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In the old Dr Seuss story, The 500 Hats of Bartholomew Cubbins, Bartholomew’s one hat turns into a troublesome string of 500, raising the ire of the king and getting poor unsuspecting Bartholomew into all sorts of strife.
Unsuspecting property investors can find themselves in all sorts of strife too from too many hats, but for them the trouble can come if their trusted advisors, who they turn to for mortgage, accounting or financial advice, start trying to wear the hat of a fully accredited property investment advisor—and start spruiking property for their own personal gain.
Property spruiking, where marketeers get massive rebates from developers for pushing properties onto unsuspecting investors, has existed in this country for decades. Over the last five or so years I have observed an alarming new approach to property sruiking which already has the potential to cause even more serious repercussions than the collective $1.5 billion which mum-and-dad investors lost in the Storm Financial collapse.
The new Storm-in-waiting is in the form of mortgage brokers, accountants, financial planners, and so-called buyer’s agents who are receiving between $10,000 and $50,000 each and every time they can convince one of their own trusting clients to buy a specific property. These service providers often have a reasonable reputation in their chosen field so the client’s guard is down when the advisor starts talking up a specific property. There’s no red flag screaming ‘marketeer’! But the Bartholomew &amp; Associates of the world are no more qualified to give property investment advice than the local hairdresser. And it’s property investors who are paying the price.
Developers and salespeople are an integral part of every community. And, there is only so much that legislation can do to protect unsuspecting consumers from the rogue element which exists within every profession. But, successive federal governments have failed to address this issue. So, I applaud the Queensland State Government for agreeing to review real estate and financial advice regulations. I am not convinced that the root of the problem is fully understood though.
The microscope needs to be focused on the alarming business practice being adopted by these two-hatted advisors. And, it would be grossly naive to think that the answer is to pass legislation to ensure that developer rebates are being disclosed!
Just ask anyone who lost their nest egg in the Storm collapse what sought of protection they received as a result of financial planners disclosing commissions on managed fund products. Answer, ‘zero’.
I would like to see laws passed so that any one at all who receives remuneration from the purchase or sale of property must hold a real estate license. A plumber who wants to also wear an electrician’s hat must first complete the apprenticeship and obtain a license; the same should apply when a financial services business wants to suddenly earn a living out of promoting property.
Just like the recent FIFO legislation now prohibits financial planners from receiving commission on managed funds, all forms of developer rebates need to be outlawed, too. It is hypocritical to suggest that any mortgage broker, accountant, or financial planner who is being remunerated via a developer rebate is acting in their client’s best interests.
The relationship between the consumer and (say) a mortgage broker is vastly different to a traditional property marketeer. The Bartholomew &amp; Associates of the world are simply swapping their everyday hat with a property hat and then claiming that, out of the 9.3 million properties in the country, they (conveniently) have a list of the most suitable ones for their client – ‘trust me’.
Real estate engagement documentation needs to more clearly pronounce who you work for - buyer or seller. And, service providers must be paid by who they represent. I am aware of numerous so-called Buyer’s Agents who receive remuneration from the vendor – rebates as high as $50,000 from new developer stock - who are they working for?
Legislators need to close the lid on the conflict of interests and consider how to protect the client’s best interests!
The legislative reform following the Storm collapse totally ignores direct property assets. But, just like Bartholomew’s ever-expanding collection of hats, I believe this issue reaches far beyond the single problem of traditional marketeers and into the realm of property investors’ own trusted advisors.
Until we see legislative change, I have this advice for consumers:
1.     Be wary of anyone promoting brand new property. A property developer can include any number of middle-men and load all their kick-backs into the purchase price of a new build, but it’s physically impossible for this to happen when an investor is buying an established property from a private individual.
2.     Remember that qualifications as an accountant (tax), mortgage broker (loans), and financial planner (managed funds) should not be confused with qualifications as an accredited property investment advisor.
3.     Ask to see proof of your advisor’s qualifications as an accredited property investment advisor with one or both of the industry associations, PIPA or PIAA.
4.     Ask them how they make their money. Even if they disclose the rebates they receive, ask yourself why the property they’re pushing (conveniently) happens to be the right one for you when there are 9.3 million properties to buy in Australia.
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 and 2013).
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Advice driven by commissions is the next Storm-in-waiting in real estate: Simon Pressley

