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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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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Buying an apartment in the Brisbane CBD could be a cheaper option than renting one, according to the December RP Data Buy vs Rent report.
The latest edition of the theoretical report lists 494 suburbs across Australia where renters should think about doing the sums and perhaps looking at buying an equivalent property (if they can find one) rather than paying rent to a landlord.
This is up from the 388 suburbs in the previous October report and well up from just 238 locations listed in the first report released in August – RP Data updates the report whenever the RBA cuts the cash rate.
However, there are very few inner-city locations where genuine deposit savings are possible, with many of the suburbs on the list being  in remote locations, hundreds and sometimes thousands of kilometres from the nearest capital city – and requiring huge deposits.
The top 20 on the list is dominated by mining towns in WA with inflated rents, but with rental population heavily subsidised by mining companies and with little incentive to consider buying.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/12/rentbuy4.gif"><img src="/images/stories/2012/12/rentbuy4thumb.gif"></a>
With the average variable interest rate now at 5.65%, Brisbane is the capital city that potentially offers renters the best opportunity to come out financially better off by becoming property owners with 58 greater Brisbane suburbs out of a total of 185 in Queensland.
Brisbane CBD units ranks 52nd out of the 494 suburbs on the RP Data list with a potential saving of $344 a month for those buyers who can find a similar property to the one they are renting and raise a 10% deposit of $45,000.
The median unit price in the Brisbane CBD is $455,000 while median weekly rent is $625.
Recent Brisbane CBD apartment sales around the median include <a target="_blank" href="https://www.realestate.com.au/property-apartment-qld-brisbane+city-110402065">this two-bedroom unit on Albert Street</a> (pictured below), which sold for $445,000 in October.
<img alt="albertst3" height="353" width="470" src="/images/stories/2012/12/albertst3.jpg">
A look at rental listings in the Brisbane CBD show there are around 90 or so two-bedroom apartments available for rent around the $600 per week mark, including<a target="_blank" href="https://www.realestate.com.au/property-apartment-qld-brisbane+city-409249651"> this fully furnished, air-conditioned two bedroom apartment</a> (pictured below) in the CBD advertised at $580 per week.
<img alt="brisbcity" height="353" width="470" src="/images/stories/2012/12/brisbcity.jpg">
There are 48 suburbs in Sydney on the list, 40 in Adelaide, 16 in Hobart, eight in Perth, six in Melbourne and seven in Darwin.
 
<hr class="system-pagebreak">
 
Other inner-city locations to feature on the Buy vs Rent report include Enmore units in Sydney, units in the Perth CBD, units in Carlton, Melbourne, units in Ascot Vale (Perth) and Wynnum West in Brisbane.
In total there are only 18 inner-city suburbs on the list out of nearly 500 where renters would $100 or more better if they chose to rent.
Click to enlarge
<a href="/images/stories/2012/12/rentbuy6.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/12/rentbuy6thumb.gif"></a>
The report, meant as a starting point for those considering buying rather than a definitive guide, compares the cost of monthly mortgage repayments (using the scenario of  paying back principal and interest on a variable mortgage rate) with the median rent in that suburb.
It does not consider the potential for capital gains or other costs of ownership such as transaction costs and ongoing maintenance expenses.
It also does not factor in the need to raise what could be a substantial deposit, particularly if you are considering buying nor does it consider the demographic factors within a location.
For example, the location where it theoretically makes the most sense to buy a house rather than rent is Port Hedland in the Pilbara, the epicentre of WA’s mining boom.
RP Data estimates that buyers are over $5,000 a month better off than those that rent with monthly rental costs in excess of $10,000.
However, the median price of a house in Port Hedland is almost $1.2 million, meaning renters could be required to stump up a 10% deposit of $120,000 to secure a loan – out of reach for most.
Furthermore, most renters in Port Hedland and other mining towns, which dominate the top Buy vs Rent locations, would have their rents paid by their mining employee  or might be fly-in-fly-out (FIFO) workers so they would have no incentive to buy.
Another point to bear in mind that some locations considered good options to buy rather than rent would have a scarcity of stock or virtually no stock at all, with the prime example being houses in Docklands, a suburb where apartments dominate.
Docklands houses rank 21st on the list with potential monthly savings for those who choose to buy rather than rent of $846 a month on a variable loan. However, do a search on real estate listings websites and you’ll find just a handful of houses and asking prices approaching $2 million for river-fronted properties.
According to RP Data national research director Tim Lawless, it is meant as a “good starting point for further investigations into whether or not a potential purchaser should consider purchasing within a specific suburb”.
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lschlesinger-FZcF9M3vE6

Brisbane CBD among 494 suburbs where you could be better off buying then renting, but very few inner-city options: RP Data

