-square-metre three-bedroom base level house on that land would cost about $135,000 or about $2,500 per square metre as a total price (including the price of the land).  Now, a larger 250-square-metre four-bedroom house with a study might cost $175,000, making the end package cost $425,000.  The buyer gets 100 square metres of extra house for just $50,000 more.  The total end price per square metre has now dropped to $1,700 or 30% less.
Here is the real rub.  Assuming that the buyer can afford to pay the extra deposit and fund a $425,000 house-and-land package, all it costs – assuming a 10% deposit and using today’s rates – is an extra $10 per day in mortgage payments.  The new home buyer can now own a home that is two-thirds larger for just $70 per week.  To upsize the house, as outlined in the example above, would cost the buyer an extra $3,640 per year.
Given the high cost of land in and around our capital cities, the trend towards larger new homes makes economic sense.  Consumers are just acting in their own interests and are making rational decisions to choose a larger and more valuable home for what is a small additional out-of-pocket expense in the broad scheme of things.
Unless there are real economies in the land content – for example the plentiful supply of subdivided land to keep land prices keen – building a small house on a more traditional-sized suburban block of land is often not the best value for money.
PS And yet the large publicly listed development companies continue to peddle that the key to affordable housing is smaller homes (on smaller allotments). Yet at the coalface, agents tell us they are the last to sell and more often than not they resell quite poorly too.  What would really improve housing affordability would be the timely release of land in major estates.  Too often the big boys drip-feed supply onto the market in order to keep the land prices high via the illusion of undersupply.  Yet the mainstream media don’t question the press releases about McMansions and about how we should really live in smaller homes.   I find such particularly rich given that those who are behind these statements live in whopping big digs on large-sized lots in great city locations.
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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Bigger houses make economic sense

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We recently surveyed property investors, and concluded that this market appears set and ready to pounce.
Half of our respondents own between two and five investment properties and almost a third own just one.  Two-thirds have no intention of selling any of their properties for at least five years, and 76% plan to buy more residential properties in the future.
Now, let’s briefly recall the property clock, with 12 representing the market peak – a vendor’s market with strong price growth, rising sales and improving yields.  And six represents the market bottom – a buyer’s market with stagnant or falling prices, falling sales and uncompetitive yields.
From our survey, 72% believe that the market is poised at the bottom of that clock, between the five and the seven, with 25% believing we are approaching the bottom.
Reasons given for renewed interest and continued confidence in the market include:
<ul>
<li>Prices are low and being discounted – half of those surveyed believe the peak buying time is now, just over a third think we are nearly there</li>
<li>Low volatility, unlike shares</li>
<li>Future growth opportunity in rents and prices</li>
<li>Hedge against inflation</li>
</ul>
The majority said they prefer to invest in detached houses, with only 14% leaning towards townhouses and 8% opting for apartments. 
Investors like detached product because of the potential to add value; the high land component; the opportunity for higher rents (tenants can share); and the absence of body corporate or on site management fees.
The vast majority of our respondents are looking to invest in Brisbane, with just over half preferring the middle ring (five to 10 kilometres from the CBD) and 35% opting for an inner-city suburb.
Overall, our investors prefer to invest in capital cities.  Only 2% would consider a mining town.
We asked about the biggest issues facing the Australian residential market.  Here are the top responses:
<ul>
<li>Low affordability</li>
<li>Taxes and charges on new homes</li>
<li>Amount of resales on the market</li>
<li>Poor rental yields</li>
<li>All up, while investor sentiment appears positive, interest in residential property remains subdued. </li>
</ul>
What this survey confirms is that interest has been tweaked and while investors may be hesitant to act, they are most certainly watching and waiting in the wings.
No doubt, the recent share market volatility has helped to shore up belief in the property market fundamentals.
What’s really needed now is a structural change to help restore confidence and entice investors to start buying again.  This change involves elections – local, state and federal.
As we have seen in the past, when the confidence tide does turn, investors can be quick to act.  Don’t be surprised if in the first half of next year, Queensland, at least, will see a surge in investment buying.
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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Investors think Brisbane market will turn around soon

