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GUEST OBSERVATION
Melbourne has defied the critics with better than expected post-GFC property price growth. The city boasts a wonderful cultural lifestyle, Australia's best town transport network, and year-round tourism.
But, is that enough to justify plonking money in to a market where the cost of accommodation is already significantly higher than two thirds of Australia?
A significant portion of Victorian government revenues over the last five to six years has been in the form of property-related taxes from an <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/2013.02.16_Propertyology_FieldOfDreams.pdf">over stimulated construction industry</a>.
<img src="/images/2015/01/30/pressley%20jan%2030%20one.jpg" alt="">
We have been increasingly concerned about an oversupply implication on Melbourne property markets. The data in our building approvals graphic shows that property supply has been significantly higher over the last five years than previous trends.
To date, the higher supply has been counter-punched by higher demand in the form of a swing in population growth. Population growth rates have come from two main sources: <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/InterstateMigration_2014-06.jpg" target="_blank">net interstate migration</a> and the international student market.
We believe that Melbourne’s property market is very delicately poised. We question the sustainability of Victoria’s ‘we’ll keep building and they’ll keep coming’ strategy. The market has been over supplied for some time. Rental yields are already the lowest in the country and vacancy rates will rise above where they are now.
In our opinion, Victoria has some significant economic challenges on the horizon. The state has a high exposure to manufacturing and the closure of Ford, Holden and Toyota during 2016-17 will inflict a lot of pain. According to a study conducted by University of Adelaide, 98,000 Victorian jobs will be lost. The city councils with the biggest exposure are Melbourne City (15,000), Hume (9,000), Dandenong (7,000), Hobsons Bay (6,000) and Geelong (5,000).
A new state government was elected in to office in November 2014 which resulted in the scrapping of one of the state’s very few major infrastructure projects – the $18 billion East West Link transport project.
With a waning manufacturing industry, fewer state-owned assets than the likes of New South Wales and Queensland, and a small infrastructure pipeline it remains to be seen how the jobs will be created to support a growing population.
Will the new government play the ‘just expand the public sector’ card?
<img src="/images/2015/01/30/pressley%20jan%2030%20three.jpg" alt="">
Even with the higher population growth rates, the rates of property supply are enough to be concerned about. Things could become quite ‘ugly’ if intervention doesn’t create the extra jobs needed to support population growth. We might see interstate migration trends do an about face over the next couple of years.
Simon Pressley is managing director of Propertyology, a property market analyst, accredited property investment adviser, and buyer’s agent. 
<a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology </a>works exclusively with property investors to purchase properties in strategically chosen locations all over Australia.
<h2>How to purchase high-performing investment properties: a free Propertyology eBook</h2>
 
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spressley-sBoeMhannA

Melbourne oversupply is an increasing concern: Simon Pressley

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GUEST OBSERVATION
Much media attention has been centred on Brisbane as the next property hotspot.
With an inability to distinguish ‘reading’ from ‘research’, more and more property investors follow like sheep thinking all roads point to Brisbane, Logan, or Deception Bay.
For the record, we do believe that parts of Brisbane offer good investment potential over the medium-long term; <a href="https://www.propertyology.com.au/your-results/" target="_blank">we’ve helped many investors to purchase properties in Brisbane</a> over the past 12 months. That said, we’ve purchased a lot more properties in alternative locations - interstate and other parts of Queensland – because we feel confident that the potential is even better.
Over the last decade, Brisbane was a major beneficiary of net interstate migration. Post-global financial crisis (GFC), the rate of growth has been easing. We continues to monitor this path.
Brisbane had the biggest pre-GFC build up of oversupply out of all Australian capital cities. This, plus the infamous 2011 floods, resulted in property values declining by a combined 15% during 2011-12.
<img src="/images/2015/01/14/pressley%20jan%2014%20on3.jpg" alt="">
A poor climate for construction finance during 2009-2012 meant lower supply and a return to equilibrium.
<a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/Supply-and-Demand-State-by-State_2014.11.pdf" target="_blank">Building approvals</a> are now at record levels again so pockets of oversupply and <a href="https://www.propertyology.com.au/inner-city-brisbane-not-spot/" target="_blank">investor no-go-zones</a> will catch out less informed property investors over the next couple of years. The CBD, West End, South Brisbane, Woolloongabba, Fortitude Valley, Bowen Hills, Newstead, Hamilton, Toowong, Nundah, Chermside, Fitzgibbon, North Lakes, The Gap, Calamvale, Narangba, Murrumba Downs, Hills District are all destined for high levels of new supply.
The jobs outlook for Brisbane is healthier than given credit. In November 2014, Brisbane’s unemployment rate of 5.8% compared favourably to the state and national rates of 6.7% and 6.1%, respectively.
<img src="/images/2015/01/14/pressley%20jan%2014%20two.jpg" alt="">
Brisbane City Council, Australia’s biggest LGA, has been proactive at engaging to do business with Asian countries. As a sign of the confidence that some private investors have in Brisbane, there are several new hotel developments which have added a combined 500 new rooms.
There are some significant major projects currently underway, including a $1.35 billion airport expansion, $1 billion gateway upgrade, $3 billion RNA showgrounds redevelopment, and $1.1 billion Moreton Bay Rail Link.
Pipeline proposals include a <a href="https://www.propertyology.com.au/brisbane/">$5.2 billion BaT Tunnel</a>, a $3 billion plus integrated resort and casino, and an expanded medical hub at Herston.
Exposure from November’s G20 Summit and the upcoming Commonwealth Games will also benefit Brisbane’s economy.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
<h2>How to purchase high-performing investment properties: a free Propertyology eBook</h2>
 
