Apartment buyers in New South Wales are set to gain a decade of insurance-backed protection against major building defects, after the NSW Parliament passed the Fair Trading and Building Legislation Amendment Bill 2026.&nbsp;

The Bill establishes decennial defect insurance, known in the market as Latent Defects Insurance (LDI), as an alternative to the existing two-year strata building bond. It cleared the Legislative Council with amendments on Tuesday evening (August 4, 2026), with the Legislative Assembly agreeing to those amendments shortly after.

Under the reform, eligible developers can satisfy their statutory bond obligation by taking out an approved decennial-style policy that gives owners 10 years of cover for major structural defects from completion, claimable directly, without first having to pursue developers or builders through costly legal action.&nbsp;

The change forms the final tranche of amendments arising from the 2021 statutory review of the Strata Schemes Management Act 2015 and related legislation.

Resilience Insurance, which originated the cover in Australia and has delivered it in NSW since 2022, welcomed the passage and credited the NSW Government for delivering it.

“This is protection apartment buyers have needed for a long time, and the credit for delivering it belongs to the NSW Government,”&nbsp;said Corey Nugent, CEO of Resilience Insurance.

“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into. Reform like this is what good, evidence-based regulation looks like.”

Resilience has delivered LDI in NSW since 2022, protecting thousands of apartments, giving the State, and now the country, real-world evidence of how decade-long, no-fault protection works in practice.

The reform also places NSW within a wider national shift.

NSW is the third jurisdiction to put decennial cover into law. The ACT legislated for it in 2024, with the scheme taking effect in late 2025, and Victoria passed its own framework on 17 June. Between them, the three cover the majority of Australia's apartment market.

The reform commences once the legislation is proclaimed, which is expected in the coming weeks. From that point, developers of Class 2 residential apartment buildings can meet their statutory obligation with an approved decennial policy in place of the bond.

Buyers who purchased into projects that took out the cover early are among the first in the country to take keys to apartments carrying decade-long structural protection.

“With the legislation passed, the focus now turns to making it work for buyers,”&nbsp;Nugent said.

“There are already thousands of apartments in NSW covered by this insurance, bought by developers who moved early. The question every buyer should be asking in a display suite is a simple one: does this building come with 10-year defect cover, and who stands behind it?&nbsp;

“We look forward to working with the Government and the Building Commission in coming weeks as the framework moves to implementation, and to sharing what we have learned over the past four years so the protection reaches owners as smoothly and quickly as possible.”

Other states are working through their own reform programs. Western Australia has indicated that decennial cover is within consideration a later stage of its reform sequence, and Queensland has been examining the settings as it looks at the development pipeline ahead of the 2032 Olympics.

Resilience Insurance acknowledges the NSW Government’s continued focus on strengthening consumer protection while supporting housing delivery across the State.

Fast Facts: What the reform means

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Proven at scale:&nbsp;Decennial cover has operated in NSW since 2022, protecting thousand of apartments.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">10 years of cover:&nbsp;Protection for major structural defects runs for a decade from completion, claimable directly and with no legal action required.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">An alternative to the bond:&nbsp;Eligible developers can meet their statutory obligation with an approved decennial-style policy in place of the 2% strata building bond.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Part of a national shift:&nbsp;The ACT has had decennial provisions in force since 2025 and Victoria passed its framework in June. NSW now joins them.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">No-fault, first resort:&nbsp;Owners corporations claim directly from the insurer without first having to establish who is liable for the defect.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost-competitive:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the 2% bond while offering broader, longer protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market position:&nbsp;Resilience originated LDI in Australia and has delivered it in NSW since 2022.</li>
</ul>

Fast Facts: What is Resilience LDI?

<ul style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Resilience Latent Defects Insurance (LDI):&nbsp;Covers major structural defects for 10 years from completion.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Consumer-first:&nbsp;Direct claim access, no need for lengthy legal action.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Cost advantage:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market leader:&nbsp;&nbsp;Resilience Insurance originated LDI in Australia and is the national market leader.</li>
</ul>

Joel Robinson

NSW parliament passes 10-year defect insurance laws for new apartment buyers

Builder-developer <a href="https://www.apartments.com.au/developers/mcnab-developments">McNab</a> has wasted little time reshaping one of South Brisbane's most significant undeveloped apartment sites after acquiring the property earlier this year.&nbsp;

McNab has lodged plans to scrap an existing approval for two 30-storey towers and instead deliver a single 28-storey residential building, preserving part of the site for a future development opportunity.

The proposal, lodged over <a href="https://www.apartments.com.au/new-apartments/64-peel-street-south-brisbane-qld-4101">64 Peel Street and 9 Cordelia Street</a>, is for a residential-led mixed-use development comprising 124 apartments above a landscaped podium, alongside a boundary realignment that preserves part of the land for a future residential project.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="743bf564-3f8f-45fc-b8d3-bbf18f5b628f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20Peel%20st%20podium.png?VersionId=EhCxGrVn_VFH3qTbKnI4WppGwaMnOn0t" />

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a>, the development will deliver 119 two-bedroom and five three-bedroom apartments across 23 residential levels. A five-level podium will accommodate 135 car spaces, while the ground floor will include a 66 sqm commercial tenancy, an activated residential lobby with work-from-home spaces, and a publicly accessible landscaped plaza linking Cordelia and Peel streets.&nbsp;

Communal amenities will span Level 6 and the rooftop, including indoor and outdoor recreation spaces, a swimming pool, barbecue facilities, kitchen and dining areas, lawn space, sauna, steam room and yoga facilities.

The application also proposes a boundary realignment to create a standalone 1,290 sqm development lot while retaining an adjacent parcel for future redevelopment, allowing the balance of the site to contribute additional housing over time.

Hayball said the architecture has been shaped by the site's elevated corner position at the intersection of Peel and Cordelia streets and Brisbane's subtropical climate.

The design incorporates generous landscaped setbacks, a masonry podium wrapped with planting, large north-facing balconies, and a slender tower profile intended to maximise natural light, cross ventilation and long-range views. The rooftop has been conceived as a wellness-focused retreat overlooking Brisbane, with amenities positioned to capture views towards Mount Coot-tha and the CBD.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="c5f99e84-6ad8-4a87-82d1-869685b754d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20tower%20perspective.png?VersionId=Gw0IuJaSAlk.tvGBxInhZOcQAdIB..2b" />

The planning submission positions the proposal as a response to both changing market conditions and Brisbane's Kurilpa Sustainable Growth Precinct planning reforms.

McNab acquired the site after the previous approval was granted, with the existing scheme no longer reflecting current residential market demands, economic conditions, construction challenges, construction efficiencies or the quality of development outcome now being pursued, the planning report noted.

McNab continues to expand its residential development pipeline across Brisbane and the Gold Coast. The developer recently launched The Tannery in West End, securing more than 60 per cent of apartments before the project's public release. It is also delivering Elements Budds Beach in Surfers Paradise and Lucia Highgate Hill, an eight-apartment boutique development overlooking the Brisbane River.

McNab resets decade-old South Brisbane approval with 124-apartment tower

A steeply sloping Bellevue Hill site is set to accommodate a new mid-rise apartment development, with plans lodged for 20 homes that respond to the site's dramatic topography.

The proposal for the consolidated land at <a href="https://www.apartments.com.au/new-apartments/138a-140-bellevue-road-bellevue-hill-nsw-2023">138A-140 Bellevue Road</a> has been designed by Sydney architecture practice Common Office, which has used the site’s substantial fall to distribute the building’s scale and unlock 20 apartments without presenting the full height to the street.&nbsp;

“The unique design strategy leverages the site’s substantial topographical fall to facilitate increased density, presenting a seven-storey profile to Bellevue Road while rising to 10 storeys at the rear,” Common Office said in its architectural design report.