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Australia’s population growth has slowed by close to 150,000 in just two years, with a 100,000 drop in the actual growth rate over the last 12 months.  As a result, the underlying demand for new housing has dropped from 180,000 starts per annum to around 125,000.  While dwelling starts are declining, we are now building too much stock.
Unless new housing starts decline in earnest or population growth accelerates, Victoria, South Australia, Tasmania and the Northern Territory face an oversupply.  Perth and Canberra are better positioned, with Queensland currently at equilibrium and New South Wales undersupplied.
Much of Victoria’s potential pain lies in Melbourne’s recent inner-city apartment boom, during which an unprecedented proportion of the state’s new dwelling starts are apartments.  This mostly speculator-fuelled surge has provided some very misleading media headlines of late about the rise of apartment living and how it is becoming the new Australian dream.  Yet two-thirds of Australians continue to buy a detached dwelling.
What?!  This cannot be right.  The housing industry and banking economists keep reminding us how undersupplied the Australian housing market is.  Don’t we have a shortfall of something like 300,000 new homes across the country?  And isn’t this shortfall going to double in size within the next decade?
But I ask you, with an average of 2.6 people per dwelling (as per the 2006 census), where are these 800,000-odd displaced people living?  Yes, too many are living it rough, but 800,000 people equate to two cities the size of Canberra or one and a half of the Gold Coast.  Where are all these people living?  I don’t see thousands sleeping in cardboard boxes in Queen Street, for example.
With this thought in mind, a few years back I started questioning the undersupply myth.  I, too, was guilty of its circulation, and maybe more so than others.  But once you look into the facts and ignore the spin, you find that Australia’s new housing market isn’t that undersupplied at all.  Yes, we don’t have enough affordable new homes (under $400,000 for two and three-bedroom stock), but we have an ample supply of new dwellings pitched at speculators.
Also, as I have outlined numerous times before, the housing industry is being forced to deliver the wrong stock, and that which is supplied costs way too much.  Ask yourself why new housing sales only a decade or so ago accounted for 30% of the total residential transactions in this country, but today they account for just 10%.  Hmmmm.  And if we are so undersupplied, why do developers need to sell their new dwellings overseas and increasingly via aggressive investment selling campaigns and expos?
So, why is underlying demand much less than the urban boosters want us to believe?
Spare capacity. The 2006 census showed that there were 830,000 unoccupied dwellings across Australia.  They aren’t all apartments on the coast.  They are second-hand homes, used only occasionally.  Estimates suggest that about 40% of them are detached homes and many are in inner- and middle-ring suburbs in our capital cities.  Since the GFC, our survey work suggests that about 10% of these have been used on a permanent basis – either via being rented out or sold to a buyer intending permanent use.
We also have spare capacity in terms of bedrooms, in both owner-occupier and rental stock.  In tough times these rooms are used.  We can fit more people in our existing homes and often comfortably.
Different migration mix While our high migration intake gets a lot of airplay these days, what is often not discussed (other than xenophobic rants) is the change in where these migrants come from.  Today, migrants from China, India, Africa and the Middle East equal those coming from our more traditional sources such as the United Kingdom, Europe and New Zealand. These new migrants often live in bigger family groups than the more traditional migrant mix (and older Australian households as well), which in turn is pushing up the average household size and reducing the need to build as many new homes. 
Rapid rise in Australian births. Another trend that is pushing up the average household size is the rapid rise in the country’s birth rate, with over 300,000 babies born in Australia last year alone.  The current federal baby bonus no doubt helped, as does the recent 18-week paid maternity leave scheme.
In contrast to recent media reports, this surge in births suggests a strong and rising demand for multi-bedroom dwellings and mostly detached.  Most of our new migrants, too, want to live in a detached house with freehold land rather than a tight apartment.
These three factors, we believe, have caused a paradigm shift in underlying housing demand.  Past trends would suggest that for each new person in Australia, we needed to build about 70% of a new dwelling.  The current need is to build around half a new home (45%) for each new person in Australia.  This suggests that the new Australian housing market is nowhere near as short-changed as most of the industry bodies would have us believe.
Our recent property investor survey found that most local investors don’t think that the new housing market is undersupplied.  In fact, many think that there are too many new dwellings (and importantly, without substantial points of difference) on the market at present.
Property sales-related businesses that continue to spruik “undersupply” are doing themselves and their developer clients a disservice.  More time and effort should be spent in meeting a market’s needs – and subsequently selling these design/locational benefits to buyers – rather than just relying on the standard spruiking formulae of “undersupply means price growth”.
The rental market, in general, however, remains tight.  What happens with interest rates, rents and the amount of stock (new and resale) for sale will direct dwelling price growth in coming years.  We expect a return to price growth, albeit anaemic when compared to that experienced during the noughties.  But this assumes that rents continue to grow by about 5% per annum, interest rates don’t rise too much (0.5% to 1% over the next 18 months) and that the number of properties listed for sale drops (down at least 20% on current levels) back to more sustainable levels.
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 housing market is oversupplied. Yes, oversupplied 