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Before the GFC hit and destroyed many Australians’ retirement funds, we were beginning to see a demographic shift as some segments of Australia’s population, particularly the retiring baby boomers, were selling up their large suburban homes and moving to the coast to retire, undertaking a transformation known as a  “sea-change”.
While this trend seems to have been halted as many boomers reassess their retirement plans in light of the current economic conditions, the trend will re-emerge, and in time, many coastal towns will have to reinvent themselves to cope with the influx of people.
When looking for a high-growth properties in coastal locations, the question to ask yourself is, “Will this be the type of property that will be attractive to a sea- changer?” Sea-changers will be looking for spacious, modern, low-maintenance properties that offer security and privacy. They will not be looking for “holiday” accommodation.
Another important factor is driving time to major cities, because even though sea-changers are shifting out of a big city environment, they still want a relatively easy drive to a major regional centre or the city. They want to be near hospitals and airports.
Beware the “holiday home” syndrome
Many people like the idea of buying a holiday home and think they can get the dual benefit of a rental income and a free holiday.
I would be cautious, because many people fall into the trap of buying with their hearts overruling their minds in this area. Many investors kid themselves and tell their friends and family that they bought a holiday property for financial reasons when, in reality, they fell in love with the idea of owning a holiday home and often paid scant attention to the investment fundamentals.
I’d rather own my investment properties in prime (non-vacation) locations and then stay at the latest and best accommodation in the spots where I want to holiday.
So which location?
For years, the agents have been telling us the answer is “location, location, location!” And in recent years they have been telling us the right location is near (not in) the CBD or near the water. But this doesn’t help us decide which location to choose and which property within that location to choose.
Location is important, but as you now realise, not always as important as some other factors. You will need to do the legwork and research you do to familiarise yourself with your chosen areas and markets so you can identify bargains and keep your finger on the pulse.
<img style="margin: 5px; float: left;" src="/images/stories/2012/12/yardneybook.jpg">
Michael Yardney is a director of <a href="https://www.metropole.com.au/">Metropole Property Strategists</a>, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is best-selling author, one of Australia's leading experts in wealth creation through property and writes the <a href="https://propertyupdate.com.au/category/property-investment/">Property Investment Update</a> blog. Subscribe today and you'll receive a free video, The Golden Rules of Property Investment.
This is an excerpt from the fully revised new edition of Michael Yardney’s best seller How to Grow a Multi Million Dollar Property Portfolio – in your spare time. Get your own copy plus four free bonuses by here <a href="https://thebookonpropertyinvestment.com/" target="_blank">https://thebookonpropertyinvestment.com/ </a>
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myardney-DFoGhGbSJX