The apartment mix spans one, two, three- and four-bedroom residences. Four two-bedroom apartments are designated as affordable housing, while the plans also include two adaptable dwellings. The mix is majority three-beds, with the typical three-bed apartment offering around 144 sqm internally, with balconies of around 15 sqm.

The affordable housing component represents 15 per cent of the residential floor area and allows the project to access additional height and floor space under the NSW Government’s in-fill affordable housing provisions. The site also falls within the inner area of the Low and Mid-Rise Housing Policy because it is within 400 metres walking distance of Double Bay Town Centre.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="b1230d0f-3bfa-4a11-abaf-0928c66ef345" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da.png?VersionId=dZeMK3P.OutGjN8ycjsxm8uNsj_QFWQv" />

Common Office has arranged the building around a masonry podium and a lighter upper volume, drawing on two recurring elements of Bellevue Hill’s established architecture: sandstone bases and the vertical proportions of local Inter-war Art Deco apartment buildings.

“The proposal is governed by a holistic design language that reconciles the solid horizontal masonry of the neighbourhood’s podiums with the elegant verticality of its Art Deco heritage,” the architect said.

“The building maintains a consistent rhythmic logic utilising deep recesses and a sophisticated material transition to break down the 10-storey scale into a series of articulated, human-scale volumes.”

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="0147f503-1af1-4d51-97fb-c2f1cba63a9d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20bldg.png?VersionId=GoW7q3NlK67OpnePXhk7zvklrlKb72Qc" />

Large-format sandstone tiles will define the lower levels, establishing a robust base that negotiates the change in elevation from Bellevue Road. Above, red-tinted precast concrete frames, recessed balconies, anodised aluminium screens and expanded metal details will create a more vertically expressed façade. Integrated planter beds will introduce greenery across balcony edges and recessed sections of the building.

The elongated northern façade has been divided into three recessed vertical masses to reduce its perceived length. Triangular window elements and metal privacy screens reference the geometry of nearby Art Deco buildings while controlling overlooking toward surrounding homes. The southern elevation will incorporate further privacy screening, landscaped edges and deep balconies to maintain light and ventilation.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="e8679cf1-18bc-4447-8a0f-0052b94ab83c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da%20rooftop.png?VersionId=5SQqQqRFf76rvE2p1TbxJSweMN70AIbc" />

Private and communal landscaping is distributed throughout the development. A landscaped garden apartment is positioned within the lower portion of the site, while a communal terrace on Level 5 will include a central timber deck, barbecue facilities, resident planting plots and areas for outdoor dining and informal gatherings.

Common Office described the terrace as an elevated sanctuary designed to capture district views and sunlight. Its planting strategy incorporates endemic species associated with the Eastern Suburbs Banksia Scrub, extending the landscape vertically through the building and providing habitat for local flora and fauna.

A second communal outdoor area is proposed at roof level, with built-in seating, paved gathering areas and perimeter planting.

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction. Positive Investment Enterprise is delivering the 16-apartment Kew Palm House on Birriga Road, while Chanine Developments is also under construction at Florian, a 36-apartment project on Banksia Road.

&nbsp;

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction.

First Look: Apartment development pitched for Bellevue Hill, Double Bay fringe

South Brisbane's apartment pipeline continues to build momentum, with <a href="https://www.apartments.com.au/developers/trk-property-group">TRK Property Group</a> lodging plans for a 161-apartment tower on Montague Road as developers accelerate investment across the Kurilpa Sustainable Growth Precinct.

The proposal for 176–186 Montague Road would replace an existing office building with a 20-storey residential tower designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, adding to a growing pipeline of high-density projects reshaping one of Brisbane's fastest-evolving inner-city precincts.

The project has been conceived as a "living building", featuring a flowing tower form, extensive vertical landscaping, and generous communal spaces that respond to the evolving Kurilpa Sustainable Growth Precinct.

TRK Property Group Development Director Matt Kan said the project reflected the confidence developers have in South Brisbane's long-term future.

"South Brisbane is entering an incredibly exciting period, and we see Montague Road sitting right at the heart of that evolution," Kan said.

"With the former Visy site directly opposite us and significant investment planned throughout the broader Kurilpa precinct, there is a real sense of momentum around this part of the city and what it will become over the coming years.

"For TRK, this is an opportunity to be part of that next chapter and deliver a project that responds to where the precinct is heading, while contributing to the continued evolution of Brisbane's river edge."

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="590fe1ad-f892-4446-a679-80e33a16d029" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20tower%20facade.png?VersionId=uOJStrcKpyHFcPE1w6_9SMAFzVMCcZll" />

The scheme includes a mix of one, two, three and four-bedroom apartments, incorporating multi-purpose rooms in selected residences to provide additional flexibility for home offices or expanded living areas. The proposed mix comprises 15 one-bedroom, 13 one-bedroom plus MPR, 73 two-bedroom, 26 two-bedroom plus MPR, 30 three-bedroom, and four four-bedroom apartments.

Rather than adopting a conventional rectilinear tower, COX Architecture has developed a sculpted form inspired by the movement of the Brisbane River.

"The proposal has been designed by COX Architecture as a 'living building' that responds to the site's riverine setting, floodplain history and evolving urban context within the Kurilpa Sustainable Growth Precinct," the planning report states.

"The architectural form draws from the fluid nature of the Brisbane River, with a curved and undulating tower form that creates a varied architectural edge and avoids a conventional rectilinear tower expression."

The podium has also been designed as an architectural feature rather than a conventional parking structure, with cascading planting, screening and natural-toned materials softening its appearance. Resident parking is elevated above ground level to address the site's flood constraints, while habitable apartments sit above flood planning levels. Upper-level communal facilities are designed to accommodate shelter-in-place arrangements during major flood events.

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="01fa15d0-90df-46c7-9555-7941fc45373c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20podium.png?VersionId=mHyua.w1pHGBt9qEdWzrlsv.leztUCwO" />

Communal amenity is a major focus of the proposal. Around 1,815 sqm of shared resident space is proposed across the ground floor, level 19 and the rooftop, including co-working areas, indoor and outdoor recreation spaces, wellness facilities, dining and gathering areas, lawn spaces, a rooftop pool and spa, and extensive landscaping. At street level, a landscaped forecourt and approximately 345 sqm of publicly accessible open space along Montague Road are intended to improve the pedestrian experience while activating the building's frontage.

The development will provide 163 car spaces, including 152 resident bays and 11 visitor spaces, together with 144 bicycle spaces incorporating resident storage, visitor parking, bicycle maintenance facilities and e-mobility charging infrastructure.

The site sits within one of Brisbane's fastest-changing inner-city precincts, less than two kilometres from the CBD and within easy reach of South Bank, West End, the Queensland Cultural Centre and extensive public transport connections. The Kurilpa Sustainable Growth Precinct planning framework is encouraging higher-density residential development to help meet Brisbane's housing supply targets while supporting walkable, transit-oriented neighbourhoods.

