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]

Joel Robinson

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 

When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.

But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.

As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.

For apartment residents, that can present a challenge.

If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.

That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.

It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.

As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.

Australia Post's Parcel Lockers provide one solution.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe>

Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.

The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.

For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.

For buyers, it's a reminder that the best apartment features aren't always the most obvious.

A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.

The apartment feature many buyers don't think about, until their first missed delivery

<a href="https://www.apartments.com.au/developers/hg-developments">HG Developments</a> is doubling down on Maud Street in Newstead, filing plans for a new apartment tower just a few doors down from its under-construction Aire Newstead development.

Recently submitted to Brisbane City Council, the proposal is for an 18-storey building designed by bureau^proberts, which has drawn heavily on Brisbane's subtropical design principles while referencing the suburb's industrial heritage.

A total of 64 apartments are planned for the amalgamated 1,518 sqm site at <a href="https://www.apartments.com.au/new-apartments/17-21-maud-street-newstead-qld-4006">17–21 Maud Street</a>, a short walk from the Brisbane River and Newstead Riverwalk.

<img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="a400c7fd-bd15-48f8-a63b-10ede92efe00" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20bldg.png?VersionId=.0vPmjpbC7CNP7kqGWa6L7rGIwsNExaw" />

"The building is defined by a series of vaulted motifs that reinterpret the arches, colonnades and layered facades evident throughout Newstead's historic built fabric," the Urban Design Report states.

"Combined with recessed glazing and generous balconies, these elements create a layered building envelope that provides shade, weather protection and opportunities for natural ventilation whilst establishing a distinctive architectural identity."

The proposal comprises 64 two, three and four-bedroom apartments across 18 residential levels, positioning it alongside a growing number of taller residential projects transforming Newstead's northern precinct. The tower incorporates extensive subtropical landscaping, with cascading planter boxes, deep planting at street level and a landscaped rooftop recreation area.

<img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="1d8140f4-8b98-45cd-b1b8-1efe8c8e266b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20podium.png?VersionId=VAZtbCoD44YCJ57N99fQCAKeSJx7ldZs" />

Bureau Proberts has prioritised passive environmental design throughout the project, with generous balconies, recessed glazing and operable façades helping reduce solar heat gain while maximising natural ventilation. River views become available from the upper levels, while the building has been orientated to capture prevailing breezes from both the Brisbane River and the west.

The architects say landscape is intended to be integral to the building rather than an applied element.

"Vertical greenery, cascading planter boxes and elevated gardens are woven throughout the architecture, softening the built form and strengthening the connection between residents and the subtropical environment."

"Through the integration of landscape, high-quality materials and passive design principles, the development delivers a refined residential address that celebrates Newstead's heritage character while contributing positively to Brisbane's evolving subtropical identity."

Newstead has remained one of Brisbane's most active apartment markets in recent years, with a number of developers continuing to back the inner-city suburb.

HG Developments is currently delivering the 40-apartment Aire Newstead at 25 Maud Street. Fortis recently launched the 65-apartment <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> on Kyabra Street, while builder-developer BPG and Don O'Rorke's Consolidated Properties are both expected to launch their respective Newstead projects before the end of the year.

HG Developments doubles down in Newstead with second Maud Street apartment development

Walk past a new apartment development promoting its sustainability credentials and it's easy to picture rooftop gardens, mature trees, landscaped courtyards and residents surrounded by nature.

But in many cases, that's not actually what those sustainability ratings guarantee.

Australia's leading environmental rating tools have played a significant role in improving the energy efficiency and environmental performance of buildings. Yet despite their focus on reducing emissions, many don't require developers to include trees, biodiversity or meaningful green space.

In other words, a building can achieve one of the country's highest sustainability ratings while containing little more than concrete, glass and hard landscaping.

That disconnect has led to the emergence of a new movement across Australia's property industry: nature-based cities.

The concept goes beyond designing buildings that consume less energy. Instead, it encourages developers to treat nature as essential infrastructure, integrating biodiversity, tree canopy, living landscapes and green spaces into projects from the earliest stages of planning.

Research has consistently linked access to nature with better physical and mental health, cooler neighbourhoods, improved biodiversity, stronger climate resilience and more connected communities. As Australia's cities continue to become denser, advocates say those outcomes should be considered just as important as energy efficiency.

Nature Based Cities (NBC) was established in 2022 to help accelerate that shift.

Founded by Hamton Executive Chairman Paul Hameister OAM, the not-for-profit was created after research highlighted a significant gap in Australia's sustainability framework. While existing environmental rating tools rewarded energy performance and emissions reductions, they placed little emphasis on the inclusion of living landscapes.

"We've always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren't there," Hameister says.

"In Australia, you can have a five-green-star rated building that's concrete and glass with not a blade of grass.

"The focus is on reducing emissions, which is laudable, but there hasn't been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities."

Since its launch, NBC has developed independent design guidelines and accreditation frameworks that encourage developers to prioritise ecology, biodiversity, tree canopy, walkability and living landscapes alongside traditional sustainability measures. The organisation first focused on medium and high-density residential developments before recently expanding into precinct-scale communities and masterplanned neighbourhoods.