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Brisbane's looming oversupply will catch out poorly informed investors: Simon Pressley

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GUEST OBSERVATION
Located between the two large urban footprints of Brisbane and Gold Coast, property investors are often attracted to Logan’s low property entry price and higher rental yields. 
Demand for accommodation in Logan has been high based on its average annual population growth rate of 2.3% over the last decade - superior to the Australian average of 1.7%. This trend appears to be holding firm.
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="147">
Population Growth
</td>
<td valign="top" width="131">
2003-2013
</td>
<td valign="top" width="114">
2008-2013
</td>
</tr>
<tr>
<td valign="top" width="147">
 
</td>
<td valign="top" width="131">
(10yrs)
</td>
<td valign="top" width="114">
(Post-GFC)
</td>
</tr>
<tr>
<td valign="top" width="147">
Australia
</td>
<td valign="top" width="131">
1.7%
</td>
<td valign="top" width="114">
1.8%
</td>
</tr>
<tr>
<td valign="top" width="147">
Queensland
</td>
<td valign="top" width="131">
2.4%
</td>
<td valign="top" width="114">
2.1%
</td>
</tr>
<tr>
<td valign="top" width="147">
Logan
</td>
<td valign="top" width="131">
2.3%
</td>
<td valign="top" width="114">
2.2% 
</td>
</tr>
</tbody></table>
<img src="/images/2015/01/12/logan%20jan%2012.jpg" alt="">
Other than a spike in building approvals in 2010-11, Logan’s housing supply has been consistent with population demand.
<a href="https://www.propertyology.com.au/free-reports-articles-archive/" target="_blank">Our research</a> confirms that locations where developers are concentrating most on future supply include Jimboomba, Loganlea, Browns Plains, Waterford, and Beenleigh.
What Logan lacks most is sufficient local jobs. An unemployment rate of 6.4% is significantly above Brisbane’s 5.1%. According to Census data, of the 300,667 population 123,619 are employed although only 72,745 of these jobs are within Logan themselves.
The region’s biggest employment nodes are Springwood and Browns Plains and both catchments battle significant traffic congestion.
A largely blue-collar demographic, Logan’s biggest industries are:
<ul>
<li>Manufacturing ($4.9 billion output per annum),</li>
<li>Rental, hiring and real estate services ($2.4 billion),</li>
<li>Construction ($2.3 billion),</li>
<li>Retail ($1.1 billion), and</li>
<li>Wholesale trade ($1.1 billion).</li>
</ul>
Transport and logistics, food manufacturing, and health care have been described as ‘emerging industries’ although there is very little tangible progress.
While the local government has been gallant in trying to improve its reputation with a ‘City Of Choice’ campaign, it still has a high rate of crime and a distinct lack of attractions.
With the supply-demand equilibrium expected to continue, I believe that Logan will to continue to performer steadily although better investing can be found in select pockets of Brisbane.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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Is it time for Logan to make its mark?

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GUEST OBSERVATION
I expect the Gold Coast market to surprise many pundits and become one of Australia’s best performers during 2015-2017. The storm clouds are gone, the sun is due to shine – and quite brightly. However, there is still some turbulence in the waters.
Tourism drives the Gold Coast’s economy. So, when the global financial crisis (GFC) hit in late-2008, consumer sentiment disappeared, jobs were shed and its property market suffered.
The Gold Coast’s only other industry of note is construction and a significant pre-GFC over-supply compounded things for its property market. In spite of having population growth (3.1% per annum during 2003-2013) of almost double that of the national average (1.7%), the Gold Coast was the worst performing market in Australia for a few years.
<img src="/images/2015/01/01/pressley%20jan%205%20one.jpg" alt="">
As the above graphic shows, building approvals declined considerably post-GFC and a lot of the surplus supply has now been soaked up. Vacancy rates have tightened. Sales volumes and property prices are already growing.
Consumer and business sentiment have improved over recent years. The new Gold Coast hospital plus a $1.8 billion passenger rail project have been good for jobs growth. Work has commenced on a $670 million expansion of Pacific Fair which will make it the largest shopping centre in Queensland.
The $500 million athlete’s village for the 2018 Commonwealth Games and a $1 billion luxury hotel by Chinese developer, Ridong, are other major projects.
<img src="/images/2015/01/01/pressley%20jan%205%20two.jpg" alt="">
The tourism boom which we predicted two years ago has arrived, meaning things will only get better for the Coast.
A decision on a proposed $7 billion mega resort is due in early-2015. An economic impact statement released by the proponent in September 2014 suggests that, if completed, tourism revenue could increase from $1.15 billion per annum to $8.9 billion; 15,000 jobs could be created.
By the end of 2015, I believe the data will show Gold Coast to have been one of the strongest markets in Australia.
But don’t be fooled, leopards don’t change their spots!
Gold Coast Mayor, Tom Tait, is a developer by trade and he is very pro-construction. There have been a number of large building applications lodged during the last 12 months. Significant oversupply is expected again in a few years time. Areas with a high concentration of new supply will include Southport, Coomera and Labrador.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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Sun set to shine on Gold Coast property market