TRK Property joins South Brisbane apartment surge with Montague Road tower plans

Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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As we start 2013 I want to briefly return to all of the various themes that I think will be key issues for project marketing professionals this year, starting with one key aspect of demographics. In particular how we will need to continue to take full account of Australia’s ageing population. 
I think we always need to keep the spotlight on this topic because from how projects are designed and then taken to market, demographics are central, and the impact of an older market is now a reality. One key issue is as baby boomers move into retirement how it’s going to directly shape many aspects of our work.
To start this topic I would firstly like to relay some published figures to help clarify why this aspect of demographics will be important.
Today (according to the ABS) there are some 7 million Australians over the age of 50, and while that is around 32% of the population they control 68% of the wealth. Clearly how this group spends money and invests is a core part of the economy and this includes the housing market at its heart.
However, there is already a robust discussion taking place about how baby boomers might plan their retirement, and possibly not surprising, after the GFC the number planning to work until they are 70 has greatly increased. This could make the employment outlook more complex.
One reason for this is understood to be the gap between retirement savings, including retirement savings, and the amount needed for a comfortable level of retirement income. For many people this reality may well involve a detailed consideration of if and when the family home might be sold, to help fund retirement plans and future health care. However there is some divergence here because there are many benefits now attributed to living at home including the wider use of home based health care.
As a group older Australians are enjoying better health and now as we live longer for a couple aged 60 today, there is (according to the ABS) every chance that one will live beyond 90.
In a report Surviving Longevity published by Rice Warner we can find a clue as to how housing options might change between the ages of 60 and 90 and hence how this group will be relevant to how some projects are planned and then sold.
The report suggests three stages of retirement, which is summarised as ‘active’ from 60-65 to 75, ‘passive’ from 65 to 85 and ‘frail’ from 75-85 and beyond. I think it is already established that during these stages how and where people choose to live will and does vary.
If, for example, in the first ‘active’ phase there is a desire to get out and about, with travel and hobbies more a priority, thus it may well be the ideal time to sell the family home and downsize. According to a report produced by the MLC 49% of people are looking forward to their retirement, and this already apparent trend may well start to escalate in 2013.
From only a brief look at this one topic there are many other aspects of the market that could be directly impacted, these would include investor demand, apartment design and amenities, changes to infrastructure and changes to tax policy, with the later already being a reality when it comes to superannuation.
As usual demographics are as always an interesting topic, and I will continue to look at other key factors for 2013 during January.
Peter Chittenden is managing director for residential of <a target="_blank" rel="nofollow" href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx">Colliers International.</a>
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pchittenden-eLqUUC8TWW

How Australia's ageing population will affect residential development

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Speculation has been rising in the housing industry since the RBA made its last 0.25-percentage-point cut to the cash rate, bringing the official figure to the post-GFC 2009 "emergency" level of 3%.  Now with rumours the banks may move outside of the central bank’s cycle and make ‘self-initiated’ rate cuts of their own, industry professionals are declaring a better year ahead for property prices than experienced over the previous two – and thus we start the crystal ball gazing.
However, as has been broadly noted, the standard variable mortgage rate remains some 0.6 to 0.8 percentage points above that of 2009, when it was sitting at 5.55% and prices were rising sharply.  Additionally, the strong Aussie dollar is still affecting our terms of trade, and although unemployment data has improved of late (falling to 5.2% in November 2012 from 5.4% in October – although this week's figures may reverse the trend), Victoria’s results aren’t so positive.
In Victoria, a series of job cuts announced by building products maker Boral, which shed 90 positions in its plant near Geelong a number of weeks ago, most recently BlueScope Steel, which announced a further cut of  170 jobs from its Western Port facility in Hastings, and additionally from major companies such as Qantas, which announced the loss of 263 positions from its Avalon base late last year, increased Victoria’s jobless rate to 5.5% from a previous 5.4% – a figure that will go some way in restraining any potential house market gains in this region throughout 2013.
Additionally, Australia-wide economists are warning of ‘softer conditions’ for the rest of the year, which could potentially push the national unemployment rate to 5.7% by December 2013 with the most alarming reports showing <a href="https://www.theage.com.au/data-point/job-losses-retraining-snags-blamed-as-those-at-peak-claim-allowances-20130102-2c5nd" target="_blank">“those aged 25 to 34 and 35 to 44”</a> are the two biggest groups currently receiving Newstart payments – a point of serious concern.
Taking this into account, along with the consideration it’s an election year, which never inspires market gains, I suspect there’ll be little change to our current environment of ‘debt-adverse’ investor sentiment for much of the year – and along with that,  little change in house prices.
In fact, regardless of the constant spruik on the effect of low interest rates on house market prices that is broadly assumed by  many armchair commentators within the property industry, a look at the long-term data shows the connection is in fact pretty weak – a point that has been noted in several academic papers and can be clearly assessed from previous boom and bust cycles (something I may delve into further in a future column).
In other words, you would be hard pushed to find any long-term historical correlation between growth in ‘nominal’ house prices and the change in interest rates – and as for ‘real’ house prices (which accounts for inflation) movements tend to be in the ‘same’ direction rather than the opposing direction as some would expect – meaning as rates, rise so do prices.
Although it may seem logical to assume lending rates initiate price changes, other economic factors play a far greater influence, and unless the needed ingredients are combined, interest rates on their own can do little to change the housing market terrain by any significant degree.
When interest rates are low and more significantly falling, it stands to reason, expected growth in the economy is waning, which doesn’t inspire anyone to take a punt on growth assets considering the low inflationary environment.
Conversely, interest rates rise in response to a ‘flourishing’ economy during which a period of wage growth and healthy employment data underpins investor confidence (hence why periods of rate rises often accompany housing price rises.)
In such an atmosphere, it’s often the panic invested ‘rush to buy’ before prices escalate out of reach, that fuels a boom cycle outside of any change to the cash rate – thereby providing the bullish atmosphere many buyers unfortunately require in order make their move.
As a typical reaction, it takes a series of sharp upward movements in the cash rate in an attempt to defuse the bubble before it overheats – (as was witnessed in 2009-10) –  and even then, prices typically plateau for a period before other factors come into play and a notable ‘correction’ is observed.
 
