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GUEST OBSERVATION
I'm so angry!
It is the property market equivalent of Storm Financial just waiting to implode and no one seems prepared to do a damn thing about it. I am one of a handful of people who have been proactive in lobbying for new legislation to protect property investors from vested interest groups for some years. Yet we keep seeing deals being done between property developers and white-collar service providers.
Currently, there is no law in this country which prevents people such as mortgage brokers, accountants, and financial planners from profiting out of persuading consumers to purchase a property from a product list, even though they have no qualifications or skills whatsoever in this field.
Just this week, a home loan group announced that they will offer “independently graded and valued” property.
“Independently graded” means “product which one gets a good kick-back through the strategic use of smoke and mirrors”.
They said that their scheme would reassure customers that the properties hadn’t been overpriced to account for massively inflated sales commissions. They were referring to some groups, including mortgage brokers, who are reportedly receiving up to 8% of a property sale price as a rebate from developer’s marketing arms.
How wonderfully comforting that is. Not!
The price of an asset being supported by a valuation report does not determine whether or not the asset has strong investment fundamentals and a healthy outlook. It disgusts me when people try to portray a white-knight status with a north-pointing moral compass when the truth of the matter is that greed and opportunity are the real behaviour drivers.
They said that they're providing a range of investments that can be confidently offered to their clients... but what's to stop them from offering clients opportunities to buy shares in the next ABC Learning or HIH Insurance?
The reality is that, unless studying property markets is your core business, I’d suggest that you’d know as much about what constitutes a good investment property as my mechanic would about stock markets. But, at least my accountant is giving stock tips and getting a clip on the ticket from the ASX.
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The federal and state governments are whom I’m most angry with over this disgraceful fiasco.
Amongst other things, I’ve personally met separately with senior officials of the federal government’s financial services ‘police’ (aka ASIC) and the Queensland state government’s Attorney General’s Office. Responses that I have received range from “we can’t intervene because property isn’t considered to be a financial instrument”, to “we must be careful not to deprive people of earning a living”, and “we are looking in to it”.
It is not uncommon for my office to receive approaches from marketing companies who represent property developers and offer us in the vicinity of $50,000 per property. They are dud investments. These companies offer to supply us with all the glossy brochures, website portals, and all of the jazz words and crappy stats which they purport to be ‘research’. Regardless of where the property is located, who the developer is, or whatever spin they use, the common denominator is always brand new property. Always!
How else can those big fat rebates payable to brokers, accountants, and financial planners get funded?
No matter what spin they choose to use they are selling property. Let’s face it, in many cases it wouldn’t be too hard for them to persuade someone to buy one of the properties on their product list because the relationship and a sense of trust is already established as a result of their core business as a specialist in home loans, tax, or managed funds. Is it just me, or can anyone else see a problem with these people selling property?
For over a century there has been a recognised profession for selling property in Australia – they are called real estate agents. The law requires them to pass exams, acquire a license, hold professional indemnity insurance, complete ongoing training, understand and respect property legislation. They also work for and are paid by the property owner, and most do a good job for their client. But, how is it possible that others can exploit a pre-existing relationship from another profession and sell property with nothing more than a nod and a wink?
If they want to sell real estate, go for it. Get the license and put the sign out the front. But present yourself for what you are – someone selling property – not a property guru who very conveniently happens to have a list the best investment properties out of the 9.3 million in Australia.
An accountant is no more qualified to determine whether property ‘x’ is a good investment than a real estate agent is qualified to give tax advice. Mortgage brokers and financial planners are not property investment advisors. And, a glossy brochure containing a few graphs, some generic statistics from Census, and key words such as ‘urban renewal’ or ‘inner city’ does not constitute comprehensive market research.
It is unrealistic to expect that we will ever be rid of the white-shoe-brigade property spruiker. But, in my opinion, the people whose core business is another profession while they line their pockets pretending to be property gurus are worse than the spruikers. Their greed-driven behaviour is no better than the used car salesman who sells you a lemon that he knows has a broken chassis. At best, these people are ‘reckless distributors’ of properties with low-grade investment potential.
No matter what other services they have previously obtained from a firm, property investors would be wise to question the motives of their so-called ‘trusted advisor’. Property investors would do well to question why not one of the other 9.3 million properties in this country.
Property investors would do well to consider how a brand new property could have the best potential for capital growth when 40% of the price is made up of the various taxes associated with developing a new property.
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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spressley-sBoeMhannA