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GUEST OBSERVATION
Why have South East Queensland (SEQ) property markets been attracting such an increasing amount of positive press over the last year or so?
Every Tom, Dick and Harry seems to have an opinion, however few people can actually articulate any meaningful comment on what is likely to drive SEQ markets.
About a year ago, a couple people with high profiles made a comment along the lines of ‘Sydney and Melbourne markets have already moved so Brisbane must be next’. Such gibberish implies that markets perform like well-behaved children who take it in turns playing with their toys.
Other headline chasers try to sound intelligent by quoting generic stats such as changes in median property values, auction clearance rates, or people attending open homes and want to pass it off as ‘quality research’. Yawn!
People, especially investor, follow like sheep. Media momentum builds and, suddenly, a growing percentage of property investors are thinking ‘all roads point to Brisbane, Logan, Ipswich, or Deception Bay’.
Comforted by the fact that everyone appears to be saying the same thing, investors all around country have felt that they’re on a winner and have set about finding an expert with local knowledge to help them secure their own piece of south-east Queensland ‘gold bullion’.
The Propertyology team certainly isn’t going to reject the increased level of new business enquiry from this herd mentality. And, while we do think that parts of south-east Queensland have a healthy outlook, investors are often shocked when we remark that we feel that we can make their investment dollar work harder in locations outside of SEQ - interstate and other parts of Queensland. Be the shepherd, not a sheep!
Much of the rhetoric which gets reported on property markets relates to matters affecting housing demand. I recently conducted a keynote presentation at the Australian Property Institute Conference and discussed why housing supply and sentiment play an equally important role in fluctuations of property prices.
Since the turn of the century, equilibrium was maintained between Queensland dwelling construction levels (supply) and demand (population growth).
<img src="/images/2014/12/15/pressey%20dec%2015%20one.jpg" alt="">
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="160">
Population Growth
</td>
<td valign="top" width="141">
2003-2013
(10yrs)
</td>
<td valign="top" width="119">
2008-2013
(Post-GFC)
</td>
</tr>
<tr>
<td valign="top" width="160">
Queensland
</td>
<td valign="top" width="141">
2.4%
</td>
<td valign="top" width="119">
2.1%
</td>
</tr>
<tr>
<td valign="top" width="160">
Australia
</td>
<td valign="top" width="141">
1.7%
</td>
<td valign="top" width="119">
1.8%
</td>
</tr>
</tbody></table>
Whilst Queensland’s population growth rate is still above the national average, interstate migration is not what it used to be and growth rates have eased.
With the mining construction boom winding back, governments are looking at alternative measures to stimulate the economy. Incentives have been offered for new property purchases, more land has been released, and zoning changed. Australia is now in the midst of a construction boom.
Several locations will soon have considerably more housing supply than demand requires, followed by underperforming price growth and rental returns. The battle between ‘supply’ and ‘demand’ is on. Most sheep will end up in the wrong paddock!
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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Does South East Queensland really deserve all the attention?

