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Have you wondered how many properties you would need for financial freedom?
I’ve found that while most property investors hope to one day replace their personal exertion income with cash from their investment properties, most don’t have a strategy to achieve their goal.
So just how many properties does it take to enable you to quit your day job and live comfortably?
The answer is simple: it depends.
OK, that’s not what you wanted to hear, but in fact it’s the wrong question to ask.
It doesn’t really matter how many properties you own. What is more important is the value of your asset base and how hard your money works for you.
Why do I say this?
Because I’d rather own one Westfield Shopping Centre than 50 secondary properties in regional Australia.
How will you live off your property portfolio?
While many property investors know they want their properties to replace their income, I’ve found most don’t actually think about how they’ll actually achieve financial freedom.
They don’t have a strategy. They don’t have a plan. They just hope it will happen.
Other investors think that they’ll live off their rental income, yet I rarely see this happen. It’s just too hard to grow a portfolio of cashflow-positive properties of a sufficient size to replace your income.
On the other hand, the wealthy investors I deal with have built a cash machine by growing a substantial asset base of high-growth properties and then lowering their loan to value ratios (LVR) so they can transition into the next phase, the cashflow phase of their investment life.
They lower their LVR in a variety of ways. They could:
•             stop (or slow down) buying properties, so that while the value of their portfolio keeps rising, their loans remain much the same;
•             add value to their properties by manufacturing capital growth through renovations or development;
•             pay off some debt using their superannuation;
•             reduce their debt by pay off principal and interest; or
•             sell a property or two.
But the first stage of their wealth creation strategy always involves building a substantial asset base.
Can’t I just live off the rent?
Let’s say you want an annual after tax income of $100,000. How are you going to achieve that? How many properties do you need?
If you plan is to eventually pay down your debt and live off the rent, you’ll probably need at least $4 million worth of properties with no mortgage to get that $100,000 after-tax income.
Don’t believe me?
The average gross yield for well-located properties in Australia is around 4%, but let’s be generous and say you earn a 4.5% yield across your property portfolio.
This means if you eventually own $1 million worth of properties with no debt, you’ll get $45,000 rent. But you’ll still have to pay rates and taxes and agents’ commissions and repairs, leaving you with something like $35,000 a year. And then you’ll have to pay tax on this income.
When you do the sums you’ll see that you need an unencumbered portfolio worth at least $4 million to earn that $100,000 a year after tax.
Remember that’s $4 million worth of property and no mortgage debt, otherwise you cashflow will be lower.
And of course you’ll also need to own your own home with no debt against it.
Let me ask you a question: will you ever be able to save $4 million?
Will you ever build a portfolio that size on a few dollars a week positive cashflow from your rents?
By now it should be clear that the only way to build a substantial asset base is to take advantage, leverage and compounding growth of well-located properties.
In my mind the only way to become financially independent through property is to first grow a substantial asset base (by buying high-growth properties) and then transitioning to the next stage – the cashflow stage – by lowering your debt, but not paying it off completely.
Here’s how it works:
Fast forward 10 or 15 years and imagine you own your own home plus $5 million of well-located investment properties.
If you had a typical 80% loan to value ratio, you would be negatively geared.
On the other hand, if you had no debt against your property portfolio you would have positive cashflow, but would forgo the benefits of leverage.
Somewhere in the middle, maybe with a 50% LVR, your property portfolio would be self-funding. You may even have a little cash flow left over, but not enough to live on.
If you think about it, it will be much easier to amass a $5 million property portfolio with $2.5 million of debt than the same size portfolio with no debt.
You could then go to the bank and explain you’ve got a self-funding portfolio that isn’t reliant on your income and in fact, there’s a little cash left over for serviceability. You would then ask for an extra $100,000 loan, so you’re increasing your LVR slightly.
The good news is that you don’t have to pay tax on this money because it’s not income. But you would have to pay interest, which won’t be tax deductible if you use the money for your living expenses.
This means after the interest payments you’re left with around $93,000 to live off.
Crunch the numbers.
At the end of the year, you’ve “eaten up” your $100,000, but in a good year, your $5 million property portfolio would increase in value by, say, $500,000.
In an average year it will have increased in value by $400,000 and in a bad year it may have only gone up by $150,000 or $200,000.
Of course your rents will also have increased because your properties have increased in value.
Sure you’ve used up the $100,000 you borrowed, but because your portfolio has risen in value, along with rents, your LVR is less at the end of the year than the beginning, so you finish off the year richer than you began it. You truly have a cash machine, and then you can do this over and over again.
Does this really work?
In the old days living off equity was easy.
You just had to go to the bank and get a low-doc loan and as long as your properties increased in value it was smooth sailing.
Sure it’s harder today, but it’s definitely doable. You just have to lower your LVR to show serviceability to the banks.
Needless to say, you can’t achieve this overnight. It takes time to build a substantial asset base and a comfortable loan-to-value ratio. But if you take advantage of the magic of leverage compounding and time, it happens.
Do you have an asset protection plan?
Of course this strategy depends on the growth in your property portfolio and your ability ride the property cycle.
This means that as you build your asset base, buying high-growth properties and adding value, you will need an asset protection plan to see you through the ups and down that you’ll experience.
After all, over the next 10 we’ll have good times and bad. There will be periods of high interest rates and times of lower interest rates. And we’ll have periods of strong economic growth, but there will also be times of downturn.
Savvy investors count on the good times but plan for the downturns by having an asset protection plan, as will as a finance strategy and tax strategy to make sure they set up their structures in the most efficient way.
Don’t get me wrong, while I’ve just made gaining financial freedom form property investing sound simple, it’s not easy. And that’s not a play on words.
Fact is, around 20% of those who get involved in property investment sell up in the first year and close to half sell their property in the first five years.
And of those investors who stay in property, about 90% never get past their second property.
So if you want financial freedom from property investment to fund your dreams, you’re going to have to do something different to what most property investors are doing. You’re going to have to listen to different people to who most Australian property investors listen.
You’re going to need to set yourself some goals and follow a strategy that’s known, proven and trusted.
Then you grow your property investment businesses one property at a time.
Of course, you need to buy the right type of properties.
One that has a level of scarcity, meaning they will be in continuous strong demand by owner-occupiers (to keep pushing up the value) and tenants (to help subsidise your mortgage); in the right location (one that has outperformed the long-term averages); at the right time in the property cycle (that would be now in many states); and for the right price.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
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How many properties do you need to own to never work again?: Michael Yardney

