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]

Joel Robinson

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

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.

Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.

While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" />

Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.

Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.

The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" />

The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.

In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.

Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.

According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.

Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.

The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a>

&nbsp;

Alfred Street the latest North Sydney pocket to be transformed by residential development

Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

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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The national residential vacancy rate remained unchanged at a tight 1.8% in May, with Melbourne having the highest number vacancies and the highest vacancy rate, according to SQM Research. 
There are currently 50,408 residential vacancies nationally, representing a fall of 440 vacancies month-on-month.
Year-on-year however, vacancies have risen by 7,270, with the national vacancy rate increasing by 0.2% since May 2011. 
None of the eight capital cities recorded an increase in the vacancy rate over the month, with vacancies tightening by 0.1% in Brisbane, Canberra and Darwin in May. 
Melbourne has the highest vacancy rate by far at 3.1%, while Darwin is the tightest market with just 100 vacancies, or a vacancy rate of 0.4%. 
The Real Estate Institute of Australia (REIA) says a vacancy rate of 3% or higher is “generally considered to reflect an oversupply of rental accommodation” while anything under 3% indicates a “strong demand for rental accommodation”.
 
Here’s a guide to residential vacancies in the eight capital cities starting with Melbourne:
<img src="/images/stories/2012/06/11427.gif">
The number of residential vacancies in Melbourne, reflecting a May vacancy rate of 3.1%. A year ago the vacancy rate was 2.4%, with 8,578 properties available for rent.
 
<hr>
<img src="/images/stories/2012/06/9140.gif">
The number of residential vacancies in Sydney, reflecting a May vacancy rate of 1.7%. A year ago the vacancy rate was 1.3%, with 7,034 properties available for rent.
 
<hr>
<img src="/images/stories/2012/06/4120.gif">
The number of residential vacancies in Brisbane, reflecting a May vacancy rate of 1.4%. A year ago the vacancy rate was 1.6%, with 4,584 properties available for rent.
 
<hr>
 
<img src="/images/stories/2012/06/2680.gif">
The number of residential vacancies in Adelaide, reflecting a May vacancy rate of 1.6%. A year ago the vacancy rate was 1.3%, with 2,041 properties available for rent.
 
<hr>
<img src="/images/stories/2012/06/1157.gif">
The number of residential vacancies in Perth, reflecting a May vacancy rate of 0.6%. A year ago the vacancy rate was 1%, with 1,770 properties available for rent
 
<hr>
<img src="/images/stories/2012/06/753.gif">
The number of residential vacancies in Hobart, reflecting a May vacancy rate of 2.6%. A year ago the vacancy rate was 1.7%, with 467 properties available for rent.
 
<hr>
 
<img src="/images/stories/2012/06/434.gif">
The number of residential vacancies in Canberra, reflecting a May vacancy rate of 0.9%. A year ago the vacancy rate was 0.6%, with 272 properties available for rent.
 
<hr>
<img src="/images/stories/2012/06/100d.gif">
The number of residential vacancies in Darwin, reflecting a May vacancy rate of 0.4%. A year ago the vacancy rate was 1.3%, with 317 properties available for rent.
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lschlesinger-FZcF9M3vE6

Residential vacancies at 1.8% nationally in May with Melbourne's landlords facing biggest challenge at 3.1%: SQM 

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One of Melbourne’s most well-known nightspots and the former site of the Metro nightclub has been listed for sale by receivers Ferrier Hodgson, with Asian developers and nightclub operators showing interest.
The building dates back 100 years, starting life as a cinema.
The three-storey building, currently operating as live music venue The Palace, will be marketed exclusively by CBRE sales agents Mark Wizel, Josh Rutman and Scott Callow via an international public tender campaign closing on July 27.
The building is stands at 20-30 and 30A Bourke Street in the Melbourne CBD between Spring and Exhibition streets on a 1,442-square-metre site with 25 metres of Bourke Street frontage.
It is just a stone’s throw from the Victorian Parliament and well-known Melbourne eateries Grossi Florentino, The European and Pelligrini’s.
Wizel says early developer interest has “centred on the highest and best use for the property being a high-density residential project subject to the relevant planning approvals”.
“Sites of this size at the top end of Bourke Street are not readily available for acquisition and, as a result, we are anticipating strong interest from local and overseas buyers, with a particularly high level of enquiry expected from Singaporean, Malaysian and mainland Chinese developers.”
The property is also expected to attract both investors and potential owner-occupiers, given the highly lettable existing improvements – acts at the Palace have included Kylie Minogue, The Darkness and Kaiser Chiefs.
Callow says there has also been strong early interest from nightclub operators and publicans who could look “to restore ‘The Metro’ to its former glory days as one of Melbourne’s leading music and entertainment venues.”
Receiver and Ferrier Hodgson partner George Georges, who was appointed in February this year, says the landmark property had already generated significant interest.
“The Metro is well known as part of the fabric of life in central Melbourne,” he says.
“It’s a brilliantly located site with a huge variety of optional uses and tremendous potential for development.”
The 100-year old building has also been home to the Melbourne Revival Centre.
The property with reported $15 million expectations is owned by Kefi Nominees, directed by nightclub identity and property developer Jerry Pilarinos.
It has been put up for sale by Ferrier Hodgson after Pilarinos’s company Kefi Nominees was forced into administration by Bankwest.
Kefi acquired it in 2007 for $10 million from Irene Meletsis.
Kefi listed The Metro for sale in May last year through Colliers International with an asking price of $20 million as a residential development site, but without a building permit.
At the same time as Kefi listed The Metro for sale, Fairfax Media reported that Pilarinos sold an apartment project, the Tresor on the north-west corner of Chapel Street and Alexandra Avenue, to builder Fridcorp for around $13 million.
He also failed last year in a court bid to recoup $500,000 he invested into small technology company Computronics Holdings.
Songstress Lana Del Rey is listed as next to perform at the Palace, with 1980s icon Rick Astley appearing in November.
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Jerry Pilarinos' Kefi Nominees set to sell Melbourne venue The Palace, formerly the Metro nightclub