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GUEST OBSERVATION
If there is one thing that I see on a daily basis that I get frustrated with it is that decision-making is a skill which few people have learned to do very well. And this, not one's salary or profession, is the primary reason why few people achieve anywhere near as much as they are truly capable of.
When taking on important projects, a lot of people's focus is too heavily weighted on how they can complete it at the lowest cost rather than focus on the outcome that they hope to achieve.
Good decisions are made with a clear mind and with a focus on 'why' you are doing it in the first place – the long-term objective as opposed to the current task. Tapping in to the best resources you can find, including input from someone whose core business is conducive to your longer-term objective, enhances decision-making quality. Regularity of good decisions is the cornerstone to success.
Getting something done is an accomplishment. Getting something done well is an achievement! Many people can lay claim to the accomplishment of buying a property. Fewer people have truly astute investment decisions on their list of achievements.
Those whose default behaviour is to save money ahead of doing something as well as they can are destined to compromise outcomes. We've all heard that saying "you get what you pay for". The first question that people ask when making enquiries about goods or services is "what does it cost?” when it should be “how can you assist me to achieve my objective?”
The client who appoints the accountant because he/she is the cheapest will never know that there were more creative strategies which would have saved them a lot of money.
I find it amusing when people chose to take that DIY option instead of paying a specialist.
Outsourcing to specialists creates more time to do more of the things that you are truly good at, enables you to make more money, and enhances the quality of your accomplishments.
The person who uses a DIY diagnosis for that constant sneeze and keeps going back-and-forth to the chemist, might have been able to overcome it very quickly from a trip to an allergy specialist – skill comes at a cost but the net result is usually worth it. A majority of property investors are like that DIY patient who never consults a true specialist!
There are only 24 hours in the day; it's what we do with them that counts! We can all make more money if we really want to but no one can make more time. No one!
If we want to achieve the very best that we are capable of for something that is important enough to do, then I suggest that's where the focus should be most, not on the easy option or the cost.
Instead of focusing on tasks associated with buying an investment property, focus on the primary objective of increasing your potential to make the most money possible. Are you a ‘property buyer’ or a ‘property investor’?
Article continues on the next page. Please click below.
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Seven common examples of poor decision-making made by property investors:
<ol>
<li>
Property selection Tax advantages and emotions dominate property selection decisions to the detriment of capital growth potential over the longer term. Hardly a day would go by without me hearing someone tell me that they want to buy a brand new property because of the extra tax incentives; or an attractive looking property to get a better tenant. A structurally sound established property, in a strategically chosen location, at a significantly lower entry-price has much more upside capital growth potential, whether it looks dated or beautiful. 
</li>
<li>
Building and pest inspections Why are some buyers so quick to terminate a purchase contract after an inspector discovers defects? The inspector’s job is not to comment on what they like; he / or she is only going to comment on the 1-2% of the property that might benefit from some best-practice attention. The long-term primary objective is to invest in a property in the right city, the right street, the most suitable dwelling style, and priced right. If you’ve already found that property and it happens to have several defects why would you be so keen to walk away? Good decision-making would be to explore how significant the defects are, the likely cost to fix them, and whether a deal could be done with the owner. What most see as risks, could actually be opportunities.  
</li>
<li>
House v apartment I wish I had a dollar for every time someone told me that they “don’t want to invest in an apartment because they don’t want to pay body corporate fees” or “land appreciates but buildings depreciate”. Narrow-minded statements such as these are living proof that too often people get distracted by small things which they don’t want at the expense of the real objective, the end result that they hope to achieve. The dwelling types within my own property portfolio have been strategically-chosen as a result of demographic and supply-demand research conducted within each city.  
</li>
<li>
Applying for an investment home loan The objective should be to get the most suitable type of loan, which compliments a professionally designed overall debt structure, has a strategy to deal with good debt and bad debt, and avoids cross-collateralising. In spite of this, the first question people usually ask is “what’s your interest rate?” A lot of borrowers are also creatures of habit who go back to the same bank because ‘it’s easier’. Banks are good at explaining features and benefits however their strategy skills generally leave a lot to be desired.  
</li>
<li>
Property management Property managers play an important role in helping investors to get the best out of their profit and loss statement. Why is it the first question investors ask is “what do you charge?” This is a classic example of how so many people lose sight of the primary objective - property management fees are only one line entry in the P&amp;L. When I interview property managers I enquire about office systems, staff turnover and ratios of properties to property managers. I ask questions about their processes to minimise vacancy periods and arrears, how they handle maintenance requests and I review samples of their rental advertisements. As with a majority of business decisions, it’s not so much as what a property manager charges, but what they do (or don’t do) for it.  
</li>
<li>
Organising insurance The point of having insurances is to protect ourselves from loss in the event of an unforeseen event. The focus should therefore be on what needs protecting, how much protection we need, and what the policy wording says that the insurer will / will not do in certain situations. When organising insurance, an overwhelming majority of people do little more than ring around and ask price-related questions (“what’s your premium, what’s your excess?”). How would you feel if a claim for flood or malicious damage was denied, or the payout following a major fire was insufficient to rebuild the entire house? If the insurer doesn’t come to the party at time of claim all of those insurance premiums that you’ve paid over the years are little more than a donation.  
</li>
<li>
Rental renewals Refusing to be flexible with the amount of rent charged without even contemplating current market forces is another example of poor decision-making which is all too common amongst property investors. What is the sense in insisting on a particular rental figure at the expense of a longer vacancy period? It is irrelevant how much rent you ‘want’, or how you justify it, unless the market is prepared to pay it. Astute property investors make good decisions through understanding that there are generally three factors which determine whether or not a property is rented: price, presentation, and promotion. Every market’s vacancy rates will fluctuate up and down from time to time and sometimes the best decision is to advertise the property for 5% less than your competition.  80% of something will always be more than 100% of nothing!
</li>
</ol>
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014)
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Seven common examples of poor property investment decisions

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GUEST OBSERVATION
In our opinion, the single biggest driver of property markets is employment.
Australia was once renowned for its farming and ‘making stuff’. In 1985-86, agriculture and manufacturing represented 8.1% and 12.2% of total employment respectively in Queensland, whereas these industries now only represent 2.4% and 7.7% of all jobs.
Mining is a major revenue generator for government and business coffers, although it is not a big direct employer. Mining jobs have grown from 1.9% to 3.4% since 1985-86.
The biggest employers are tourism (419,100 Queenslanders are currently employed in retail trade and accommodation), health care (282,600), construction (230,700), manufacturing (178,500), and education (176,400).
The industries with the biggest employment growth since 1985-86 are health care (from 8.0% to 12.1%) and white collar professional services (3.8% to 7.1%).
Casting our mind to Australia’s core assets and the role which this country plays in the Asian Century, we believe that the industries with the largest potential for employment growth are:
<ul>
<li>Tourism (retail trade and accommodation)</li>
<li>Education (international students)</li>
<li>Construction (hotels, apartments, infrastructure, resorts, ports)</li>
<li>Health care (our aging population)</li>
</ul>
Australian towns and cities which have a strong presence in these industry sectors will have increasingly high demand for accommodation.
Specific to the state of Queensland, locations with these industry drivers include: 
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="188">
Tourism
</td>
<td valign="top" width="188">
Education
</td>
<td valign="top" width="188">
Construction
</td>
<td valign="top" width="188">
Health Care
</td>
</tr>
<tr>
<td valign="top" width="188">
Brisbane
Gold Coast
Townsville
Sunshine Coast
Cairns
</td>
<td valign="top" width="188">
Brisbane
Gold Coast
Townsville
Cairns
 