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What most of us have been taught about risk is wrong, and it’s probably holding you back from obtaining real wealth. 
Conventionally we’re taught that there’s a continuum of risk starting with low-risk investments at one end of the spectrum to highly speculative investments at the other. We’ve been led to believe that any investment can be placed somewhere along this continuum and that, in general, the higher the risk, the greater the potential rewards. 
The fundamental problem with this logic is that you are taught to evaluate the risk in the investment itself. There’s something very important missing from the equation and that’s you – the investor. 
Imagine you are considering undertaking a small property development. Traditionally you would look at this proposal in isolation and ask yourself, “Is this a risky venture?” 
But here’s the thing: that question is impossible to answer in isolation because we still don’t know enough about you. 
Have you ever invested in property before? Have you ever completed a property development? 
Do you have the knowledge, skills, contacts and experience required to successfully complete a property development? If you have no, or limited, knowledge about council zoning, town planning, feasibility studies, building costs and the building process, no matter how good the deal itself might be on paper, jumping headlong into your first property development will be a high-risk proposition for you. 
Over the years I’ve seen people make a lot of money out of real estate, but over the same time, in the same market and the same economic conditions, I’ve seen just as many people lose a lot of money. The difference is in the individual investor’s skills, contacts, strengths and expertise. 
So in light of this new idea associated with risk assessment, let’s take a closer look at what really makes an investment more or less risky. 
1.  What is your area of expertise? 
Your experience and network of contacts could be your biggest competitive advantage or your most potent risk factor. If you’re investing in something that is your speciality, you start with a built-in advantage that will allow you to achieve a higher return than other investors. 
2. What level of control do you have? 
The more control you have over your investment, the lower your associated risk.
3. Is there transparency? 
The more you know about what is happening with your investments, the lower your risk.
4. How liquid is your investment? 
How easy it is to access your money by selling your investment and converting it (or part of it) to cash. The more liquidity, the lower your risk will be.
5. How do you achieve your returns? 
Property investors receive returns from their investment property in four distinct ways: 
<ol style="list-style-type: lower-alpha;">
<li>Cashflow – the rent you receive</li>
<li>Capital growth - the increase in the value of your property as the overall values in the area increase</li>
<li>Forced appreciation – the increase in value you “manufacture” by undertaking renovations or redevelopment</li>
<li>Tax benefits – such as depreciation and tax deductions</li>
</ol>
 The more secure the returns on your investment, and the less dependent you are on any one of these four categories, the less risky your investment will be.
6. Is your equity safe? 
Is the initial money you outlaid to acquire your investment secure should the investment fail? 
7. What is your personal liability?
When you make an investment, you are sometimes required to provide a personal guarantee. If you do, this gives others (usually the banks) the right to pursue you personally for any lost funds should things go pear-shaped.
8. What is the market risk?
Some risks are inescapable as they are inherent to certain markets. For example, if you invest in tourism, you are subject to the market collapsing if a natural disaster occurs, such as a cyclone, a Tsunami or a disease outbreak.
9. What is the specific investment risk? 
This is the risk specific to the particular investment itself. Is it the right property, in the right suburb, at the right price and at the right time in the cycle? 
When assessing risk, most investors focus only on the last two factors – the market risk and specific investment risk. This tunnel vision often means that they fail to take account of other critical underlying factors that, in many cases, are more significant. 
Your take home lesson should be that while most investors spend vast amounts of time analysing the deal, you must spend more time understanding yourself better. 
My risk spectrum is different to yours and relates to my expertise, my background, the things I’ve done, the lessons I’ve learned and the mistakes I’ve made. Which means that some types of investment are much less risky for me than for you! 
In the same way, you have your own risk profile and you need to take the time to assess what that might be. Whenever you consider putting your money into an investment, don’t make the mistake of analysing the investment in isolation – look at that investment in relation to yourself. What types of investment choices are low-risk for you? What type of investment is medium-risk for you? And which type of investment is high-risk for you? 
Remember that even though all investment comes with some degree of associated risk, you can change this by developing expertise in an area and make the journey to your own financial freedom a low-risk, high-return venture.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
 
 
 
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The riskiness of a property investment depends on you

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<a href="https://www.propertyobserver.com.au/trends/seven-wealth-myths-that-hold-you-back-michael-yardney/2012050354553" target="_blank">In a previous article</a> I explained despite living in a land of plenty, the sad reality is that the majority of Australians will never achieve financial freedom. On the other hand, a small group of Australian property investors are becoming very wealthy in property. 
Today I continue exploring the common money myths that hold many people back from achieving their financial goals.
Myth #8: The rich are lucky 
The truth is that success in wealth creation is no more about luck than is success in anything else in life. To become wealthy you have to be in control of your finances and not count on good fortune. When you have a proven investment system or strategy, luck becomes unnecessary. 
As a child, I used to play Monopoly: Sometimes I won, sometimes I lost. 
As an adult, I’ve played Monopoly a couple of times with some financially intelligent people and I realise now that, contrary to what I thought when I was young, it’s not a game of luck. 
Good players know the right spots on the board to get the best return on their investments. They know how to acquire and control the best “monopolies” in order to collect the highest rents. They’ve learned to negotiate and find ways to make great deals. They’ve learned how to take the luck out of Monopoly and consistently win big as a result. 
To me, this sounds a whole lot like the real world of investing. You need to learn how to take the luck out of wealth creation and instead develop smart strategies to get ahead. First you need to learn how to play the game, and then you need to know how to win the game. 
Myth #9: To become rich you must diversify 
Wrong! Yet that’s what most financial planners suggest, isn’t it? Diversification leads to an average outcome. I’ve found that successful investors don’t diversify; they cultivate the skills required to make better, smarter investing decisions and specialise in one niche.
 