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House prices have fallen more than unit prices over the past year. Additionally, the most expensive properties continue to drag down the overall index. 
Dwelling value trends vary widely from city to city. 
{qtube vid:=wgqwDhETjVI&amp;feature=context-ch}
Tim Lawless is research director at<a href="https://www.myrp.com.au/" target="_blank"> RP Data.</a>
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tlawless-5VLUrbAk9s

Housing market remains soft despite rate cuts: Tim Lawless

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According to a recent report by Property Watch, overseas investors appear to be strongly buying office buildings within Docklands and the CBD of Melbourne.
Currently, these office purchases account for around 36% of all very major deals being transacted — and they seem to be driven by Melbourne having the second lowest vacancy rate for this kind of property, after Perth.
Apparently, investors are not being put off by the federal government's recent decision to double withholding taxes for international landlords.
It seems the reason being given for this surge in buyer activity is Australia's economic strength — low inflation, declining interest rates, solid population growth and relatively low unemployment.
And these underlying fundamentals are what obviously appeal to overseas investors, as they consider the foreseeable uncertainties within the US and Europe.
<img src="/images/stories/2012/06/langjune18.gif">
As a result, investors are being drawn to the expected rental growth due to a clear lack of new construction, currently in the pipeline.
This became apparent during 2011, when just over 41,000 square metres of new office space came onto the market, which was well below the annual 135,000 square metres 10-year average.
Bottom line: Sometimes it takes a few "outsiders" to cause local investors to realise that things are not nearly as bad, as what some pundits would have them believe.
But here's the thing — by the time the "overly cautious" have come to realise the truth of where the market currently sits, many of those attractively priced commercial property opportunities will already been snapped up, by savvy offshore buyers.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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chrislang-EQKojcgJPV

Overseas investors showing strong interest in Melbourne office stock, undeterred by double withholding tax

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One of the first generalisations you learn when it comes to assessing real estate is the closer you are to the city, the higher the price will be. While it may be a sweeping statement with data proving the rule has many exceptions, it simply outlines what inspires one buyer to value a location over another in terms of monetary value – and that’s time.
The time it takes to travel from A to B is the most important consideration for today’s property buyers rather than the exact kilometre distance from the CBD. If a buyer is able to travel to work, the footy and any other “lifestyle” amenity on the priority list within a 30- to 40-minute period, the desirability factor increases greatly and when it comes down to it, you can value a building any which way you like, but in the end it’s only worth what a purchaser will pay. Unless you get the time factor right, demand is always going to be marginal.
When buying residential real estate, the real commodity a home buyer will purchase is the lifestyle on offer. Dwellers don’t live in houses so much as they live in communities. Therefore, building ever more houses on the outskirts of our cities is not the be all and end all for Australia’s population growth – although it’s a vitally important component if we’re to ease inflation in the already stretched and strained established inner- and middle-ring suburbs. Regardless of this, unless planning includes the other considerations I’ve outlined above, the new housing market risks long periods of stagnation in between the various government incentives on offer.
We’re all aware Australia faces an affordable housing shortage. Prices have risen past the reasonable level when judged against the average wage, and first-home buyers are all but an endangered species. I’ve written regarding the reasons for this numerous times. Quite simply, we’re a country that has centralised itself on an urban lifestyle and overwhelmingly so in the major capital cities dotted around the coast line.
As a result, no one wants to live “out of town” (or at least the vast majority of Australia’s population don’t – some 75% of them) and we’re all trying to cope with a level of unprecedented population growth from in coming immigrants – all of whom seem to have a desire to live in the inner city. When it comes down to it, it’s impossible to cope with this growth unless density increases substantially – which is precisely what the capitals’ 2030 city plans have in mind.
<img src="/images/stories/2012/06/boxhill.jpg">
Thus far urban planners and profit-chasing developers just can’t seem to develop a standard of housing that will attract the average home buyer (or, for that matter, renter). Just take a look at this <a href="https://bit.ly/Lha9jJ">eyesore</a> (pictured above) proposed in the Asian-dominated middle-ring Melbourne suburb of Box Hill. The developer’s website states” “The proposed development is significantly higher than the immediate surrounds and its striking form will be a landmark for Box Hill”. A landmark for Box Hill or not, I can’t conceive anyone thinking it’s something property buyers would fight over. As I’ve pointed out on numerous occasions, the disadvantages of living in high-rise accommodation are the major factor in the lack of genuine home buyer demand they inspire.
 