<hr class="system-pagebreak">
 
Currently, regardless of falling rates, other economic data provides little promise of broad-based asset growth (setting aside the obvious disclaimer that certain micro markets are likely to buck the trend). Therefore, understandably, many investors are looking elsewhere for profit, and the competition needed to initiate property prices is simply not prevalent without further economic changes (which are not at this stage anywhere on the horizon.)
Furthermore – as was seen throughout the year, despite buyer activity remaining woefully low, home owners unwilling or unable to sell their properties tend to withdraw from the market rather than drop prices further, preferring to wait for better times ahead than respond to market demands.  This could be another reason the change in house prices this year has been lower than last leading many to assume we’ve reached six on the property clock – (a position I suspect we will retail for a while yet).
There are however always winners, and in the current atmosphere it’s obviously the mortgage holders.  In Victoria October was the fourth consecutive month and longest period to date during which more mortgages were discharged than lodged as vendors took advantage of competitive lending rates to reduce their debt.  This brings the annual decrease of mortgages to 1,998, which when compared to 2011, is an increase of 726 discharges.
The results are mirrored elsewhere, with national data showing the preference among consumers remains firmly in the ‘safety zone’ of paying down debt and saving – a seemingly sensible environment that has thus far upset the RBA, which is all but counting on property investment to take up any slack from a post-peak downturn in mining – not to mention the government, with a 2013 surplus well and truly off the agenda.
As Glenn Stevens noted in an interview published in a recent edition of the Australian Financial Review ,it’s “most surprising” that the property sector has thus far not reacted (to lower rates) as expected.
Is it really? Surely it should be clear as daylight considering the other market indicators shadowing Australia’s investors – and even with further cuts to interest rates broadly assumed by the majority of economists, the level of uncertainly regarding the performance of the housing market continues.
Forecasts for the year ranging from 3 to 5% by Australian Property Monitors,  4 to 5% by AMP Capital, a more bullish 6% and 8% for Sydney and Brisbane respectively from BIS Shrapnel (which emphasises the changes will “jump” following the federal election – as if property purchasers are all going to suddenly let their hair down in and end of year buying spree).
And a remarkably ‘bullish” prediction of 10% (!) from <a href="https://gulfnews.com/business/property/international/australia-home-prices-seen-rising-10-on-rate-cuts-1.1128423" target="_blank">Janu Chan</a>, a Sydney-based economist at St George Bank – who I suspect may have purchased his crystal ball at a discounted price – and most notably Stephen Koukoula,s who bases his assumption on an additional ingredient  “that house prices in the first 10 days of 2013 have already risen by 0.6%”.
(I argue against the foolishness of relying on a “daily house price index” to reliably predict ongoing trends here)
The weeks leading up to Christmas are generally the busiest of the year in the property market.  Yuletide provides a natural deadline for home buyers desperate to make their move prior to the January break (during which the real estate industry and various offshoots take their annual breather).
Post-Christmas, most are still recovering from too much food, drink and weighty credit card debt to pay the property market much attention – a figure usually reflected in the first quarterly results, which on the face of it typically show weakening conditions.
Speculation that growth in the economy will fall to 2.5% during the year ahead – well below the usual trend of 3-3.25% – is why many are ‘assuming’ a further 25- to 50-basis-point drop is needed if we’re to stimulate the ‘non-mining sectors’ of our economy into a positive environment.
Should this occur and the banks ‘pay it forward’, it will take lending rates low enough to provide a greater incentive for potential property investors to make their move (especially considering long-term deposit accounts will no longer  provide a viable alternative option.) I’d advise any property buyer to err on the side of caution and keep a long-sighted view on the term of any investment they venture into.
As has been noted, it’s an election year, and it can’t be denied that property and politics have close ties. Changes to policy such as inflationary grants and tax incentives, for example, are the best weapons against the housing market, do bear influence on market prices.
Of course, in any market there are always losers – and in this market, it’s without doubt the oft-ignored renters who face erosion to their savings, rising yields, and a market that isn’t providing enough suitable and affordable accommodation in which to secure long-term tenancy. This is an issue I’ll address in my next column.
For the time being I’d take any crystal ball prediction with a pinch of salt – there are quite simply far too many resounding uncertainties looming ahead to make any assumptions.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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catherinecashmore-6LXia3pPQj

Interest rates do little to influence Australian property prices

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There was a marked decrease in the amount of time it took to sell property in Perth in December 2012 compared with December 2011, according to Australian Property Monitors.
Perth property took an average of 125 days to sell in December 2011, but in December 2012 that number had dropped to 104 days.
The APM report on the number of days on market indicator recorded an increase across 2012 in all other capitals except Canberra, where it remained steady at 78 days.
The biggest increase was in Brisbane, where the number of days on market increased 14%, from 120 days in December 2011 to 137 days in December 2012. 
In the December 2012 month Hobart's rate of sale quickened, but Brisbane fell back noticeably. In December 2012 Sydney's days on market stayed about the same, while in Melbourne it took an average of five days more to sell than in November 2012. 
The latest Darwin December 2012 figure dropped in an unusual way, suggesting it might not yet be considered a permanent realignment. 
 
Click to enlarge
<a rel="shadowbox" href="/images/stories/2013/01/apmjan141.gif" title="Click to enlarge"><img src="/images/stories/2013/01/apmjan141thumb.gif"></a>
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cknowlton-QnEa6ntUYP

Property selling faster in Perth in December 2012 than December 2011

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Those expecting a "get rich quick" list of tricks will be disappointed. If you are reading this and you have even a slight interest in using property as a vehicle to grow wealth and prosperity, you’ll know that most property investors employ a mid-long-term strategy instead of a ‘get rich quick’ one. If ultra-fast profits, aka ‘get rich quick’ schemes, is your ambition in the property investment sector, then my advice is to seek other types of investment! Instead, I’ll list tricks that are more about thinking outside the square, or perhaps processes that can be made more efficient to either save time or money, during your property investing career.
1. Be stamp duty conscious and don’t be afraid to take advantage of states where duty is less extreme.
One of the biggest hurdles in getting started in property investing is the stamp duty element. It sucks, but for a long time, it has been a necessary evil. Those buying their own homes may be able to avoid it, but investors must pay this upfront. The best thing you can do is keep yourself updated on state-by-state nuances when it comes to stamp duty.
There has been a lot of talk recently about it being scrapped in some states in order to help kick-start the housing industry in those states. My thoughts are that any scrapping in stamp duty purchase costs will come back as some form of tax or another. Perhaps higher land taxes or other state taxes would replace them. Still, assuming for now that stamp duty won’t be scrapped, you should investigate states where these costs are reduced.
When I refer to stamp duty, I refer to three charges actually, that must be paid for, per state, at purchase. These are the stamp duty itself (the biggest portion), the transfer fee (this can vary from as little as $100 up to thousands), and mortgage registration fees (a very minimal charge). For example, on the same $300,000 investment property price, you could be paying as little as $8,873 in the ACT, or up to $14,041 in VIC. The difference of $5,000 could be a make-or-break factor for first-time or new investors.
2. Pay down your bad debt while you are doing your due diligence. 
 This is a big one, and one of the easiest to do. Personal debt (which most, including myself, call 'bad debt' because it is debt that is not producing an income) can hurt your chances when working with a lender (or a broker who engages lenders on your behalf). I read somewhere that for every $1,000 of credit card debt, personal loan debt, or other debt that you can pay out, it can add around $5,000-$10,000 of loan capacity to your status. Not sure how true that is, but my trick is to use your due diligence time (say three to six months of intense research) to aim to pay off as much outstanding debt as possible. You'll be surprised at how much more a lender will loan you when you have little to no personal debt. The additional volume of loan you can then have may enable to you to invest in a more desirable investment property than you initially hoped for.
3. While on finance – get used to the word 'no' and use it to your advantage. 
 The trick here is all about lenders saying no. Those who employ the services of a mortgage broker are less likely to have an ‘absolute no’ (in other words, not one single lender willing to lend to you). But even then, never accept a ‘no’ from a lender as defeat. Banks and other lenders, while tightening their purse strings in the past year or two, are still willing to lend, you just have to find creative ways to agreeing on a product-type with them. 
 