</td>
<td valign="top" width="188">
Brisbane
Gold Coast
Sunshine Coast
Cairns
Gladstone
Toowoomba
Mackay
Rockhampton
Ipswich
Logan
</td>
<td valign="top" width="188">
Brisbane
Sunshine Coast
Ipswich
 
</td>
</tr>
</tbody></table>
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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The Queensland locations with the largest potential for employment growth

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<div class="WordSection1">
GUEST OBSERVATION
Negative gearing is a form of financial leverage where the gross income generated by an investment is less than the cost of owning and managing the investment, including interest charged on the borrowings.The negative cash flow is then offset against personal incomes. 
</div>
Doesn’t negative gearing just help the rich get richer?
According to 2011-12 ATO statistics, there were 12,736,030 individual taxpayers in Australia and 1,897,668 (14.9%) of them owned one or more investment properties. 73% of property investors own one property and only 4% of investors own four or more properties. For a property to be negative geared there must be a significant debt against it (they don’t own it outright).
In other words, an overwhelming majority of investors are ordinary mums and dads; they are attempting to fund their own retirement, as opposed to being a burden on Australia’s taxation system via government-funded pension.
Doesn’t negative gearing reduce the amount of revenue available to governments each year?
A report produced by REIA in August 2014, mentioned that a total of $7,860 million in losses were claimed by Australian property investors in 2011-12. The ATO also charged extra taxes on the $5,939 million worth of investment property profits.
Should changes ever be made to negative gearing and results in fewer property transactions each year, governments would stand to lose a lot more tax revenue from stamp duties, infrastructure charges, land tax, construction industry payroll taxes, and more. The existing $71 billion (and growing) spent each year on tax-payer funded pensions and allowances will increase significantly. 
What impact would the removal of negative gearing have on Australia’s housing supply?
According to 2011 Census data, Australia has 9,117,003 residential properties and we are adding approximately 160,000 more each year. Negative gearing is a tax-policy linked to property – other policies include stamp duty, first home buyer incentives, tax rebates and incentives to purchase new property, land tax, and capital gains tax.
Tightening of any of these policies will directly influence consumer behaviour and become a disincentive to buying and holding property. As we’ve seen already with ‘new home building grants’, the introduction and removal of tax policies directly affects the construction industry (Australia’s biggest industry by direct and indirect jobs).
What about Australia’s social housing problem?
75% of residential properties in Australia are occupied by the owner. Of the remaining 25% that are rented only 5% are provided by governments. Governments can’t afford to fund social housing (some governments have actually been selling off parcels of properties in order to raise money for other reasons).
The National Rental Affordability Scheme (NRAS) is government admission of our social housing shortfall which governments can’t fund so they developed a policy designed to encourage others to do it for them. Removal of negative gearing would be a gross contradiction to this.
How might the removal of negative gearing affect Australia’s welfare system?
Australia’s financial literacy crisis is in our DNA - only 4% of people are financially independent by age 65. The federal government have said that we can't support our ageing population with our unsustainable reliance on tax-payer pensions. They have touted the possibility of the superannuation age increasing to 70. Stripping back incentives which encourage investment would only compound this country's problem.
Article continues on the next page. Please click below.
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Does negative gearing force property prices up and make it harder for first home buyers to get in to the market?
Property markets are affected by dozens of factors. The factors which affect property values the most are related to the general economy, employment, and credit policies, not tax policies). When property markets perform strongly, like they have in Sydney in 2013-14, it is not uncommon for segments of the community to blame investors for driving values up and making bit harder for others to get in.
Negative gearing has been in place for generations and it is no more responsible for Sydney’s property price growth in 2013-14 than it was for its flat-line performance from 2001 to 2008.
Doesn’t negative gearing make rents more expensive?
In July 1985, in response to claims that negative gearing was the primary cause of property rents rising uncontrollably, the Hawke government quarantined negative gearing. During the two years that the quarantine was in place, ABS figures show rents rose by an average of 22%. The policy was reversed in 1987 and rents still rose by 21% over the next two years. A similar trend occurred with property values. As mentioned previously, tax policies have a smaller impact on property markets (values and rents) than most people think.
What other potential impacts could occur if negative gearing was tinkered with?
Propertyology often describes property investment as a business – the business of providing accommodation – and the investor’s role is akin to that of a company director (to make responsible decisions which are in the best interest of your balance sheet and profit and loss statement).
Negative gearing involves claiming interest expenses from borrowings plus other costs associated with maintaining an asset in much the same way that more traditional businesses do. Similarly, a share investor will claim the interest expense from their margin loan. Time will tell whether property investors will be singled out or not.
A final word...
Rumours of negative gearing getting scrapped arise almost every year – either in the lead up to a federal budget or whenever there is a major review of Australia’s taxation policies. It is the responsibility of governments to periodically review everything; nothing lasts forever. The reality however is that negative gearing has existed in Australia for a few generations.
In the event that negative gearing was ever scrapped, there might be some short-term referred pain but the real estate body will eventually realign itself (once the dust settles, it will be business as usual again for most property investors).  The potential implications to scrapping negative gearing will be spread a lot further than property investor’s tax returns. Any government who is bold enough to make a change faces consequences far greater than the revolt of 1.9 million people at the election box. For these reasons, it is my view that negative gearing will survive further generations.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014)
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Scrapping negative gearing would have consequences far beyond an investor's tax return