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If you’ve been strategic and capitalised on the booming mining industry and the myriad of opportunities coming from the Asian Century, you might have bought an investment property in a town or mining-related region over the past few years.
If you have been reading the news lately, you might now be getting jittery and questioning the cleverness of that move. The media is reporting declining commodity prices and job losses.
The prices of coal and iron ore (Australia’s two biggest export commodities) are down on their highs of late 2012 and there have indeed been layoffs. But is this cause for panic over the value of your investment property? Or is the better strategy a little education and a lot of savvy staying power?
The first part of the answer lies in whether or not your property is in a town that has more going for it than a couple of mines.
Clever investors look for locations with a solid economy and strong employment opportunities stemming from diverse industries and growth drivers. Towns whose fortunes rise and fall solely on the back of a few mining businesses can quickly become ghost towns if opportunities stall or projects fail.
Because, regardless of what else mining means to Australia’s economy, it is a boom or bust proposition and falling prices might mean it’s time for you to pull up stumps.
If the economy of the market in which your property is located has more strings to its bow than a few mines, I’d say a little education and some savvy staying power would be a wise choice.
Let’s start with education. We all know coal is big business. Despite pushes towards renewable energy, coal remains the world’s main fuel source. Coal is the world’s largest source of electricity (43 per cent).
Australia is the world’s fourth largest coal exporter (behind China, USA and India). Domestically we use coal to generate about three-quarters of Australia’s electricity.
Iron ore (used to make steel) is actually even bigger business than coal: it’s Australia’s biggest export commodity and we have the world’s second largest iron ore deposits. The greater majority of these are in Western Australia.
Both coal and iron ore are commodities, which means they’re useful, valuable and can be bought and sold. Just like money or gold, say.
But commodities are, by nature, volatile and their price fluctuates for a wide range of reasons. What we’re seeing now with coal and iron ore are some lower price points than we had six to nine months ago although still sitting above average for the past decade.
The price of iron ore has dropped from its late-2012 high, but even at today’s prices, it’s considerably higher than it was in about October last year.
That said, declining coal and iron ore prices plus a high Aussie dollar, rising wage costs, and the costs to miners of government red tape can put a brake on both mining operations and mining construction which can inevitably lead to job losses.
These cuts to workforces can then have a flow-on effect to rental returns because fewer miners and tradies need fewer houses to accommodate them. But economies are cyclical, good times follow bad times and circumstances change.
Job losses in the mining sector often create paranoia among some property investors, but it’s important to remember that job losses aren’t restricted to the mining industry. There are always market conditions at play in any industry.
State and federal governments have shed thousands of public sector jobs in capital cities throughout the country over the past few years, and major companies like Ford, Holden and Boeing (manufacturing) and various major retail chains have also shed staff.
So the lessons here are these: coal and iron ore are valuable commodities, their market price goes up and down depending on market forces, they won’t stop being valuable and they won’t disappear any time soon. Down times do bring job losses but good times bring growth.
There might well be short-term market volatility but the megatrends aren’t stopping. The Asian middle class is still getting bigger and richer and consuming more of what Australia has in abundance. The Asian Century has really only just begun.
 
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Employing some savvy staying power with your investment property would clearly be the smart strategy then. If you’ve got higher vacancy rates in your location, determine the reasons for the downturn. If it’s caused by some of this commodity market volatility, but other industries and projects are going strong, be proactive:
·     Engage more with your property manager.
·     Find out your tenant’s intentions about six weeks before their lease is due to expire.
·     Be guided by your property manager about the likely rent your property is going to generate in the current market.
·     Accept less rent if necessary (because ninety per cent of something is always better than 100 per cent of nothing!).
·     Make sure your property manager is actively advertising for a new tenant the minute your current tenant notifies of their intention to leave.
·     Stay positive and stay pleasant with your property manager.
Above all, remember property is a long-term asset class. Like shares, you need to ride the waves with the distant shore in sight. In my opinion, falling commodity prices are not cause for panic if you’ve researched your investment location and are managing your asset to suit market conditions.
Over the past few years, my company, Propertyology has been actively investing in a few major regional towns that have benefitted from mining industry projects, a couple of smaller mining communities, and a couple of capital city locations.
Interestingly, even with declining commodity prices and the scaling back of some projects, rental returns still remain higher in our regional and mining-related communities than in the capital cities. The locations in which we’ve successfully helped investors to purchase property have multiple approved projects in their pipeline.
In some cases, falling commodity prices and rising costs have resulted in project commencements being delayed, certainly; but the resources have not evaporated and projects are still very likely to proceed once the economic cycle settles down.
Other industries supporting these communities provide stability and sustainability for their economy. It’s not overly important whether the best couple of years are now or in a few years time; the property market outlook remains just as promising.
So if you’re a property investor who’s been wondering whether you’ve made the right choice with mining, remember this: even a fire whose coals aren’t burning red hot still has plenty of heat!
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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What happens to property markets when commodity prices lose their red hot glow? Simon Pressley