Think property spruikers are bad? How about these guys

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GUEST OBSERVATION
The performance of Sydney’s property market over the past 12-18 months is as concerning as it is spectacular.
Double-digit price growth isn’t consistent with Sydney’s property market fundamentals. While I’ll stop short of predicting that a downturn is on the horizon, the drivers of Sydney’s market are as fragile as a house of cards. With over 9.3 million properties to choose from in this country, one begs the question, “Why Sydney?”
First, The Fundamentals
Contrary to tabloid rhetoric, Australia is not having a property boom. Outside of Sydney, property markets are experiencing a predictable post-GFC recovery phase with normal rates of growth (0 to 6%) over the past 12 months.
The state of New South Wales is home to 7.4 million people (a third of Australia’s total population) and 4.3 million (18.7%) of these are in Sydney
Greater Sydney can be broken in to ‘Metropolitan’ and ‘Western Sydney’. With a population of 2.06 million people (8.9% of Australia), Western Sydney on its own is bigger than the combined populations of South Australia, Tasmania, ACT, and Northern Territory.
 <img src="/images/2014/06/10/pressley%20june%2010%20one.png" alt="">
With a median house price of $802,000 Sydney is the least affordable location in Australia (miles above the capital city average of $580,000).
For the same price that you can buy a Sydney apartment (median value $576,000) you can buy a house in every other location in Australia with the exception of Melbourne.
Sydney’s population growth rate has been below the national average over the past 10 years, and only ahead of economic minnows South Australia and Hobart. Rate of growth is completely different to size.
 <img src="/images/2014/06/10/pressley%20june%2010%20two.jpg" alt="">
New South Wales has a long history of people immigrating away from Sydney to alternative locations
 <img src="/images/2014/06/10/pressley%20june%2010%20three.png" alt="">
Sydney has been Australia's worst performing capital city market since the 2000 Olympic Games (it’s not a typo).
<img src="/images/2014/06/10/pressley%20june%2010%20four.jpg" alt="">
Through 2000 to 2010, the NSW unemployment rate was regularly above the national average. After finding its way back to parity it improved further to fall below the national average this January and currently sits 0.5% below. It is no coincidence that Sydney’s property market has improved with its employment record.
Metropolitan Sydney is Australia’s white-collar capital and unemployment rates are currently up to 50% better than the national average. It’s just a shame that few people can afford to buy a metropolitan home.
Large parts of Western Sydney, on the other hand, have significantly fewer job opportunities. Manufacturing accounts for 16% of jobs (not ideal with a high Australian dollar) while a fifth of all businesses are in the construction industry. Australia’s highest crime rates are in western Sydney
 <img src="/images/2014/06/10/pressley%20june%2010%20five.png" alt="">
To overcome a reported 182,000 job shortfall, tens of thousands of people have to commute from the more affordable western suburbs to work in metro Sydney each day.
Transport infrastructure has not kept pace with population growth. The rail network has not been significantly expanded since the 1930s, yet the region’s population is now five times greater. The heavy reliance on passenger cars results in horrendous traffic congestion, loss of productivity, and high fuel costs. Remember that earlier Interstate Immigration graph?
15 years of babble about Sydney having run out of land and therefore having an under-supplied property market is not totally correct. Metro Sydney’s land shortage has been compensated by higher density construction while sprawl has occurred to the west. Overall, dwelling construction was greater than required until the GFC handbrake was applied. The tightening of supply is another reason for the more recent pressure on Sydney property prices.
 <img src="/images/2014/06/10/pressley%20june%2010%20six.png" alt="">
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The Foreign Investor Phenomena
Structural changes resulting from the revolution known as the ‘Asian Century’ has directly resulted in unprecedented volumes of properties being purchased in Australia by Asian investors.
With Sydney and Melbourne having Australia’s biggest profiles internationally, they have been the centre of attention for the construction industry’s marketing teams.
In a majority of cases, Asian investors are buying brand new properties – only Australian residents are permitted to buy established properties.
According to the latest report from Australia’s Foreign Investment Review Board (FIRB), there were 12,647 applications approved in the 2012-13 financial year. A total of 12,025 of these approvals were for Australian real estate transactions (289 were for mining).
The number of FIRB approvals for Australian (residential) real estate has grown from 3,723 in 1999-10 to 11,668 in 2012-13. I’d be staggered if the numbers aren’t even bigger this year. The tsunami is coming! Victoria (38%) and NSW (30%) account for the lion share.
<img src="/images/2014/06/10/pressley%20june%2010%20seven.jpg" alt="">
The House Of Cards Concern
While I think that Sydney’s employment will follow current trends, its property market will ease (refer lack of affordability and a significant supply of new dwelling stock in the pipeline).
 <img src="/images/2014/06/10/pressley%20june%2010%20eight.png" alt="">
An unhealthily high ratio of investor-owned properties is already occurring with recent ABS data confirming that 53% of NSW home loan approvals (refer Sydney) were for investors. Melbourne is concerning high at 45%, 30% is about normal. Yields will reduce!
In light of the fundamentals outlined, the only thing that can sustain Sydney’s market strength is continued high rates of Asian investment. This is where there are two jokers in the pack which I feel make Sydney’s house-of-cards very fragile.
With the boom being isolated to Sydney and pressure still on the Australian dollar, the Reserve Bank is unlikely to pull the trigger on a few interest rate rises as they would normally do. But, what if the FIRB passed legislation to restrict Asian investment in Australian real estate? Joker number one!
The other possibility lies in China. There are recent reports of China’s residential market declining by 15% over the last 12 months. Chinese banking executives and economists say that a severe housing downturn could cause a considerable increase in non-performing loans at the country’s banks. We know that when times get tough investment properties are often one of the first assets disposed of in order to bring the household budget back in to order. Further instability in China’s market could result in high levels of resale stock in Sydney. Joker number two!
In so far as a medium term outlook, my money is on Sydney performing similar to the last 15 years – below the Australian average.
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 REIA / REIQ Buyer’s Agent of the Year (2012, 2013, 2014).
Photo courtesy of Peter Roberts/Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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Sydney’s property market is a house of cards