Myth #10: Paying off your house provides security 
This is one of the old myths many of us learned from our parents, who probably learned it from their parents. But it doesn’t make sense in the new financial era. The problem here is that once you’ve paid off your house, you end up with idle equity sitting under your roof doing nothing; equity you could use as a deposit to buy an investment property and grow your wealth. 
Myth #11: All the good investments are taken 
That’s not true - opportunities are always out there - in every market. Sometimes there are a lot and sometimes there aren’t. Some are obvious and others are opportunities you create by understanding investment markets. Sure, all of yesterday’s deals have been taken, but tomorrow’s deals have not. Someone will snap them up. Why shouldn’t it be you? 
Myth #12: If you want to do it right, you have to do it yourself 
There’s no such thing as a self-made millionaire. All successful property investors have a good team of professional advisors and supportive mentors around them. 
That doesn’t mean you should hand over full responsibility for your wealth creation to others. But the rich recognise they can’t have expertise in all aspects of wealth creation, so they find a team of experts they can lead in order to help them achieve their goals. 
Myth #13: I’ve done everything wrong! It’s too late 
It’s never too late to learn how to invest or to overcome your mistakes. There are many success stories of people who conquered all sorts of adversity, or started investing later in life and ended up achieving financial freedom. In fact, Ray Croc was over 50 years old when he built his very first fast food outlet. You might have heard of it – it’s called McDonald's.
Myth #14: Debt is bad 
Most Australians believe debt is a dirty word, but not all debt is bad. Savvy property investors know how to use good debt to buy appreciating assets. 
Myth #15: It doesn’t matter what I want – I just can’t do it 
Subscribing to this myth is almost a guarantee of failure, because our beliefs and perceptions become our reality. Some people who’ve had a few failed attempts “learn” that wealth is beyond their control and they can’t affect the outcome. They remain in a cycle of victimisation all their lives. 
This is one of the reasons why the rich get richer – they believe they are in control of their destiny. You must also believe you’re in control and act as if you’re in control. Then pretty soon you’ll be surprised by the results you achieve. Invariably, the more success you have, the more your thoughts about what you can and can’t control will alter for the better. Yes – you can do it! 
There’s no way money can know who’s in control of it, what their qualifications are, what ambitions they have or what they’re going to do with it. Money is there to be used and spent, saved and invested. It can’t judge whether you’re worthy or not. 
Now that you understand some of the myths that have held so many people back, the good news is you can do things differently. Choose to change your beliefs to produce outrageous results and reach every goal you set.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
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The final eight of 15 wealth myths that hold property investors back: Michael Yardney

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Money doesn’t discriminate; it doesn’t care who you are or where you come from and it’s there for the making. 
No matter what you did yesterday, today begins anew and you have the same rights and opportunities as everyone else to become wealthy. Yet the sad reality is that the majority of Australians will never achieve financial freedom. 
On the other hand, a small group of Australian property investors are becoming very wealthy. In this, the first part of a two-part series, I begin exploring the common myths about money that hold many people back from achieving their financial goals. 
Myth #1: It takes money to make money 
Despite what some people believe, it doesn’t really take a lot of money to make money. 
Many Australians have untapped equity in their homes that they can use as seed capital for investments, while others will have to learn the discipline of saving to get some start-up capital. Then all they need to do is invest in high-growth investments such as residential real estate and use the magic of compounding leverage and time to grow their asset base. 
You don’t need a fortune to begin making your first million; you just need to commit to making a start and stick with it. 
Myth #2:  I don’t make enough money 
 Almost everyone makes enough money to become an investor. The truth is most people don’t have an income problem; they have a spending problem. 
Look at your current wage and ask yourself; how much am I likely to earn over my lifetime? For most of us, the answer will probably be more than a couple of million dollars. The problem is most of us spend as much as we earn. You’ve got to start living within your means, paying yourself first, saving a deposit for a property and investing in order to break your current pattern.
 
Myth #3: My job and superannuation will take care of my financial future
If you accept my definition of financial freedom as having enough passive income to finance the lifestyle you desire without having to work, you will never achieve this through your job or superannuation. Instead you will need to take control of your financial future by investing. 
Even if you try to save 5% or 10% of your income as many financial planners suggest, you’ll find it won’t give you a big enough nest egg to fund your retirement.
 
Myth #4: I’m not smart enough
In our country everybody has the ability and opportunity to become rich. Successful people come from different backgrounds and while some have university degrees, others have never finished high school. 
To reassure you that an education doesn’t equal a financial fortune, here are a few multi-millionaires who never graduated from college: Bill Gates (Microsoft), Michael Dell (Dell Computers) and Steve Jobs (Apple). The truth is you can do whatever you want; not being smart enough is just another excuse.
 
Myth #5: Investing is complicated
Developing your own financial freedom is only as complicated as you make it. Sure, gaining the knowledge to become financially independent is challenging; but many new things seem more difficult than they are until you develop an understanding of them. 
Investing is no different. 
Now it’s easier than ever before to learn the fundamentals of wealth creation, with limitless tools available in today’s high-tech, info-laden world. The key is to learn from the right people – those who’ve already achieved what you want to achieve. The process is also simplified when you select an investment niche such as residential property investment and develop specialist knowledge in that area. 
Myth #6: Investing is risky
The dictionary definition of “invest” is: “To commit (money or capital) in order to gain a financial return.” The word “risk” doesn’t even get a look in. 
However, many people speculate when they think they are investing – they buy a property in a secondary location or off the plan “hoping” it will increase in value. Speculation is risky. 
On the other hand, finding a property with an element of scarcity so it will always be in strong demand, in an area that has always outperformed the averages and buying it below its intrinsic value, is a proven investment strategy that minimises your risk. 
Myth #7: You have to know how to time the investment markets
It’s often said that timing is everything when investing, but that’s not really the case. 
Sure timing matters - you don’t want to buy property at the peak of the boom, but successful investors find that timing isn’t really that important. Have you noticed how some investors do well in good times and do just as well in bad times, while others do poorly in good times and even worse in bad times? 
The truth is successful investors know how to create wealth at any point in the property cycle while unsuccessful investors manage to lose money at the same stages of the cycle. This suggests to me that it's not our external world that determines whether we make money; it's our mindset.
 