Jan Talacko, founder of sustainability consultancy Ark Resources and a member of the Nature Based Cities Advisory Council, says the initiative addresses an area that has largely been overlooked by the property industry.

"Throughout my 25 years of working collaboratively with all stakeholders in the property sector, I've always favoured a pragmatic approach to sustainable design which encourages initiatives that not only meet environmental expectations but also improve amenity," Talacko says.

"Whilst we are making steady progress in relation to energy and carbon emissions from buildings, there has been much less emphasis on encouraging biodiversity and tackling the urban heat island effect.

"The Nature Based Cities initiative responds to a gap in the suite of tools currently used by the property development sector, which don't provide sufficient incentive, or recognition, for the integration of landscaping and greenery."

For apartment buyers, the shift is also changing the questions worth asking.

Rather than assuming a sustainable building will naturally include abundant green space, buyers are increasingly being encouraged to look beyond environmental ratings and ask what nature is actually being delivered. How much tree canopy will the development create? Has biodiversity been considered? Are landscaped spaces designed for people as well as appearance?

As Australia's cities continue to grow upwards and outwards, the next generation of sustainability may not simply be measured by lower emissions, but by how successfully developments bring nature back into everyday urban life.

What does it really mean for a building to be 'green'?

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>

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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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About 3.7% of Australian dwellings are now worth less than their original purchase price, according to a comprehensive RP Data analysis.
The decline in property prices following the global financial crisis has had its biggest impact in Queensland, where about 6.3% of all properties are in negative equity.
Queensland is followed by Western Australia, where about 4.9% of properties are worth less than the owners paid.
The Queensland districts with the highest negative equity are far north Queensland, the Gold Coast and Sunshine Coast.
For homes purchased from 2008, the RP Data findings show that 7.7% are now worth less than what the owner paid.
An estimated 13.3% of post-GFC buyers in Queensland are likely to be in negative equity, with the property likely to resell at less than its purchase price.
Queensland is followed by Western Australia with 9.6% in negative territory post-GFC and Tasmania with 9.5% negative equity since the 2008 economic downturn.
“The global financial crisis began affecting housing markets in 2008,” Tim Lawless, RP Data national research director, says.
“The home owners that are at the greatest risk of home values moving below their purchase price are those that have purchased since 2008,” Lawless says.
The Australian Capital Territory was ranked as the least affected, with just 1% showing negative equity. Victoria followed, with 1.8% of Victoria’s owners considered negative-equity households.
But the report concluded that 45% of home owners across Australia are sitting on a nest egg that’s worth at least double what was paid.
“Strong value growth in property over recent years has been the catalyst for most regions enjoying quite strong levels of equity,” Lawless says.
“Over the five years to June 2011 capital city home values have increased by about 30%, providing a significant wealth boost to most home owners during this period.
“More recently the Australian housing market has softened and home values are down 2.7% between their October 2010 peak and June 2011,” Lawless notes.
RP Data estimates that Australia’s residential housing market is now worth $4.56 trillion – almost four times the value of the $1.3 trillion Australian equities market.
RP Data’s report measures the difference between the original purchase price of a home and the current valuation for individual properties around the country.
The property valuations used in the analysis are based on RP Data’s automated valuations model, where the value of more than 8 million dwellings is regularly estimated across Australia.
The report does not factor in home owner debt levels.
Worst-performing areas
<img src="/images/stories/worstareas.gif">
 
Best-performing areas
<img src="/images/stories/bestperformingareas.gif">
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jchancellor-FAypfDUnLy

Queensland hit hardest post-GFC as 6.3% of homes worth less than their purchase price

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Three of the four Richmond properties on the hit Nine renovation series The Block 2011 are now available for rent as its emerges that all four cottages were bought by investors.
Katrina and Amie's furnished house at 41 Cameron Street, which sold for $860,000, is the cheapest rental – listed at $950 a week through Hocking Stuart agent Stephen Chamberlin. It would reflect a 5.74% gross yield.
The three-bedroom, two-bathroom home at 39 Cameron Street renovated by Polly and Waz, which sold under the hammer for $855,000, is for lease at $995 a week through Brant Williams, of Advantage Property Consulting. Its asking rent reflects a 6.05% gross yield.
The dearest home on The Block at 37 Cameron Street, which Josh and Jenna sold for $1 million, is for rent at $1,250 per week through Woodards Carnegie. It reflects a 6.3% gross yield.
Rod and Tania Walsh's property at 43 Cameron Street has yet to appear. It was bought at $922,000 by a Melbourne couple as an investment through Jellis Craig agent Clayton Smith.
The indicative gross rental yield for <a target="_blank" title="Richmond" href="/news">Richmond</a> houses is 3.5%, according to RP Data.
The depreciation reports for the renovated homes heightened investor interest in the offerings.
The depreciation reports were been prepared by BMT Tax Depreciation Quantity Surveyors, which have inspected the older properties – now renovated – and estimated what a buyer could claim in deductions in his or her tax returns.
The house renovated by Polly and Waz at 39 Cameron Street could have an initial maximum $27,000 claimable depreciation in its first financial year. Its depreciation would peak in its second financial year at $29,700.
The house at 37 Cameron Street, which Jenna and Josh renovated, has an initial $25,000 claimable depreciation.
The house renovated by Katrina and Amie at 41 Cameron Street could have an initial maximum $28,000 claimable depreciation in its first financial year. Its depreciation would peak in its second financial year at $30,000.
It is estimated the renovated house at 43 Cameron Street, renovated by Rod and Tania, could have an initial maximum $29,000 claimable depreciation in its first financial year. Its depreciation would peak in its second financial year at $31,500.
Even though the buyers will not have carried out the work themselves, the ATO allows property investors to claim a deduction related to the building and plant and equipment items contained within it. It can be claimed by any owner of an income-producing property.
The asking rents for 41 Cameron Street and 39 Cameron Street are<a target="_blank" title="Friday Form Guide" href="https://www.propertyobserver.com.au/victoria/friday-form-guide-yields-of-up-to-7.5-on-the-block/2011081851199"> far higher than what their agents estimated for their rental potential before auction</a>. The asking rent for 37 Cameron Street is in the rental estimation range provided by Roberts pre-auction.
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Block Richmond properties hit the rental market with yields of up to 6.3%