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GUEST OBSERVATION
Have we all recovered from this week's news that our homes fell in value by $10,355 last month?
According to RP Data, the typical $545,000 Australian property declined by 1.9% last month. And, it gets worse if you live in Melbourne where homes fell $19,980 (3.6%) during May. In just one month!
But, don't worry; anyone who is keen to make up for their loss in a hurry might buy in Darwin where a typical property grew in value by a whopping $30,800 (5.5%) over the last three months. 
It’s nice to know that yesterday’s RP Data statistics confirmed for us all that Australia is officially having a property boom. The combined value of properties across all capital cities has climbed by an impressive 10.7% over the last 12 months. With the extra $58,315 added to everyone’s balance sheet over the last year perhaps we can now all afford to cut back to a three day working week.
Confused?
Did we lose $10,355 last month, or did we gain $58,315 over the past year? Answer: none of the above!
As they say in the media though: “If it bleeds, it reads”.
According to Monday's RP Data, the 1.9% fall during May is the <a href="/expert-insights/finance/last-months-price-growth-dip-the-first-since-may-2013-so-rba-will-be-content">first monthly fall in values since May 2013 and the biggest fall since December 2008</a>.
On an annualised basis, the typical Australian home declined by 22.8%. Almost a quarter of the value of Australia's 9.3 million residential properties was wiped off the market last month.
Quick, I better sell that farm!
Changes in median values often don’t provide an accurate reflection of actual changes in property values. It’s not like RP Data sends out an army of property valuers each month to conduct formal values on every property in the country.
Median values are based on those properties which sold during a particular period (that’s a very small sample of data within a community). Given that a typical new property is worth more than a typical established property, it makes sense that, if there were a lot of new properties sold in one market over a reporting period that the median value would be higher.
A lot of new properties sold have sold in places like Sydney and Melbourne recently, <a href="/expert-insights/investing/the-shifting-dynamics-of-the-current-buyer-demographic">especially to investors of Asian origin</a>.
Trends in median property value changes are an unreliable measure of how a market is really performing.
As for what is really happening across the country, Sydney’s market appears to be tapering after a 12 month strong run.
The remaining capital cities, including Melbourne, have experienced price growth of between 0% and 6% over the past year.
Broadly speaking, Australia has finally shaken off the post-GFC gitters and entered in to a new (upswing) cycle.
As for the next year or two, PROPERTYOLOGY believes that most capital cities will perform better than last year.
But don't necessarily rely on reading that through future changes in median values.
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 REIA / REIQ Buyer’s Agent of the Year (2012, 2013, 2014).
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Median values fall for the first time in a year! Let's get some perspective