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Gold is rare because it’s not found everywhere. And yet, if you listen to some in the property investment industry (often those whose income depends on a particular ‘scheme’), you’d swear there was a glittering new gold mine discovered every other day.
There are some who have been giving Greater Western Sydney the gold-plated sales pitch. So is this densely populated and diverse region of Australia’s most expensive city really worth plundering for profit? Let’s replace the spin and wishful-thinking with objectivity.
For Greater Western Sydney (GWS), which takes in 14 local government areas as far west as the Blue Mountains, the hype is all about population booms, better housing affordability, and major infrastructure projects in the pipeline.
While there might be some truth to these tales, the only story that ever matters is: how will this influence property values?
It’s densely populated and demographically diverse
A whopping 9% of Australia’s total population (that’s one in 11 people) lives in GWS. If you put all the people from South Australia, the ACT, Tasmania and the Northern Territory within its borders, you’d still fall short of the 2.02 million people who actually live in the region.
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And that 2011 population figure is increasing by 1.6% a year (above the state average of 1.1% and the national average of 1.4%) so that by 2036, it will be tipping the 2.96 million mark.
The region is demographically diverse: around 35% of the region’s population was born overseas, and 37.3% of all residents are aged 24 years or younger.
Crime is a significant factor too. Half of New South Wales’ recorded incidents of ‘discharge firearm into premises’ were recorded in GWS in 2011, according to a report from the state’s Bureau of Crime Statistics and Research.
It’s no wonder then that GWS is a political battlefield in the lead up to every federal election as both sides of government attempt to buy votes with (broken) promises ranging from reducing crime to easing traffic congestion to creating jobs. For certainly these are some of the greatest problems facing what is the most densely populated part of our country.
The economy and employment aren’t real rosy
The region’s gross regional product in 2010–11 was $95.6 billion, accounting for one-third of the entire Sydney Metropolitan GRP. Manufacturing made up 16%, which is quite a worry when the Aussie dollar is so high. One fifth of all businesses are in the construction industry, and some big multinationals including BHP Billiton, Coca-Cola, and Qantas have a presence in the region.  
GWS’ median household income is well below the national average and unemployment is significantly higher. Jobs for white-collar professionals are light-on. Accordingly, a lot of people have to commute out of the region, which puts strain on the region’s roads.
By 2036, when the population is nudging the three million mark, forecasters project the region will need an extra 450,000 jobs. Already there’s a jobs deficit of 182,000, which is expected to grow to 290,000 over the next 25 years (according to the Penrith Business Alliance’s Metropolitan Plan).
In 2011, 12% of Sydney homebuyers and 25% of renters were experiencing housing stress. These figures are higher for low–middle income earners, and eight of the 10 worst affected areas are in GWS.
Housing is more affordable than Sydney metro, but some of it’s a bit misguided
Since Sydney Metro has the most expensive housing in Sydney, a lot of locals look to GWS to invest because it offers a considerably lower entry price and a higher rental return.
Interestingly, granny flats are at almost plague proportions, especially in the Penrith and Blacktown LGAs. Some investors think granny flats are a great way to generate a dual income stream, and the NSW government supports granny flats through its Affordable Rental Housing State Environmental Planning Policy.
But lately there’s been a rise in the number of property valuers not supporting purchase prices, and banks are also being more conservative by limiting the amount they will lend for these purchases or not recognising the dual income stream.
I’m not a big fan of granny flat properties – not just in GWS, but across the board. Granny flats can be a triple whammy. High initial purchase price, extended vacancy rates (because not everyone wants to live with someone else in their backyard), and a restricted resale market (because 70% of buyers, the owner-occupiers, aren’t real keen on the set-up) can combine to give the investor limited capital growth. Others may (conveniently) overlook these important investment fundamentals. 
 
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Transport infrastructure is appalling
While Sydney’s 2000 Olympic Games was a roaring success its infrastructure planning was deplorable at best. The city has never recovered. Transport routes in GWS are the least efficient in Australia and will get worse as population grows.  
Infrastructure upgrades have 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.
So the region relies heavily on passenger cars, adding to traffic congestion, fuel costs, poor air quality, and stress-related health issues. Not surprisingly, people aren’t keen to cosy up in places with such financial and emotional stressors, and potential property investors would soon see the results of this in their capital return.  
Education and social infrastructure are sadly lacking
GWS has the University of Western Sydney (36,000 students), Western Sydney TAFE and South Western Sydney TAFE. The region has a high proportion of low income families and staff shortages are a major issue for its early childhood centres.
High school retention rates for GWS are the lowest in the Sydney Metropolitan area, sitting at 69.5% compared with 95.2% for Northern Sydney.  
Western Sydney’s Urban Frontiers Program: A new vision for Western Sydney – options for 21st Century governance (April 2002) probably best sums up the social infrastructure: ‘Decades of under-investment of policy and fiscal resources in Western Sydney by successive state and federal governments have left many of the region’s cultural, social and environmental needs unmet. The legacy of this undernourished development includes mounting social and environmental problems, including hardening pockets of poverty and social exclusion, a dwindling and fraying public sphere and ever increasing ecological stress.’  
Major projects are stalling at the starting gates
GWS’s infrastructure problems are dire and a growing population continues to accentuate the problems. Decades of state government instability, poor planning, and limited funding continues to prolong the chaos for GWS residents.  
Take the North West Rail Link, first proposed back in 1998 and redesigned a few times since.
The O’Farrell Government has declared the latest design (a 23-kilometre line from Chatswood to Riverstone, including eight new stations) will commence late-2014, but doubt remains and there’s (still) no federal government funding for this project, which some say could cost as much as $10 billion.
Or take Westconnex, a proposed $10 billion road project to extend 33 kilometres of motorway along the M4 from Parramatta to Sydney and unclog arterial roads around Port Botany and Sydney Airport.
Planning is not finalised, federal and state governments don’t see eye-to-eye and funding is not in place so the 2022 completion date is dubious.
So where does this leave us?
I personally wouldn’t recommend GWS to my clients now or in the foreseeable future, but what I would recommend about GWS – and every property investment opportunity you’re ever presented with – is to push past the glitter to see what really lies beneath.
You’ve got to go in with your hard hat on, get your hands dirty and be prepared to drill down into the details to determine the real and potential impacts on your capital return.
Because sadly, all that glitters is not gold. And it’s not called fool’s gold for nothing, folks!  
Simon Pressley is Managing Director of <a target="_blank" href="https://www.propertyology.com.au/">Propertyology</a>, an accredited property investment advisor, and Australia’s Buyer’s Agent of the Year (2012 and 2013).
 