Be wary of investing in holiday properties

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Unless you have a reliable crystal ball, predicting how the property market will shape up in 2013 is a tough call to make.
Uncertainties include how the global economy will play out and impact on Australia, the extent of the slowdown in the mining investment boom and how quickly non-mining sectors like retailing, housing, manufacturing and tourism can pick-up the slack.
Economists are tipping interest rates to fall further in 2013 and reach record lows, which will be good news for mortgage holders, but astute buyers and investors will recognise the economic warning signs.
Lower interest rates are having less of an impact on buying intentions, with confidence seeming to be the major stumbling block.
Still, many property market players are tipping modest property gains in 2013 for some markets, while others are set to tread water or fall further.
Property Observer has spoken to a wide range of industry players and pundits to get their thoughts on what might happen next year.
Here are 10 tips from property market analysts about what to expect in 2013:
1. Sydney to do better, but best NSW prospects still in the regions: Terry Ryder
Hotspotting.com.au’s Terry Ryder expects the Sydney market to do better in 2013 but still tips a number of NSW regional towns to outperform the capital city. Regional towns, he says, are more affordable and have provided much better capital growth over recent years. He expects the following regional market to continue to outperform Sydney in 2013: <a target="_blank" href="/news">Dubbo</a>, <a target="_blank" href="/news">Tamworth</a>, <a target="_blank" href="/news">Gunnedah</a>, <a target="_blank" href="/news">Mudgee</a>, <a target="_blank" href="/news">Orange</a>, <a target="_blank" href="/news">Goulburn</a>, <a target="_blank" href="/news">Albury </a>and <a target="_blank" href="/news">Wagga Wagga</a>. For more on <a target="_blank" href="/news">capital city vs regional prospects in 2013 watch the full webinar</a> with Terry Ryder.
2. Luxury market to recover first: Janusz Hooker
LJ Hooker deputy chairman Janusz Hooker says a recovery in the housing market is “inevitable”, with the luxury high-end market expected to be the first to enjoy price recovery having been hit the hardest by the downturn. His advice to property investors is to “look for places that went down the most and also watch the big cities – when they move it fans out to the regions usually within six to 12 months”.
3. Sydney sub-$750,000 market the strongest in Australia’s “BHP of real estate”: John McGrath
McGrath Estate Agents CEO John McGrath says recent weekend clearance rates indicate clearly that the under-$750,000 market is still strongest in Sydney, with McGrath averaging a 69% clearance rate in this bracket, followed by 65% for the $750,000 to $1.5 million sector. "Sydney remains the <a target="_blank" href="https://www.propertyobserver.com.au/residential/the-end-of-the-buyers-market-drawing-near-with-australian-property-prices-set-to-rise-in-2013-john-mcgrath/2012121658475/Page-1?utm_campaign=observers&amp;utm_medium=aida&amp;utm_source=po">BHP of Australian real estate</a> – the big blue-chip market that generally outperforms the rest, says McGrath, who predicts a 2% to 5% price rise in the under-$750,000 market and a 5 to 8% rise in the $750,000 to $1.5 million bracket.
4. Consider the outer suburbs of Adelaide and Brisbane: Margaret Lomas
Destiny Financial’s Margaret Lomas says property investors are starting to take a look at the outer suburbs of Adelaide and Brisbane, with activity picking up towards the end of 2012. These were areas were house prices started to move up a little bit in contrast to the rest of the market, which mostly stagnated, she told realestatetalk.com.au.
5. Rent vs buy equation to sway more first-home buyers and renters into the market: Tim Gurner
Tim Gurner, director at Melbourne-based property development company Urban Inc, says the buy versus rent equation will sway strongly towards buying in 2013, “so we’re expecting to see a lot of first home buyers and renters return to the market”. Urban Inc is currently developing Alessi in West Melbourne.
6. Perth and Sydney to perform, Brisbane held back by unemployment: Aaron Maskrey
Aaron Maskrey, research director at PRDnationwide, expects Sydney to experience steady, but modest growth of around 5% throughout the upcoming year. He says Perth should also be a stronger performer in 2013, with a combination of mining investment and low interest rates helping to shift this market off the bottom of its property cycle. “A conservative estimate of price growth during 2013 would see Perth increase in value by 2%, but such is the swing with this resource affected region, greater market sentiment could give rise to 6% growth." Maskrey says Brisbane finds itself in a similar situation to Perth and would have been included with Perth’s forecasted growth but for the sharp rise in unemployment. “With a rising rate of jobless residents, any potential growth that was initially forecasted for Brisbane is now expected to be temporarily suppressed in early 2013,” he says.
 
<hr class="system-pagebreak">
 
7. A more generic uplift in property prices for Sydney then Melbourne: Matthew Chun
Becton CEO Matthew Chun is more bullish on the Sydney property market than Melbourne in 2013. Chun tells Property Observer he expects “meaningful price growth” in Sydney of 4% to 8% with modest growth of 2% to 4% in Melbourne. Chun also expects a more generic recovery across the Sydney market, while Melbourne will be restricted to growth from unique, well-located properties within 10 kilometres of the CBD. “Outside of this zone growth will be flat, and I also don’t expect much growth in the Melbourne apartment market,” he says. Becton's two key projects are Divercity in Waterloo and Newleaf in Bonny Rigg in the west of Sydney.
8. West Melbourne land market has better prospects: Jeff Garvey, director of ID Land
Jeff Garvey, director of Melbourne residential developer ID Land, says the outer west growth corridor, which includes suburbs like <a target="_blank" href="/news">Truganina</a> and <a target="_self" href="/news">Plumpton, </a>have good prospects, in contrast to the perception that the Melbourne land market is struggling. Garvey says the area is supported by “really big infrastructure projects” including the $5 billion regional rail link running from Southern Cross to Werribee and due for completion in 2016. In addition, Truganina is only 20 kilometres from the Melbourne CBD. 
9. Don’t expect or wish for the cash rate to reach 2%: Joe Sirianni
Joe Sirianni, executive director at mortgage brokers Smartline, anticipates only one more rate cut in 2013 and says were the cash rate to fall to 2% it would undermine confidence, which he says is the key issue. “We’re living in changing times and the use of interest rate cuts as a lever to stimulate the economy just isn’t having the same impact as it has in the past. Therefore, I think the RBA will realise that there is little point in going much lower with the cash rate.  A cash rate of 2% would be unprecedented in Australia, and I think there’s a danger that if rates were cut to this level, it would un-nerve most people and exasperate the already low levels of confidence,” says Sirianni.
10. A modest recovery in new housing in NSW in 2013 with better buying conditions: Craig D'Costa
Craig D'Costa, senior development manager of Sekisui House, a co-developer of the $2 billion Central Park project in Sydney, says a recovery in the housing industry will be a key factor in boosting the NSW economy. "The housing industry is forecasting NSW to achieve a modest increase in housing starts for 2013, this comes of the back of government led stimulus for new home buyers with substantial saving in stamp duty and grants. Overall, improved affordability and better buying conditions will underpin home buying activity next year in 2013, with upgraders and investors also likely be very active sectors," he says.
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The 10 insights into the 2013 property market: What, why, when and where to look