<hr class="system-pagebreak">
 
4. People watching!
No, not in a perverted neighbourhood peeping Tom kind of way, but more in a 'walking the streets, eating in the restaurants, and sitting in the local park on a Saturday' kind of way. Get to know your target suburb occupants firsthand by witnessing them in their daily lives. Why? This can help give clues as to the kind of property type to buy.
Census data and other data sources cannot always be trusted in capturing the snapshot of who really lives in a suburb, so you need to see this first hand. It'll help inform your decisions about dwelling type, bedroom volume, and demand for proximity to certain amenities. For example, if you see lots of very young families with babies – despite data telling you otherwise – those babies will likely need pre-school within a couple of years. It may be worth considering proximity to pre-schools as a factor in your property search.
5. Always keep your eye on the prize by having an exit strategy up front. 
 Too many new investors – including yours truly – tend to focus much of their energy on the acquisition stage. Some people are heavily focused on growth, so they set targets like 'I want to acquire one property a year for 10years, and then hold'. But then what? Selling up, or 'cashing out', as some call it, is a process that must be planned for, up front, by collaboration with an account, an advisor, and with your personal dreams, hopes, and aspirations. That last part is the most important bit, and should be the dictator of when it's time to cash out.
If you are like me, you'll want to be spending most of your 50s and beyond cruising down the Nile River for six months of the year, or trekking through Alaska or something. You need to figure out how you are going to dump as many of these properties as possible, at the right time to achieve your goals. If you have 10 properties you may want to offload over half of them, but beware: this process could take many years to do it in the most tax-effective way. Starting out, you must focus on the start, but so too should you map out when you want it all to end.
6. Build your industry relationships and foster them.
Build solid relationships with your ‘crew’ (as I like to call them: your mortgage broker, solicitor, planner, accountant, managing agents etc). I send them all a Christmas card every year. It sounds like a minor thing to do, but little touches like these, help keep the relationship strong. In effect, you are paying all of these people to do work for you, so really, you are their customer. If anything, they should be sending you a Christmas card! But being polite, while being assertive, helps to maintain a good relationship. I’ve known investors who treat their crew terribly, getting angry at them all the time over small things, being rude and demanding on calls with them. This attitude can come back to hurt you later on if you need to call upon them for a favour; the favour may be met with resistance or little interest.
7. Be more organised. 
 A pretty obvious one, but as you start to collect data, due diligence research and then move to a property purchase and ongoing management of it, you’ll collect lots of information. If your day job is in an office, you are probably pretty organised when it comes to paperwork, Microsoft Office files, and so forth. For those who do not work in such an environment, you need to become very savvy, very quickly, with data filing and admin. It sounds boring, but having everything organised and easily/quickly accessible is key. Some areas you can make more efficient are:
<ul>
<li>File naming conventions. Keep successive versions of your spread sheets, word documents, and pdfs logically named, and filed in the correct folders</li>
<li>Back everything up. Ideally you’ll have some kind of network-attached storage that can duplicate every ‘save now’ in a document, on a second drive or space, so that data loss is avoided</li>
<li>We still live in a print world, sadly. This means you’ll get lots of bills, notices, and contracts in print. Ensure you keep these filed in logical lever arch folders, or invest in a filing cabinet and employ a consistent filing convention to ensure nothing is misplaced.</li>
<li>Keep a log of all expenses close to where you keep the receipts for them.</li>
<li>Generally speaking, keep everything that any key party (lenders, solicitors, estate agents and so on) sends you, even if you don’t think you’ll need it later on.</li>
</ul>
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" href="https://propertyspectator.blogspot.com.au/">Property Spectator.</a>
 
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Seven smart moves when buying your first investment property: Cameron McEvoy

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While credit rating agency Fitch is forecasting Australian property prices to <a target="_blank" href="https://www.propertyobserver.com.au/residential/stable-outlook-for-australian-housing-market-but-no-price-gains-in-2013-fitch/2013010958671?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">go nowhere in 2013 </a>as the market continues to stabilise, Australian commentators and analysts are more expectant of some gain over the next 12 months.
The strongest outlooks are for Perth and Darwin, both beneficiaries of the mining investment boom, while the prospects for Sydney and Brisbane are also sound.
As for the other capital cities, flat markets are in prospect with analysts particularly bearish about Melbourne and Hobart.
Fairfax-owned Australian Property Monitors (APM) is forecasting prices to rise a modest 3% to 5% over the course of the year, but with quite different outlooks for the major capital cities.
APM is most bullish about Perth, tipping property prices to rise by between 5% and 7% over the year, with a similar outlook for the smaller Darwin market.
There are modest property price gains tipped for Sydney, following a decade of near stagnation, with APM expecting rises of between 3% and 5% ,with similar expectations for Brisbane.
At best, Melbourne and Canberra will experience gains of 3%, says APM, while no change is expected in Adelaide and Hobart.
Both BIS Shrapnel and Hotspotting.com.au’s Terry Ryder are bullish about Perth and Darwin, with Ryder expecting double-digit growth in both these cities. Ryder also expects Sydney and Brisbane to perform strongly.
For both BIS Shrapnel and Ryder, Melbourne, Canberra and Hobart are the clear weak spots.
Property price forecasts for 2013
<table style="width: 470px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="154" valign="top">
 
</td>
<td width="154" valign="top">
APM
</td>
<td width="154" valign="top">
BIS Shrapnel
</td>
<td width="154" valign="top">
Terry Ryder
</td>
</tr>
<tr>
<td width="154" valign="top">
Sydney
</td>
<td width="154" valign="top">
3% - 5%
</td>
<td width="154" valign="top">
2.7%
</td>
<td width="154" valign="top">
5% - 10%
</td>
</tr>
<tr>
<td width="154" valign="top">
Melbourne
</td>
<td width="154" valign="top">
0%  - 3%
</td>
<td width="154" valign="top">
0.9%
</td>
<td width="154" valign="top">
-5%
</td>
</tr>
<tr>
<td width="154" valign="top">
Perth
</td>
<td width="154" valign="top">
5% - 7%
</td>
<td width="154" valign="top">
6.4%
</td>
<td width="154" valign="top">
10%+
</td>
</tr>
<tr>
<td width="154" valign="top">
Brisbane
</td>
<td width="154" valign="top">
3%  - 5%
</td>
<td width="154" valign="top">
3.9%
</td>
<td width="154" valign="top">
5% - 10%
</td>
</tr>
<tr>
<td width="154" valign="top">
Adelaide
</td>
<td width="154" valign="top">
0%
</td>
<td width="154" valign="top">
1.3%
</td>
<td width="154" valign="top">
0% - 5%
</td>
</tr>
<tr>
<td width="154" valign="top">
Darwin
</td>
<td width="154" valign="top">
5% - 7%
</td>
<td width="154" valign="top">
5.3%
</td>
<td width="154" valign="top">
10%+
</td>
</tr>
<tr>
<td width="154" valign="top">
Hobart
</td>
<td width="154" valign="top">
0%
</td>
<td width="154" valign="top">
-1.1%
</td>
<td width="154" valign="top">
-5%
</td>
</tr>
<tr>
<td width="154" valign="top">
Canberra
</td>
<td width="154" valign="top">
0 – 3%
</td>
<td width="154" valign="top">
-0.8%
</td>
<td width="154" valign="top">
0%
</td>
</tr>
</tbody></table>
APM bases its relatively positive outlook following interest rates being cut to near record lows last year, with chief economist Andrew Wilson expecting prices to build on the modest gains achieved in 2012.
He tips Perth to be the top performer based on record levels of immigration, housing shortages and soaring rents, as well as its exposure to the relative strength of mining sector.
While Ryder is tipping property price growth in excess of 10% for Perth and Darwin, he believes the best opportunities in 2013 will be in regional markets – to find out where, watch the Property Observer webinar: <a target="_blank" href="/news">Regions versus capital cities - where to invest in 2013?</a>