<html><body>
GUEST OBSERVATION
Rising world demand for gas, iron ore, and coal have already made a mark on several property markets across Australia over the last four to five years. Propertyology’s continuous investment in property economics has us questioning whether another commodity, nickel, might soon create other property investment opportunities.
While not as well known as other metals, nickel plays an important role in modern life. When mixed with other metals it helps create strong alloys that won't rust, can withstand high and low temperatures, and can be easily shaped into anything from thin wires to flat sheets.
One such use of nickel is adding it to iron to make stainless steel. Just ponder: with the existing western world and the fast rising Asian middle class, how much extra demand will there be for cooking utensils and kitchen equipment, surgical instruments, marine equipment, the construction industry, crank-shafts and axles in cars, washing machines, aircraft engines? What opportunities will this create for businesses with links to nickel? Where might all the new jobs be created?
Ponder this also: rising petrol prices, a push for cleaner energy and more advanced technology is expected to result in a major ramp up in production of battery-powered cars. It doesn’t require rocket science to figure out that a similar increase in production of portable devices such as smart phones and laptops is also expected to boom. Rechargeable batteries for mobile phones, cars, clocks, kid’s toys, and remote controls require nickel.
Get the picture? Now ponder this...
Australia is currently the world’s fourth largest producer (11.4%) of nickel, behind Russia, Indonesia and Philippines. If world demand for nickel intensifies as forecast, it might become even more prevalent that Australia is ranked number one in the world for nickel resources with 24.4% of known reserves.
Stock market analysts, Credit Suisse, recently placed a couple of Australian-based nickel mining companies on their ‘watch list’. Western Australia (refer Kalgoorlie) has the lion’s share of nickel resources. Other less significant resources are located in the central west of New South Wales, far northern tip of Tasmania, south of Gladstone and near Townsville. Property investors might consider placing a couple of these locations on their watch list, too.
<img src="/images/2014/08/12/nikel-deposits-aug-12-one.jpg" alt="">
Source: Geoscience Australia, '<a href="/news">Australia's Identified Mineral Resources 2013</a>'.
Buying an investment property in a remote location because of the potential for a single mine is something that Propertyology would consider to be very speculative. However, when we combine economic sustainability with some future upside we often get a really astute investment decision which stands out from the rest of the pack.
Sometimes the best investment results over the longer-term come from buying in the towns nearby to the mines, although an understanding of the higher volatility from commodity price fluctuations is important. In different situations the wisest investment might be in the large city (capital or regional) which will supply most of the goods and services to the smaller towns.
Perth, for example, has one of only two existing major nickel refineries in Australia. The BHP-owned Nickel West refinery at <a href="/news">Kwinana</a> processes most of Western Australia’s nickel and you’d have to think that there is considerable potential to increase upon its current 2,000 employees.
QCG Resources has just acquired the Avebury nickel mine in Tasmania for $40 million. The mine closed in 2009 due to floundering nickel prices. Due to the aforementioned rising demand for nickel, the commodity price has increased by a significant 34% since Christmas and QCG clearly see an encouraging outlook for nickel.
Clive Palmer will be as excited as anyone about the forecast demand for nickel. He may be controversial, however he didn’t become a billionaire by chance. Palmer owns the Queensland Nickel Refinery in <a href="/news">Townsville</a>. Queensland Nickel imports the commodity from mines in the Pacific, processes it, and then exports it out as a refined product. Whilst nothing has materialised as yet, Palmer has proposed a $1 billion upgrade of the refinery and supporting infrastructure. If that goes ahead there will be significantly more than the existing 1,000 people employed at the Townsville refinery. Townsville already has a lot to offer for property investors.
Palmer is also the major shareholder of Gladstone Pacific Nickel Limited (GPNL) which has proposed the establishment of a $3.5 billion nickel and cobalt refinery adjacent to the existing deepwater Port of Gladstone. GPNL already owns a nickel mine at <a href="/news">Marlborough</a>, near Gladstone. In spite of Gladstone’s current property market downturn, population growth forecasts are very strong and the surplus property stock will be soaked up before too long in Australia’s industrial powerhouse.
The future outlook may well be one of those ‘upside’ factors for Gladstone and Townsville – both are very strong regional cities with incredibly strong long-term property investment fundamentals. 
<img src="/images/2014/08/11/press-aug-11-one.jpg" alt="">
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
Picture courtesy of Wikimedia Commons.
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Nickel could be behind the next mining boom: Here are the areas set to benefit