Next week, I’m going to share another eight wealth myths that tend to hold back ordinary Australians from reaching financial freedom. 
The good news is that as you become aware of these myths, you can do things differently. You can choose to change your beliefs and produce outrageous results and reach every goal you set.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
 
 
 
 
 
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Seven wealth myths that hold you back: Michael Yardney

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During times of slower property price growth, let’s be honest, property investors count on rising rents to boost their investment returns. 
The fact is, since the beginning of 2006 rental growth across the combined capital cities has outpaced the growth in home values. 
Rents outpaced capital growth 
The following table from<a href="https://www.rpdata.com.au" target="_blank"> RP Data</a> shows that over the last six years, capital city home values have increased by 34.5% compared with rental rates, which have increased by a total of 46.8%.
Click to enlarge
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Nationally, rents have grown about 5% over the last year, with vacancy rates generally sitting below 2% due to strong demand from tenants and a limited supply of properties. 
The rental markets are fragmented
 
Currently the Sydney, Perth, Canberra rental markets are particularly strong due to a low level on construction of new accommodation and this is expected to place an upward pressure on rentals. 
On the other hand, while rents are still rising in Melbourne, Adelaide, Hobart and Darwin, the markets are not as tight. 
According to Gerard Haines, department head of Metropole Property Management Sydney, his team in Sydney is experiencing strong demand from tenants, particularly in the inner west, where vacancy rates are less than 1%. 
“This region is gentrifying and there is a strong demand from a wide demographic of tenants who want to live close to the CBD in these up-and-coming lifestyle suburbs.” 
“There is also strong demand and restricted supply in Sydney’s eastern suburbs, and rents are likely to keep rising in these areas,” says Haines. 
Peter O’Brien, head of Metropole Property Management in Melbourne, tells a different story. 
“While the overall vacancy rate in Melbourne as reported by the REIV is around 2.4%, and there is strong demand from tenants for well located properties in Melbourne’s inner and middle ring suburbs, there are some pockets of Melbourne where the vacancy rate is double that and tenants have the upper hand. This is because there is abundant supply following a period of over exuberant construction by developers,” says O’Brien. 
<a href="https://www.sqmresearch.com.au/" target="_blank">SQM Research</a> reports a vacancy rate of around 8% in some western Melbourne suburbs such as Point Cook, Tarneit and Melton. 
The Melbourne CBD is also suffering with an oversupply and the situation is likely to become worse with an estimated 5,000-7,000 apartments coming onto the market in 2103, with many of these in high-rise complexes. 
To make matters worse, according to Charter Keck Kramer, there are currently 17,860 apartments under construction in Melbourne, with another 16,850 apartments still being marketed across Melbourne. 
Competition for tenants from these projects, which have mainly been bought by investors, is likely to put a lid on CBD rental growth. 
Rental growth is slowing
 
The latest figures from <a href="https://www.apm.com.au" target="_blank">Australian Property Monitors</a> show national weekly rents for houses remained steady for the first three months of the year and rents for units fell 1.1%. 
While asking rents dropped in Melbourne and Adelaide, some rental markets are still performing strongly according to APM. 
Year-on-year rent growth was highest in Darwin (+11.8%), Perth (+3.9%), Brisbane (+2.7%) and Sydney (+2%). 
The bottom line
 
We are at that stage of the property cycle when capital growth is slower and rental growth is strong. But the divergent performance of our rental markets just goes to remind us that buying the right property in the right location is, as it always has been, the key to successful investing. 
For your property investment to perform well in the long-term you need to own the type of property that will be in continuously strong demand by a wide range of owner-occupiers (who will push up the price of similar properties in the area) and tenants (who will pay you rent).
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
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This could be the year of rental growth

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Have you noticed how successful property investors, in fact people who are successful in most walks of life, usually have the gift of being good negotiators. 
In fact, they are more than that – they are good persuaders. They have the ability to influence others to go along with their point of view. 
We’ve all heard of win/win negotiation, but let’s be honest, in many of our negotiations we would really like a bit more than win/win. When buying a property, or any other big-ticket item, we usually want to buy it at the best price possible, while the vendor wants to sell it for the highest price they can achieve. 
Admit it: when you buy your next car, you would really like the negotiations to end up favouring you and not being an even-handed win/win. 
Good negotiators have developed the art of being able to influence others to see things their way. They know how to get others to do things they want to get done. They seem to have an innate gift of understanding others’ needs and wants and finding a way of delivering that within the bigger context of getting what they themselves want.
 A number of years ago I came across a powerful book, The Psychology of Persuasion, in which Robert Cialdini outlines six universal principles of influence that he discovered as he studied what made people do the things they do, in his role as a professor of psychology.
Let’s look at these in more detail…
1. Reciprocation
We were all taught that we should find ways to repay others for what they do for us. That’s only fair – most people will make an effort to avoid being considered an ingrate or someone who does not pay their debts.
Cialdini explains how in the 1970s the Hare Krishnas used this principal to raise millions of dollars. They would give passers-by a flower and requested no money. However, this innate principal was so strong that even though the recipients didn’t really want the flower, they felt the need to repay the debt of kindness in some way and many donated money.
You probably have come across this principle, where someone has delivered a number of uninvited "first favours" over time and then you feel obliged to deal with them or do business with them.
Put simply, whatever you give out in life you tend to get back sooner or later. If you go through life looking for good in others and helping others get what they need, you may not always get an instant reward, but the principle of reciprocity will provide somewhere along the line.
2. Social proof 
 