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BIS Shrapnel as part of of forecasts prepared for QBE LMI's 2012 - 2015 Housing Outlook report says affordability in Perth and Brisbane improved substantially in 2011-12 with a "rapidly rising dwelling deficiency is developing".
"In Darwin, meanwhile, median house price growth of 10.7% was registered in 2011-12 – driven by substantial levels of investment in mining and resource capacity leading to significant income and migration growth.
"Falls in vacancy rates are also expected to continue across all three cities, placing upward pressure on both rents and dwelling prices, attracting demand from investors in particular," says BIS Shrapnel.
News Limited national economics editor Jessica Irvine warns those looking to dip into the property market in 2013 must be aware of spruikers claiming “the next boom in property prices is about to get underway”.
Irvine says while spruikers may talk up mortgage rates being low and that affordability has improved, a “more sober look at the Australian property market reveals prices have hit a wall, although remain historically expensive”.
This is the partly the <a target="_blank" href="https://www.propertyobserver.com.au/residential/australian-housing-still-least-affordable-in-the-world-despite-recent-improvements-fitch/2013010958698?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">argument made by Fitch</a>, in its forecast of <a target="_blank" href="https://www.propertyobserver.com.au/residential/stable-outlook-for-australian-housing-market-but-no-price-gains-in-2013-fitch/2013010958671?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">no movement</a> in Australian house prices in 2013.
Irvine points at that in the boom years from 2003-04 and 2009-10, property prices grew by 50% to 60% in Melbourne, Brisbane and Adelaide and by a “whopping” 10% in Perth.
But now the property boom is “well and truly at an end”.
“Over the past five years, home prices have clocked average annual growth of just 1.9%. You would have been better with your money in the bank,” she says.
Irvine alludes to the fact that the new generation of home buyers need their parents help to acquire their first property while those already on the property ladder are using lower interest rates to pay down debt.
“And so it's hard to see property prices rising much this year, unless something radically new happened to boost people's capacity to borrow,” she says. 
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Australian analysts tip modest property price gains in 2013 led by Perth, depending on who you ask 

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Demand is growing for more affordable small properties and tiny CBD studio apartments, but obtaining financing can be harder, according to Aussie Home Loans founder John Symond.
“For all the affordability that a small apartment provides, however, there is a catch,” says Symond in his latest Aussie blog.
“There are often strict lending rules around studios that prevent those without sizeable deposits from buying in.
“Buyers will typically require a deposit upwards of 20% to buy an apartment with less than 50 square metres in floor area, and lenders mortgage insurance (LMI) is often more expensive as well,” he says.
In August last year Property Observer provided readers with a <a target="_blank" href="https://www.propertyobserver.com.au/residential/top-10-cheapest-studios-apartments-in-the-melbourne-cbd-starting-frrom-%24145000/2012081255753">top 10 list of studio apartments</a> in the Melbourne CBD starting from a 17-square-metre apartment on Flinders Street, which sold to an investor for $145,000 last year.
Property Observer noted <a href="https://www.propertyobserver.com.au/new-south-wales/sydney-cbd-s-10-cheapest-studio-apartments-starting-from-%24255000/2012073155743" target="_blank">Sydney studio apartments were proving tempting to investors and home buyers  </a>given both buying classes were being affected by rising rents across the city. We listed 10 of the cheapest, starting with a studio on Dixon Street in Chinatown at $255,000, with eight of them now sold.
Also last year, we wrote about <a target="_blank" href="/news">pocket-sized inner Sydney listings</a>, including what is believed to be Sydney’s smallest home, a terraced house measuring just 27 square metres built in a former alleyway on Evans Street in Rozelle.
Symond mentions the tiny Bondi Beach flat dubbed the “bolt-house” measuring just 16 square metres, which <a href="https://www.propertyobserver.com.au/new-south-wales/old-fashioned-studio-fails-to-ride-the-bondi-beach-property-wave/2012091156502" target="_blank">Property Observer wrote about October</a>. The property failed to attract a single bid at auction, coming with $270,000 hopes, eventually selling privately for $245,000.
Symond says small properties and tiny studio apartments have become increasingly popular in the last few years “as home buyers seek affordability in cities with escalating property prices”.
“Typically a studio apartment – defined as ‘any unit that does not have a wall separating the bedroom from the living areas / kitchen’ – will require a floor area no less than 40 square metres and have a maximum loan to value ratio of 60%."
Of the 10 cheapest Melbourne CBD apartments, which we wrote about in August last year, two remain up for sale:
<a target="_blank" href="https://www.realestate.com.au/property-studio-vic-melbourne-105215032">210/600 Little Bourke Street</a>
$148,000
Unit 210 at 600 Little Bourke Street is a serviced apartment currently run by Hotel Ibis, which has the contract until 2018. The 25-square-metre apartment has a modest guaranteed income of $650 a month, and agent Lilian Yoon from OzAsia Real Estate is unsure of the outgoings for the property, although she says they would be minimal. The unit, which has no cooking facilities, has been on the market for years.
<a target="_blank" href="https://www.realestate.com.au/property-studio-vic-melbourne-110840411">417B/268 Flinders Street</a>
$165,000
This studio apartment is in the Home @ Flinders building opposite Flinders Street Station and rents for $310 a week. It’s 15 square metres and has outgoings of more than $4000 a year. It includes a kitchenette and a bathroom, and there’s room to walk.
We’ve also tracked down a few more tiny apartments currently up for sale:
<a href="https://www.realestate.com.au/property-studio-vic-melbourne-112356715">1306/268 Flinders Street</a>
<a href="https://www.realestate.com.au/property-studio-vic-melbourne-112356715"></a>$225,000
This studio apartment - in the same building as the previous apartment (417B)- is being sold by Robert Eggers of Dingle Partners - Melbourne. 
<a href="https://www.realestate.com.au/property-apartment-vic-melbourne-111726639" target="_blank">57/546 Flinders Street</a>
$150,000 – $170,000
This apartment is situated across the river from Crown casino, and close to Southern Cross train station. It is currently leased at $240 per week. It is being sold by Dien Tran of Ray White CBD.
Of the 10 Sydney studio apartments we wrote about in August last year, just two remain available for purchase. These are:
$265,000
<a rel="nofollow" href="https://www.realestate.com.au/property-serviced+apartment-nsw-sydney-106659143" target="_blank">318/8 Dixon Street</a>
It’s a 28 square metre studio on level three of the building. The property currently earns $14,502 per year in rent from Quest Apartments, which is set to increase to $15,082 next year. That works out to about $280 a week. Agent David Tsang from Friendly Properties says outgoings would total around $250 a quarter.
$275,000
<a rel="nofollow" href="https://www.realestate.com.au/property-studio-nsw-sydney-107037659" target="_blank">94/8 Dixon Street</a> <a rel="nofollow" target="_blank" href="https://www.realestate.com.au/property-studio-nsw-sydney-107037659"></a>
In the same building again here, but back down to 25 square metres. It’s a similar deal to the cheapest on the list but it earns slightly less rent at $400 a week. Total quarterly outgoings are $1,296. It’s being sold by Alan Cheung from LJ Hooker Chinatown who says the vendor for apartment 124 is just slightly more motivated.
For information on <a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-investing-outside-the-square">out-of-the-box property investments, download our free eBook.</a>
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Demand rising for tiny studio apartments, but mortgage hurdles higher: Aussie John Symond