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The best measure of the data on residential prices, RPData-Rismark Hedonic Index, shows that Australian house prices fell just 0.2% last month.  This equates to an actual drop of $1,200 against a median dwelling value of about $525,000.  Even on a quarterly basis, the drop is just 0.9% or $4,700.
This effectively means no change, which is amazing, really, given the low level of confidence, the high level of advertised stock for resale and the persistent warnings of a real estate Black Friday.  The year-on-year result is a fall of just 2% or $10,600.  Even Brisbane, with the impact of the recent flood weighing down its property market, has fallen just 2.6% or by $11,600 since January.  The Australian share market can fall more than this in a single day.
RPData’s index suggests that maybe the worst is behind us, with the monthly and quarterly results starting to trend upwards.  This recovery, however, is likely to be slower than those in the past, as many markets are now priced over $500,000, which presents an affordability barrier to many households and especially investors and first home buyers.  It will take some time before wages grow enough to start pushing dwelling prices.
Recent research, also by Rismark, shows that just one in 14 resales across Australia over the last decade made a loss.  Importantly, close to half of the sellers since early 2000 made an annual gain of over 10% per annum.  Keep in mind that capital growth can be deceptive as most measures exclude inflation, costs, taxes and charges.  But still, such a positive result is encouraging.
Yet the negative news abounds – the latest being from national valuation firm Herron Todd White.  HTW’s bearish August post has, as one would expect, received lots of airplay via a range of economic websites whose authors are proud of their track record of forecasting about 10 of the last two recessions.
Now, HTW’s work is correct, in that it is a buyer’s market and sellers need to meet the market in order to make sales, and yes, “most markets in SEQ have seen a 5% to 10% fall in prices over the past six to twelve months” But that doesn’t mean that the sellers have made a loss; they may have had to accept less for their property than they would have achieved a year or so ago.
Several Brisbane suburbs were used as examples in the latest HTW release – Gordon Park, Inala, Redbank Plains, Paddington and North Lakes.  I am quite familiar with two of these suburbs and have confined my reply to Redbank Plains and Paddington.
True, HTW, sellers need to seriously cut their asking price in order to make a sale.  My wife and I have just sold two properties in Redbank Plains  for about 10% less than we think we could have achieved a year or so ago.  But we still made about 25% on what we paid for both properties about five years ago.  Not one of our finest investment decisions, true, but we made money, albeit not that much.
Now, let’s look at Paddington.  I lived in Paddington for close to 10 years and it is a market I still know very well.  We concur with HTW’s general comment that if you are looking for a safe investment, then a good bet is an inner-city traditional cottage, and while you can still pick up such a property for around $600,000, this doesn’t mean that those who are selling cottages for these prices are taking a loss.
Over the last six months, the median annual gain made by sellers across Paddington was 7.6%, with just one in 10 properties selling for a slight loss.  This analysis excludes those properties which have undergone a serious renovation.
Also, sales around the $600,000 price point are becoming much scarcer than HTW’s comments would have a reader believe.  For example, during 2007, 55 houses sold for between $550,000 and $650,000 across Paddington.  In 2008, 36 similar sales took place.  In 2009 it dropped to 28; then in 2010 it rose to 31 and so far this year just seven sales have settled in this price range.
For mine, now is the right time to buy.  But you must be able to comfortably service a mortgage at least 1% higher than today’s rates.  Also, you need a long timeframe; the buying power to afford property close to infrastructure; and a property which can be shared by tenants in order to maximise your rental return.
HTW’s work, again, highlights that it is a buyer’s market and if you are not prepared to meet the market, then it may be best not to sell right now.  Sadly, any bearish commentary on the housing market is picked up very quickly these days in the blogosphere and it soon loses its original meaning and context.
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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Bearish property market predictions off the mark