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A leading housing academic has taken a swipe at Australian property investors and warns that drastic tax changes are needed to prevent the “landed gentry” from making housing affordability even worse.
Ian Winter, executive director at Australian Housing and Urban Research Institute, says the upcoming Canberra Tax Forum should consider measures to limit negative gearing and replace the stamp duty tax system.
He says the “fair go” of the Australian housing market has disappeared.
“Property has become a speculators’ picnic, with homes treated more like share portfolios than as a basic human need,” he says writing for academic commentary website <a href="https://theconversation.edu.au/" target="_blank">The Conversation</a>. 
Winter warns the current imbalance in the housing market calling Australia “a nation of landlords and renters rather than a nation of home owners”.
“With 22% of Australians owning 55% of the homes across our capital cities, the landed gentry are on the rise,” he says.
According to Winter reforming the tax regime as it applies to housing has the potential to improve the lives of many Australians.
“If we get the settings right we can do some good,” he says.
Measures that could work have already been identified in the Henry Tax Review.
These include limiting negative gearing provisions and replacing state-levied stamp duties with a broad-based land tax.
“Limiting negative gearing provisions for residential landlords would likely see an increase in the supply of private rental accommodation from equity investors, such as superannuation funds,” he says.
“Henry’s proposal to replace stamp duty with a broad-based land tax levied on an individual rather than aggregate basis could also see prices drop by up to 10%.”
But he warns that getting the tax changes wrong could make things with the “current generations of wealthy property owners will be responsible for leaving behind a housing system far worse than the one they inherited”.
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lschlesinger-FZcF9M3vE6

Housing academic says 'landed gentry' destroying 'fair go'

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
It never ceases to amaze how distorted investment thinking can get among even seasoned professionals. A classic example is the very different approaches taken to Australian commercial and residential property in the superannuation fund sector. 
Of the nearly $1 trillion in non-self-managed superannuation money (i.e., held by retail, public, government and industry funds), the average portfolio weight to “real estate” is between 10% and 15% of all fund assets. 
Now the rational observer might reasonably assume that there would in turn be a say, 90:10 split in favour of residential over commercial given the relative asset class sizes. The total market capitalisation of private residential property is about $3.6 trillion based on Rismark’s best estimates. In contrast, the total value of all core commercial, industrial, retail and wholesale property is less than $300 billion, according to RMIT. That gives us a rough 90:10 split. 
Another way of building portfolios is via much more sophisticated “mean-variance optimisations”. We have applied this technique over the last 30 years of data and the results are even more damning: you don’t allocate any money at all to commercial property because of its lower total returns, higher volatility, and strong correlation with the business cycle. 
One could also fairly argue that since more than 30% of contributing superannuants have zero exposure to residential property, and those who do have access own one very risky individual asset and presumably possess a powerful motive to get diversification to a truly national portfolio (much like if you only owned Fortescue shares and wanted to diversify across the whole market), super funds have a logical incentive to deliver these imperatives. 
The final nail in the asset-allocation coffin is the risk, return and correlation characteristics of Australian housing. The table below summarises all the major asset-classes’ performance over the last three decades, which is the longest period over which can objectively evaluate the data.
<img src="/images/stories/joyesept281.gif">
On a risk-adjusted basis, a national portfolio of Australian housing has consistently outperformed Australian shares, global shares, Australian bonds, and Listed Property Trusts (LPTs). The “uncorrelated” feature of residential property returns vis-a-vis equities, whereby housing yielded strikingly superior performance during the 1987 stock market crash, when shares fell 44%, the 2001 tech wreck, when global equities collapsed by around 50%, the 2002-03 period, when Australian shares were down 10% to 15%, and 2007-09, the GFC, when Aussie and global equities once again halved in value, implies that housing is a valuable portfolio “diversifier”. 
The most remarkable thing is that notwithstanding the compelling evidence above, your typical Australian super fund has no allocation at all to housing. That is, the 10% to 15% investment in real estate is dedicated almost exclusively to commercial property. There seem to be few sensible reasons for these decisions. 
One controversial explanation that has been proposed to me is that super funds suffer from an insidious form of “industry capture”. In short, most of the executives responsible for managing real estate investments within super funds previously worked in the commercial property sector in one capacity or another. The same is true of the super funds’ advisors: almost all “asset consultants” that focus on real estate come from commercial property backgrounds. 
This possibly gives rise to an instinctive bias to pursue commercial property strategies. At the margin, there are a few funds that do have some residential development holdings. But in an investment sense these are far removed from the traditional, established housing stock. 
There are good reasons why banks happily lend to established housing but avoid developers like the plague: the probabilities of loss are far greater with the latter, as they are with commercial property. Development assets tend to be located on the fringes of cities with lower quality public infrastructure and amenities. The demand for these homes is often less certain while the buyers frequently have lower incomes. This is why the “risk-weighting” APRA forces the banks to apply to commercial property and developer loans is multiples the risk-weighting attached to established residential loans. Through the business cycle, established housing credits have proven to be much safer (as we shall see shortly). 
It is easy to highlight the comparative risks of commercial and residential property. In the first chart below we contrast the performance of the ASX LPT Accumulation Index (reinvesting dividends) with the total net returns generated by Australian housing in the period since 1982. To proxy for housing’s performance, we have used the capital gains plus only half of the gross rents to control for transaction costs. 
 