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Many people reading this column might be relaxing at a beachside getaway, a wine region, a great fishing spot or perhaps in a heritage town.
Over summer many people will be enjoying the state’s delightful holiday spots, particularly along the coast of Western Australia. Places like Dunsborough, Denmark, Dongara, Lancelin, Cervantes, Albany and beyond. Over the years many people have bought holiday homes in these places.
Today, holiday homes are being purchased as far apart as Exmouth and Esperance. It all depends on people’s budget, allowable travel time and their strategy behind the purchase.
The ideal holiday home for most people is one that is always available for short stays, but this is a costly option for people who need to take out a mortgage on a second home. They are not the inexpensive country option they once were, particularly on the coast.
However, these days an increasing number of buyers are choosing to combine the purchase of a holiday home with long-term investment plans. This is possible because many favoured holiday locations have developed viable rental markets with local tenants leasing properties for extended periods, often beyond the summer holiday.
Some of these places might include Albany, Harvey, Busselton, Margaret River, Gin Gin, York  and Cervantes in WA, for example.
Homes initially purchased as investments in these locations can later be used for holiday purposes.
In places where demand for rental accommodation is seasonal, such as fishing towns, windsurfing spots and agricultural areas, there is a greater likelihood of vacancies for rental properties outside the peak holiday or industry period. However, the rentals are normally much higher in properties leased for short periods, and this can partly offset the loss of rental income when the place is vacant.
The benefit of this strategy is that the owner can then take advantage of the seasonal rental market by using the property off season.
Another option for holiday home buyers is to purchase a unit in a resort development. Some resort operators will guarantee a rental income for a fixed period. In many cases the purchaser is acquiring a share of a managed investment scheme, which includes a stake in the total income and expenses incurred by the resort.
Either way, the most important consideration when buying a holiday home is, as far as possible, to set aside the emotional reactions and approach the purchase with a clear understanding of the real value of the property, its ongoing costs and the likely rental income.
If you are travelling around the state this holiday season and maybe thinking of a holiday home investment, why not drop into the nearest REIWA agency office and talk to the staff about opportunities?
David Airey is president of the <a href="https://reiwa.com.au/home/default.aspx" target="_blank">Real Estate Institute of Western Australia.</a> This article was originally published on <a href="https://reiwa.com.au/Faq/Pages/Feature.aspx">reiwa.com</a>.
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dairey-MVZf5ZguQC

Where to invest in a holiday property in WA

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Are you ready to undertake a renovation, buy or sell in 2013? Are you looking for property inspiration? Here are some books to take with you to the beach or read on your balcony as summer evenings linger. 
<a target="_blank" href="https://www.propertyobserver.com.au/trends/summer-reading-from-property-investment-tips-to-managing-tenants/2012122358620">And don't miss part one of our summer reads list. </a>
<a href="https://au.wiley.com/WileyCDA/WileyTitle/productCd-1118319273" target="_blank"><img src="/images/stories/2013/01/janessbook1.jpg" style="margin: 5px; float: left;" width="100"></a>
Jane Slack-Smith reminds property investors <a target="_blank" href="https://www.propertyobserver.com.au/news/why-you-need-to-do-your-demograpahic-research-before-writing-that-buyer-s-cheque-jane-slack-smith/2012073055771">that they need to do their demographic research </a>before writing that buyer's cheque in her book <a href="https://yourpropertysuccess.com.au/">Your Property Success with Renovation</a> published by John Wiley &amp; Sons.
 
 
 
 
 
<img style="margin: 5px; float: left;" src="/images/stories/2012/12/buildingalways.jpg" alt="buildingalways" height="146" width="100"> 
 
Gerry Karidis <a href="https://www.propertyobserver.com.au/developments/why-developers-are-not-the-devil-in-property-disputes-gerry-karidis/2013011058604?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=developments" target="_blank">defends the property development profession</a> in his book <a href="https://www.wakefieldpress.com.au/product.php?productid=979" target="_blank">Building Always Building: The Life and Times of Gerry Karidis</a>
 
 
 
 
<img src="/images/stories/2013/01/journeysbook.jpg" style="margin: 5px; float: left;"> 
 
 Property investor Swarnie Condon talks <a href="https://www.propertyobserver.com.au/residential/our-first-resort-investment-was-not-all-smooth-sailing/2011062450600" target="_blank">about her first resort investment</a>, which was not all smooth sailing, in the book <a target="_blank" title="Journeys Along the Property Path" href="https://www.ipip.com.au">Journeys Along the Property Path: 12 real life stories of 12 property investors</a>, published by Inspirational People in Property. The book is aligned with Club Cares and is donating $10 from the sale of every book, hoping to sell 8,000 books and donate $80,000. So far $4,610 has been raised.
 
<img style="margin: 5px; float: left;" src="/images/stories/2013/01/lomasbook.jpg">
 
 
Margaret Lomas advises<a target="_blank" href="https://www.propertyobserver.com.au/residential/property-investment-is-not-a-get-rich-quick-scheme-margaret-lomas/2011083051342"> investors look at property as a long game</a>, rather than a get-rich-quick scheme, in her book <a target="_blank" href="https://www.propertybooks.com.au/investing_in_the_right_property_now!_by_margaret_lomas">Investing in the Right Property Now</a>
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po-LsXgBTHBmX

From renovation to investment: Summer reading

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Retail sales rose only 0.1% in November, below expectations, but economists and retail property analysts are reasonably confident of a good year for retailers and retail property landlords in 2013.
Shopping centre owners and retail landlords with a high proportion of service-orientated tenants, such as cafes, restaurants and travel, and entertainment operators should be well placed, and there is also expected to be a continued expansion of overseas retailers into Australia.
In addition, the ABS figures suggest the larger chain stores and supermarkets are continuing to perform well, (though department stores are still struggling).
Michael Bate, Colliers International head of retail, is optimistic about 2013, after the sector underwent what he calls “significant structural change” in 2012 following two decades of outperforming the commercial property sector as a whole.
“While retailers will continue to review their store portfolios with a view to improving performance, most domestic retailers have now completed their network rationalisations and we anticipate some will look at expansion at 2013,” he says.
He says the retail sector will be influenced by the impact of interest rate cuts on household disposable income, the level and intensity of price discounting by retailers and the management of operating costs by both property owners and retailers.
While figures from the all-important Christmas retail period are not yet available, Bate says Colliers expects a modest improvement in retail spending in 2013, with “household incomes to be supported by rate cuts, cushioning the impact of slower wages growth and higher taxes”.
“Retail spending remains below long-term averages in Australia, but the volatility experienced over the past six months has now moderated,” he says.
Nora Farren, Colliers International research director and author of the latest Colliers International retail research and forecast report, says that from an investment perspective, retail assets remain appealing.
“High quality, dominant shopping centres are still performing well despite the slowdown in retail turnover growth.
“They continue to be viewed as a defensive investment class. Retail has also been the beneficiary of capital inflows from overseas investors. The high relative yield spread (due to low bond yields) combined with the global appetite for low-risk investments are supporting this demand. Foreign investors have been active in the retail property sector, with several major sales involving offshore institutional investors,” she says.
She says “experience with convenience” will keep consumers coming back to shopping centres.
“Consumers are spending more on experiences such as travel and at cafes and restaurants. As a result, we are seeing increased focus on entertainment, lifestyle and food precincts in shopping centres, as perceptions change as to what attracts consumers to a centre, and keeps them there for longer,” says Farren.
She also expects the influx of overseas retailers to Australia continue “apace next year”.
“This charge is being led by US brands, but retailers from Europe and increasingly Asia are looking to expand into Australia.
“While the entrance of offshore retailers has some domestic retailers shaking in their boots, the arrival and positive view of our market potential should be a comfort to our industry. Positives can be taken from the renewed interest in retail that these new brands generate.”
 