 
 
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Greater Western Sydney is spruiked as a gold mine but investors should be wary: Simon Pressley

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Can someone please tell the Victorian state government that Kevin Costner is an actor, not a policy maker?
Costner’s infamous theory of “Build it and they will come” worked a treat for him in the 1989 film Field of Dreams, when he built a baseball field on a cane farm in the middle of nowhere, then attracted a crowd to see his team relive their glory days. But in Melbourne, where it’s not baseball diamonds that successive governments are building but too many greenfield housing estates and high-rise apartments, the “Build it and they will come” theory is way off base.
Melbourne has around 41,000 properties for sale right now – that’s a whopping 74% more than Sydney’s 23,467. And yet, Sydney’s population is 12% higher.
Melbourne’s glaring error is that the “baseball field” it has built is now bigger than two MCGs put together, yet the number of people who’ve turned up at the "game" could comfortably fit inside Rod Laver Arena. It’s construction on steroids!
You could say Melbourne’s property market won the "World Series" in 2009 and 2010. The $155,000 (38%) increase in the median value of established houses topped the table in Australian property terms and rightly created jubilation for its fans.
Then, property owners in Melbourne hit a home run when the Victorian government added significant stamp duty incentives to the federal government’s GFC stimulus package incentives. It created a buyer frenzy, which was further fuelled by an influx of Indian students needing somewhere to live.
"Sign me up for season tickets!" was the call of many DIY property investors looking to join a winning team. Instead, they’ve witnessed successive wooden spoons, with Melbourne’s property market performing abysmally over the past two years. In Costner terms, we could say the crowd numbers are way down. In property parlance, we can say Melbourne’s got high vacancy rates and low rental yields right now.
The problem with Victoria’s "field of dreams" strategy is that, while they certainly have "built it", they no longer have the people to come. Large-scale job cuts in the public service, manufacturing, and financial services sectors are putting punters out of action. This "field of dreams" is fast turning into a "boulevard of broken dreams".
I love Melbourne for its culture. But as a property market, unless it can rid itself of its addiction to construction steroids, its performance is more likely to resemble a B-grade spaghetti western than an Oscar-winning epic. And even Kevin Costner couldn’t save it.
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 2012 REIA / REIQ Buyer’s Agent of the Year.
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If you build greenfield housing estates, they won't necessarily come: Simon Pressley

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Eight years ago, if we lived in Brisbane, were tempted to buy an investment property, and were a creature of habit, the chances are that the property we purchased also would have been in Brisbane.
The typical Brisbane house in 2003 cost $226,000 and would today be worth around $425,000. That’s pretty good growth on our capital, even with three years of this eight-year period being the GFC-gloom times!
If we lived in Perth and were that same creature of habit our investment capital would have performed slightly better ($202,000 to $469,000). In Sydney, where affordability constraints have acted as a deterrent for people buying homes, the typical house increased in value from $500,000 to $641,000.
What if we were that same person looking to invest in property eight years ago only this time we were not a creature of habit? What if we understood that property investment was not an act of “buying” but an act of reading the science of property markets and making the most money we could within a level of risk which we were comfortable with?
If we were this person, our research back then might have taught us that there was going to be an enormous demand for housing in West Australia’s Pilbara region, a demand that could not be matched by supply. We might have purchased a home in <a href="/news">Karratha</a>, where thousands of new jobs would be created to support a relatively new industry called liquefied natural gas. Or we might have purchased a similar home in <a href="/news">Port Hedland</a>, where new infrastructure would be built to support the most lucrative reserves of iron ore in the world.
If we purchased that home in Karratha or Port Hedland we would have paid $185,000 and $210,000 respectively – a similar price to what we could have paid for a home in most of the capital cities. The same home today would be worth an incredible $755,000 in Karratha and $1.1 million in Port Hedland.
With a current population of 19,000 in Karratha and 15,000 in Port Hedland, housing is now so expensive that many people elect to rent instead of buy. If you are one of those landlords you would today be receiving rent of $1,500 per week in Karratha or $2,650 per week in Port Hedland.
Of course, the key words used throughout this story are “if” and “might”.
The reality is that, of all of those Australians who could afford to invest only a small percentage of them actually do it. They either don’t understand how acute the consequences will be later in life or they allow the rat-race of life to take precedence over their own finances. Many others can afford to invest although they’ve never sought out a skilled advisor to assist them to (safely) maximise their investment returns – they are the creatures of habit.
The moral of this story is not to encourage property investors to buy property in Karratha or Port Hedland today. While rental yields there continue to be among the best in the country our research suggests that housing supply will catch up soon so rates of growth will normalise – and might even go backwards. In addition, home prices are such there now that we wouldn’t consider it wise to tie up so much capital in a single property.
Moreover, the moral of this story lies in the importance of investing as soon as you can afford to. And don't be a creature of habit! An astute share investor acknowledges that the share market will always contain a plethora of opportunities. Similarly, an astute property investor will look at the credentials of property markets across the country and not restrict their search to a handful of suburbs in their home town.
While Karrathas and Port Hedlands don’t pop up for property investors very often there will always been several locations throughout the country that have exceptional investment credentials; you are not going to find them being a creature of habit!
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 2012 REIA / REIQ Buyers' Agent of the Year.
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Astute property investors are not creatures of habit and will buy to maximise their returns