Cialdini points out that we decide what is correct by noticing what other people think is correct. Innately we want to be like others and people are comforted knowing others are doing the same thing.
This principle is often used by sales people who give testimonials from people “just like you” who have bought and appreciated their product or service. Most people feel at ease if they know others have already done what they intend to do. Celebrity product endorsements are an obvious application of this principle of social proof.
If you want someone to do something for you, be sure to let them see that other people are already doing it or are willing to do it. Show them that others like them believe in your product or service and are using it.
3. Commitment and consistency 
 
Once people have made a choice or taken a stand, they are under both internal and external pressure to behave consistently with that commitment. When people tell their friends they are going to give up smoking, or lose weight, it motivates them to keep going with their decisions. We tend to feel pressured to behave consistently with the choices we have made. No one likes to admit they were wrong.
You can use this principal in negotiations by taking the time to understand what motivates others and speak to them in their own language. Try and elicit their values. Find out what they want, what they are trying to achieve. This will allow you to tap into their natural motivators, while also giving them what they want.
When you can get someone to commit verbally to an action, the chances go up sharply that they'll actually do it.
4. Friends
We all like doing business with people we know and like. And people tend to like others who appear to have similar opinions, personality traits, backgrounds or lifestyles. More people will say “yes” to you if they like you, and the more similar to them you appear to be, the more likely they are to like you.
That’s why it’s important to build rapport with people you plan to negotiate with.
5. Authority
Most of us were raised with a respect for authority, so we tend to place importance on information given to us by authority figures like doctors, policemen or professionals.
Sometimes people confuse the symbols of authority such as titles, appearance or possessions with the true substance. This means you can use this principle to your advantage during negotiations. Look and act like an authority yourself – dress like the people who are already in the positions of authority that you seek. Or cite authoritative sources to support your ideas.
6. Scarcity
The feeling that we may miss out on something special or unique will drive us to take action. Things always seem more valuable if there’s an element scarcity. Hard-to-get things are perceived as better than easy-to-get things.
Look at most advertising and you’ll see words like “limited offer”, “closes this weekend” or “limited edition collectors items”. How can you use this principle of scarcity in your negotiations?
Cialdini's Six Weapons of Influence are incredibly powerful and can be combined in many ways.
They are useful in property negotiations, in business or in fact, in all walks of your life.  Use them whenever you approach people you want to influence and they will assist you in becoming a powerful communicator.
 Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
 
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The secret power of persuasion for successful property investors

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Now that we’re a quarter of the way through the year and our property markets have had a chance to show their hand, it’s probably a good time to do a whip around Australia and see how property is performing.

<a target="_blank" href="https://www.rpdata.com/">RP Data</a> has reported their March quarter house price index results and the findings were encouraging.
Once again, the latest stats will disappoint the doomsayers who frequent the property forums and for the last four years have been predicting an apocalypse.
What the stats show
Overall Australian dwelling values were unchanged across the eight capital cities over the first three months of this year. In fact, RP Data-Rismark’s hedonic index data suggests that Australian dwelling values have not budged at all since the end of October 2011.
The tide is turning
Of course, there is not one property market in Australia, so while the market is flat in general there are markets within markets, each pulled by a multitude of influences and, as a result, sectors within sectors are performing at differing speeds.
<table style="width: 432px;" border="1" cellpadding="0" cellspacing="0"><tbody>
<tr>
<td valign="top" width="140">
City
</td>
<td colspan="2" valign="top" width="293">
Index results as at March 31, 2012
</td>
</tr>
<tr>
<td valign="top" width="140">
 
</td>
<td valign="top" width="151">
Median dwelling price 
</td>
<td valign="top" width="142">
Change in dwelling values March 2012 qtr
</td>
</tr>
<tr>
<td valign="top" width="140">
Sydney
</td>
<td valign="top" width="151">
$525,000
</td>
<td valign="top" width="142">
1.1%
</td>
</tr>
<tr>
<td valign="top" width="140">
Melbourne
</td>
<td valign="top" width="151">
$465,000
</td>
<td valign="top" width="142">
-0.8%
</td>
</tr>
<tr>
<td valign="top" width="140">
Brisbane
</td>
<td valign="top" width="151">
$400,000
</td>
<td valign="top" width="142">
-0.4%
</td>
</tr>
<tr>
<td valign="top" width="140">
Adelaide
</td>
<td valign="top" width="151">
$370,000
</td>
<td valign="top" width="142">
-1.5%
</td>
</tr>
<tr>
<td valign="top" width="140">
Perth
</td>
<td valign="top" width="151">
$445,000
</td>
<td valign="top" width="142">
-0.7%
</td>
</tr>
<tr>
<td valign="top" width="140">
Hobart
</td>
<td valign="top" width="151">
$340,000
</td>
<td valign="top" width="142">
7.3%
</td>
</tr>
<tr>
<td valign="top" width="140">
Darwin
</td>
<td valign="top" width="151">
$470,000
</td>
<td valign="top" width="142">
3.9%
</td>
</tr>
<tr>
<td valign="top" width="140">
Canberra
</td>
<td valign="top" width="151">
$529,975
</td>
<td valign="top" width="142">
0.0%
</td>
</tr>
<tr>
<td valign="top" width="140">
Capital city aggregate
</td>
<td valign="top" width="151">
$445,000
</td>
<td valign="top" width="142">
0.0%
</td>
</tr>
</tbody></table>
Source: RP Data
Clearly our property markets have slumped over the last 12 months, as the following table shows, but the latest results suggest we are now in the consolidation phase of the property cycle.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/yardneyapril13.gif"><img src="/images/stories/yardneyapril13thumb.gif"></a>
Apartments outperformed houses
Units outperformed houses in Australia’s major capital cities by a wide margin during March. Capital city apartment prices increased by 0.9% during the month to a median of $400,000, while detached house prices increased by just 0.1% to a median of $464,500.
Let’s now look at some of our major property markets in a little more detail.
Sydney 
Sydney has been outperforming the rest of Australia, but the top end of the market is still suffering from an oversupply of property relative to the reduced demand.  However, affordable gentrified suburbs within close proximity to the city, transport, amenities and infrastructure are performing well. 
In particular, well located apartments in the inner western suburbs and Sydney’s eastern suburbs are being snapped up by investors and owner-occupiers at hotly contested auctions according to George Raptis, director of <a href="https://www.sydneybuyersagent.com.au/" target="_blank">Metropole Property Strategists in Sydney</a>. 
“I’d like some of the property doomsayers to come to one of these auctions and see how many genuine bidders are in the market for the small selection of good properties for sale,” says Raptis. 
“The market for well-located apartments is likely to remain strong throughout the year. Strong rental demand, a shortage of rental properties, tightening vacancies and rising rents means investors will vie for the same apartments as owner-occupiers, underpinning prices.” 
Melbourne 
Different segments of the Melbourne housing market are at different stages of the property cycle. 
There is still an oversupply of property at the top end relative to the reduced demand for luxury property. While there is more competition for properties in the middle end of the market, there is still an oversupply of properties relative to demand, even though recent auction clearance rates have been encouraging. 
Currently there are some good investment opportunities buying established apartments in Melbourne’s southern or eastern suburbs and adding value through renovations. 
But there are some segments of the Melbourne property market to avoid. 
According to Charles Marvelli, head of the <a href="https://www.melbournebuyersagent.com.au/">Melbourne buyer’s agency</a> division of Metropole Property Strategists, “Builders and developers have got ahead of themselves, and there is an oversupply of newly built house-and-land packages in Melbourne’s outer western suburbs such as Point Cook and Melton. Currently there is a flood of new properties, but buyers are showing a preference for two- to three-year-old homes which can be bought considerably cheaper than new stock.” 
“There is also an oversupply of inner-city CBD apartments, with more being completed in the next few years at a time when there is less demand from the tenant demographic that rents in the CBD,” adds Marvelli. 
“This will put downward pressure on prices and rentals. I expect there will be an oversupply of inner-CBD and near-CBD apartments in Melbourne for a few years, causing prices to fall slightly” he says. 
Brisbane
 