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I can outline many reasons why I think interest rates should have fallen earlier this year.  These days, one’s reasoning has the most cut through if summed up in pithy quips – “two-speed nation”; “gloom and boom”; “paradox of thrift”; “OK but not happy” or my current favourite, “RVO” – Real Versus Official – economy, that is.
We can now, maybe, even add “GFC Mark 2” into the mix.
But for mine, interest rates are now, ironically, unlikely to fall.  In my opinion we are also unlikely to experience GFC Mark 2.  Remember, the share market isn’t the real economy. Ask yourself, did anything really happen last Thursday to make Apple, America’s most valuable company, worth $36 billion more than the day before?
The US downgrade is as much to do with politics as it is economics.  What we have witnessed (so far) is an overreaction and one which should, in time, correct itself.
There is no doubt that there is way too much debt in the world, that its geopolitical and economic structure is off-balance, and that Western governments continue to spend way beyond their means.  But we, as voters, get the government we deserve.  We demand that the government “spends tomorrow’s today”.  We don’t really want to save for a rainy day.  But gone are the days of “all things cheap”.  Some say we are just starting to enter the “peak of everything”.
Official interest rates, of course, stayed put earlier this month.  But for how long is questionable.  Since the release of the latest Australian inflation figures plus the US government downgrade, things have changed.
For those waiting for interest rates to fall, I now hope that you will be disappointed.  You should now also be careful what you wish for.  A drop in official interest rates would signal that Australia is close to recession.  Ironically, steady interest rates for the time being would do us more good in terms of confidence than a rate drop.  In short, the Reserve Bank is unlikely to cut rates in an environment with such serious market volatility.
So I hope, it is steady as she goes regarding official interest rates for the time being.
You see, and I do hope they are right, the RBA believes that our current economic malaise is only temporary, and that the economic softness (even despite recent events) is not entrenched.  In addition, as the central bank continues to point out, the Chinese economy remains sound – ensuring that commodity prices are healthy and the boost to the terms of trade remains intact.  Let’s hope that the RBA is right in this regard too.
Consumers are not spending out of choice rather than the inability to do so.  We need to be careful that we don’t “save” ourselves into demise – the classic paradox of thrift.
What is missing is a circuit breaker. For mine, that means government elections.
Most economic commentators, however, don’t understand why confidence is so low and hence we are not spending.  Most put forward last November’s rate rise, adverse weather events, weak overseas markets, stagnant job growth, falling house prices and rising household costs, to name just a few.  But very few realise – or are maybe too timid to say – that our overly frugal condition is largely self-inflicted.  We have elected (twice now!) a government that is largely incompetent, is anti-business and has little real interest in the economic wellbeing of the country.
Real inflation of course, not the official CPI measurement, but the increase most of us are paying for the essentials of modern life, is much higher than 3.6%.  Some estimate it is as high as 8.5% per annum at present.
Yes, a lift in official interest rates will have little impact on these rising costs, but we are not, as a nation, prepared to implement the things that would.  We need more tools in our economic tool belt – wholesale tax changes, a moving GST, far less governance, labour productivity reforms, a much higher migration intake, real town planning and most important of all, a long-term view.
A generational outlook is needed and not one based on a three-year election term – or worse still, one centred on the 24-hour media cycle.  But alas, the country isn’t mature enough for such a debate.
Several wise gentlemen, whose economic counsel I seek on occasion, believe that Australia’s cash rate will still rise by between 0.5% and 1.0% within the next 12 months or so.  The recent events will now most likely keep rates steady for the rest of calendar 2011.
So what impact will a 0.5% to 1% lift in the cash rate have on the new housing market?
Some great survey work to this end was recently completed by <a target="_blank" href="https://www.rbsmorgans.com/">RBS Morgans</a>.  Its recent survey of the construction industry found that 57% of home builders think that such a lift in interest rates would have a “very material” impact on housing activity. Western Australia and New South Wales, this survey suggests, would be worst hit, with each state scoring a 70% “very material” impact if rates were to rise. Queensland scored 60%, and Victoria just 30%.  Ironically, I believe that Victoria would be the worst hit when interest rates rise.  <a target="_blank" href="https://www.switzer.com.au/video/matusikaugust3/">Watch </a>here, if you are game!
Whilst some builders think that a rise in interest rates “would kill the market,” many of them believe that rate rises are on their way and most home buyers actually expect such.  The key is how much and how well spaced out these rate rises are.  Also, as we discussed in a recent missive, the pending lift in interest rates needs to be communicated clearly and well in advance.
Few of us will like it.  But instead of complaining, or worse still, continuing to argue for an interest rate drop, we should focus our attention on how we will build our businesses in such a climate.  Likewise, what we do regarding our investments.
I don’t have any great pearls of wisdom, but I do believe that in business you should prepare for the worst and hope for the best.  Ensuring cash flow and reducing debt/expenditure also helps.  And when it comes to investing – go long, hold your nerve, buy when the market is low and wait for the upswing.
So in summary, with inflation likely to be above the target range, economic activity uneven and the high level of the currency hurting some industries and regions, the RBA will face difficult decisions during the next couple of years as to what level the cash rate should be.  For now at least, the safest assumption is the RBA will leave the cash rate unchanged for the next three to six months, and then move it higher during 2012.
There is much more behind last week’s London revolt than elitism, corruption and too many social handouts.  For mine it runs much deeper than that.  The London rising (let’s call it that) wouldn’t have occurred if the elites (let’s call them that too) weren’t so corrupt, compromised and incompetent.  The real issue (to paraphrase <a target="_blank" href="https://www.stratfor.com/">Stratfor</a> CEO George Friedman) is: who are these people who are running things, what gives them the right to do so, and if that right does not somehow flow from competence, what does it flow from? We have a crisis not of corruption or disjointed wealth, but of sheer incompetence and worst still indifference to that incompetence.  The solution isn’t more regulation but enforcement of the regulations we already have in place.  The world is in need of some serious tough love.  Higher interest rates are just one of many bitter pills we are about to face.
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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We must be careful not to save ourselves into a recession