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GUEST OBSERVATION
Supply and demand for Brisbane apartments are on the up. Property investors would do well to consider both the short-term and long-term supply and demand outlook for apartments.
For a few years after the GFC, Brisbane did have an oversupply of property in general. It's one reason why Propertyology elected to do very little investing in Brisbane for some time. Tighter credit policies post-GFC then made it very difficult for developers to acquire project funding which enabled Brisbane's surplus of property stock to be soaked up.
During the middle of last year, Propertyology observed an increase in buyer activity and Brisbane's market recovery got under way. While we don’t believe that Brisbane is the number one location to invest in right now we do like the city's outlook and are investing there again.
Over the last year, several new, multi-storey apartment complexes have settled around Brisbane; inner-city vacancy rates have increased to a more normal level of around 3% as a result.
Yes, there is a significant level of new inner-city apartments in Brisbane's pipeline. In our view, suburbs such as <a href="/news">South Brisbane</a>, <a href="/news">West End</a>, <a href="/news">Fortitude Valley</a>, and <a href="/news">Bowen Hills</a> should be avoided by investors. ‘Property consultants' with vested interests will undoubtedly tell you differently.
Generally speaking, there is a growing trend for increased demand for apartment living across most capital cities and in some regional locations. Over the two year period to March 2014, 43% of new residential dwelling approvals in Australia were for attached dwellings. Yes, almost half. This compares to 30% of total approvals for the two years ending March 2007. Quite an increase!
<img src="/images/2014/05/23/pressley%20may%2023%20one.png" alt="">
New South Wales (refer Sydney) had an even bigger percentage of attached dwelling approvals over the last two years -56% - while the ACT (Canberra) and Northern Territory (Darwin) are even higher at a whopping 63% and 60%, respectively. Victoria (refer Melbourne Docklands) and Brisbane also have high percentages of apartment approvals, 45% and 43% respectively.
The millions of Baby Boomer Australians seeking to exit the workforce over the next decade simply don't have anywhere near enough money squirreled away to retain their current digs and have a healthy income stream. More and more Baby Boomers will be attracted to selling the suburban house, downsizing in to apartment living, and releasing a few hundred thousand dollars to supplement their income.
Market analyst, Michael Matusik, recently said: "Brisbane City has an aging demographic profile.  Increasingly, much of the housing market across the Brisbane City area will be looking to downsize and/or retire.  This will fuel the need for more attached homes; often smaller in size than traditional detached housing.  The catch-cry is “place for space”, meaning that buyers will be looking to live in quality projects, in established urban areas. The Brisbane downsize/retirement market will experience its greatest growth over the next ten years.  Interestingly, the first home buyer segment and even the upgrader market is unlikely to grow as much in size as those downsizing, suggesting that resale supply of baby boomer-first generation homes may exceed demand (first time buyers and those upgrading)."
There are plenty of people who don't want to spend their weekends maintaining gardens. Many Gen Y, for example, see a lot of merit in apartment living. There is a growing number of Gen Y’s who either can't afford the mortgage payments on a suburban house and / or prefer the conveniences of inner-city lifestyles.
While there will be an increase in apartment supply in Brisbane, there will also be increased demand.
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 REIA / REIQ Buyer’s Agent of the Year (2012,2013,2014).
Photo courtesy of Andrew Sutherland/Flickr/<a href="https://creativecommons.org/licenses/by-sa/2.0/" target="_blank">Creative Commons</a>.
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Brisbane apartment market to see increase in both supply and demand