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According to some, Australia has an (under-supplied) housing crisis and an affordability crisis. I don’t subscribe to either claim. I agree we have a crisis. A very big one. But it’s got nothing to do with undersupply or affordability. Our crisis is a financial literacy one.
Let’s get this clear: there is a big difference between general intelligence and financial intelligence. A respectable occupation, a university degree, business ownership and a six-figure salary may imply a person has above average intelligence. But these are simply the byproducts of that person using general intelligence to generate income. We all have skills, and we use them to make money. Financial intelligence, on the other hand, is more a measure of what we do with the money we make. And it’s staggering how few people truly have financial intelligence. They don’t understand the basics, such as the power of compounding and leveraging, good debt versus bad debt, and how negative gearing works. And most shocking of all: it’s because, as a nation, we don’t teach people these fundamental financial principles.
Every day, as a property investment advisor, I see the consequences of Australia failing to invest in its financial intelligence. For example, when planning and strategising an investor’s investment choices, there is a huge advantage in looking at different combinations of the best use of their available capital and cashflow. But a lot of people don’t see that a tweak to the amount of capital one way will have a very different effect on their cashflow than would a tweak to the amount of capital another way. An investor who can afford one property can afford multiple. Most property investors do little more than select a property and get a loan approved to pay for it. With greater financial literacy, they could make their money work so much harder.
The statistics are damning
According to the Australian Bureau of Statistics, only 4% of Australians aged 65 years and over are self-funded retirees. The other 96% of people rely on a taxpayer-funded pension, remain in the workforce, or are dead. These shocking statistics unequivocally confirm that Australians in general are financially illiterate.
Ask yourself these questions (and be honest):
•             Were your parents in a financial position to exit the workforce when they wanted and continue living their desired lifestyle? Have they passed these skills on to you?
•             At high school, did you study a subject about managing money, budgeting, the power of compounding and leveraging, and the importance of saving?
•             On entering the workforce, did someone explain to you basics such as how interest rates are set, the difference between good debt and bad debt, and how negative gearing works?
•             Has anyone ever sat you down and explained that your superannuation will be nowhere near enough money to comfortably retire on?
•             Do you have any idea how big your investment portfolio needs to be if you wish to live your desired lifestyle without having to work?
I’m tipping that you answered “no” to most, if not all, of these questions, and the reason is simply that there’s a yawning gap in your knowledge. You’re not alone.
Australians have above average education, are hard-working, enjoy low unemployment and earn above average incomes. So why is the self-funded retiree portion of the population barely a drop in the bucket? Because too few people understand what it takes to get there. They aren’t financially literate. And this includes many of the white-collar professionals often revered in the community. (They answered “no” to most of these questions too!)
Those who choose to invest in assets such as property because they understand and want to avoid the consequences of relying on pensions and superannuation will, generally speaking, achieve more financially than those who don’t. But we still shouldn’t kid ourselves that we are adequately educated in financial matters.
 
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We can’t be trusted to invest responsibly
The underlying principle of compulsory superannuation is: We know that you need assistance, but we don’t trust you to be responsible or to make sound decisions.
A household (couple) receiving a government pension gets the grand sum of about $26,000 a year. This only permits a very modest retirement lifestyle, but the sheer volume of people depending on taxpayer-funded pensions places a massive financial burden on our growing and ageing population. In an attempt to address this burden, the Keating Labor government first introduced compulsory superannuation in 1992 by forcing employers to contribute 3% of an employee’s wage to a fund that is preserved until the employee retires. As we know, the contribution rate has progressively increased to the current 9%.
There are many advantages to compulsory superannuation, but it being set up so the funds can’t be accessed until retirement and having someone other than the recipient make the investment decisions for the funds are arguably the most compelling indicators of a frightening degree of financial illiteracy among Australians generally.
I put it to you that if, instead of increasing the employer superannuation by just 1% we invested it in financial literacy among the Australian workforce, we’d be making a much bigger dent in the burden of taxpayer-funded pensions than superannuation does.
We have to grasp ‘opportunity cost’
I find very few investors understand the concept of “opportunity cost”. While we’d prefer to be sharing our property market research with our investor clients in preparation for their next purchase, it is becoming increasingly common in this post-GFC era to need to deliver clients some bad news about the outlook for a market in which they previously invested as a DIY. We commonly see this with investors who bought a house-and-land package within a recently converted greenfield site. It’s not uncommon for the property’s current market value to be as much as $100,000 less than what they paid for it brand new only three or four years ago.
Unfortunately, not everyone can understand the benefits of disposing of one asset with a poor outlook in order to put the capital in to a different asset with a much better outlook. Opportunity lost.
 
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We have to stop blaming affordability and undersupply
I don’t agree with those who claim Australia has a housing affordability crisis. Most people have a job and a reasonable income but have never been taught how to use that income responsibly and so they go forward financially illiterate and worse off than they could be.
I think the attitude of a lot of Gen Ys should not be underestimated in the affordability debate. They seem to want the creature comforts they see others having, but aren’t prepared to make the sacrifices over time to acquire them. They want the nice car, the fancy clothes, fine dining and an inner-city apartment all by the age of 25. Then there are others who could make a few changes to boost their earning capacity, but think “w/e” is an abbreviation for “weekend”, not “work ethic”. This isn’t about affordability. This is about attitude and choice.
Then there’s the choice we all have about where we live. We shouldn’t cry poor over not being able to afford a $500,000 inner-city pad when we’ve got the choice of downgrading our “must haves” wish list, being a bit further out of town, or selecting small digs. There are locations all around the country with below average unemployment rates, a great lifestyle, and quality three-bedroom houses for around $300,000 – just like the many we invest in for clients all the time.
So affordability isn’t the issue. Undersupply isn’t the issue. Financial education is the issue! Investing as a country in our financial literacy and encouraging people to learn and apply the basics when using their income and making investment decisions would see far more people much better off and the nation less burdened over time. It’s simple maths, people!
Simon Pressley is a property investment advisor and buyers' agent for Queensland-based <a href="https://www.propertyology.com.au">Propertyology</a>.
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Australia's property market has a financial literacy crisis, not an affordability crisis