<hr class="system-pagebreak">
 
It’s usually only considered a desirable option when the buyer is in the higher price bracket able to choose an apartment offering attractive views – and considering the abundance of high-rise development proposed across our major capitals, this is anything but a guarantee for the life of the property. Parking – if you’re lucky enough to get it – commonly requires a long trip up multiple levels of a multi-storey basement car park and then in peak hour, a queue to get out as cars ahead filter onto the busy main road (most high-rise development is located on busy main roads).
In addition to this, residing in the same building with so many others makes resolving owners’ corporation issues a relative nightmare. To get anything approved obviously requires a majority vote. If you’re fortunate enough to have a good showing at the annual meeting there may be a chance of getting a repair or dispute resolved. However, owners’ corporation meetings are sparsely attended at most low-rise developments with fewer than 20 units – therefore a majority showing at a meeting for a high-rise development, within which most units are rented along with a high proportion of foreign ownership, is unlikely.
Waiting for the lift and as it stops on its way up and down. Paying extortionate owners’ corporation fees to cover the size and various components of design (which often include a gym, swimming pool and high level security features) – all add up to buyers choosing to sit on the rental ladder rather than buying into a development that they’ll move out of as soon as they’re able. All in all, high rise is not currently offering the home buyer market what they want. It’s principally servicing rental needs.
Having said this, there are high-density developments that are extremely successful and as a consequence, tightly held. Furthermore, it’s possible to develop models that are relatively “low rise” yet still take up a similar footprint, housing the same number of residents. Unlike high rise, where the outdoor communal areas are limited to rooftop gardens with space around the building (the required setbacks), which is generally unused, a low-rise design built around a central communal courtyard is a proven success. I can cite a few examples in Melbourne’s Southbank that attract consistent buyer demand and consequently when assessing the historical data, prove stable capital growth. Furthermore, the level of “perceived” density of a relatively low-rise yet high-density development, in comparison with residential tower blocks, is predictably much lower. There’s less overall impact on the street aspect for neighbouring homes and they are generally better received. However, regardless of the need to increase inner urban density, it’s also necessary to continue building a steady supply of new accommodation further away from our capitals if we accept population growth is inevitable.
Thus far, most first-home buyer schemes have focused on sweeping incentives that cover established real estate as well as new homes. Property advocates have long argued how essential it is to scrap incentives for established dwellings and if grants are needed at all – use them to fuel new growth. The “noisy” housing data when a grant is introduced and then withdrawn does no one any favors aside from the investor who manages to capture the wave when selling. We don’t need incentives to encourage the purchase of established real estate. The desirability factor is there already.
In the recent NSW budget, it was a welcome change to see all incentives pushed into new homes. The shortage of property in NSW is greater than that of some other states, so encouraging additional supply has been broadly welcomed by all. However, you’ve got to have some sympathy for the first-home buyers who do venture out buoyed on by the incentives because planning in the outer-suburban estates has been woefully unsuccessful principally for the reason I stated at the beginning of this article: time!
Despite all the rhetoric broadcasting the contrary, when new suburbs are zoned you can guarantee promised facilities to encourage commuters who need to get back and forth from the major commercial centres within the hour will never eventuate. Without them, you can forget any hope of attracting consistent demand to the outer suburban estates. Grants and incentives may produce a wave of growth in the newer suburbs, but as soon as the lifestyle – or lack of such – bites and grants are once again withdrawn, the market will stagnate and we’ll be back to square one.
If there’s no money set aside to build the needed amenities alongside the residential dwellings at the start of the project, you’ll always need to introduce incentives to encourage home buyers to make the move. It’s not the distance from the CBD – it’s the time. Buyers could accept outer-suburban living a lot more readily if they were able to commute within a reasonable time frame and demand would go up naturally without the need for a “sweetener”.
 