House prices in Brisbane have dropped for the last two years and are now 11% below their peak, but there are tentative signs of improvement in this market. 
However, Brisbane buyers are lacking the necessary confidence to re-enter the market, instead sitting on the sidelines waiting for signs that real estate has bottomed before they make a purchase. 
Vacancy rates have fallen to 2.2% in December 2011 from 3.7% 15 months earlier, suggesting that the market is working through an overhang in supply, and there is evidence that investors as well as owner-occupiers are slowly returning to the market. 
The prestige end of the Brisbane housing market is suffering, but more affordable homes within five to 10km of the CBD are likely to perform well when the upswing eventually takes place. 
One area of opportunity is the established apartment market around Auchenflower and Toowong, where you can find 1970s and 1980s apartments with good size rooms, close to amenities and within a brisk stroll to the CBD. 
Increasing confidence with a new state government and an upswing in economic conditions, along with improved affordability, suggest that prices should stabilize over the next six months before starting to edge upwards. 
However, there are a large number of off-the-plan apartments available in the Brisbane CBD and surrounding suburbs. Many of these remain unsold, and this oversupply of properties will put downward pressure on prices and rentals in these suburbs. 
Many of the apartments that have been sold off the plan are coming on stream in the next few years and have been purchased by investors. Some will have difficulty getting finance and settling their purchase. Others will be disappointed to see the end value of their properties is less than the original purchase price. 
Adelaide
 
The Adelaide property market has been flat for some time now. Prices fell a further 1.5% over the last three months and are likely to correct a little more before the market bottoms. 
<a href="https://www.anz.com.au/" target="_blank">ANZ Bank</a> reports that, “While the SA housing market should remain subdued through the first half of 2012, the economic benefits from a number of large non-residential building redevelopments in Adelaide (Royal Adelaide Hospital, Adelaide Convention Centre and Adelaide Oval) and a positive outlook for regions benefitting from major mining and energy projects (including the proposed Clinton and Arckaringa Basin coal-to-liquid gas project and Olympic Dam) should drive an improved outlook into 2013. We expect rental vacancies will grind lower through 2012 and 2013, while house prices should trough around mid-2012.” 
Perth
 
While the WA economy continues to benefit from our resources boom, the Perth property market is still suffering a hangover from its pre-GFC boom. 
In the three years leading up to the 2008 peak in house prices, WA house prices increased 20% per annum on average, compared to a national average of 6% per annum. Since then, investors and homeowners have deserted the Perth residential property market, prices have fallen and are currently 8.2% below their March 2008 peak. 
However, there are signs of optimism creeping back and some areas of the Perth market are likely to turn around later this year or in 2013. 
What next?
We’re entering the stabilization phase of the property cycle, where buyers are returning and slowly taking up available stock, but not really pushing up prices yet.
This means our property markets are likely to remain soft this year, but should keep consolidating.
One encouraging sign is that first time buyers are back, applying for loans at levels not seen for two years. Remember, first time buyers are typically a good barometer for changes in affordability.
How soon things turn around will depend a lot on buyer confidence, and this will depend upon what’s happening overseas, how our local government performs and what happens with interest rates.
Does this mean you should put your money under the mattress or buy gold bullion rather than invest in property?
You already know what I’m going to say, don’t you? 
Property is more than just an investment – it is a fundamental human requirement. Everyone needs a roof over their head, whether they rent or own their own home. As a basic necessity, housing will always be in demand – it will always have value because we simply can’t live without it.
The long-term future is assured for those who invest in property.
At some stages in the economic cycle property values will rise strongly and at other times they will languish. When people can’t afford to buy property (when price growth slows because of decreased demand), people end up renting, so investors win by getting better returns. And that is currently happening as rents rise strongly.
Of course, this also means that buying any property and hoping it will make a good investment just won't work at this stage of the cycle.
You need to buy the right type of property. One that has a level of scarcity – meaning it will be in continuous strong demand by owner occupiers (to keep pushing up its value) and tenants (to help subsidise your mortgage); in the right location (one that has outperformed the long-term averages), at the right time in the property cycle (that would be now in many states) and for the right price.
Then hold it as a long-term investment and reap the rewards.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
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Tide is turning for Australia's property markets

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There are some things we just take for granted. Like the ability to buy and sell a car or a home.
 