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Phew, what a year (sigh of relief that’s it’s almost over).
This year we completed the most development projects for our clients in our business history, but it wasn’t until I sat down to lunch with one of my builders and team last week that I’d even had time to reflect.  We wanted to celebrate the massive year we had all had.  My builder had turned over a record amount, and his business was up 15% – not bad in these ‘tough’ times.  Property Bloom also had a record year, which shows in new wrinkles forming on my face. I need a holiday!
At lunch we looked at some stats I put together on what we’d achieved.
There were some highlights but also some lowlights. I had one builder go into liquidation, which I would not wish on my worst enemy but wanted to mention in the light of another large NSW builder – Procorp was swept into administration a few weeks ago.  We completed this three-unit project early this year, and I had coffee with my client recently. Of course it wasn’t what we had expected, and the delay and added cost of finishing construction with another builder is very frustrating, but Property Bloom managed this process smoothly. After getting no fewer than five quotes to complete their triplex, we saved about $80,000 by using our smaller, renovation builder.  He was more affordable because he was on the tools himself.  At the end of their project the tax rebate from the high depreciation was a good reward together with the high yield they are getting. So they were not too sad, but this was definitely a lowlight for us.
We also completed two other projects that started off very differently to how they ended. We had planned for three-unit projects but ended with dual occupancies due to a sequence of unexpected events at the council, which had its planning powers taken and an independent planning panel suddenly put in place that proceeded to reject development application after development application (DA) without warning or giving us or anyone else a chance to modify plans. These circumstances were well beyond everyone’s wildest imaginations, and so these developments were impacted by a situation totally unforeseen.
We are extremely proud of this year because the highlights far outweigh the low ones.  The reason I’m even mentioning lowlight projects is because we all need to understand the risks in property developing and also because I’m an honest person.  It’s not always beer and skittles!
If you are going to develop property, you need to be prepared for the unknown. It’s like unwrapping a Christmas gift and not knowing what’s inside until all the wrapping is gone and the contents revealed.  A development site is somewhat similar; it’s not until you get through each phase – site selection, design, planning and construction that you really know what you will end up with.
 
<hr class="system-pagebreak">
 
So now I’m going to boast of one of great results.  This three-unit project (pictured below) surprised even me when we finally ‘unwrapped’ it – it was truly the gift you always wish for.
<img src="/images/stories/2012/12/chiversdec14.jpg">
Our first signal that we were off to a good start was sourcing an off the market site directly from the land developer, a farmer who was subdividing off some on his very flat, well-located land. Our client paid $195,000 for a 1,090-square-metre lot.
We completed the project with 14 months, including design, DA approval, construction certificate approval, finance approval and construction.
The build time was 25 weeks.
The equity created through the development process was a massive $222,301, representing a 16% return on investment (within 14 months).
The gross yield was 7% upon renting the villas.
The best result we achieved was to bring in the project $38,623 less than what was originally estimated.  Our initial estimates are done before we have any plans and based on our experience on similar projects.
There were many other very successful developments, and as I reflected on this with our team and builder at lunch overlooking the vineyards of the wonderful Hunter Valley, we summarised it quite simply into the ingredients for successful developments: finding good sites, implementing good systems, running a good team and having great clients, ones who make quick decisions and let us get on with what we do best.  Thank you to all our wonderful clients, and I wish everyone a safe, relaxing and happy Christmas.  I’m looking forward to a nice break myself so I can try and better our bumper year in 2013.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.
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A year of highlights and lowlights in property development management