<hr class="system-pagebreak">
 
Over the past 29 years, a national portfolio of Australian residential property has produced superior total returns (10.6% per annum) with, crucially, nearly one-third the risk. This was borne out most graphically during the GFC. The peak-to-trough fall in the LPT index was a stunning 69% even allowing for dividends. On the other hand, the peak-to-trough fall in boring old bricks and mortar was less than one-10th this amount. Click to enlarge
 
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyesept282.gif"><img src="/images/stories/joyesept282thumb.gif"></a>
Those in the commercial property industry would argue that the ASX-listed returns tell an artificially negative story apropos their asset-class. They instead prefer to use “unlisted returns” measured by a group called IPD. The problem with these unlisted performance estimates is that they are based on human valuations of capital growth over time. They are not based on actual sales data, or the judgments of thousands of investors participating in an actively traded market.
Many of these unlisted valuations are also commissioned by the fund managers that own the underlying assets, which presents a well-known, albeit rarely acknowledged, conflict of interest. In brief, it has been repeatedly documented that human valuations of commercial properties significantly lag real-world events and materially underestimate true losses. This is why we prefer to rely upon the day-to-day pricing afforded by a market such as the ASX. For the record, the house price data we use here is based on around 40,000 home sales a month, and does not include any human valuations.
On the basis of the analysis presented herein, the really big “bubble” was in commercial real estate, not residential property. 
A similar observation applies to Australian shares. In the next chart I have added the All Ordinaries Accumulation Index to our analysis (grey line), and telescoped in on the past 10 years of data (although note this stops in March 2011, and does not account for the recent share market correction).
Once again, the take-away is that by far the two biggest bubbles were in domestic shares and commercial property. This was illustrated by the tremendous price appreciation generated in the years before the GFC (observe the stunning rise in the blue and grey lines) followed by precipitous 50% plus declines. Australian housing just did what it always does: produced low volatility (viz., risk) total returns that typically track changes in disposable household incomes and borrowing capacity. Click to enlarge
 
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyesept283.gif"><img src="/images/stories/joyesept283thumb.gif"></a>
 