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Let’s face it, we don’t have expensive housing in Australia, we have expensive land.  The average cost of residential land overtook the median cost of constructing a dwelling, across all Australian capitals, about five years ago.  The difference between the two is now considerable and growing.  Volume builders in Queensland are constructing quality new detached homes for well under $1,000 per square metre. 
The proof is readily available.  Across the south-east corner of Queensland, for example, the price of vacant land per metre is now 2.3 times (230%) what is was a decade ago.  Established house prices (which include the price of land) also increased, but at a lower rate – they are 1.5 times (150%) the price a decade ago.  The cost of new project homes, which exclude the cost of land, are just 0.65 times (65% higher) what they were a decade earlier. 
Land is expensive because we have a shortage of it.  To the rest of the world, such a statement would be bordering on lunacy. Australia is one of the most spacious countries – based on total land area per capita – in the western world, after all.  And yet, ironically, we are one of the most urbanized places on the planet. 
Over-governance, green politics and town planning tomfoolery are corralling us into a handful of already crowded places.  This has created a shortage of land, driving up its price and resulting in fewer economically feasible developable sites.  Land now accounts for about two-thirds of the cost of a new home in our major capitals and close to half in our regional centres. 
There is no better place to illustrate how out of whack the system is than on the Gold Coast.  The Queensland Government and the local council are doing everything they can to make housing on the Gold Coast unaffordable, and in turn, undermining employment. 
Despite what we read in the daily press, the Gold Coast market – in terms of total stock – isn’t oversupplied.  There is just way too much of the wrong stock and too little of that which is in demand. 
The oversupplied stock consists largely of apartments, mostly in high-rise towers and priced over $800,000.  By default, this targets a short-term tourist market, which for the most part cannot afford to pay the tariffs.  In contrast, apartments under $600,000 are undersupplied but are suffering collateral damage, so to speak, given the negative commentary about the apartment market in general on the Gold Coast. 
There isn’t enough new detached housing or new townhouse development on the Coast.  The SEQ Regional Plan (which covers a time period from 2008 to 2031), expects 77% of new development on the Gold Coast to be “infill” i.e. medium and high-rise dwellings.  However, just three years into the plan, only half of the new starts are in “infill” areas.  The demand for detached housing is rising and is currently about 70% of the overall demand.  It can only be provided, and at an affordable price, on “greenfield” sites.  There are plenty of these sites available on the Gold Coast. 
There is little government can, or should, do about the price of “infill” real estate.  But there’s a lot they can and should do about affordable housing in “greenfield” areas.  This is where there’s an infinite supply of land available and a housing industry ready, willing and able to build top-quality houses at unbelievably low prices. 
The Gold Coast doesn’t just need a new police helicopter, the Commonwealth Games or even a light rail system; what it needs is jobs.  Close to 25% of the region’s economic growth comes from new construction, with over 30% of its workforce employed (directly and indirectly) in the building trade.  It needs much more new detached housing. 
It also needs to open up its industrial land bank to new business.  It must incentivize new operations to move to the Coast.  It should be all about permanent jobs and industries which have higher employment multipliers, rather than one-off feel-good events, white elephants and election stunts. 
Thousands of people are being denied the opportunity to replicate what those now running the show were able to do, i.e. to get a start in the housing market.  This is not only socially and economically unsound, but morally wrong!
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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Residential land is overpriced

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The $10,000 Queensland building boost started last weekend and no doubt will lead to more housing starts, pulling forward those first-home buyers lucky enough to have a bit of a deposit, and investors who can look beyond the current economic malaise.
The boost (and any additional developer incentives) is effectively doing what the more astute developers have been doing for some time – meeting the market. Many need to sell their existing homes before they can buy new dwellings, and most expect the developer to share their pain. That is, if they need to drop their asking price by say 10% in order to sell, they expect the developer to do likewise or at least meet them part of the way.
Price, however, is only ever part of the equation. Buying a new dwelling has numerous benefits over buying a second-hand property. This particularly applies to investors. Few new residential developments, for mine, promote these benefits well enough. Some don’t even bother to discuss them at all. One firm that does is <a href="https://issuu.com/ausbuild/docs/beyondliving?viewMode=magazine&amp;mode=embed">Ausbuild</a>.
New homes offer buyers:
<ul>
<li>Great capital depreciation – with up to 60% of the built cost being tax deductible over time;</li>
<li>A builder’s warranty – and often these days for materials too;</li>
<li>Energy-efficient and more importantly, government-compliant “green” inclusions;</li>
<li>The need for far less maintenance; and</li>
<li>According to our research, about 15% more real value than a similar second-hand property.</li>
</ul>
That 15% is often forgotten about by buyers and valuers, too. Think about the true cost of a new kitchen, bathrooms or a laundry. Don’t forget about the cost of new floor coverings; painting; air-conditioning; purpose-built storage; security screens and fencing.  We have itemised these things across several new dwellings and have found that they can add up to well over $70,000, or about 15% more than the median sales price of a second-hand dwelling (in southeast Queensland) that don’t have all these goodies.
Many of the things that a renter really wants can often only be found in a new home. Again, revisit the Ausbuild Beyond Living E-Magazine (page 12).  Also, a recent QBE LMI survey found that 14% of first-home buyers rent out a room after buying to help meet their mortgage payments. New homes make such rental arrangements easier.
There are many ways to sell property – price is important, but it isn’t the only ingredient.
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 style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;" href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>.
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Purchasing a new home could save buyers 15%

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We all know it is a buyer’s market, with more properties for sale in most markets than buyers.  The amount of property advertised for sale has lifted across all capital cities and most, if not all, regional towns as well.  According to one data provider, there are about 275,000 residential properties currently advertised for resale across the country.  This is up from 220,000 (or by 25%) on the same time last year.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">I am not saying it isn’t a buyer’s market or that the amount of stock advertised for sale has not risen, but the question is, when is a property really “for sale”?  You see, most data houses source their “for sale” lists from the internet.  Some are more careful than others to ensure they don’t double count.  But it is just a count after all, and little or no attention is given to what is actually being measured.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">As I have said many times – and find myself repeating more frequently of late – “It is the easy things that are most often measured, rather than the things that should be measured.”  This applies directly to these “for sale” lists.

I recently asked a dozen or so veteran real estate agents (sadly, most like to be called such) about the number of properties that are really for sale in their trade area.  By really I mean that they are priced to sell and the seller is motivated to do so.  In other words, the sellerneeds to sell rather than wants to sell.  We would sell our house, for example, if someone offered us enough money and the terms of the contract suited us.  Our house, by the way, isn’t advertised for sale – it is a buyer’s market after all.
 