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It has been another comparatively weak year for the residential housing market, with data to November indicating that capital city home values have fallen by 0.1% over the year.
<h3>What to expect in 2013</h3>
As we enter 2013, Australia’s housing markets are likely to remain relatively flat. However, in some sectors we may see capital gain increases over the coming year.
As per the current status quo, there is likely to be a continued variance in performances from city-to- city and region-to-region. Property markets in Sydney, Brisbane, Perth and Darwin, where home values have corrected more than the other capital cities, may be the markets to watch for improving conditions.
We are already seeing signs of a recovery in these markets, particularly in Perth and Darwin. On the other hand, markets such as in Melbourne, where capital gains have had a strong run, are more likely to see weaker conditions.
The number of properties being advertised for sale across Melbourne has ramped up very quickly; new listings have remained fairly constant. However, the total number of homes available for sale simply hasn’t been absorbed due to a slowing rate of sale.
Due to the high capital gains and a comparatively weak rental market, Melbourne rental yields are also comparatively low. There seems to be a likelihood of further interest rate cuts in the near future by the RBA, especially in light of the revelations of a slowing Chinese economy and a substantial decline in commodity prices and the likelihood of much slower economic growth over the third quarter of 2012.
The rising rental costs and lower interest rates may, in certain areas, result in some renters now looking to enter into home ownership. On the other hand, consumer caution persists and consumers broadly continue to prefer paying down debt and shun new debt, which is likely to restrict any significant improvement borne through lower interest rates.
The big wild card remains the global economy. The likelihood of further economic uncertainty is high, which will continue to dampen consumer confidence and the willingness to spend on high commitment decisions like purchasing a property.
As a result, any significant growth in values across the national housing market would appear to be some way off. The recent improvement in sales transactions will be vital to a sustainable return to value growth across the country. However, it will need to be maintained for a number of months before there is evidence to proclaim a recovery.
Click to enlarge
<a href="/images/stories/2012/12/rpdec13.gif" title="Click to enlarge" rel="shadowbox"><img src="/images/stories/2012/12/rpdec13thumb.gif"></a>
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
<h3>The state of play in 2012</h3>
This year delivered weaker market conditions for the residential housing market, with data to November indicating that capital city home values fell by -0.1% over the year.
<ul>
<li>House values fell by -0.4%</li>
<li>Unit values increased by 1.6%</li>
<li>Over the first 11 months of 2011 capital city home values fell by -3.8%</li>
<li>House values were down -4.0%</li>
<li>Unit values declined by -2.6%</li>
</ul>
<h3>How did 2011 compare with 2012?</h3>
There are a number of reasons for the property market’s lacklustre performance in 2012. These include: growth in housing credit has been extremely limited; low levels of consumer confidence; affordability barriers due to a higher mortgage rate environment.
Although research confirmed that the property market was weak over the past 12 months, there are select areas around the country that have well and truly outperformed others.
The following lists the top performing suburbs around Australia over the 12 months to September 2011. Specifically, the analysis will look at:
<ul>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-2">Highest median sale prices</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-3">Most affordable median sale prices</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-4">Most affordable median sale prices within 10km of the capital city</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-5">Highest indicative gross rental yields</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-6">Highest indicative gross rental yields within 10km of the capital city</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-7">Greatest increase in median selling price over the past 12 months</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-8">Greatest increase in median selling price over the past five years</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-9">Highest median weekly advertised rental rates</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-10">Most affordable median weekly advertised rental rate</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-11">Highest gross value of sales</a></li>
</ul>
 
<hr class="system-pagebreak">
Highest median value
<img src="/images/stories/2012/12/rpdec18.gif">
<img src="/images/stories/2012/12/rpdec181.gif" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
Most affordable median value
<img src="/images/stories/2012/12/rpdec182.gif" width="470">
<img src="/images/stories/2012/12/rpdec183.gif" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Most affordable median sale prices within 10km of the capital city
<img src="/images/stories/2012/12/rpdec184.jpg" width="470">
<img src="/images/stories/2012/12/rpdec185.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
<h2> </h2>
<h2>Highest indicative gross rental yields</h2>
<img src="/images/stories/2012/12/rpdec186.jpg" width="470">
<img src="/images/stories/2012/12/rpdec187.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
<hr class="system-pagebreak">
Highest indicative gross rental yields within 10km of the capital city
<img src="/images/stories/2012/12/rpdec188.jpg" width="470">
<img src="/images/stories/2012/12/rpdec189.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Greatest increase in median selling price over the past 12 months
<img src="/images/stories/2012/12/rpdec1810.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1811.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Greatest increase in median selling price over the past five years
<img src="/images/stories/2012/12/rpdec1812.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1813.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
<h2>Highest median weekly advertised rental rates</h2>
<img src="/images/stories/2012/12/rpdec1814.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1815.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
<h2>Most affordable median weekly advertised rental rate</h2>
<img src="/images/stories/2012/12/rpdec1816.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1817.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Highest gross value of sales
<img src="/images/stories/2012/12/rpdec1818.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1819.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
This article originally appeared on <a href="https://www.smartcompany.com.au/index.php" target="_blank">SmartCompany</a>.
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The property suburb winners and losers of 2012: Cameron Kusher