Sure we sometimes complain that properties are expensive, but we just expect to be able to buy or sell something we own. 
However, it’s not that way everywhere in the world.
When Fidel Castro took power in Cuba in 1959 he placed a ban on property sales, which has been in effect until late last year when the purchasing and selling of private property was legalised by President Raul Castro in a bid to keep the struggling Communist state afloat.
And not surprisingly the newfound freedom to buy property has created a property boom in Cuba <a target="_blank" href="https://www.dailymail.co.uk/news/article-2122601/Cuban-property-market-booms-house-buying-allowed-time-1959-Revolution">according to a report in the Daily Mail</a>.
Only citizens and permanent residents are allowed to buy properties in the Communist country, but many Cuban exiles in America are entering the property markets through friends and family on the island – bumping up property prices.
Why the ban on property sales? In an effort to fight absentee ownership by wealthy landlords, Fidel enacted a reform that gave title to whoever lived in a home. This meant most who left the island forfeited their properties to the state.
Cubans have long bemoaned the ban on property sales, which took effect in stages over the first years after Fidel Castro took power in 1959.
What this meant was that before this new reform, Cubans were mainly stuck in the homes they were born in, only moving through house swaps and marriages.
Since no property market was allowed, the rules meant that for decades Cubans could only exchange property through complicated barter arrangements, or through black-market deals.
Some Cubans entered into sham marriages to make deed transfers easier. Others made deals to move into homes to “care” for an elderly person living there, only to inherit the property when that person died.
Many more were forced to live in overcrowded apartments with several generations crammed into a few rooms.
The new property market will alter everyday life for Cubans, with many being able to choose where to live for the first time.
But the government has insisted no individuals will be able to accumulate great wealth through the new legislation, as sales will be subject to taxes.
It’s much the same with cars. The ability to buy and sell property came shortly after the legalisation of the purchase and sale of cars.
But the new rules have so many restrictions that it is still hard for ordinary Cubans to buy new cars.
And you can go into business. Raul Castro took over from his infamous brother Fidel in 2008 and has said repeatedly that “the system” is not working in the communist country where the government employs more than 80% of the workers in the island's economy.
So he has now allowed citizens to go into business for themselves in a number of approved jobs – everything from party clowns to accountants – and has pledged to streamline the state-dominated economy by removing 500,000 government workers.
Yes our government could do a better job, some properties in Australia are expensive and unfortunately the value of my home has fallen a little over the last year. But overall the wealth of our nation is increasing, our standard of living is improving and we’re living longer. 
Yes, we live in the “lucky country.”
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
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Cuba has a property market for the first time since 1959: Michael Yardney 

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Our property markets started the year in a tug of war, caught between falling interest rates on the one hand and market uncertainty on the other. 
Now that we’re almost a quarter of the way through the year, it’s worth reviewing what’s really going on in the property markets and what’s ahead for the rest of the year. 
CommSec economist Craig James is calling Australia the boom and gloom economy. Our economy is still growing – unlike many others, especially in Europe – and underpinned by a mining boom, but consumers and businesses are gloomy. 
And it is much the same with property – some areas are faring well, but many aren’t. 
So what gives? 
The world economy is slowly working through its problems. 
The concern of a meltdown in Europe that could bring the financial system to its knees now seems to have been averted.  And the US economy is improving, albeit slowly, however its property market is still in a slump. 
Back home we started the year with political uncertainty, which hasn’t really disappeared. Worries about the mining and carbon taxes, as well as the effectiveness of a minority government still remain. 
Add to that the fact that the banks are now raising interest rates out of line with the Reserve Bank plus threats of increasing unemployment and many of us are putting off making major purchasing decisions like buying a new house or investment property. 
What’s happening in our property market? 
Fact is, the number of properties on the market is high, properties are remaining on the market for sale longer and many buyers are still nervous about making a decision. 
Of course there is not just one “property market”. What I call “investment-grade properties” – in the middle price range (say $450,000 to $850,000) in prime locations and with an element of scarcity – are still selling well, even though there is clearly less interest from both owner occupiers and investors than there was before. 
However, “B” and “C” class properties are not selling well. 
Some have dropped in value by up to 10% and some can’t be given away (well, it’s not really as bad as that, but you’d have to give a very steep discount for someone to buy them). 
When you look at the whole of Australia, property sales are at a 16-year low, with <a target="_blank" href="https://www.rpdata.com/">RP Data</a> reporting that only 375,000 properties sold last year. In more normal times, sales were over 600,000 properties a year. 
The problem is that even though turnover is down the number of properties listed for sale is climbing, with about 310,000 properties for sale across Australia. 
This is up 23% on a year ago and more than 50% above pre-global financial crisis levels. 
So what does this all mean for the future? 
This means the market has about 10 months' supply of housing for sale, up from a more normal level of four months of stock. 
In other words, unless we see a substantial improvement in sentiment or in the economy we are not likely to see much change in house prices over the next six months. 
What these figures don’t show is how fragmented the markets really are. 
 