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With property acquisition and disposal costs being what they are, investing in property needs to be undertaken with a mid- to long-term focus. So, with large-scale urbanisation unfolding across many Asian countries, it is essential for a property analyst to look at how the resultant structural changes to world economies might impact Australian property markets over the mid- to long term too.
The rise and rise of Asia has kept me keenly interested over the past few years. Asia’s urbanisation and rising middle class are generating demand for natural resources and presenting economic opportunities on a scale not seen since the Industrial Revolution.
Where Australia sits as these globally significant megatrends play out is the subject of the federal government’s white paper Australia in the Asian Century, due out within weeks.
We expect the white paper will outline opportunities and possible roles for Australia in what is known as the ‘Asian Century’ — the current 100-year period in which great economic, political and strategic change in Asia (encompassing China, India, the key ASEAN countries, Japan and the Republic of Korea) is underway. (Although given we’re a good 12 years in and we haven’t yet seen, let alone begun planning and implementing, the contents of this white paper, it’s fortunate for the federal government that it is a century of opportunity or we’d be missing the boat entirely.)
You need to be a visionary to invest successfully, so documents such as this white paper interest me. Government policy changes and business decisions will have an impact on industry sectors, employment opportunities, and demand for that essential commodity we property investors love: accommodation.
This white paper will outline opportunities resulting from stronger ties with the Red Dragon (China) and other emerging countries, such as India, South Korea and Vietnam. So you could say, the opportunity is in the "red" and the detail is in the "white". Bring it on!
Asia is on a mission to replace the simple lifestyles of its villages with the creature comforts of modern cities, which the Western world has taken for granted for generations. As this evolves, dozens of new cities the size of our own capitals will be built and Asia’s middle class is forecast to grow from 0.5 billion (in 2009) to 1.5 billion by 2020. To put this in to perspective, Australia’s total population is 0.02 billion.
The opportunities for Australia should already be obvious. Australia has what Asia wants: energy resources, commodities for construction and manufacturing, agricultural products, education facilities, and quality tourism locations. But it’s not just one-way traffic.
Asia has something Australia is short on: capital. With federal and state budgets increasingly under pressure and funding difficult to secure generally, there is scope for Australian-based private investors to partner with Asian companies to secure the funds they need to get major infrastructure projects off the ground, thus creating enormous economic and employment opportunities and improving facilities, which would otherwise have taken decades.
To this end, Australia must relax its foreign investment policy to encourage joint ventures. Because 50% of something is much more than 100% of nothing!
If all levels of Australia’s governments are smart, they will use this once-in-a-lifetime opportunity to score two wins: decentralise our population away from the capital cities where there’s an unsustainably high concentration of people, and add economic diversity to specific regional communities. With some lateral thinking and an eye for the future, governments could create unprecedented opportunities out of the Asian Century.


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Here’s the chance to take the focus away from capital cities and to work with the strengths of many regional locations. Just a few examples:
<ul>
<li>Asia’s rising middle class is seeking quality education facilities. Strong regional locations such as Orange (Charles Sturt University and specialist medical facilities) and Townsville (James Cook University and the CSIRO facility) have potential to become a future breeding ground for Asian professionals. The same could be said for Perth’s expanding Murdoch medical precinct. Adelaide might also consider jumping on board and investing in facilities to support Asia’s future demand for higher education.</li>
<li>Vast areas of dust bowl land from the Pilbara to Cape York could be irrigated to produce thriving agricultural crops to serve as Asia’s future "food bowl". In return, Asian capital could help fund strategically-positioned communities that could provide goods and services to support thousands of new jobs in these precincts.</li>
<li>Cairns and the Gold Coast, with their unhealthy reliance on tourism, could both benefit from adding an alternative string to their economic bow. </li>
<li>Geraldton would do well to explore investment in hotel accommodation and to promote its pristine beaches and Abrolhos coral islands to tap into the Asian tourism market. And a Chinese partnership could secure the venture capital necessary to fund the proposed Oakajee Port and rail infrastructure, enabling several inland iron ore mines to deliver their product to the Asian market and creating tens of thousands of jobs.</li>
<li>The natural beauties of Darwin and Broome could be boosted by investment in better facilities, which would also make these areas strong attractions to the Asian tourism market.</li>
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But if Australia is going to prosper from the urbanisation of the world’s largest population and fastest-growing economy, a bit of elbow grease will be needed. We’ll have to strive to understand Asian culture and how these countries do business, and overcome any language barriers. We’ll need to overhaul our school curriculum, our foreign investment policy, and our immigration policy for (specific) skilled labour and Asian students.
Dare we hope the long-awaited white paper will cement the path ahead with its recommendations? I’ve read dozens of government planning documents over the years and I expect the Australia in the Asian Century White Paper to be much the same as the rest. It’ll use the words "plan" and "projected" a lot. There’ll be plenty of media hype, delegated responsibility, and money spent on feasibilities.
Property spruikers will see it and other related reports as an extra sales tool. Selectively chosen comments will be lifted from the White Paper and recited as if the outcome is guaranteed.
Oh, and one last thing. The author of this long-awaited white paper is former Treasury Secretary Dr Ken Henry. Yes, the same man who the same government commissioned to prepare a different report that was designed to give Australia’s inefficient tax system a complete overhaul.
The same report that has mostly blank spaces in the ‘implemented’ column alongside its 138 recommendations. Perhaps that’s why they call it a ‘white paper’?
Let’s hope for a very different outcome with this next one.
Simon Pressley is a buyers' agent for Queensland-based <a href="https://www.propertyology.com.au">Propertyology</a>.
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The Asian Century provides unprecedented opportunities for regional Australian property