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There are many theories about what makes property prices move, but in the simplest terms, there are two factors that determine price: supply and demand.
These factors are themselves affected by a myriad of smaller factors such as availability of financing, affordability and tax laws, to name but three.
So, what is my opinion on the future for Australian residential property? Well, the markets have a tendency to make monkeys of those who try to make forecasts. I will not make a definitive forecast, but instead I’ll look at the fundamentals of the market and the probabilities in order to make investing decisions. 
Here are just a few of the fundamentals to consider: 
<ul>
<li>Demand: the population of Australia is predicted to increase dramatically to somewhere close to 30 million by 2040 </li>
</ul>
<ul>
<li>Immigration: the majority of immigrants will be heading for the capital cities, in particular to Sydney, Melbourne, Perth and south-east Queensland </li>
</ul>
<ul>
<li>Supply: statistics on this vary significantly, but it is generally acknowledged that Australia has an acute shortage of dwellings in certain areas and is not building enough new properties to house the expected numbers of immigrants; this is especially true in some landlocked city areas </li>
</ul>
<ul>
<li>Expected inflation: the target inflation rate of the RBA is 2 to 3%, although core inflation is a shade below the target at the time of writing </li>
</ul>
<ul>
<li>Demography: generally, the population is marrying later, living in smaller two-income households for longer, and the younger generation overwhelmingly want to live near the CBDs of cities </li>
</ul>
<ul>
<li>Population density: the increasing population will mean denser traffic, and rising fuel prices will increase the importance of transport links to the CBD. </li>
</ul>
My opinion is that property will continue to increase in value, but we are unlikely to see the relentless double-digit growth that we have seen in past decades. 
Crucially, credit growth is extremely unlikely to continue to expand at such a dizzying rate, and it seems to me that the RBA is likely to be far more hawkish on inflation than governing bodies of decades gone by. 
I also feel that the events of and fallout from the sub-prime crisis of 2007-2009 may force the world’s central banks to adopt a slightly different approach – rather than only focussing on controlling CPI and turning a blind eye to asset-price inflation, they may take a more active role in the controlling and deflation of asset bubbles. 
For these reasons, I rationalise that the most obvious proxy for future property market growth is likely to be the growth of household incomes: logically, the more people have to spend on their residence, over time the more they will spend (though immigration may make the growth rate slightly higher). 
Over the last couple of decades, median household income growth has been very strong, at times close to 6% per annum, but this has been partly fuelled by a significant increase in the number of two-income households. 
Looking forward, it is reasonable to believe that the rate of increase may be somewhat lower, perhaps nearer to 4-5%, and consequently median dwelling price growth is likely to be somewhat lower than it has in the past too. 
While this might be a reasonable assumption to make for a longer-term average, it is worth noting that in the short term property prices rarely move in such a uniform manner. 
History shows us that growth asset classes are likely to spend long periods with values either flat or falling before seeing a period of accelerated growth. As property investors, we want to remain invested through as many of these boom periods as we can. 
We would do well to remember that between 1960 and 1990, the average rate of inflation was 8%, wage growth was 9.7% and property growth was around 11% (thus outperforming the CPI by around 3%). 
Whether or not we have such high rates of inflation in the future remains to be seen, but we should note that the RBA’s target rate of inflation is now far lower than historical levels. 
Property price growth is not the conspiracy that many people think it is. Much of the increase in property values over time is simply driven by the inflationary nature of our economy. Things will cost more in the future than they do now. 
Unfortunately for the doomsayers, I believe that our property prices are likely to be heading upwards when we consider a reasonable time horizon. In future decades, Australia’s property prices are very likely to be far higher than they are today. 
The question is, if median property price growth in the future is only somewhere around 5% instead of the 7–10% that has been seen in the past, is property still an asset class we should invest in? For my money, the answer is an emphatic ‘yes’. 
Remember that, as property investors, we are not too concerned with median price growth. We want to significantly outperform median price growth through investing in harmony with market cycles, picking properties that are in continual high demand and selecting properties that we can add value to through renovations. 
Specifically, in Australia I will be investing in two-bedroom, two-bathroom units (and sometimes even one-bedroom units) with parking that are in suburbs close to the CBDs of some of the major capital cities. 
I will be seeking investment-grade units in the supply-constrained, lifestyle suburbs that have transport hubs or links for easy access to the city. 
Nobody knows what the future will bring, but if the median price of property grows by 5% over future decades, as a property investor I will be looking for my portfolio to outperform the median growth by at least 2%. 
I believe that these suburbs and types of properties will achieve that because they are highly sought after as a result of their local resources and facilities. Properties in desirable suburbs are also impacted less by affordability issues than some of Australia’s housing stock.
<img src="/images/stories/2012/12/wargentbook.jpg" style="margin: 5px; float: left;">
Pete Wargent holds a range of finance and property qualifications and is the author of <a target="_blank" href="https://petewargent.blogspot.com.au/">Get a Financial Grip – a simple plan for financial freedom.</a>
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Property prices determined by supply and demand balance: Pete Wargent