<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">The typical response confirmed that about half of the properties listed were really for sale – though even then, only one-in-three (on average) of that fifty percent had the property priced appropriately to do so.  You see, the internet is a wonderful thing; it has driven down the cost to advertise, so sellers (let’s call them that) can cheaply take a punt in the hope that someone will like what they see, offer them a big wad of cash and Bob’s your uncle…or Robert’s your mother’s brother, which ever saying takes your fancy.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">Partly to blame here, too, are those real estate agents who list property this way.  Experienced agents don’t waste their time listing overpriced property – and especially in a buyer’s market.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">I did a little bit of a test to validate what I had been told.  Apparently, in the Kenmore area of Brisbane (postcode 4069), there are 350 properties listed for sale on the internet.  By my way of reckoning, only about 200 of those are really “for sale”, and from what I can gather from the internet, agents windows and actual inspections, only about 75, maybe 100 tops, are priced to sell within the next three to six months.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">My constraints required that the property had a physical “for sale” sign; gave the address on the website; offered a time to view the property; provided some indication about price expectation or an auction date, and had a real estate agent engaged on behalf of the seller.  Now, some readers will dismiss these parameters, but unless these details are provided then I would not be interested in investigating the matter further.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">In our street alone – which comprises 74 properties – there are seven homes currently listed for sale on the internet.  Yet only one has a “for sale” sign in front of the property, and all are way overpriced for the current market conditions.  Several of these seven have been “for sale” since we moved into the street in late 2005.  The one with the sign is the only somewhat motivated seller and even then, they “aren’t in a particular rush”.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">It would be great if data houses – instead of trying to out-pip each other in the press – provided some meaningful statistics once in a while.  I do think that RPdata is the best of the lot, but their weekly “advertised stock on the market” table would be greatly enhanced if they provided some extra vigour and listed those properties priced (and sellers motivated) to sell, separate from those that would like to sell.

<p style="margin-top: 0cm; margin-right: 0cm; margin-bottom: 13.2pt; margin-left: 0cm; background: white; vertical-align: baseline; outline-style: initial; outline-width: 0px; outline-color: initial; font-weight: inherit; font-style: inherit;">Food for thought.

<p style="margin-top: 0px; margin-right: 0px; margin-bottom: 1.1em; margin-left: 0px; outline-width: 0px; outline-style: initial; outline-color: initial; font-weight: inherit; font-style: inherit; font-size: 15px; font-family: inherit; vertical-align: baseline; padding: 0px; border: 0px initial initial;">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/" style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;">Matusik's Missive</a>.
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'For sale' listing figures inflated

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I had to laugh the other day; the Australian Financial Review wrote a very upbeat piece on the high rate of settlement in one of Brisbane’s more recently completed riverfront apartment complexes.
The article reported a 40-odd per cent settlement rate, which isn’t something that is usually bragged about, especially in the financial press. It does, however, reflect the risks associated with developing large-scale new apartment projects these days.
Another apartment project coming up for settlement later this year is Hamilton Harbour. More than 90% (440 out of 470 in the first two towers) of the apartments are reported to be sold off the plan. While newly released apartments across inner Brisbane are now being sold at prices 20% above (based on a gross rate per square metre) the contract purchase prices achieved within Hamilton Harbour’s first two towers, this project, too, could face some risk at settlement. This time the risk lies with bank valuers.
When assessing the worth of an apartment in a project like Hamilton Harbour, valuers need to appreciate the importance of the overall project on the price of the apartment itself, as well as where the project is actually located. Also – and this is very important – they must pick comparable sales as evidence. Recent resale prices in the Urban Renewal Precinct in the likes of Freshwater, Newstead Terraces and even Ellington have more relevance than looking further afield. The apartment prices in Brisbane’s middle ring offer little in the way of comparable sales. ValEx, my friends, just doesn’t cut it.
While there are about 2,500 new apartments currently for sale across inner Brisbane and another 4,000 planned for release over the next 12 to 18 months, many of these planned apartments are unlikely to proceed in the time frames proposed. Getting enough unconditional sales in order to raise development finance will be the largest stumbling block.
Keep in mind that one in every five new residents to Brisbane (5,000 each year) now moves into the city’s inner suburbs. This is a significant turnaround, given that in the 1990s inner Brisbane was actually losing permanent residents. Also, the vacancy rate across inner Brisbane is already very tight at 1.5%. Apartment rents are increasing as a result.
Hamilton Harbour’s settlement rate should be on the development industry’s “must watch list”. Hamilton Harbour is a litmus test for the Brisbane apartment market – a beachhead, if you will.
We wish both the developers of Hamilton Harbour – Devine and Leighton – all the best. And to the more novice apartment suppliers out there, you had best do your homework and maybe have it checked by another before proceeding. Developing new apartments is getting harder by the day.
PS Last week the Queensland government made three announcements regarding the eligibility requirements for the $10,000 Queensland building boost. These include the extension of building construction deadlines for multi-unit projects from July 31, 2013 to January 31, 2015, making National Rental Affordability Scheme products eligible and excluding foreign investors from the boost.  All good things, if you ask me.
Apartment developers, in particular, however, need to be very careful about how they promote and especially embellish the $10,000 government offer. Some are already doubling, and even tripling the boost. Others are paying the stamp duties for buyers during the boost’s period. Meanwhile, some are offering free furniture packages and guaranteeing rent for an extended period. These are fine incentives – although one does wonder why it took a relatively small government grant to trigger them – but it remains uncertain if bank valuers will discount these from the purchase price upon settlement. Also, in projects with substantial presales, those who have already bought off the plan might feel more than a bit peeved that they aren’t getting the same discounts.
A bird in the hand is worth two in the bush.
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 style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;" title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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Brisbane's rash of new developments could have trouble getting financing