<hr class="system-pagebreak">
 
It’s really unforgivable to encourage erosion of city fringes, eating into arable farmland and areas of natural beauty unless the compensation is a genuine answer to population growth. We all understand that if you purchase in the inner city land sizes are smaller and to keep around the city median, choices are going to be limited to apartment living. However, for most people there is no choice but to stick to established areas. If they do dare to venture out into “never never land”, they face endless hours sitting in peak-time traffic and a vague dream of the government-proposed promise of a train service.
We’re currently going through this yet again in Victoria. Aside from the abundance of poorly designed high-rise apartments popping up in the CBD, fringe growth is back on the agenda. The state government has released plans for six new suburbs and 12 new train stations. If you’re a first-home buyer reading that as a headline it sounds fantastic. However of the “12 new train stations”, only two have had funding approved. The rest – so says the government – will be part funded by developers along with additional infrastructure, all compensated with tax rebates. However, guess who’s going to end up paying if the developers agree to the above proposal (which I doubt will happen)? The home buyer, of course – it will all be added on to the already inflated prices!
Anyone familiar with Melbourne’s planning history will be able to prove how “airy fairy” the above proposals sound. For example: what happened to the Doncaster and Rowville train stations initially promised in 1890? Plans commenced in 1969, and yet residents are still waiting – not so patiently! Furthermore, once any proposed train stations are finally built and functioning, the level of demand has already outgrown the facility. For example, Lynbrook train station, which opened in April this year, has already “outgrown” the number of people wanting to commute. <a href="https://bit.ly/KIdJkb">Two weeks</a> after opening, and the 900 space car park is not only packed to capacity, the surrounding neighborhood has taken on the overflow, regardless of restrictions. Forget getting the peak hour train – it’s already over brimming.
Existing train lines were promised upgrades years ago – Mornington and Melton, for example, have plans pending to be “electrified”, however once again, some 20 years later, residents have long lost faith it will happen. It’s not just Melbourne that such outlandish examples can be found. Despite the level of investment in NSW’s infrastructure doubling over the past five years, Sydney is a capital locked down by peak-hour traffic. As with Melbourne, promises of train lines – such as the 23-kilometre north-west link first proposed in 1998 (to be completed in 2010) – are still in the planning stages. Yet residents move into newer suburbs with the promises tinkling in their minds. “Buy in” now – and once the train line has been established, the schools built, the leisure facilities created – land value will rise and investment potential increase. Promises made by successive governments should come with a small printed disclaimer stating *unless notified otherwise, this promise will expire within 24 hours. 
Rather than building ever more roof space in outer-suburban localities, we need a national plan for population growth and it should be firmly focused on increasing supply in already flourishing and established satellite cities along with a strong rural agenda. Geelong, Ballarat and Bendigo in Victoria, for example, all of which have infrastructure and existing train lines (which can be upgraded at a lower cost than building new stations) offer “affordable” options for first-home buyers and upgraders. Rural regions are crying out for growth – and agriculture is a growing industry. Yet we ignore it at our peril, with policies that favour “big farmers” over their smaller counterparts and an unforgiveable lack of funding for universities to encourage young Australians to involve themselves in the industry.
Fly in, fly out mining towns – why is this formula even allowed to be promoted by the mining companies? It may be a needed option for a proportion of the workforce, however policies should be placed to force large companies to train local residents. A targeted goal established, where the majority of employees are locals and the workers are “walk in, walk out” residents, should have started a generation ago. Instead, mining companies have systematically destroyed once flourishing rural neighborhoods – and they’ve been allowed to do so.
Like it or not there’s little we can do to stop population growth. As it stands, the real market has become a game of shuffling cards – as increasing numbers trade and compete over established dwellings, which arguably are the only feasible option for most of today’s property buyers. Planning ministers and state governments shoot themselves in the foot when they make vague promises with outcomes that never eventuate. Before new suburbs are built, the infrastructure should have already been planned, funded and projects started, with the final ingredient being community involvement. There’s none better to understand what a community needs to flourish and grow than the residents who’ve been living in the general locality. If any minister cares to understand why consumer confidence is at a GFC lows, despite Australia’s attractive prospectus – perhaps they should start listening.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition. She is Channel Ten’s property expert on<a href="https://ten.com.au/the-circle.htm">The Circle</a> and a senior consultant for <a href="https://www.nationalpropertybuyers.com.au/">National Property Buyers</a> servicing the needs of property owners Australia wide.
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catherinecashmore-6LXia3pPQj

Home buyers' necessary premium price to cut down on commuting time

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If anyone wants evidence that politicians haven’t the first clue about real estate, here are three items that present an open-and-shut case. 
Exhibit A: The state governments of South Australia and New South Wales, in their budgets for next financial year, are offering stamp duty concessions to people who buy new product. 
Exhibit B: The state government in NSW has been offering $7,000 to anyone who will move to the country. 
Exhibit C: The governments of the Northern Territory and Queensland have extended their schemes that offer $10,000 grants to builders of new dwellings. 
The NSW incentive for people to relocate from a city to a country area has been running for some time and has gained little traction. Fewer than 700 households have applied for the grant in the past year, despite NSW Treasury forecasts of 10 times as many. 
In similar vein, a Queensland scheme to boost new home building with a $10,000 grant has been unsuccessful. And in equally similar vein, a Northern Territory scheme to induce people to buy/build new houses or apartments in Darwin (the $10,000 BuildBonus grant) has been conspicuous by its non-success. 
Both governments have responded to these failures by extending the schemes, presumably to give them longer to not work. 
Why haven’t these measures worked? Because the government inducements amount to only a fraction of cost of doing what the governments want buyers to do. 
For this reason, the new stamp duty concessions and/or grants in SA and NSW will miss the mark as well. 
The problem is that while more Australians are buying homes and investment properties this year, they’re buying established properties rather than new ones. Eight out of 10 first-home buyers buy an established dwelling. 
The building industry has convinced itself that it’s all the fault of politicians and for years has been harassing all levels of government to do something. 
The grants and stamp duty concessions are an attempt by politicians to shut them up. They’re trying to induce consumers to build new homes rather than buy existing ones. 
Here’s why it doesn’t work. Buying a new house costs, on average, $70,000 more than buying an equivalent second-hand one. In some locations, notably our larger cities, the cost difference is well over $100,000. One research exercise last year found the cost differential in the Brisbane City Council area was $120,000. 
The stamp duty savings on offer from state governments are petty cash compared with that cost discrepancy. Anyone who does her sums won’t be excited by the prospect of a $15,000 handout (the new NSW grant for first-timers who build a new dwelling) to cover a $100,000+ cost – unless she particularly wanted a shiny new home that no one else had lived in. 
It was reported this week that, much to everyone’s surprise, few people have taken up the NSW government’s offer of a $7,000 gift for anyone who relocates from a city to a regional area. 
Clearly, no one in the state government has sat down and worked out how much it costs to relocate, which means selling the existing home and buying a new one elsewhere. Nor has Federal Minister for Regional Australia Simon Crean, who says he’s surprised the scheme hasn’t excited greater interest. 
Selling costs include stamp duty, legal fees and agents’ commission. Buying costs include stamp duty, legal fees, building and pest inspections, valuations, bank fees and charges. And then there are the logistics and expense of packing up and moving. 
A family that sells up in Sydney and moves to the bush could easily be up for $50,000 – against which the government’s handout is a pittance. 
If they were still making episodes of Yes Minister I’d put this forward as a script idea. Sir Humphrey Appleby would love the concept of urging people to spend $50,000 to earn $7,000. 
If politicians seriously want to stimulate the building industry, there’s plenty they can do. But it’s not about handouts to consumers – it’s about reducing the costs of creating new homes, a huge proportion of which is the burden of taxes, fees and charges by all three levels of governments.
 Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a> and can be <a href="https://www.twitter.com/hotspotting" target="_blank">followed on Twitter</a>.
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Home buyer handouts prove politicians haven’t the first clue about real estate: Terry Ryder