<hr class="system-pagebreak">
 
In recent years, the RBA has gone to great lengths to highlight the fact that commercial property investments are more hazardous than established housing exposures (see <a href="https://www.businessspectator.com.au/bs.nsf/Article/The-pitfalls-of-commercial-property-pd20100702-6Y9ZX?OpenDocument&amp;src=is&amp;cat=property-al">here</a>). It is widely accepted that bad commercial property loans in 1991 almost bankrupted ANZ and Westpac. 
In this context, the chart below depicts the losses realised by CBA in different parties of its credit portfolio over time. Observe that during the 1991 recession, when unemployment peaked at around 11%, CBA, like the other major banks, suffered an enormous increase in bad debts. These were, however, almost exclusively attributable to CBA’s “business lending” activities, which includes commercial property. Despite a huge increase in unemployment and double-digit mortgage rates, CBA’s losses on its home loans (lower red line) hardly budged. Importantly, a similar pattern reasserted itself during the GFC.
<img src="/images/stories/joyesept284.gif">
The RBA’s bi-annual Financial Stability Review (FSR) is the single most authoritive Australian study on the banking system’s risks. In examining these issues, the RBA offers some fascinating comparisons of the commercial and residential property asset-classes.
The first RBA chart I want to highlight is effectively two diagrams compressed into one. The left-hand-side panel shows commercial property prices in <country-region>Australia</country-region>, the <country-region>US</country-region>, <country-region>UK</country-region>, <country-region>France</country-region>, <country-region>Ireland</country-region> and <country-region><place>Spain</place></country-region> over the period 2003 through to 2011. What is especially interesting is that the RBA’s analysis demonstrates that Australian commercial property prices (blue line) surged way past peer country rates of growth in the years preceding the GFC (note the large protrusion above the other lines). And while Australian commercial property prices naturally fell by a very substantial margin, they remain materially above any comparable country today.
<img src="/images/stories/joyesept285.gif">
In the right-hand-side panel the RBA conducts the same analysis for residential property. Here the results are very different. You can see that in the period 2003 to 2007 Australian house price growth was substantially less than that witnessed in the US, UK, France, Ireland and Spain. In contrast to commercial property, the relative “outperformance” only emerged in the years following the GFC, which makes sense given <country-region><place>Australia</place></country-region>’s underlying economic outcomes. Indeed, even accounting for the deep European recessions, Australian house price growth since 2003 has been substantially less than its French equivalent.
Rismark recently undertook a similar study comparing Australian and <country-region><place>UK</place></country-region> house price growth over a longer period. We used the UK Academetrics house price index because it employs the UK Land Registry’s information, which includes 100% of all <country-region><place>UK</place></country-region> home sales. Other <country-region>UK</country-region> house price measures, such as the <place><city>Halifax</city></place> or Nationwide benchmarks, cover less than 15% of all sales.
Notwithstanding the implosion and ensuing nationalisation of much of the UK banking system, and the exceptionally acute recession experienced in that country, house price growth in Australia and the UK has been nearly identical over the last two decades. In fact, what is most noticeable from this analysis is the much more rapid run-up in <country-region><place>UK</place></country-region> house prices (red line) in the years before the crisis, which significantly exceeded Australian gains. Click to enlarge
 
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyesept286.gif"><img src="/images/stories/joyesept286thumb.gif"></a>
 
<hr class="system-pagebreak">
 
I want to conclude today’s column with some more charts from the RBA’s Financial Stability Review. The first examines “non-performing” home loans (ie, mortgages in arrears) in <country-region>Australia</country-region>, the <country-region>US</country-region>, <country-region>UK</country-region>, <country-region>Canada</country-region> and <country-region><place>Spain</place></country-region>. What is important to remember when studying this chart is that mortgage rates in <country-region><place>Australia</place></country-region> are much higher than they are in other countries. All things being equal, that would suggest that the probability of default should also be higher in <country-region><place>Australia</place></country-region>. Yet according to the RBA’s latest information, only 0.8% of all Australian home loans are currently three months or more behind.
<img src="/images/stories/joyesept287.gif">
If we assume that there are about 5 million households with mortgages, that implies that only 40,000 are materially behind on their repayments. That is slightly less than the monthly number of sales transacted in <place><country-region>Australia</country-region></place>’s housing market. While the default rate has understandably trended up as the RBA has lifted interest rates to above-average levels, it remains very low by international standards (compare the lower blue line with the <country-region>US</country-region>, <country-region><place>UK</place></country-region>, Spanish and Irish rates). 
The next chart I want to reflect on quantifies the size of “impairments” in <country-region><place>Australia</place></country-region>’s banking system by loan type. As is the RBA’s wont, we are looking at three different charts compressed into one. The first left-hand-side panel shows impairments of residential home loans. Focus on the red line. We can infer here that there are about $2 billion worth of “bad” home loans in <country-region><place>Australia</place></country-region>. In total, there are more than $1.1 trillion home loans outstanding, so only 0.2% are truly impaired.
<img src="/images/stories/joyesept288.gif">
The blue “past due” line above the red impairments looks to be around $8 billion. That makes intuitive sense: if we multiple the 0.8% national mortgage default rate by the $1.1 trillion of loans outstanding we get $8 billion to $9 billion. If we multiply the 40,000 borrowers who are three months behind on their repayments by the average loan balance of $200,000, we also get about $8 billion. 
Now move to the next, middle panel in the chart above. This shows the same analysis for all the banks’ “business” lending activities. Observe how total impairments are around $20 billion. That is, the size of business impairments in <place><country-region>Australia</country-region></place> is about 10 times larger than residential home loan impairments. Recall that this is similar to what happened in the 1991 recession: most bad debts in the banking system originated from the business, not residential, lending portfolios. 
In the next chart, the RBA splits out commercial property loans from total business lending. You can see in the left-hand-side panel that commercial property impairments are much higher than the overall business lending average, which gels with the regulator’s view of commercial property’s more elevated risks.
<img src="/images/stories/joyesept289.gif">
 