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If there’s one thing which this country doesn’t have a shortage of it is property schemes and ‘gurus’ who promote these schemes to the vulnerable property investor. The defence housing scheme and National Rental Affordable Scheme (NRAS) now has competition from another scheme.
This scheme is sweeping places such as Sydney, Adelaide, Perth and Ipswich. It’s the granny flat (yes, the granny flat!); the next epidemic that will give plenty of property owners grey hair.
The logic of the granny flat goes like this: “Pick an area where the local government zoning permits granny flats, buy a house, spend $100,000 to build a granny flat on it, rent out both properties, and bring in a double-rent bonanza!”
Clever, right? Wrong!
I see it a lot where property investors get caught up in the higher than normal rental return of a property at the expense of the ultimate potential for capital growth. Don’t get me wrong, the rental income has importance however let’s not lose sight of why we are actually investing. For a majority of people, they invest so that one day they will have the financial freedom to exit the workforce with an income stream that will give them a significantly better lifestyle than they’d get on a taxpayer-funded pension.
At first glance, you’d think a granny flat with its capacity to bring in more rent from one property would be the perfect way to ratchet up those retirement funds. How close will you be to retiring by owning a property that is cash flow positive to the tune of (say) $2,000 per annum? How many granny flat properties will you need to acquire in order to sail the Bahamas? And, how will you fund future dual-living duds like this?
Sure, the granny flat property will grow in value over the years, but its growth will be directly influenced by the buyer demand for it. And this is where the rubber really hits the road.
Think about this scenario logically: who wants to buy a granny flat property? It has to be a buyer who doesn’t mind someone else living in their backyard and the various annoying behavioral traits of each new tenant. That buyer probably is not a young family, a baby boomer, or a young professional couple.
Most often, granny flat properties only appeal to investors. The number of owner-occupiers choosing a granny flat property over any other more conventional home is minuscule. According to the latest Census data, only 25% of all properties are investor-owned. So, to invest in a granny flat property is to sink a heap of money in to an asset with a very small basket of future buyers and to ignore the much bigger basket brimming with first home buyers, renovators, upgraders, downsizers and investors (75% of the market actually)!
Granny flats fall under Propertyology’s category of ‘specialised properties’: properties which only appeal to a very select population segment. These properties have lower demand than a more conventional property.
There’s been a rise in the number of property valuers not supporting purchase prices for properties with a granny flat. Spending $100,000 to build a granny flat on an existing detached house block rarely adds an extra $100,000 in value. Why? Because granny flats aren’t pretty and there are far less teetotalers than willing grannies (buyers).
There is a growing number of ‘property consulting’ companies out there spruiking new houses with granny flats on them to investors. With the gift of the gab and more glossy brochures than you can poke a stick at, these are often the same ‘consultants’ who ran out of NRAS stock and / or are suddenly struggling to make a buck from selling defence housing.
The extra rental income isn’t everything that’s it made out to be either. There is often a longer vacancy period between tenants because a lot of people are turned off at the thought of having a stranger live in their backyard. And those tenants who are interested will demand a lower rent. Property management and letting fees will be applicable to each dwelling and there is increased potential for tenant conflicts.
Banks have a more conservative credit policy for granny flats. When assessing a borrower’s affordability banks will often significantly discount the potential rental income. They often will also limit the amount that they will lend against granny flat properties. Think about why banks would do this.
If you are still um-ing and ar-ing about whether the cash flow positive granny flat is an ideal strategy for stopping work one day, think about this:
Property investor ‘A’ and property investor ‘B’ both have $500,000 to spend. Investor ‘A’ spends his money on a specialised property while investor ‘B’ spends hers on a conventional property. 10 years pass and the conventional property has grown in value in line with the broader Australian market at 6% a year and will then be worth $895,000. The smaller buyer pool for the specialised property has resulted in an increase in value by 4% a year for an end value of $740,000. It’s not rocket science figuring out which property will make a bigger contribution to that retirement nest egg.
On the surface, the dual rental income creates an allure that granny has become youthful again. But, take off the rose-coloured glasses and you’ll discover that, beneath all that botox and bottled-blonde hair is the genuine granny. My advice: keep your granny, but ditch the granny flat. It’ll save you years of grey hair!
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 the REIA's Buyer’s Agent of the Year (2012 and 2013).
                                     
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Keep granny, ditch the flat

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Forecasts from 2014 to 2016 around Australia.
Sydney
Sydney’s home price growth since the GFC has been an average of 3.7% per annum, slightly above the national average of 3.05%. While the market was very strong in 2013, high volumes of new apartment sales to Asian buyers was a main driver and I have sustainability concerns as well as questioning resultant changes to the social fabric.
Several major projects will be good for Sydney’s economy. This includes Barangaroo ($6B), Crown Casino ($1.2B), Darling Harbour ($2.5B), WestConnex Motorway ($10B), and North West Rail Link ($8.5B). A second Sydney airport and further sale of state assets to fund additional infrastructure projects will dominate tabloids. I expect Sydney to continue to perform slightly above the national average. Housing supply will continue to be tight, although there is more in the construction pipeline.
Metropolitan Sydney is the most expensive property market in the country and a reason for investors to look elsewhere. The more affordable Western Sydney has high unemployment, crime, and an inefficient transport network. More Australians leave NSW than those who arrive as illustrated in the interstate migration chart below.
<img src="https://www.urban.com.au/images/stories/2014/01/16/graph1syd.png" alt="graph1syd" width="365" height="230">
 
Brisbane
We purchased very few properties in my home town over the last couple of years – there were better opportunities for our clients elsewhere (mostly in regional locations).
A high level of engagement with Asia and a ‘How Can We Help You Do Business?’ attitude from the Newman government is resulting in improved conditions.
Queensland is the only state where the unemployment rate declined in 2013. Major projects in Brisbane include $1.1B Moreton Bay Rail Link, $1.4B airport expansion, and $3B RNA development. The CBD will benefit from several projects including the $5B Underground rail project, a new state government office block, hotels, and possible new entertainment / casino precinct.
Brisbane will also attract world-wide exposure from hosting the G20 Summit (2014) and Commonwealth Games (2018). Don’t be surprised if additional demand for accommodation comes from an in increase in people migrating from other Australian locations for Brisbane’s lifestyle, affordable housing, and employment opportunities. Housing supply is quite tight and pressure is already starting to build. Of all of the capital cities in Australia, Brisbane will perform best – I wont be surprised if we see double-digit growth.
 