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From the mundane – housing market crash; mortgage defaults climbing; low housing affordability; interest rates set to rise; household costs skyrocketing; double-dip recession – to the catastrophic – Malthusian population explosions; peak oil everything; climate change; global warming; deforestation; urbanisation and over-consumption – all we hear these days is doom and gloom.
Janet Albrechtsen, a few weeks back in The Australian, titled these portrayers of gloom “apocaholics”. An apt description, indeed.
Let’s turn the tables on some recent reports of gloom and doom and see how they sound.
<ul>
<li>Australian dwelling prices fell just 2.3% over the last 12 months despite the pessimistic jawboning of expectant falls in excess of 10% to 15%. Brisbane’s values fell just 5.9% – a great result if you ask me given the floods, the ham-fisted governance and pending local/state elections.</li>
<li>Sellers are starting to get the message. They’re taking their dwelling off the market, with fewer new “for sale” listings this month across Brisbane compared to the same time last year.</li>
<li>It is a good time to buy a dwelling in Queensland, according to the Westpac-Melbourne Institute. Its June Queensland index is sitting at 134.4, up 11% on May, and a massive 52% on this time last year. Queensland not only has the highest “good time to buy a dwelling” index in the country, but also enjoys the largest monthly and annual improvement as well.</li>
<li>Queensland’s dwelling approvals have risen for the second consecutive month. ABS monthly approvals figures released this week show a 1.1% increase in Queensland activity. Not much, true, but an improvement nevertheless.  In contrast, across Australia approvals were down 7.9% in May. While the small rise in Queensland numbers was largely due to the volatile apartment sector, the monthly trend provides grounds for optimism.</li>
<li>Forty-nine out of 50 Queensland households pay their mortgage on time. Just short of 99% of other Australians do so, too.</li>
<li>Australians are now saving one-eighth of their take-home pay. It’s a massive plus for our economy as household balance sheets become stronger and more resilient to difficult times.</li>
<li>Official interest rates have been raised only once in the last fifteen months and actual mortgage rates are starting to fall. Three-year fixed interest rates are also starting to fall and are lower than the current variable rate of interest – suggesting interest rates could fall. Bank bills and government bonds are, at present, only slightly up on the current cash rate, suggesting any interest rate rise should be modest.</li>
<li>According to Rismark International, Australian homes are currently at their most affordable in almost a decade. Rismark’s work looks at all properties across the country, not just detached houses in our capitals; and also uses household incomes rather than average weekly earnings.</li>
<li>We are doing better, financially, than we think.  While the cost of certain consumer items has increased, real household incomes are rising faster than inflation.  Since March 2009, inflation has risen 6.3%, whereas real household income rose 7.3%. Real household incomes have grown by about 16% in the past six years.  Maybe John Howard was right after all – we have never had it so good.</li>
</ul>
Too optimistic? Was the last point a step too far? Well consider how long we have to work these days to earn an hour of reading light. On the average wage today, half a second of work will pay for an hour of light.  Just 50 years ago you had to work for 10 seconds.  In 1880 it took 15 seconds to burn a kerosene lamp, and more than six hours of work for an hour of light by a candle.
In 1750 BC your average Babylonian needed to work 50 hours to get 60 minutes of light from a sesame oil lamp. Little, obviously, happened at night before the birth of Christ.  How many TV screens, laptops, iPads and other mobile devices do you have at home?  We have 11 and neither of our children, at present at least, aren’t living at home.
Healthy economic growth doesn’t only have to be supported by government, and ideally, shouldn’t be that frustrated by perverse policies.
But increasingly, of late, that isn’t necessarily the case. Yet the greatest barrier to recovery is psychology – stubborn gloom – which is conditioning household and business spending decisions.
Foolish optimism led to the GFC by assuming things would work out for the best.  Now, automatic pessimism weakens growth by ignoring good news or believing it cannot last.  Our greatest challenge this financial year is to think and act more optimistically.  I will give it a serious try.  How about you?
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" style="outline-style: none; outline-width: initial; outline-color: initial; text-decoration: underline; color: #6888b1;">Matusik's Missive</a>.
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Automatic pessimism versus foolish optimism: making the right property call

Melbourne developer Spacious Group has completed Voyage Altona, one of the closest new apartment developments to Altona Beach.

Off the plan purchasers have started moving into the 49-apartment project on Pier Street, with the remaining move-in-ready one-, two- and three-bedroom apartments starting from just over $500,000.

Display apartments have now been fitted out, allowing prospective buyers to inspect the completed residences by appointment.