<hr class="system-pagebreak">
 
My final two charts illustrate RBA analysis of changes in Australian banks’ lending standards, and <country-region><place>Australia</place></country-region>’s house price-to-income ratio.  In the first we can see that loan-to-value ratios (LVRs) have fallen significantly in the period since the GFC. Indeed, elsewhere in the Financial Stability Review the RBA explains that the recent increase in mortgage arrears has been largely driven by loans that were extended before the crisis hit, not subsequent to it, as is often claimed.
<img src="/images/stories/joyesept2910.gif">
The last chart reinforces Rismark’s analysis of changes in dwelling price-to-income ratios over time. The RBA finds that <country-region><place>Australia</place></country-region>’s “all regions” dwelling price-to-disposable household income ratio is about four times (the actual levels are less useful than the change in the ratio over time). Importantly, this ratio has been falling for a while now; we have had no house price growth in about one and a half years while ABS-reported disposable household incomes have been expanding at a circa 8% per annum pace based on the latest June quarter National Accounts. Like us, the RBA finds that with the exception of a brief dip during the GFC, Australia’s house price-to-income ratio has fallen to its lowest level since about 2003.
<img src="/images/stories/joyesept2011.gif">
Christopher Joye is a leading financial economist and works with <a target="_blank" title="Rismark International" href="https://www.rismark.com.au/">Rismark International</a>. Rismark and RP Data provide house price analytics products, and solutions that enable investors to go long and/or short the housing market. The above article is not investment advice.
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chrisjoye-JYhJsTrNRC

Commercial, not residential, property in a price bubble

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Strong housing demand in South Australia is expected to wane due to a likely slowdown in jobs growth, according to Westpac’s September Coast-to-Coast report. 
“While the fundamentals for South Australia housing demand and consumption are somewhat supportive, partial data indicates momentum is waning,” the report says.
“Specifically, although the SA unemployment rate has, as yet, not followed the national series higher, employment growth has slowed markedly through mid-2011.” 
Furthermore, the report notes that the state’s population growth moderated through 2010 to about 1% annually, below the1.5% national growth. 
While the report forecasts demand for housing to drop, it notes that dwelling investment was one of the “hotspots of the second quarter in South Australia, rising by 13% on the back of double-digit gains for new housing and alterations and additions”.
<img src="/images/stories/westpacsept28.gif"> 
 Source: Westpac
Over the year, housing investment is up 12% in South Australia, compared with a broadly flat outcome for the nation as a whole. 
“The strength of housing demand is quite a contrast to the recent growth in SA household consumption which was weak in the second quarter ( down 0.4%) and is little changed over the year – compared to 3.2% annual growth for the nation as a whole,” the report says. 
Of particurlar concern for Westpac going forward is a lack of major infrastructure projects planned for the state. 
“While the immediate outlook for investment activity is positive, the absence of material planned (or even mooted) projects is a serious concern. 
“Yes it is true that the Olympic Dam expansion may happen (at some point), but other than that there is little else on the horizon – that certainly gives cause for concern.”
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Strong housing demand in South Australia won't last: Westpac

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
Sadly, both parties, initially led by the Liberal Party and quickly followed by Labor under Julia Gillard, have opted for Little Australia.  For generations, both political parties have done the right thing by Australia on population.  They have strongly supported high immigration despite great reluctance from voters for it.  Big Australia makes sense.

Cutting migration means higher interest rates in the short term and higher taxes in the long-term as our population ages.  As for house prices, well, don’t expect them to grow much, if at all.  House price devaluation is a more likely outcome if we adopt Little Australia.

A smaller population growth means lower productivity.  In order to maintain our standard of living – assuming lower migration – we will have to work longer (and smarter) plus raise taxes.  Working smarter is a noble aim, but it takes a long-term view; real short-term pain; and genuine investment in education and infrastructure.  Think the East’s commitment to such, not the West’s.  I don’t want to sound like a cynic, but I don’t think Aussies are up for this challenge.  Every time I get behind a “Sustainable Australia” or “Australia is Full” sticker on an RV, I just chuckle and mutter “hypocrite”.  My wife and children, I must add, are getting pretty sick of it.

But the economic argument isn’t the only rationale for maintaining high immigration.  There’s a strong moral case too.  Nearly all Australians are the children or descendants of immigrants.  A deep cut in immigration is inter-generational opportunism on our part, in effect denying to future immigrants and their children the advantages that we ourselves have enjoyed.  I also don’t think the world will allow it.

And as for the environmental squabble, well, let me say that if America and Canada can do it, then we can too.  Yes, we have a more sensitive environment than the Americas, but long-term planning plus a regional approach will overcome most issues.  Did you know that only a handful of US cities are bigger than Sydney, Melbourne or Brisbane?  Most of their population lives in regional centres, many of which are under 500,000 people.  We now need to do the same.

On that note, Ken Henry gave the best contribution to the population debate so far, when he said that the first step around regional population imbalances was to address the range of areas where economic growth is being constrained, often at a local level.  Henry correctly nominated water in addition to the more frequently nominated areas of infrastructure.  But it also applies to housing, where approval processes are an important constraint on the market responding to growing demand.  Throwing money at the problem, vis-à-vis Labor’s $225 million quick fix pledge to 15 regional cities, is a Band-Aid solution to much deeper wounds.  Regional Australia needs major surgery, not ointment and a gauze wrapping.