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The Queensland government appears to have followed the lead of its NSW counterpart by scrapping the existing $7,000 first-home buyer grant and replacing it with a $15,000 grant applicable (only) to new property. While it’s not clear as to whether the policy is intended to stimulate first-home buyer activity or the construction industry it won’t matter either way – the policy will fail on both fronts.
It never ceases to amaze me how governments are fixated with new builds. Liberal, Labor, state, federal – every government’s solution to the construction industry’s belly-aching appears to be to stock up on the latest flavour of government grants that are on special for new property.
Memo to policy writers: If your government wants to introduce a policy with genuine intent to support a targeted audience, pause before you reach for your pen, engage with the targeted audience first and find out what they actually want.
Only a small percentage of first-home buyers actually want to live in mass-produced, high-rise apartments with large body corporate fees. The same goes for a house-and-land package far out in the 'burbs, disconnected from employment nodes, social amenities and recreation facilities. The reality is that’s what you get when buying a new property, and with a significantly higher price tag than established properties in the immediate proximity.
Don’t expect to hear members of the construction industry complain about government grants though. Not yet, anyway. See how they go trying to sell the properties. Then they’ll lobby for the grants to be targeted at investors and / or more NRAS projects. Guess what? We investors don’t want these new properties, either – we see much better investment potential in well-chosen established properties.
According to the REIQ, the $21,000 grants for new property at the height of the GFC only attracted 24% of first-home buyers. Subsequent to that, the former Bligh government’s $17,000 Building Boost for new property also had a poor take-up rate; ditto to numerous other state government initiatives around the country targeted at new properties.
There are approximately 8.4 million residential dwellings in this country; buying one is a big decision. Recognising that buyers don’t want their choices restricted to 1.5% – the 130,000 new homes built each year – should be the starting point for designing good policy. This is not rocket science!
Governments would also do well to understand property cycles before developing policies. A buoyant first-home buyer market is a buoyant economy for everyone. Benefits from increased first-home buyer activity extend far beyond people establishing a footing in their own homes. Increased first-home buyer activity is often the first phase of price growth. Initiatives targeted at encouraging first home buyers causes competition in property markets, encourages investors to become more active, and is a proactive way of releasing this country’s heavy reliance on tax-payer funded pensions.
Increasing property transaction volumes creates jobs in real estate and other service industries, improves retail spending, creates more opportunities for blue-collar tradies in the form of renovation projects, and increases loan volumes for banks. Consumer confidence increases across the board. Governments get a clip of the ticket all the way through via stamp duty revenues, GST receipts, and payroll taxes. The cycle starts with the first-home buyer, not the investor. Policies need to be targeted to encourage first-home buyers, not restricting them!
I agree wholeheartedly that we all need a healthy construction industry, however we should not be fooled in to thinking that the solution is in the form of grants for new homes. This country does not have an over-supply of homes. If we did we would see very few properties for sale, much lower vacancy rates, and banks comfortable with approving more development projects. With a decline in the rate of population growth over recent years maybe the question should be asked “do we have more people seeking employment in the sector than current demand requires?” Or maybe governments need to relax our immigration policy. Now that’s a different debate.
Simon Pressley is a buyers' agent for Queensland-based <a href="https://www.propertyology.com.au">Propertyology</a>.
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Queensland first-home buyer grants targeted at new property miss the mark

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We would all know of Albert Einstein, the German-born physicist who developed the general theory of relativity and is best known for his formula E = mc2. A smaller percentage will know of Ernest Rutherford, the New Zealand-born British chemist who is widely credited with first "splitting the atom" in 1917.
Even fewer people will know the formula of “the long-run average ratio of house prices to disposable income and to rents equals (property) fair value”. And, that by adopting this formula, the Australian property market is 36% above fair value. This is what The Economist is claiming in its August 2012 update of 21 residential-property markets around the world. I must have been truant the day that they taught this theory at property school.
Here’s another formula that those who know me personally will relate best to: “full-time property market student plus outlandish claim from so-called expert equals outburst.” That’s the response which those in earshot of me hear each time some suit in an ivory tower tries to make a name for himself with an attention-seeking headline.
I always find it amusing when people talk about “the Australian property market”, as if every one of the 8.4 million residential properties spread across 15,000 suburbs in this country all move in the same direction.
It is similarly amusing when an economist looks at what occurred to property values in one country, then plays around with a few ratios in a spread sheet, and concludes that she’s unlocked the formula that is going to split the property atom in another country. Economists would have us all think that their reading of the stars in the sky says that the Southern Cross is about to fall apart.
I am sure that fellow property market analysts such as Terry Ryder and Michael Matusik will concur with me that forecasting from one Australian city to the next is a very involved science that even we, as full-time property students, find difficult to keep up with. Add to this the many political, economic, legal and cultural variables across different countries and you have an impossible task.
Australia is nothing like America or Europe. Credit policies adopted by Australia’s (very strong) banks are completely different to the policies during which American banks handed out interest-free loans and a set of keys to unemployed people with no deposit. Australia’s economy (current and forecast) is vastly different to those in the Western world. And, unlike practically every other part of the world, Australians have a deep-seated cultural attachment to bricks and mortar – that Anzac spirit in our DNA means most Aussies, when faced with adversity, will fight hard to retain our family homes.
Economists love two things: data and formulae. The problem is, data is a record of the past, not the future. And, not everything in life can be calculated using some magic formulae. I like data too, however in order to draw any conclusions from data one needs to understand the things that influence it. You can’t just extract some data from a spreadsheet, multiple it by three, divide by the power of five, and end up with the square root of nine. One needs to understand the human behaviours that influence both the supply and demand of that essential commodity called “accommodation”. Most economists are flat-out predicting interest rate fluctuations, let alone reading the dozens of property markets across the country.
In some ways the science of evaluating share markets has similarities to property markets. In other ways, they are completely different. Ratios, for example, are referred to a lot by stock brokers as they dissect company balance sheets. Economists who persist with referring to ratios between median property values and median wages as a formula for our property being overvalued are delusional.
In a former life as bank manager during the 1990s my then employer had a policy that clients couldn’t afford a home loan if their total annual financial commitments were more than 30% of their gross annual income. This formula implied that 70% of a given client’s gross income was needed for taxes and living expenses. This formula was scrapped several years ago after even the conservative credit-Nazis who write polices acknowledged that it was inappropriate to generalise that a household earning (say) $300,000 lived a proportionately more extravagant lifestyle than the household earning $30,000.
“Median value : median wage” in the affordability debate is inappropriate. How do you compare the $250,000 salary of the boiler-maker who just purchased a $900,000 shack in the iron ore belt at Port Hedland to the retail assistant earning $60,000 and living in a nicer home in Port Adelaide?
For the economists out there trying to split the property atom I’ll spare everyone the excruciating pain that you will cause and share the formula with you: Property knowledge equals industry-specific education, plus real life experiences, divide by accountability, to the power of common sense.
Simon Pressley is a buyers' agent for <a href="https://www.propertyology.com.au">Propertyology</a>.
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There is no magic formula to understand Australia's property markets