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Greeks escaping the European crisis are chasing low-cost rental properties in Australian Greek communities.
Agents in Greek communities in Sydney and Melbourne say while sales patterns have not changed much since the crisis, many more young, recently arrived Greeks are seeking affordable housing.
Agent Nes Loizides from Fox First Real Estate in Oakleigh says he’s had many more Greek applicants for his shared housing arrangements.
“I do a lot of shared accommodation. I have a lot of Greeks coming into shared accommodation houses. A lot that don’t have much money are going into shared accommodation.”
“With the shared houses it’s definitely increased in the last eight to 12 months. A lot more of them are coming now.”
He says a lot of the applicants are Australian-born Greeks who have returned home after stints in Greece.
“A lot of Greeks are coming back. They were born here, went to Greece lost all their money and came back. They’re coming back and I’m giving them a place to live.”
Agent Tony Ioakimidis from LJ Hooker Earlwood says the pattern is similar in Sydney.
“We’ve had a lot of young Greeks asking for rentals. That’s what I’ve noticed.”
“I’ve been involved with property management, and I’ve had a lot of Greeks come through asking for rentals.”
The turmoil in Greece has not led to any noticeable shift in sales, however.
“Greek buyers are always on the market. Greeks like me, they buy, they don’t sell. I don’t think it made a big difference. People are concerned over there, but I haven’t noticed any changes in sales,” Ioakimidis says.
The Herald Sun recently reported an expected 65% increase in Greek migrants this financial year as Greeks seek safer shores.
A Department of Immigration spokesperson says the department acknowledges an increase in Greek migrants but says the increase does not represent a dramatic increase in the scheme of things.
But what their numbers don’t include is the number of Australian citizens moving back to Australia.
President of the Greek Orthodox Community of Melbourne Bill Papastergiadis says the number of returning Australians is around 5,000 this year.
“The people who are coming are all former citizens. Greece has the highest population of expat Australians outside of the UK,” Papastergiadis says.
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Many Greeks choosing low-cost Australian rental housing over Greek austerity measures

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NSW Treasurer Mike Baird has defended the government’s timetable of changes to handouts available to first-home buyers, non-first-home buyers and investors announced in the state budget.
The changes initially grabbed favourable headlines due the size of first-home owner grants –up to $35,240 for those purchasing a new home – but the <a href="https://www.propertyobserver.com.au/residential/nsw-budgets-needlessly-complex-artificial-deadlines-have-short-term-and-long-term-consequences-for-residential-property/2012061455119" target="_blank">artificial deadlines</a> has since been heavily criticised for killing off the investor market and encouraging first-home buyers to wait until after October 1.
The program of changes, announced on June 12, gave investors (and non-first home buyers) just 18 days to complete off-the-plan purchases to take advantage of a a zero stamp duty option – and the potential saving of $22,490 through the NSW home builders' bonus, which ends on June 30.
For first-home buyers, the state government decided to scrap the $7,000 first-home owners’ grant entirely for established home purchases and replace it with a $15,000 grant for new homes – but only from October 1.
This means that many first-home buyers are likely to put off their new home purchases until after October 1, when there will be up to an additional $8,000 up for grabs.
The executive director of the Housing Industry Association, David Bare, expects the three-month lag would be felt in the construction market and could have a significant impact on the cash flow for builders.
Meriton boss Harry Triguboff says this three-month time frame will be “hopeless” for developers targeting the first home-buyers’ market.
But a spokesperson for NSW Treasurer Mike Baird told Property Observer the three-month notice period for first-home buyers “provides a reasonable timeframe for the market to adjust to the changes and is in line with the timeframe applied to stamp duty concession changes in last year’s budget”.
In the 2011-2012 NSW budget, delivered on September 6 last year, Baird gave first-home buyers just under four months’ notice that stamp duty concessions under the first home plus scheme would be limited to the purchase of newly constructed homes (including off-the-plan purchases) from January 1 this year under a new scheme, the first home – new home scheme.
The expired first home plus scheme meant borrowers did not have to pay any stamp duty for homes under $500,000 – a saving of up to $17,990.
The spokesperson for the Treasurer also said the home builders’ bonus had been due to expire on June 30.
“However from the July 1, the NSW government will introduce the new home grant of $5,000 which will go to all non-first-home buyers of new properties up to $600,000.”
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NSW Treasurer Mike Baird defends timing of changes to home buyer handouts