The Little Australia advocates want to preserve Australia in amber, to prevent it from ever-changing.  Why?  Because change is threatening.  We need leadership now, not spin.  Many of us are hungry for it.  My mate Bernard Salt summed it up well in The Australian when he lamented our incredibly sparse population and the low-quality debate to which our leaders are subjecting the nation.

The cowardly retreat from immigration by both major parties is a policy disaster of the first order.  And it’s one for which future generations of Australians will pay.

Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>.
Photograph by Phillip Capper
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Cutting immigration will hurt not just housing, but the entire economy

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Recent reports reveal that Australia has overtaken the US as titleholder for “home to the world's largest houses”. Large McMansions on expansive suburban blocks have long been held as the ideal “Great Australian Dream”, while smaller inner-city apartments copped a pretty bad rap as the cheap and nasty end of the property market.
However times are changing, with many home buyers and tenants forced to reflect on whether their priority is square footage and a big backyard in the burbs or getting into a property without breaking the budget.
Suddenly that one-bedroom apartment seems a lot more appealing.
While many developed countries have embraced the virtues of high-density accommodation clustered around major cities –  think New York, Paris, London and Tokyo –  here in Australia, our culture has been based on backyards, barbecues and wide-open family spaces.
Now though, a demographic shift is occurring, with more single-person households and childless couples choosing to live in and around our big cities where employment and lifestyle factors are big drawcards.
Figures from the Australian Bureau of Statistics indicate that the number of one-person households will surge to between 3 million and 3.6 million by 2031, a dramatic shift when you consider that in 2006 only 1.9 million people lived alone.
This massive increase is due to factors including:
<ul>
<li>A forecast jump in the number of DINKS (Double Income No Kids). According to the ABS couple-only households are set to overtake the number of families with offspring in the next two or three years, and it's expected that DINKS will make up 60% of all couple-only households by 2031.</li>
<li>A rapidly growing population and continuing housing shortage in some of our major cities.</li>
<li>Ongoing affordability issues and increasing rental prices forcing many to rethink their size requirements. </li>
</ul>
Demand for one-bedroom apartments, which sceptics have long considered to be less desirable, is set to soar as many Australians adjust their ideals according to what they can afford. And one of the questions they'll be asking is: do I really need that extra bedroom? 
In the past singles and couples have, by and large, sought out two-bedroom apartments with the perception that they offer larger living spaces and the convenience of extra storage.  However, with median price tags for such real estate heading upwards of $500,000 and rents soaring over $500 per week in many desirable locations, the affordability barrier is encouraging many tenants, investors and home buyers to accept one-bedroom units as a viable alternative. 
Recognising this growing trend, developers are jumping on the bandwagon and including more one-bedroom units in their large-scale projects. But be wary –  the price of many of these new apartments is going up as their size is going down. 
So do one-bedroom apartments make good, affordable investments? Is there enough ongoing future demand from tenants and owner-occupiers alike to ensure they perform as long-term cash cows? 
The simple answer is yes. 
Why? Because affordability means more owner-occupies will be pushed into this type of real estate as they sacrifice size for location, thereby increasing demand and placing upward pressure on prices.  These apartments are often located closer to the city and major work nodes as well as universities and hospitals, in areas that generally have efficient transport connections, plenty of retail facilities and social amenity, all key elements high on the list of young buyers. 
In addition, tenants seeking rental accommodation in and around desirable lifestyle locations will look for affordable one-bedroom alternatives, meaning investors will have a large tenant pool to help pay the mortgage. 
Sure, one-bedroom accommodation caters to a narrow demographic of one- and two-person households, but the reality is this is a mismatch of the demand from this growing demographic and the relatively restricted supply of established one-bedroom apartments that are “investment grade” properties. I have to say that some of my best-performing investments over the last few years have been one-bedroom apartments. They attract a diverse range of tenants, including Gen Ys making the break from mum and dad; young professional couples, middle-aged singles as well as downsizing baby boomers. 
A few words of warning:
<ul>
<li>Small spaces can either be highly functional or incredibly pokey, meaning the design and layout of your apartment is critical. </li>
</ul>
<ul>
<li>Avoid studio apartments. They are too tiny, the banks don't like them and they are very hard to sell. Instead go for something that offers at least 50 square metres of indoor space and if you can manage a balcony and plenty of clever storage options, all the better. Off-street parking is a desired bonus, but not necessarily required if close to transport. </li>
</ul>
<ul>
<li>Steer clear of new and off-the-plan developments in our major capital cities. Especially in Melbourne and Brisbane, which both have a looming oversupply. </li>
</ul>
<ul>
<li>Avoid the large generic developments sold off the plan in the centre of major cities.  While these might seem shiny and new, they quickly lose their lustre when people realise they lack character and the timeless appeal that puts property in continuous strong demand.  Usually the majority of buyers in these soulless complexes are investors, while owner-occupiers – the true driving force behind real estate vlaues – tend to stay well away in preference of something more established or in a boutique block. </li>
</ul>
So next time you're shopping for an investment remember that it's not the size of the property that counts, it's the size of the profit you'll realise at the end of the day! 
Michael Yardney is a director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> who create wealth for their clients through independent, unbiased property advice and advocacy. He is best-selling author, one of Australia's leading experts in wealth creation through property and writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
Photo of one-bedroom apartment <a href="https://www.domain.com.au/Property/For-Sale/Apartment-Unit-Flat/NSW/Potts-Point/?adid=2009161817" target="_blank">403/15 Bayswater Road, Potts Point, NSW</a>, which is for sale with price hopes of $560,000 plus.
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One-bedroom apartments set for a big future