<hr class="system-pagebreak">
 
However, it is likely to be a continued struggle for many smaller retailers, especially those selling discretionary items that can be bought more cheaply online.
Landlords with retail investment in the mining states appear well-placed, with WA annual retail growth to November standing at 8.6% and Queensland at 4.8% per annum, compared with NSW managing just 2.2% annual retail sales growth and Victoria. 1.2%.
At face value, the November ABS figures were a disappointment, with the market tipping a 0.3% rise in November and earlier rate cuts in May and June totalling 75 basis points appearing to have little impact on consumer spending.
With October's flat outcome left unrevised, the annual pace of retail sales growth moderated further to 2.9%.
Westpac economist Elliot Clarke points out that in trend terms, retail sales are now growing at “an insipid 0.05% per month – a 0.6% annualised rate”.
He also points out that all the growth in retail sales in November was solely due to a 1.2% increase in “takeaway activity” with cafe and restaurant activity falling 0.4%.
“Arguably, this is further evidence of consumers economising, favouring eating at home over eating out. Basic food retailing was flat, possibly due to falling fruit and vegetable prices,” says Clarke.
Department store sales fell for a third successive month by 0.4%, clothing &amp; footwear experienced its fifth consecutive decline (–0.6%)  and household goods retailing declined by a further 0.9%.
Clarke concludes that retail sales growth will again be weak in December and in 2013.
However,  CommSec economist Craig James notes that sales by “larger retailers” rose by 0.5% over November and “soared to record highs”, with larger retailers now accounting for a record 64.8% of all retail trade.
<img src="/images/stories/2013/01/absjan10.gif">
The large retailers segment refers to 500 of the biggest retailers in surveyed by the ABS each month, whose results are not weighted due to their size, unlike the 2,750 'smaller' retail businesses that are weighted.
The ABS does not provide details of which businesses are included in this category, but says the results indicate that some of the larger business chains such as supermarkets are doing well, while others (notably department stores) are struggling.
 
<hr class="system-pagebreak">
 
According to James, this could indicate that larger retailers are continuing to take business from small business, but may also indicate the growing tendency to purchase goods online as the major online businesses are in the large retailer sector.
While the mystery remains as to what impact online sales is having on retailing figures, James says there is “good reason to suspect that retail spending is stronger than the top-level data suggests. In fact, much closer to ‘normal”.
“I think 2013 will be a better year for retailers,” James tells Property Observer.
While there will be further pressure on retailer margins, he says he is “reasonably positively” about 2013 provided there are no major overseas disasters.
Factors in favour of a better year for retailing include low unemployment, improved housing affordability and lower interest rates meaning consumers can be a little more confident, says James.
"Consumers will still continue to look for bargains and compare store prices with what is available online."
He says service-orientated retailers (cafes, restaurants, travel and entertainment providers) should continue to do well.
ANZ economists Riki Polygenis and Justin Fabo also note the better performance of larger retailers  "trending higher in contrast to the broadly flat profile for small retailers’ sales over the past 18 months"
They say that recent weakness in retail sales appears "heavily concentrated among smaller retailers, with sales well down from their peak in June".
"These retailers tend to have less flexibility to maintain sales via discounting, marketing and other strategies and a higher share of their sales are likely to be discretionary,says Polygenis and Fabo.
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Better year expected for retail property sector despite 'insipid' November ABS sales result

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Greater financial incentives are being offered to first-home buyers in Victoria following the raising of the stamp duty discount for homes priced under $600,000 from 20% to 30%.
The higher discount kicked in on January 1, 2013, and applies to both existing homes and new homes, delivering first-home buyers additional savings starting from $600 to a maximum of just over $3,000 on a house price at $600,000.
First-home buyers can work out their stamp duty savings using this table provided the <a href="https://www.sro.vic.gov.au/sro/sronav.nsf/LinkView/C88211C9E07486F0CA2578B70001025018E490D796850F8ECA2575C1008187C7" target="_blank">Victorian government’s State Revenue Office.</a>
Maximum stamp duty savings are now over $9,000. Combined with the existing first-home owners' grant of $7,000 there is nearly $16,000 in savings for those first-home buyers who are willing to venture into the property market in 2013.
The stamp duty discount will rise to 40% on January 1, 2014, and to 50% on September 1, 2014.
To qualify for the stamp duty discount, first-home buyers must also qualify for the $7,000 first-home owners’ grant.
All added up it means Victorian first-home buyers purchasing an existing home receive the highest amount of financial support from their state government.
South Australia, NSW and Queensland all offer higher total incentives and savings, but these are restricted to buying or building a new home.
This is what the other states are offering first-home buyers in 2013:
NSW
A first-home buyer who purchases a $550,000 new home will get $35,240 in assistance.
This includes a $15,000 grant for first-home owners who purchase or build a new home valued at up to $650,000. The grant is available until December 31, 2013, reducing to $10,000 from January 1, 2014.
Non-first-home buyers who buy a new home are eligible for $5,000 whether the new home is off the plan or newly built with a value up to $650,000, The $5,000 grant is also available to buyers of vacant land that is intended to be the site of a new home valued up to $450,000.
First-home owners are also eligible for a maximum stamp duty saving of $20,240 for homes up to a value of $550,000, with duty concessions for new homes valued between $550,000 and $650,000. The transfer duty exemption cap on vacant land is $350,000, with duty concessions for vacant land valued between $350,000 and $450,000.
Queensland
A $15,000 first-home owner construction grant (FHOCG) is available. The FHOCG applies to new property bought or built at a value under $750,000.
First-home buyers also pay no duty on purchases up to $500,000, with a phasing-out rebate applicable for values up to $600,000.
For non-first-home buyers, the Queensland government offers a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase. The buyer must occupy the home for a period of 12 months – an applicant may lose the concession if he sells or leases part or all of the home before moving in or within a year of moving in.
 
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South Australia
South Australian first-home buyers have the chance to secure $23,500 from the state government, provided they build a new home.
The $23,500 handout comprises a doubled first-home owner grant of $15,000 for contracts entered into on or after October 15 and up to a value of $575,000, plus a further $8,500 housing construction grant (HCG). The housing construction grant replaces the $8,000 first-home bonus grant.
The HCG is available to all builders of new homes for properties valued up to $400,000, phasing out for properties valued up to $450,000 where contracts are entered into between October 15, 2012, and June 30, 2013, inclusive.
Concessions could rise to $39,830 if first-tome buyers buy an apartment off the plan in the Adelaide CBD under $400,000, where a stamp duty concession of $16,330 applies.
This part of a new stamp duty concession scheme available on the transfer of a new CBD apartment or a "substantially refurbished apartment" for a contract entered into from May 31, 2012, to June 30, 2014, capped at stamp duty payable on a $500,000 apartment of $21,330.
An example where a $39,830 saving would be available to a first-home buyer is <a target="_blank" href="https://www.realestate.com.au/project-aria+on+gouger-sa-adelaide-600000551">Aria on Gouger Street </a>being developed by Brock Urban Projects, where two-bedroom apartments are priced from $335,750.
Up until June 30 2014, South Australian first-home buyers of established homes are entitled to a $5,000 grant. From July 1, 2014, no first-home owner grant is available to purchasers of established homes.
 
WA
A $7,000 first-home owner grant remains in place for a newly constructed or established home. It does not apply to vacant land purchased to build a new home. The total value of the home must not exceed $750,000 if the property is located south of the 26th parallel of South Latitude, or $1 million if located north of the 26th parallel of South Latitude. First-home buyers eligible for the $7,000 grant pay no stamp duty on homes valued up to $500,000 and up to $300,000 for vacant land.
ACT
A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000.
Tasmania
A $7,000 first-home owner grant remains in place for both existing and new homes, with no cap on the value.
Tasmanian first-home buyers buying or  building a new home (including off-the-plan) are eligible for an additional $8,000 under the First Home Builder Boost Scheme, which applies from January 1 2013 to June 30 2014 if the qualify for the first-home owner grant.
Northern Territory
A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000.
The NT government also offers first-home owners stamp duty concession of up to $26,730 (the duty owed on the first $540,000 value of a property).
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