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The Real Estate Institute of Western Australia has urged the state government not to consider ending the universal application of the first-home owners' grant in its upcoming midyear budget review.
Currently, the state distributes the $7,000 grant to first-home buyers irrespective of whether they are purchasing an established property or building a new one.
Some premiers in the eastern states have changed the rules for eligibility and will now only provide funds to first-home buyers who build a home or purchase a newly built one.
The New South Wales and Queensland governments recently scrapped the first-home buyers' grant for people who buy a previously lived-in property as a means to stimulate their flagging construction industry.
However, that stimulus is not needed in WA, especially when 75% of first-home buyers in this state purchase a second-hand home, not a new one.
WA is presently experiencing the strongest non-stimulatory growth in first home buyer activity in both the established and new housing sectors since FHOG was introduced in July 2000.
Now is not the time to distort the healthy recovery in the WA housing market.
First home buyer activity  is currently very strong in WA, constituting up to 30 per cent of all turnover around the state.
We are also starting to see a healthy recovery in new building activity, which has partly been led by first-home buyers now representing 25% of this new activity.
Meddling with the application of the first-home owners' grant now would greatly distort this healthy sector of the market and disadvantage three-quarters of people trying to own their first homes.
The Commonwealth introduced this grant with the purpose of it having universal application to all first-home buyers. This universality must continue in WA to keep this section of the market stable and to ensure fairness for all new buyers.
REIWA is also encouraging the state government to maintain its transfer duty exemption for first home buyers in the forthcoming midyear budget review.
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

The WA government should leave the first-home owners' grant as it is: David Airey

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Mortgage industry bigwig John Symond has tipped a gradual improvement in the housing market in 2013 and for interest rates to fall further.
“I am pretty confident the housing market throughout the country has bottomed out,” he says.
Symond believes there will be a “very gradual increase in [property] values across the board”, but not the 15% or 20% annual spike that occurred pre-GFC.
Mirroring comments made by<a href="https://www.propertyobserver.com.au/https://www.propertyobserver.com.au/news/no-housing-price-crash-but-if-pries-increase-further-australia-flirting-with-danger-glenn-stevens/2012121858581" target="_blank"> RBA governor Glenn Stevens </a> about sustainable house price growth, Symond said such price spikes were “not healthy”
Rather, he says a gradual increase of 4% to 5% would be “a good healthy return year-on-year”.
“I believe the property market will now head into a healthy state of growth with only gradual increases and that is on the back of low interest rates,” he says.
He is also starting to see a return of property investors to the market due them having the “greatest choice in the number of properties on the market in Australia’s history” combined with the low interest rates.
“I am confident we will see a healthy gradual improvement in housing across the country and I believe the regional centres will see that increase as well because overall Australia still has a shortage of housing,” he says.
Symond says he also expects interest rates to head lower in 2013.
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Property has bottomed out and heading for “healthy" growth rates of around 4% to 5% per annum”: John Symond

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To the average person the concept of a drug lab operating out of a standard residential property may seem somewhat far-fetched. Surely these types of operations only exist in abandoned sheds on the outskirts of town, just trying to mind their own business?
Unfortunately, this is not the case. The drug lab epidemic has leaked into neighbourhoods across the country next door to unsuspecting families and children.
An article titled “Landlord blasts property agents after drug raid” was published in the Gold Coast Bulletin about the discovery of a drug lab property on the Isle of Capri.
This is a prestigious island suburb located in the heart of the Gold Coast with most properties boasting waterfront access. Not exactly an abandoned shed, is it? The property in question was a rental property and it once again highlights property managers’ exposure to potential mismanagement claims by their landlord clients.
According to the article, the landlord lived next door to the rental property and allegedly had concerns about its condition. The landlord reportedly blamed the property manager because he believed the agent’s inspections had been inadequate.
The setup of drug labs is not always easily identifiable, and in many instances landlords may look to blame agents and seek to recover their losses from them.
It is an apt time for the Real Estate Institute of Queensland to remind agents that the cover provided by the Aon/REIQ/ Professional Indemnity policy is unique in that it is the only policy which has a standalone property mismanagement extension.
This extension provides protection from allegations of negligence arising from any claim arising as a result of an actual or alleged breach of the agent’s professional duty as a property manager, including malicious damage to a rental property or loss of income or value to a rental property as a result of illegal activity by tenants (including drug labs).
With drug labs appearing in the most unlikely of suburbs across the country, this is a timely reminder for those in the real estate profession to be aware of the associated risks, both personally and professionally.
More information on drug labs can be found through the <a target="_blank" href="https://www.police.qld.gov.au/programs/druglabs/">Queensland Police Service</a>
Amanda Haack is events manager journal deputy editor at the <a target="_blank" href="https://www.reiq.com/">Real Estate Institute of Queensland</a>. This article originally appeared on the<a target="_blank" href="https://reiqblog.com/"> REIQ blog.</a>
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ahaack-6499LRWKce