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GUEST OBSERVATION
Understanding the chain which leads to future property supply is an important consideration before deciding to invest in to a market.
Forecasting future property supply is arguably the single most difficult task for property analysts.
Analytically-minded property investors enjoy statistics. While statistics do play an important role for property analysts, some statistics have greater relevance than others. And then there's the skill in being able to interpret statistics. Building approval statistics play an important role in understanding property markets.
Building approvals are a lead indicator for future property supply. ‘Approved’ does not mean ‘built’. The property supply chain is such that lot owners must (first) apply to the local government authority and have the application approved, (then) secure the necessary funding, and (finally) begin construction. The time lag from building approval through to completion of construction often ranges from six months to two years.
Building approval statistics are relevant for property investors because they have a direct impact on that relationship between demand and supply.
<img src="/images/2014/07/16/building%20approvals.jpg" alt=""> 
Generally speaking, when there are a large number of buyers (demand) at a time when the levels of supply are low, increased competition is created; price growth then occurs. Conversely, when supply is high buyers have more choice and prices are discounted.
A lot of property investors don't understand the lag affect that building approvals have on property values. An investor might purchase in to a market a buoyant market and neglect to study the supply chain. Supply might be tight at the time of purchase however there might also be a large volume of new properties literally 'on the drawing board' and slated for construction completion in the near future. A much softer market might be just around the corner.
Take a look at Western Australia's building approval graph (remembering that 75% of WA's population is based in Perth). The volume of building approvals eased during 2010 and 2011. The lag affect of the declining number of new properties coming on to the market was one significant reason why Perth experienced above-average price growth in 2012 and 2013.
A significant rise in building approvals in Perth during 2013 means that a lot more supply is hitting the market this year.
Property developers will always find a way to build (their livelihood demands on it). A healthy construction industry generally means a healthy economy however there will always be a fine line to building too much. And statistics will only enable us to look so far in to the future.
Forecasting future property supply is arguably the single most difficult task for property analysts.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
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The property supply chain: The effect of building approvals on property values

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Joel Robinson

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

When the opportunity arose for South Australian developer Palumbo to return to Kent Town, where it had previously delivered East Park Apartments and the East 
Rundle Apartments, it wasn't one the longstanding developer-builder was going to pass up.

The decision was quickly vindicated, with more than 30 apartments sold within the first month of launching <a href="https://www.apartments.com.au/new-apartments/royal-apartments-kent-town-2-8-north-terrace-kent-town-sa-5067">Royal Apartments</a> to the market.

The 206-apartment development, which will bring significant new supply to Adelaide's tightly held eastern city fringe, also gives <a href="https://www.apartments.com.au/developers/palumbo">Palumbo</a> the opportunity to bring new life to one of Kent Town's most recognisable watering holes.

[smartcode_project:default project_id=6109 project_image_fid=376073]

Royal Apartments incorporates the historic Royal Hotel, a venue Palumbo Managing Director Daniel Palumbo said has a longstanding connection with the local community.

"Everyone in the area has history with the Royal Hotel," Palumbo told Apartments.com.au.

"It was quite an active pub and social gathering place for locals. We want to bring it back to its former glory."

[smartcode_project:default project_id=6109 project_image_fid=376072]

The wider development will comprise two residential towers alongside the restored hotel, sitting on North Terrace opposite the Adelaide Park Lands.

For Palumbo, the project also marks a return to familiar territory.

The developer completed East Park Apartments next door more than a decade ago and jumped at the opportunity to develop in Kent Town again when the Royal Hotel site became available.

"The opportunity emerged, and we moved to secure the site," Palumbo said.

"We were approached by the previous landowner, who said they had extensive commitments in Sydney and weren't in a position to deliver the project.

"We took over the site and within six months recut the design scheme to be more in keeping with the type of development we want to bring to Adelaide.

"Now we're on the market and those changes have really resonated with local buyers."

That has translated into a strong start to sales, with 33 apartments transacting in the project's first 35 days.

Palumbo said the early purchaser profile had been consistent with the group's traditional focus on owner-occupiers rather than investor-led apartment stock.

"Local owner-occupiers have always been our market," he said.

"There are always some investors, but we've never developed what would be called traditional development stock. Owner-occupiers are very much our market."

[smartcode_project:default project_id=6109 project_image_fid=376068]

The buyer mix has been diverse so far, with downsizers and younger professionals both accounting for a significant portion of early sales.

South Australia's current stamp duty settings, which allow&nbsp;eligible homeowners in South Australia aged 60 savings of up to $103,830 on stamp duty when they downsize to a new property valued at up to $2 million,&nbsp;have helped encourage downsizer activity, while younger buyers in their late 20s and early 30s have been attracted to the opportunity to live immediately outside the CBD while still being able to walk into the city.



Location has been a major part of the proposition for both buyer cohorts.

[smartcode_project:default project_id=6109 project_image_fid=376075]

Royal Apartments sits on North Terrace directly opposite the Adelaide Park Lands, with residents able to walk through the parklands toward the East End, Rundle Street and Rundle Mall.

Apartments have been positioned to capture views across the parklands, Adelaide skyline, Botanic Gardens and Adelaide Hills.

Palumbo believes the scarcity of developable land along this section of the Park Lands makes the site particularly difficult to replicate.

"There's very few allotments on that side that can be developed," he said.

"If this location was in New York and you were sitting on Central Park, you'd be talking about a $60 million apartments."

Royal Apartments will offer a broad mix of residences, ranging from one-bedroom apartments through to four-bedroom sub-penthouses and penthouses.

Current listings include one-bedroom apartments from $680,000, while larger three and four-bedroom residences are priced around $2.5 million.

Residents will have access to a swimming pool, gym, barbecue and recreation areas, residents' lounge and dining space, and a communal deck.

[smartcode_project:default project_id=6109 project_image_fid=376067]

The apartments will feature generous balconies, while secure parking, bicycle storage and storage cages will also be provided.