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Have you clicked and collected recently? Or shopped at a kiosk? Or popped into a pop-up shop?
If you have, you’ve experienced one of the new retail models which are changing the way consumers shop.
Innovative retailers are turning to these new models to fight back in the face of low consumer confidence and <a href="https://www.smartcompany.com.au/economy/049977-warning-that-retail-growth-outlook-could-stagnate-after-fall-in-monthly-retail-turnover">dismal growth forecasts in the retail sector</a>.
1. Click and Collect
“Click and collect” is the solution for all those consumers whose joy of online shopping is tempered by the sheer inconvenience of queuing up at a post office with a missed-delivery card, or <a href="https://www.smartcompany.com.au/retail/20120116-retailers-increasingly-embrace-lay-by-click-n-collect-to-snare-greater-share-of-consumer-wallet">waiting at home for hours for a delivery truck to arrive</a>.
Consumers purchase goods online by “clicking” and then “collect” the goods from a store or locker.
It’s a model that UK shirt retailer TM Lewin is planning to roll out in Australia, enabling consumers to order a shirt online and then pop into a store to pick it up.
Gerard Crawford, country manager for TM Lewin in Australia, toldSmartCompany click and collect has been gradually rolled out in TM Lewin’s UK stores over the last couple of years and has proved to be successful, particularly in the retailer’s London stores.
“It is just an added choice for the customer, with click and collect you have the convenience that saves you having to wait for something at home,” says Crawford.
“It is more prevalent now in the UK and we have developed it from testing and trialling and now have it in the majority of the stores and it does work.
“Some department stores have taken retail space in the UK purely to have the space as a click and collect depot.”
In the UK, catalogue chain Argos had led the way with click and collect stores that do not display any products and exist only for customers to collect orders.
It’s a strategy that has been a huge success for the catalogue chain, with half of its £4 billion sales now multi-channel.
Click and collect is not as widespread a retail model in Australia as it is in the UK, but that is set to change with TM Lewin’s move and retailers including JB Hi Fi, Australia Post and Coles adopting the concept.
Jim Cooper, spokesperson for Coles, says click and collect is popular with the supermarket’s online customers who do not want to lock in a time to be home for delivery.
“They like the fact that click and collect lets them shop online, but collect their order when it suits them. They also save money by not paying home delivery charges,” says Cooper.
“The click and collect option operates from 43 Coles stores around the country, and is already generating thousands of orders a week.”
Coles is also running a trial where click and collect customers can collect their orders from refrigerated lockers located at Coles Express fuel sites.
“The early results of the trial have been encouraging, but customers tell us it could be improved. For example, by using a pin pad door rather than a obtaining a key from the service assistant,” says Cooper.
Australia Post has started using click and collect parcel locker sites to store goods bought over the internet with those who subscribe to the service receiving a single use six-digit code via SMS and email each time one of their parcels is ready for collection.
“The 24/7 parcel lockers mean customers can pick up their parcels on the way to work, on the way home or even on the weekend,” says Mel Ward, media and communication manager at Australia Post.
“A small trial at a facility in St Kilda resulted in 1,500 customers signing up to use the parcel lockers.
“As a result, we are extending the trial to a further 10 locations in Melbourne, Sydney and Queensland, with plans for a national rollout to further expand this service.”
Brian Walker, retail expert at The Retail Doctor, says the click and collect model represents a move from web-only retailers to multi-channel sales that use “clicks and bricks” together.
“It is the merging of online and the physical store. So we know that research and buying online is increasing, but it is a way of providing a technical process and experience of an online order with an in-store example,” says Walker.
“I think we will see more and more of it in Australia, it will just become a standard play in its own right.
“Conceptually, it is not a lot different from days gone by, from having a telephone and getting a retailer to put something aside for you and then collecting it.”
Walker says click and collect is particularly attractive for commodities like basic apparel and groceries with time poor customers who want to control the point of pick up.
2. Kiosk retailing
Forget megastores and big box retailers; the new retail model is for smaller and smaller “kiosk” retail units.
Hairdressing franchise Just Cuts, founded by Denis McFadden, has unveiled a haircutting kiosk at a Westfield shopping centre in the Melbourne suburb of Doncaster, <a href="https://www.smartcompany.com.au/start-up/049760-just-cuts-kiosk-highlights-shrinking-franchise-operations">in a bid to attract time-poor consumers</a>.
Luke Manning, Just Cuts business development manager, says the franchise would love to establish more kiosks over the next year.
Manning says the outlay for a normal Just Cuts site – which is typically 30 to 40 square metres – is anywhere between $160,000 and $260,000.  But for a kiosk site a franchisee could be up and running for $100,000, so it could be an ideal option for new franchisees with less capital.
“The kiosk was created for a niche market where an existing owner might want a second salon or for smaller shopping centres,” he says.
“It has been well received and my hope is that we see a lot of them in the next 12 months. We have people on the run coming in and we have had people from every demographic using them.
“For franchisees, it is cheaper. Start-up costs are less than half the initial start up costs of a salon and a kiosk is relocatable, so if it’s not working we can move it to another site.”