 
Adelaide
Adelaide is officially Australia’s most liveable city and home to 76% of South Australians. Key industries are defence force manufacturing, motor vehicle manufacturing (which is on life support), and agriculture (not a major employer). Development projects in Adelaide’s inner-city include a new hospital, redevelopment of the Adelaide Oval, and entertainment precinct. While housing is very affordable there is considerable new supply of new apartments. Adelaide’s property market is like its economy – uninspiring. Unless major job creation projects such as Olympic Dam are announced Adelaide’s property market will continue to perform below the national average.
<img src="https://www.urban.com.au/images/stories/2014/01/16/graph3adelaide.png" alt="graph3adelaide" width="364" height="199">
 
Perth
Over the last couple of years Perth’s property market mirrored the State’s iron ore activity. Growth in wages, employment, and record population created more demand for housing than could be supplied.
As mining projects wind down skilled labour has become more readily available for WA’s construction industry. Combine this with recent building approval and land supply data and it would appear that housing supply is set to increase significantly. Perth has the most active first home buyer market in the country, meaning reduced demand for rental accommodation and a rise in vacancy rates.
While there have been job losses in WA’s mining industry Perth’s economy is still buoyant due to an unprecedented level of major projects. This includes hospitals, highways, casino expansion, entertainment and sport precincts, railway and airport upgrades, and inner-city revitalisation. There is a lot to like about Perth although housing has become very expensive. Perth’s property market will be firm, although not spectacular.
See over page for the other four capitals
 
 
 
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Canberra
The Nation’s capital has a very high reliance on government employees (politicians, military training bases, federal police academy). The incoming federal government has flagged the possibility of up to 12,000 job cuts and it stands to reason that a significant portion of these will be in Canberra. On the supply side, the construction pipeline is growing. Canberra’s property market will perform below par for the foreseeable future.
<img src="https://www.urban.com.au/images/stories/2014/01/16/graph4canberra.png" alt="graph4canberra" width="369" height="245">
 
Melbourne
The Victorian economy has a high reliance on manufacturing and State Government’s primary strategy appears to be to stimulate the construction industry (as illustrated in this chart) – this persistent over-supply is to the detriment of property investors.
<img src="https://www.urban.com.au/images/stories/2014/01/16/graph2melb.png" alt="graph2melb" width="364" height="199">
Large volumes of new apartment sales to the Asian buyers is likely to shield what will otherwise be a property market with low yields and below-par performance in general.
 
Darwin
Darwin has been Australia’s best performing capital city over the five years with an average change in median values of 7.24%. Demand for additional accommodation has come from major projects such as the Icthys LNG plant, a marine supply base, and correctional facility.
To address its very expensive housing the NT government has an accelerated land release strategy and housing supply is likely to work against the property investor grain. While its geography will lend itself to Asian-related projects a big segment of Darwin’s population is transient and I have concerns for the sustainability of Darwin’s property market.
 
Hobart
Hobart’s recent economy is summed up by its incredibly high unemployment rate of 8.1% and some of its youth are therefore heading to the mainland. Most commentators have been very critical of Hobart’s property market.
There are opportunities for economic growth through tourism, agriculture, and science and housing is very affordable. I have an open mind on Hobart.
 
 
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 Simon Pressley is Managing Director of Propertyology, a full-time property market analyst, accredited property investment adviser, and the 2012 and 2013 REIA / REIQ Buyer’s Agent of the Year.
 