 How Queensland property insurance can help if a drug lab is found in an investment property

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Landlords could find themselves bearing heavy losses if their properties are rented by tenants who  undertake criminal activities if they don’t take out extra insurance to cover this sort of behaviour.
However, investigations by Property Observer indicate that obtaining the extra insurance needed may be hard to come by, with many insurers not readily covering this kind of activity.
It especially highlights the importance that property managers properly vet prospective tenants before signing lease agreements.
The issue has come to light following the reporting of two drug labs uncovered in rental properties in Melbourne and on the Gold Coast in the last few months.
In September, the Herald Sun reported that property investor Nicholas Milan Wyman would sue his property manager after suffering extensive damage his rental property in St Leonards, Sydney, which was used as a drug lab and where a corpse was dismembered.
Last week, the Gold Coast Bulletin reported that a police drug raid uncovered a drug lab in a rental property<a href="https://www.propertyobserver.com.au/landlords/how-queensland-property-insurance-can-help-if-a-drug-lab-is-found-in-an-investment-property-amanda-haack/2012121858560?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=observers" target="_blank"> on the prestigious Isle of Capri.</a>
Property Observer recently contacted the major landlord insurance providers, but only one – Terri Scheer Insurance – provided a definite response to the question of landlord recompense cover for criminal activity.
Another insurance provider, Perth-based EBM Insurance Brokers, has subsequently contacted Property Observer to say that its RentCover landlord insurance does cover drug lab clean-up costs and recently paid out a $50,000 claim to clean up a property used as a drug lab in Hoxton Park, NSW.
According to RentCover general manager, Sharon Fox-Slater, police discovered the laboratory by chance when investigating a child abuse allegation; the home was occupied by a family with four children aged under 10.
Fox-Slater says in this case the alleged crooks were careful with gardens well-kept and the four-bedroom home "immaculate during property inspections, with the laboratory dismantled".
“We treated the claim as tenant damage because the ongoing liability is massive if the property is not cleaned correctly,” she said.
A spokesperson for Allianz Australia said the company could not provide any comments in relation to the example of the St Leonards drug lab story.
“We have looked into it, but there are some many potential complexities and unknowns in the scenario provided below that it is not possible to provide a simple response as to whether our landlords policy could respond in full or part to such an event,” said the spokesperson.
A spokesperson for CGU said the insurer had no comment.
Aon said it could not comment, though it does provide a professional indemnity policy for property managers with a “mismanagement extension”.
 
<hr class="system-pagebreak">
 
This extension provides protection from allegations of negligence arising from any claim arising as a result of an actual or alleged breach of the agent’s professional duty as a property manager, including malicious damage to a rental property or loss of income or value to a rental property as a result of illegal activity by tenants (including drug labs).
Terri Scheer Insurance manager Carolyn Majda said criminal activity by a tenant that results in damage to the rental property “may be covered by insurance – provided there is a tailored landlord insurance policy in place”.
Terri Scheer Insurance offers tailored insurance policies to cover landlords for many risks including malicious and accidental damage, loss of rental income and legal liability.
“Landlord insurance policies that cover these specific risks can assist landlords to safeguard their investment and ensure they continue to receive a steady flow of rental income,” Majda says.
“A good landlord insurance policy that covers malicious damage – for example holes punched in walls, doors that have been kicked in and intentional damage to carpets and floors - will class illegal activity within this category.
“Loss of rental income resulting from criminal activity may also be covered by landlord insurance, for example, if the landlord is unable to lease the property while it is repaired or cleaned, or if the tenant absconds before their lease is up for renewal.
“This is why every landlord should have a tailored landlord insurance policy,” she says.
“Landlord insurance policies that cover these specific risks can assist landlords to safeguard their investment and ensure they continue to receive a steady flow of rental income.
Majda says the policy should also provide cover if a court orders a tenant’s eviction or terminates the rental agreement due to tenant hardship.
“A standard building and contents insurance policy generally won’t cover landlords for many of these risks,” she says.
From January 1 next year, all real estate licensees in NSW will be required to have mandatory professional indemnity insurance with cover of at least $1 million for any one claim and not less than $3 million in the aggregate for all claims made during the period of insurance.
Photo by West Midlands Police courtesy of <a href="https://www.flickr.com/" target="_blank">Flickr</a>.
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