A porte-cochère-style arrival and drop-off area has also resonated with buyers, particularly those attracted to being able to walk into the CBD during the day while retaining secure vehicle access at home.

Palumbo is acting as developer, architect and builder on Royal Apartments, continuing the vertically integrated model it has used across its South Australian portfolio.

The group was also behind the $150 million Sofitel Adelaide, the 251-room five-star hotel and residential tower which opened in 2021.

Palumbo said Royal's launch had come at an interesting time for the broader Adelaide apartment market.

Buyer confidence had initially been impacted by uncertainty surrounding the Federal Budget and broader economic conditions, but Palumbo believes sentiment is beginning to improve against a backdrop of significant investment flowing into South Australia.

He pointed to increased activity across defence and resources, including Olympic Dam, as potential long-term drivers of the state's economy and housing market.

"Money is starting to flow into Adeliade, significant amounts as Adelaide bucks the trend of the rest of the country.," Palumbo said.

"There's a lot of activity in the economy over the next decade. I think more investment will come into this market."

Early works on Royal Apartments are expected to commence this year, with major construction activity and cranes anticipated on site from early next year.

[smartcode_project_cta:default project_id=6109]

Palumbo's return to Kent Town strikes early chord with buyers

Go-to builder-developer <a href="https://www.apartments.com.au/developers/graya">GRAYA</a> is continuing to bulk out its already impressive and diverse apartment portfolio across South East Queensland. Their latest milestone is securing development approval for Silk, its boutique riverfront apartment development in St Lucia.

The approval clears&nbsp;the way for the team to begin construction planning for the 22-residence project.

<a href="https://www.apartments.com.au/new-apartments/silk-st-lucia-16-18-sandford-street-st-lucia-qld-4067">Silk</a> will rise 15 levels from an 810 sqm site at 16-18 Sandford Street, occupying a prominent bend of the Brisbane River with a prized northern aspect across Orleigh Park toward the Brisbane CBD.

The approved scheme will comprise 16 split-floor and six full-floor residences, continuing GRAYA's move into larger-format apartment developments targeting Brisbane's prestige owner-occupier market.

The project has been designed around the site's broad river frontage and dual-direction views, with GRAYA prioritising larger residences, privacy and outlook over apartment yield.

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="aa5c2349-f96c-4914-a812-1f2cd6827af8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.44%E2%80%AFAM.png?VersionId=WY0vEU_7vYjeRJKQHiCwFdMxu8PvFh52" />

GRAYA Co-founder and Chief Executive Officer Rob Gray said the project had been shaped around local homeowners wanting to remain in St Lucia without maintaining a traditional family home.

"St Lucia is one of those suburbs people do not want to leave," Gray said.

"They know the river, the trees, UQ, the golf course, Toowong and Indooroopilly, and that familiarity is hard to replace.

"True riverfront opportunities here are exceptionally scarce. What we have designed at Silk is a way to stay in the suburb people love, with the scale and privacy of a private home and far less to maintain.

"This is not typical apartment product. It is a proper home on the river, and that is exactly what this market has been missing."

The approval comes as new apartment development continues to increase across the St Lucia and neighbouring Toowong corridor, although direct riverfront sites remain considerably more tightly held.

GRAYA Co-founder and Managing Director Andrew Gray said securing the approval had removed a significant element of development risk from Silk.

"Genuine riverfront sites of this quality in St Lucia are not something that comes up regularly," Gray said.

"The approval removes a substantial layer of execution risk, and the location underwrites demand in a way very few inner-city sites can.

"The fundamentals here are as strong as anything we have assessed in Brisbane."

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="d0f3d734-65e1-48e8-8ed3-2e0715ffcdd9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.56%E2%80%AFAM.png?VersionId=sOLSs_jdHkXLWbBKzRyayf5BfTb2vPsD" />

Silk will see GRAYA return to a stretch of the Brisbane River where it already has recent construction experience. The vertically integrated group recently completed ARC in neighbouring Toowong as builder for developer Spyre, delivering the riverfront project on a constrained site.

GRAYA will take a different role at Silk, controlling the project from design and development through construction and aftercare under its vertically integrated model.

The development will include a gym and resident leisure areas at ground level, integrated with the river's edge.

Silk joins a growing pipeline for GRAYA across Brisbane and the Gold Coast, which includes Enclave, The Gallery, Coral and Ripple.

The developer-builder has also recently lodged plans for its largest project to date, <a href="https://www.apartments.com.au/new-apartments/the-silo-19-chester-street-newstead-qld-4006">The Silo</a>, a proposed <a href="https://www.apartments.com.au/news/qld/graya-buys-frasers-newstead-site-plans-the-silo-between-james-street-and-gasworks-precincts">$700 million mixed-use development</a> in Brisbane's James Street precinct.

Silk is expected to predominantly target local owner-occupiers and prestige buyers seeking a permanent riverfront home in Brisbane's inner west.

Registrations of interest are now open, with further details on the project and construction program to be released as it progresses.

<hr />
<h2>SILK PROJECT FACTS</h2>

Developer-builder: GRAYA

Project: Silk

Location: 16-18 Sandford Street, St Lucia

Apartments: 22

Built form: 15 levels

Site: 810 sqm riverfront holding

Mix: 16 split-floor and six full-floor residences

Status: Development approved

Next step: Construction planning underway

[smartcode_project_cta:default project_id=152168]

Simon Pressley

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