 
 
 
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How our capital cities will perform from now to 2016: Simon Pressley

Fundamentals for 2014 are solid but I'm not predicting a boom: Simon Pressley

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I’ve been saying all year that the massive spikes in visitor numbers from Asia’s rising middle class will create tourism hotspots for property investors in states such as Queensland.
Places like the Sunshine Coast, Rockhampton, and Cairns are the obvious choices, and we’re seeing considerable improvement in confidence in these markets.
Even Australia’s property investment ugly duckling, the Gold Coast, has a much healthier market outlook now compared to twelve months ago. Although I still suggest exercise caution before jumping in to the Gold Coast.
But despite the strong predicted growth in tourism, I advise property investors to look beyond the traditional tourism locations to places that offer growth drivers across a wide range of industries.
Queensland will increasingly become more and more popular for international students. Between 2010 and 2030 a massive 2.5 billion extra people will enter Asia’s middle class. They will want to travel to quality tourist destinations, and pay for their children to study. Queensland has world-class universities, a safe environment, affordable lifestyle, and a relatively short direct flight from home.
Brisbane’s benefit from tourism is not to be under-estimated. It is already the third most visited Australian city by international tourists. I am tipping that James Packer will be successful in his attempts to gain a second casino license to attract the Asian high-rollers. I think the state government is on the money with their concept plan to convert the CBD Northbank site in to an entertainment precinct on par with Melbourne’s Crown casino precinct.
We purchased very few investment properties in Brisbane for our clients over the last few years but we have recently become quite active here again.
In spite of its controversy, Clive Palmer’s proposal for a unique tourism experience involving dinosaur theme park, hovercrafts, aquarium, and convention centre is exactly the type of thing which the Sunshine Coast needs. My appetite for the Sunshine Coast’s property market is warming.
We’re presently negotiating some great deals for our clients in several locations in Queensland and throughout Australia with some really strong growth drivers. Tourism is the obvious one because it really will go off.
 
<hr>
 Simon Pressley is Managing Director of <a rel="nofollow" target="_blank" href="https://www.propertyology.com.au/">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and the 2012 and 2013 REIA / REIQ Buyer’s Agent of the Year.
 
 
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Tourism hotspots popping up, but look beyond the traditional options: Simon Pressley

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Confucius say: Study the past if you would define the future. I say: Study the past 16 years of property metrics in Australia and you will see signs that a strong growth period might well be upon us. Now, I know Confucius’ pearl of wisdom fits neater on a fortune cookie, but my advice is just as sage; history is pointing to an exciting trend in property prices and investors would be wise not to ignore the signs.
According to REIA data, the average Australian capital city property was worth $165,000 in June 1997. Despite riding a rollercoaster of peaks and troughs over the following 16 years, the average property grew by 7.6% a year to now be worth $525,000. I think this is a healthy outcome worthy of a closer look.
Plotting the Australian capital city median property value against the national unemployment rate and the RBA cash rate for the period from June 1997 to December 2012 reveals there were three periods of significant interest rate reductions in that time: one during 2001, another in 2009—and, most interesting to us, we are currently in the midst of the third right now.
Click to enlarge
<a title="Click to enlarge" href="/images/stories/2013/09/16/pressley-sept-16-big.gif" rel="shadowbox"><img src="/images/stories/2013/09/16/pressley-sept-16-small.gif"></a>
Hot on the heels of both of the first two of these interest rate reductions was a bigger than normal surge in property values. “Booms”, if you will.
Significantly for today’s property outlook, interest rates and unemployment rates are both lower now than they were for the booms of 2001 and 2009—and so the smart money would seem to be on another surge in property values being about to ramp up.
Bellowing about boom times is always a bit risky of course, but the trends are there for the taking. And if we add in the long laundry list of current economic factors that can also play a positive role—lowest interest rates in over 50 years; an increase in home loan activity; an increase in consumer confidence as measured by Westpac and Genworth; rising population growth (housing demand); the fact that building approval levels (supply) haven't kept pace with demand; low vacancy rates nationally; falling stock on market figures across most capitals; and increasing buyer activity nationally—a pretty convincing picture starts to emerge.
In our search for suitable properties for our investors, Propertyology is already observing increased buyer activity and fewer properties for sale in several markets across the country.
One cautionary note of course is that consumers are currently more conservative with their spending habits and leveraging than they were in years gone by, and this might put the brakes on a fully-fledged boom. But, regardless, the data points to very strong fundamentals for Australian property markets. And Confucius is well known for being wise.
 
<hr>
 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 the 2012 and 2013 REIA / REIQ Buyer’s Agent of the Year.
 