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Yesterday's announcement by BHP to delay and downsize its Olympic Dam expansion plans should be a lesson to all property investors. If you were ever seriously thinking of investing in a location on the back of the anticipated impact that a single major project might have on that property market, then make sure all of project approvals are in place.
The process leading up to the now famous boom that has occurred in Gladstone is an example. Our research on Gladstone was completed approximately three years ago, after various government approvals had been granted for the construction of an initial liquefied natural gas (LNG) plant. Importantly though, we intentionally kept things under wraps and delayed purchasing properties in Gladstone until the formal board approval had been granted to fund the first of Gladstone’s LNG plants. Clients whom we subsequently helped buy investment properties in specific pockets within Gladstone have made approximately $100,000 over the last 2 ½ years.
The unfortunate consequences for many property investment speculators who may have already invested on the expectation that Olympic Dam would be given the green light this year is that a rocky road is ahead.
Government approval for the Olympic Dam expansion was granted late last year. BHP had always advised that its board would not make its final investment decision until December this year. We had a very good look in to the potential property investment opportunities to spin off Olympic Dam on behalf of our clients. Investigation was definitely warranted when the biggest mining company in the world says that it is going to invest $30 billion to dig the biggest hole on the planet.
We’ve felt that the writing has been on the wall for BHP to back out of its original plans. South Australians will be shattered by this. The state’s economy has been in the doldrums for decades. From the premier to the suburban pie maker, the SA public have been waiting with baited breath for a large, good news story.
On the expectation that the Olympic Dam expansion was a fait accompli, and with very few other locations in SA that have high demand for new housing, several development projects have already commenced in towns like Whyalla. In the absence of the extra service contracts that were to support BHP and new job creation the Eyre Peninsula is now likely to be an over-supplied property market with low consumer confidence.
The Olympic Dam scenario should highlight to property investors the risks of getting caught up in all the hoopla and making major financial decisions without the expertise to conduct a comprehensive feasibility.
For what it's worth, we think the expansion will go ahead at some stage. BHP’s decision is primarily due to funding pressures. It requires significant capital to be invested in multiple projects, not just in Australia, and in a climate where it's increasingly difficult to secure funding. The copper, zinc, gold and uranium won't disappear. The opportunities to BHP from of expanding Olympic Dam are too big for it not to proceed.
Olympic Dam isn’t the only project to be put in hold because of funding challenges. While stakeholders such as shareholders, governments, property investors, and the like would prefer to see BHP proceed as scheduled, the silver lining is that deferments of some projects reduces pressure on availability of skilled labour for those projects which are underway. It is also likely to "smooth" out what was an enormous spike in the Australia's project pipeline and spread it over a longer period.
Other than when will the expansion proceed, the biggest questions is where will the biggest impacts on property markets be felt. The consensus appears to be debated over Roxby Downs, Whyalla, or Port Augusta. While we do expect the economy in each of these towns to benefit we are turned off by the Eyre Peninsula’s over-reliance on mining. We believe that Adelaide will be the main beneficiary of Olympic Dam. A majority of workers will operate on a fly-in-fly-out basis, similar to those who commute from Perth to the Pilbara. Adelaide’s economy unfortunately has challenges that even a project as big as Olympic Dam won’t fully address. Adelaide also has a history of being more than capable of supplying adequate housing to meet demand.
Simon Pressley is a buyers' agent for <a href="https://www.propertyology.com.au">Propertyology</a>.
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Rocky road ahead for property investors dependent on Olympic Dam expansion

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

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After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

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Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

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Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

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Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

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ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

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For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

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Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

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Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

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Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

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Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

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Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

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Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

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The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

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The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

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The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Simon Pressley

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