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<a target="_blank" href="https://www.propertyobserver.com.au/retail/hotdog-shop-dognation-almost-cuts-the-mustard-in-one-of-melbournes-smallest-retail-premises/2012061555135">Dognation, a newly opened hotdog shop in central Melbourne</a>, also operates a kiosk model with its three metre square shop.
Owner Seong-Lee Ang told SmartCompany he thinks Dognation is the smallest food shop in the city.
“Our leasing agents said they have never heard of anything as small as three square metres for a food shop,” says Ang.
Ang says the small format of Dognation creates interest from consumers with people walking past and taking photos of the store as it is “so unique”.
“The talking point of us being in such a tiny spot has been a really big thing, besides the product itself,” he says.
There are also practical advantages to Dognation’s small size, with Ang saving significant money on the lease.
“Per square metre the rent is not cheap, but obviously because we are only paying for three square metres as an overhead the rent is not that expensive,” says Ang.
“It is a big factor to us to say what is our productivity out of such a small space and there are definite advantages from a cost point of view.”
Ang says he is already in the planning process for more stores and will try to continue the kiosk model.
“I had a leasing guy call me today and he said we have another small kiosk space if you are interested. I think a lot of people are getting the idea that small spaces work well for certain types of businesses and ours is certainly one of them.”
David Gordon, partner in charge of the national retail advisory practice at WHK Group, says kiosks are attractive because they are cheaper.
“The cost of rental is less, the cost of fit-out is less, you need less staff because your security of product has a more physical framework,” says Gordon.
“There is a narrow range of stock sold in a kiosk. It is quite a category-based outlet, so you don’t need a vast range of stock and you don’t need to take the stock risk that a shop would take.
“Often you don’t need to take the long-term rentals that a shop has to take with landlords.”
However, Gordon warns kiosk retailing is not the panacea to all retail problems.
“It has its disadvantages and they are that your physical presence is not as enhanced as a shop would be. You don’t have the range so you essentially let customers down; the customer service isn’t as good.”
<h3>3. Pop-up shops</h3>
New products come and go, and now the stores that sell them do the same. Pop-up shops have taken off in the UK and USA and <a href="https://www.propertyobserver.com.au/https://www.startupsmart.com.au/innovation/three-reasons-behind-the-surging-popularity-of-pop-up-stores/201203145674" rel="nofollow">now in Australia as well</a>.
Amy Malin, co-owner of Danish furniture importer Modern Times, has built her business on “one-off concept stores that blur the line between retail store and exhibition” and Modern Times is now onto its third pop-up shop in the Melbourne suburb of Collingwood.
Malin says having a pop-up shop was the ideal way to start Modern Times as a business and was a great way to generate publicity.
“For us, it was a way to see if it was something we wanted to do, because it was a new business for us. It allowed us to test the market, and to create buzz.
“I have a background in events and we felt confident that we could run it like an event and market it like an event,” says Malin.
“There is that sense of urgency because it is temporary; people want to come and have a look straight away. For a regular shop, there is no urgency for consumers or for publicity.
“People like something a little underground and they expect it to be something interesting – and we didn’t disappoint people.”
Malin hasn’t decided whether Modern Times will run a fourth pop-up or look to set up shop permanently.
“Because we sell furniture, it is quite intense to pack up and move. That was confirmation for us that we should do a permanent shop,” says Malin.
“But we could also go and do a pop-up in Sydney or pop-up in New York, and it’s a great way to market our website as well.”
Walker says pop-up shops are perfect for event style retailing and allow retailers to surprise consumers.
“Pop-up shops give you instant accessibility, instant wow factor if done well, and put you in environments that you might not be otherwise,” he says.
“The challenge is that it is not a cheap solution and that is the first thing some retailers do. They put up a cheap fitting and it is uninspired.
“A pop-up shop is an extension of the brand and should be treated that way – so investment of capital is key.”
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/index.php">SmartCompany</a>.
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cwaters-YrtBR88nBe