 
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The past is pointing to future property prosperity: Simon Pressley 

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Despite some cooling in commodity prices and job losses, Australia’s mining party is still in full swing.
For property investors, hearing about a new mining project really gets the corks popping because a new mine can mean demand for accommodation skyrockets, rents can go through the roof and property values can start to look very peachy indeed.
But a new mine announcement does not always mean a new mine will be built. And a new mine coming to town does not always means its workers will look for local housing.
Here are five tips to making the right move when investing in mining towns.
Wait for the green light. In the mining industry, the approval process for building a new mine is long and complicated. The time between project announcement and start of construction can be several years.
When you look at the long list of factors in the approval process, it’s obvious how hurdles are hit and plans are scrapped. Competing land use challenges, native title, water supply, fauna and flora impact, land contamination, waste disposal, effects on marine life, and general environmental impact all need to be dealt with. Some issues can take years to resolve, involve masses of government red tape, create conflicts in communities, and sometimes just become too difficult for mining companies to pursue.
Meanwhile, the economic landscape changes around us. In our post-GFC world, there are other complications, too. Some companies are finding it harder to secure funding or to gain final investment approval from their board. Costs can blow out because companies are paying interest on loans for projects that haven’t yet started to make money or there are higher wage costs resulting from a shortage of skilled local labour or trade union demands.
The problems are real. In fact, I’m seeing an emerging trend of mining companies putting ego aside, sharing infrastructure, and doing joint venture agreements on some projects in an attempt to trim costs and make projects more economically viable.
If return on your investment is highly dependent upon specific projects it’s important to wait for that green light.
Do your research. Understand exactly what the mine is and how it will operate.
Look closely at its workforce requirements; How many workers will it need? What roles will they perform? How long will they be in town? Where will they be living – conventional housing or on site in temporary employer-supplied villages? Will the impact on local goods, service, and accommodation be sustainable or short-lived? Will the departure of the construction workforce and the arrival of the (often smaller) mining workforce reduce your rental returns? Is there likely to be a glut of housing once this occurs and high vacancy rates as a result?
Know the mining industry. According to Geoscience Australia, Australia produces significant amounts of 19 different minerals from almost 400 operating mines across the country. Coal and iron ore are Australia’s biggest export commodities, but liquefied natural gas is a major growth market and copper is also significant.
Mining is big business, but commodities are, by nature, volatile and their prices rise and fall for a wide range of reasons. It’s standard practice in the mining industry to recruit workers when prices are high (to maximise the amount of resource they can get out of the ground to sell at high prices) and to lay off large numbers of workers when the price of the commodity falls.
Vacancy rates obviously take their lead from the workforce. These cycles can be deep, bringing high peaks and low troughs.  An astute investor will be aware of these fluctuations and insulate against them by choosing a location that relies on more than a couple of mines so their pool of potential tenants is large and diverse.
Get in on the ground level. The best time to make a move is just prior to the start of mine construction.
Constructing a new mine and associated infrastructure generally needs a mass of skilled workers. There can be processing plants, railways, pipelines and ports to be built and create direct jobs.  Indirect jobs also come in the form of businesses supplying manufacturing components, heavy vehicles and machinery, and shops in town.
If a property investor times it right, they’ll be buying just as those jobs are being advertised and the people are starting to roll into town. Once the mine is built, it’s onto the business of mining, which sees the workforce change and downsize to those mine workers who will extract the coal, iron ore, copper or gas, and transport it away for processing and exporting.
If you’ve bought in, you’ll already know from your research who these people are and where they are coming from. You’ll know that your rental property is a likely candidate for their accommodation and there will be sufficient numbers of potential tenants to generate some competition for housing.
Understand what a ‘high-performing investment property’ means in a mining town.
A high-performing investment property is one that consistently produces above average rental returns and capital growth over the long-term. To attract those two factors, a property needs to be in a place where the tenant pool is significant, the infrastructure is established and of high quality, and the economic outlook is positive, with plenty of growth drivers from a diverse range of industries pushing it along.
A lot of traditional mining towns only exist because of a few local mines and are therefore unlikely to present high-performing investment properties to the market. They don’t have the infrastructure or the diverse economy.
If, however, the mines are already in, or coming to, a town which has a range of other industries, such as tourism, agriculture or education for example, and the infrastructure to support these industries and their workers is in place, then the location will benefit enormously from the addition of mining to the mix—and a property investor is likely to benefit enormously from their investment decision.
<ol></ol>
I am very selective about investing in mining towns. There have been many times when I have anticipated a strong growth period for a property market on the back of certain mining projects but held off from purchasing property for clients because of my concerns over things such as mine project approvals and a location’s unhealthy reliance on a single industry.
I favour locations with several mines, 10 or more years of life left in the available resources, additional untapped resources directly in the area providing scope for new mines in future, and a few other sustainable industries supporting the economy.
 
<hr>
 Simon Pressley is Managing Director of <a target="_blank" href="https://www.propertyology.com.au/">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and the 2012 and 2013 REIA / REIQ Buyer’s Agent of the Year.
 
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Five tips to make the right moves investing in a mining town: Simon Pressley

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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