We know there is not one Australian property market. There are many different markets in different geographic locations and at various price brackets. 
There is no doubt that home values are still falling in some areas and they are rising in others. And overall our property markets are flat. 
It’s a bit like me putting my left hand in a bucket of ice-cold water and my right hand in a bucket of hot water and saying “on average the temperature is fine.” 
Currently there are some property markets that are strong, with more buyers wanting the short supply of available good properties, and there are other markets where the property markets are ice-cold, with few buyers available for the large number of properties available for sale. 
It’s worst at the top end. 
The top end of the market has been worst hit. 
The most expensive 20% of suburbs across Australia have registered price falls of about 6.5% over this period. And if you broke this group down further – into say the dearest 10% of suburbs – you would find steeper losses again.
<img src="/images/stories/yardneymarch30.png">
Source: RPData.com
 
 
Some green shoots 
Before all this makes you feel to gloomy, there is some good news out there:
 
<ol start="1">
<li>The vacancy rates in our capital cities are low and rents are increasing.</li>
<li>More properties are selling – sure it’s still a buyer’s market out there, but vendors are becoming more realistic and meeting the market.</li>
<li>Consumer confidence is slowly increasing. </li>
<li>Finance preapprovals are slowly rising. This always happens when new buyers are getting themselves ready to enter the market.</li>
<li>The cycle is moving on as it always does. We are now in the stabilisation stage of the property market. </li>
</ol>
So what is a property investor to do? 
While some will sit waiting for the proverbial bell to ring proclaiming that we’ve reached the bottom, others are taking advantage of the opportunities that this uncertainty is dishing up and getting set for the next stage of the property cycle by buying the right type of property. 
One with an element of scarcity, in an area that has always exhibited above average capital growth and one to which they can add value through renovations or development, thereby ‘manufacturing’ capital growth. 
We are moving into the next stage of the property cycle 
And the next stage is the stabilisation phase of the cycle. 
You see, the markets don’t move directly from the downturn phase to a property upturn. There is a period of time where buyers return and take up the slack before prices start rising. 
And I expect more buyers to return to the market later this year when they realise prices won’t fall any further. 
By the way, the stabilisation phase is a great time for savvy investors to get set for the upturn stage of the cycle. 
This year may be a good time to buy property – I have always found it a good time to buy when everybody tells you that property is a bad investment. Now is the time to get set for the future. 
I’m looking forward to the balance of 2012. Are you?
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
 
 
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Australian property markets differ, and investors must find opportunities: Michael Yardney

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Around budget time each year, and whenever tax reform is discussed, property investors shudder at the thought of the abolition of negative gearing. 
At the federal government tax summit last year, Grattan Institute economist Saul Eslake called for changes to negative gearing, arguing it provided $4.5 billion each year to affluent Australians and reduced the supply of affordable housing. 
“We've got a personal income tax system that rewards accumulation of wealth through borrowing and speculating and penalises the accumulation of wealth through working and saving,” he said. 
Not that long ago ANZ Bank's Phil Chronican took aim at negative gearing, claiming the tax break was leading to an unhealthy focus on housing as a means to get rich, while pushing property prices to unaffordable levels. 
Opponents of negative gearing appeal to the frustration of would-be home owners, suggesting they have been locked out of the market by greedy, tax-driven property investors who receive billions of dollars of tax breaks that push up property prices. It is sometimes argued that it would be better to use revenue forgone through negative gearing to build more “affordable” homes.
 
A quick primer:
A property is negatively geared when the costs of owning it – interest on the loan, bank charges, maintenance, repairs and depreciation – exceed the income it produces. 
Since the costs of producing an income are generally deductible against the taxpayer’s other income, property investors can effectively offset some of the interest expense against their wages. This has made some argue that other, less fortunate taxpayers help these property investors meet their costs. 
Why would anyone go into a business deal that is expected to make a loss? 
Generally it’s because property investors hope that their income losses will be more than offset by their capital gains when they eventually sell their properties. And in Australia capital gain is not taxed unless you sell your property, and then it is concessionally taxed – again evoking the argument that it favours wealthy landlords. 
Of course negative gearing is more favourable for taxpayers who earn high incomes. 
Imagine an investor had excess interest expenses of $10,000. If he were on a marginal tax rate of 15¢ in the dollar he could use his loss and reduce his tax by $1,500. But a taxpayer in a higher tax bracket, one who pays 30¢ in the dollar tax, could reduce her tax by $3,000. 
So the benefits of negative gearing are greater the more you earn and the higher your tax rate. 
What’s the fuss about?
In our modern society we pay our taxes and expect the government to provide us with certain essential services. These include hospitals, roads, schools, jails, public transport, aged care and public housing. 
In Australia the government often shares the burden of providing these services with private enterprises that can often deliver them more efficiently and cheaply. 
When the government can’t supply enough public hospital beds, privately run hospitals step up to the mark and not only receive tax deductions for their business loans, but also allowances to subsidise them. So do aged-care providers, schools and public transport providers who provide services in tandem with the government. 
Our government also provides public housing, but not enough for all those who can’t afford to buy their own property. While government programs such as the national rental affordability scheme and other social and public housing programs are helpful, it is only the private rental market that can deliver rental accommodation at the rate and scale that is required at present. 
Property investors like you and I save our deposits, buy a property, commit to a loan for 25 or 30 years and provide accommodation for others in our community. 
In return we expect to get a reasonable return on our investment risk, just like other business people do. We know that the rent won’t cover our expenses, but accept that certain tax benefits plus the long-term capital growth will make up for this. 
Sometimes it does, and sometimes it doesn’t. 
Leverage and negative gearing compounds returns in the good times, but multiplies losses when property prices are flat or falling. I know as many people who have lost money in property investment as those who have made money – much like most other small business people. 
If the government takes away my tax concessions, I would have to consider my investment options. To ensure I get a decent return I’d put up my rents if I could, or maybe I’d invest elsewhere to get the best bang for my buck. 
The result would be that rents would rise and tenants would have to fight over the few rental properties left, or the government would have to invest its own money and buy or build properties and enjoy the pleasures of being a landlord. 
Of course the government already provides some public housing, but not enough, leaving the task of providing rental accommodation not only in our capital cities, but also in regional Australia and in the remote mining towns to private investors. These are people like you and me who have chosen to run our own little property investment businesses. 
If we set up a dog wash business or a restaurant, we’d be able to claim a tax deduction for legitimate business expenses including loans to set up our business or purchasing business equipment. 
Why should it be different for property investors who take on a business risk? 
Something for the government to think about.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
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Property investors are helping the nation, and negative gearing is justified for the service they provide

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 Yardney

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