Australian retailers devising new methods to entice customers offline

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What “real” (i.e., after inflation) rate of return should you expect to earn on your savings over the long run? The governor of the Reserve Bank of Australia, Glenn Stevens, offered an unsolicited answer to this thorny question in not one, but two, speeches delivered during the past week.
Central bank governors don't typically wander out in public and proffer specific point estimates for expected through-the-cycle returns generated by diversified investment portfolios. So a related ponderable is why Stevens would engage in such an exercise.
One possible answer is that he was seeking to condition community beliefs. Now this is a valuable undertaking. The next step in Stevens’s argument, which he did not articulate, is that if investment returns in the future are much lower than they were in the past, households will need to do more saving in order to fund their retirements and adequately mitigate the rather perverse “longevity risk” that retirement brings.
In his optimistic “<a target="_blank" href="https://www.rba.gov.au/speeches/2012/sp-gov-080612">Glass Half Full</a>” speech last week, which came hot on the heels of Australia’s exceptionally healthy GDP and labour market data (to say nothing of three rate cuts in two months that have radically reduced the real returns earned by savers),  Stevens argued that household wealth “will surely resume an upward track, sooner or later”.
Now if you want to be negative, this contention is debatable, and the experience of Japanese savers is a sobering counterfactual. But let’s assume Stevens is on the right track and that there are credible differences – population growth chief among them – that argue against a convergence in Australia and Japan’s economic destinies.
Stevens’ key message was that the returns savers realise in the future will probably be less than half of what they have earned over the last 10 to 15 years. More exactly, he said, “When [wealth does start rising again] … it is unlikely to be at 6 or 7% per year in real, per capita terms. I would guess that over the long term, something more like 3% would be nearer the mark.”
In his second speech, the governor obliged with a more detailed exposition. In particular, he presented the chart enclosed below sketching the after-inflation change in real, per capita household asset values over time. The insight he wanted leave us with was that the 6.4% per annum growth rate earned over the 1995 to 2005 period was historically exceptional. In fact, over the three decades that preceded it the average rate of household asset price appreciation in real per capita terms was closer to 3% per annum.
<img src="/images/stories/2012/06/rbajune15.gif">
 If Stevens is right, savers should budget on total net nominal asset price growth of about 6% per annum – i.e., adding in expected future inflation of about 3% per annum – across a well-diversified portfolio comprising, as it historically has, exposures to cash, shares and property.
For the avoidance of any doubt, Stevens believes this is a big deal: “I think this is a profoundly important point and worth emphasising. The decade or more up to about 2007 was unusual. It would be quite surprising, really, if the same trends – persistent strong increases in asset values, very strong growth in per capita consumption, increasing leverage, little or no saving from current income – were to re-emerge any time soon.”
Another way to define asset price growth expectations is to look at sustainable, or “steady-state”, rates of economic growth. One school of thought says that no individual sector can outgrow the overall economy for any lengthy period of time, or it will eventually become bigger than the economy itself.
Since 1974, Australia’s real (after inflation) economic growth rate has been 3.1% per annum. But underlying this figure is quite a bit of population growth. As the population expands, we tend to produce more. If we, therefore, strip out population growth, we find that real per capita economic growth has only been about 1.7% per annum.
As I have shown before, Australia’s central bank has a strong statistical bias to overshooting, rather than undershooting, the mid-point of its “thick” 2-3% inflation target. Over the last decade, core inflation has averaged about 3% per annum. And there is mounting evidence that inflation targets are becoming less important to central banks, including Australia’s, as they wilt under community pressure to foster growth.
Let’s nevertheless assume that future inflation remains contained at about 3% per annum. Combining this with our real per capita economic growth estimate of 1.7% per annum gives us future nominal growth of about 4.7% per annum.
Observe that both these numbers are significantly lower than the figures offered by Stevens: he gave us a real asset price growth estimate of 3% per annum, which in my nominal terms would be closer to 6% per annum.
What might explain this disconnect? In all likelihood, the fact that the household sector is a major supplier of riskier “equity” capital for both listed companies (i.e., shares) and property. Who, then, provides the non-equity, or debt, capital? The banks and bond markets.
When thinking about investments, people forget that the share market is a leveraged play on the Australian economy. That is, most listed companies fund themselves with a combination of debt from the banks or bond markets, and equity capital from shareholders.
The same underappreciated insight applies to housing. Over the last 25 to 30 years, Australian residential real estate has generated a total net return (including both capital gains and rents after transaction costs but before taxes) of about 10% per annum.
Yet gearing across the entire housing market is about 30%, and for those property investors with some debt (as opposed to those that have paid it off), gearing rises to around 45%. Thus the actual returns to equity investors in housing would be significantly higher than the 10% figure I quoted above. This makes intuitive sense because, like equities, an individual property has very high return volatility of about 15% per annum.
So irrespective of whether you are an investor in shares of Australian listed companies, which in the non-bank sector have average gearing of about 25% (note the banks are leveraged about 20 times), or in residential real estate that offers even more attractive leverage of up to 90% at lower rates of interest and longer terms, your “equity” returns (and risks) are going to be greater than the blended equity plus debt returns reflected in my aggregated 4.7% per annum asset price growth estimate. This blended return is like averaging the returns that both the bank and you get.
And this analysis probably helps explain the difference between real per capita economic growth of 1.7% per annum and real household asset price appreciation (in per capita terms) of more than 3% per annum.
Christopher Joye is a leading financial economist and a director of <a href="https://www.ybr.com.au/savings/index.cfm" target="_blank">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
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