[smartcode_project:default project_id=112195 project_image_fid=372638]

The completed apartments feature open-plan living and dining areas which extend onto private balconies and terraces, while full-height glazing maximises natural light throughout the interiors.&nbsp;

Hybrid timber-look flooring, stone benchtops, Miele appliances, porcelain-tiled bathrooms and generous storage feature throughout the building which also features landscaped communal areas, expansive shared terraces, lift access and secure on-grade parking.

Drawing inspiration from its bayside setting, Voyage adopts a restrained palette of warm neutral tones and textured finishes. Many of the apartments take advantage of views across Port Phillip Bay, while the indoor-outdoor living spaces have been designed to make the most of the coastal outlook.

[smartcode_project:default project_id=112195 project_image_fid=3286]

Voyage was developed to address what Spacious Group identified as an undersupply of higher-quality apartment product in Altona, with a focus on owner-occupiers looking to remain within the bayside community.

"Voyage responds to very strong local buyer demand for quality, owner-occupier-focused product," says Barry Plant Projects Director Jarrod Farey, who has handled sales since the project's launch.

"The project delivers an elevated lifestyle proposition, with its design and quality of finish far exceeding anything previously produced in the area, as well as its proximity to Pier Street Village and the beach."

The majority of purchasers have been local downsizers and owner-occupiers looking to stay within the Altona community but who previously had limited opportunities to buy a brand-new apartment.

[smartcode_project_cta:default project_id=112195]

Joel Robinson

Spacious Group completes Voyage Altona in Altona's beachside precinct

Homecorp has secured approval for a $360 million apartment development at Budds Beach, paving the way for one of the Gold Coast's most amenity-rich residential projects to launch later this year.

Gold Coast City Council has approved Lýon Residences, a 32-level tower that will deliver 178 two and three-bedroom apartments across a prominent corner site at 8-10 Acacia Avenue and 25-27 Oak Avenue.

The approval comes as developers continue to invest in premium lifestyle-driven apartment projects on the Gold Coast, where owner occupiers are increasingly prioritising amenity as much as apartment size and location.

<a href="https://www.apartments.com.au/new-apartments/l-on-residences-25-27-oak-avenue-surfers-paradise-qld-4217">Lýon Residences</a> has been designed around a resort-style wellness offering, headlined by a Moroccan-inspired spa precinct featuring treatment rooms, a Nordic sauna and steam room, hot and cold plunge pools, a soaking pool and a residents-only juice bar.

The rooftop will include a heated infinity pool and spa, residents' lounge with private kitchen and bar, gymnasium, yoga and Pilates studio, outdoor entertaining areas and barbecue facilities overlooking the Surfers Paradise skyline.

<img alt="Lyon" data-entity-type="file" data-entity-uuid="2d3e29af-8793-486e-a684-52cef862241f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-15%20at%204.32.26%E2%80%AFPM.png?VersionId=ayG2zpLf3SS6Zy8XmKDcQods4kVWb0gm" />

Homecorp Founder and CEO Ron Bakir said Budds Beach provided the ideal location for the company's latest luxury apartment project.

"Budds Beach represents one of the most unique and sought-after pockets of the Gold Coast, and Lýon Residences has been designed to reflect that sense of rarity and refinement," Bakir said.

The project arrives as wellness continues to become a defining feature of new residential developments both in Australia and internationally.

The latest Global Wellness Institute figures show wellness real estate remains the fastest-growing segment of the global wellness economy and is forecast to exceed $1.8 trillion by 2030. Australia continues to rank among the world's 15 largest wellness real estate markets, with developers increasingly integrating health, recreation and community facilities into apartment projects.

Queensland is also experiencing strong population growth, with the Gold Coast continuing to outperform many other Australian cities as demand for new housing remains elevated ahead of the 2032 Olympic and Paralympic Games.

Bakir said the project had been designed to respond to that shift in buyer expectations.

"Strong population growth and sustained demand across the Gold Coast continue to highlight the need for well-designed new housing supply. Lýon Residences responds directly to this demand while setting a new benchmark for residential living," he said.

Each apartment has been designed to maximise views across the coastline, the Nerang River and the Gold Coast hinterland.

Located just minutes from Surfers Paradise beach and the Broadwater, the development also offers easy access to the light rail network, Broadbeach and Burleigh Heads.

Early site works are underway, with construction expected to commence later this year.

Homecorp approved for Budds Beach apartment tower, Lýon Residences

New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

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A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

[smartcode_project_cta:default project_id=28384]

North-facing Swan River views drive demand at Rivière Residences in Applecross

Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.

The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.

[smartcode_project:default project_id=143337 project_image_fid=374768]

McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.

"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.

"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."

[smartcode_project:default project_id=143337 project_image_fid=374767]

A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.

The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.

[smartcode_project:default project_id=143337 project_image_fid=374760]

Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.

Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.

"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."

Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.

[smartcode_project:default project_id=143337 project_image_fid=374761]

Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.

"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.

She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.

Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.

Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.

Construction is underway, with completion expected in the second half of 2027.

[smartcode_project_cta:default project_id=143337]

More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Michael Matusik

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