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Some 500 Sydney properties went up for auction last Saturday and an auction clearance rates of 59% was achieved – a result that amazed even me. With first-home buyer incentives, very little stock on the market and interest rates now steady, everyone is feeling comfortable to trade in this marketplace. With the Australian dollar hitting lows of 97 cents this week, the expatriates have been back on the phone looking for a bargain. Our buyer’s agents have been busy purchasing everything from substantial homes in Lindfield, Northbridge, Greenwich and Mosman to penthouse beach apartments in North Curl Curl and two-bedroom apartments in Cremorne. We are finding that vendors are now meeting the market because they want to buy before Christmas, and most people are opting to sell before they buy. I have had PK Property coming up to 15 years now and since introducing the whole buyer’s agents concept to Sydney, I have never seen a market where our buyer’s agents are saving our clients more money than ever before. The selling agents seem to be a little nervous and not confident enough to push for a higher price as they normally would, because they simply just don’t have enough competition on the table. There’s no doubt I can feel a change in the air happening at present because it’s all about stock levels and some vendors are just choosing not to list their properties for sale, creating a higher demand from buyers and therefore pushing prices up. BIS Shrapnel, probably the most respected forecaster in the property space, has come out this week saying Sydney prices will move a bullish 6% over the next 12 months and I must admit I am yet to see the company wrong over the 15 years I have had my business. I think the only thing that will upset growth like that will be a hike in interest rates, but NAB came out last week saying it doesn’t expect a rate hike until November 2011 and cuts could even occur.
The higher end has been performing a little bit better over the last six weeks, with many people opting to upgrade. I recently purchased a property in Mosman for just over $5.75 million when it had an asking price of around $6.4 million. I think the higher end of the market will still struggle next year but the market from $2 million to $3.5 million will start to gain some momentum. We also purchased a substantial family home in Northbridge last week from L.J. Hooker Northbridge that had an asking price of $2.3 million but after long negotiations got it for $1.95 million. October 16th is when it all starts up again after the school holidays but I am hearing that in certain areas the stock is still thin on the ground and if you don’t find anything before Christmas you will have to start your house hunting end of February next year.
Peter Kelaher is managing director of <a target="_blank" title="PK Property Search" href="https://pkproperty.com.au/">PK Property Search and Negotiators</a>.
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Vendors meeting the market in rush to sell before Christmas

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A 2.6-hectare block of land in Port Douglas that was due to be developed by the late Gold Coast property developer Brian Ray has been listed for sale.
The land, which is approved for the construction of 23 strata-titled villas or homes, was to form the third and final stage of Ray’s upmarket Niramaya Resort (formerly called Bale resort).
It includes a central lake, utilities, landscaping and roads and is being marketed by Port Douglas agent Tony McGrath from Tony McGrath Real Estate.
The marketing material notes its listing was to finalise Bale Resorts Ltd holdings in Port Douglas.
Niramaya Resort  was developed by MFS Bale, a joint venture partnership of Brian Ray’s Ray Group and Queensland property and financial services business MFS (later re-named Octaviar).
MFS collapsed in January 2008 owing creditors $2.8 billion.
Brian Ray and his wife, Kathy, died when their plane crashed during a snow storm about five kilometres from the Mount Hotham airport in July 2005.
At the time of his death he was worth a reported $130 million and counted Kerry Packer, Gerry Harvey and John Singleton among his friends.
His most well-known development was the $1 billion Salt Village resort on the north coast of NSW developed in partnership with Octaviar.
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Final piece of the late Brian Ray's Port Douglas dream for sale

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A $100 million resort complex in Queensland owned by developer and marina group Meridien has been placed into voluntary administration.
The 124-unit One Bright Point project, of which 114 apartments have been sold, is now being looked after by BRI Ferrier, which will look to sell the remaining apartments.
It’s understood the project was hit by the weakened property market, troubles in the tourism industry, the Queensland natural disaster and the strong Australian dollar.
The move follows the appointment of receivers to the Meridien-owned Port of Airlie project, Abel Point marina and Horizon Shores marina, the latter with approvals for up to 2000 berths and promoted as being on its way to becoming Australia’s largest marina.
Of its four marinas across Queensland only one of Meridien Marinas' assets is not in administration – its marina in Port Douglas is said to be unaffected by troubles in the industry.
Early this month Meridien Marinas managing director Russell McCart said Abel Point and Horizon Shores were both “excellent assets and have a great future and will continue to trade very well”.
“The receivers have re-employed all marina staff and will continue to operate as usual, without disruption,” McCart says.
He said the collapse can be attributed to the “ongoing GFC and strong Australian dollar” creating difficulty trading conditions for Australia’s boating industry.
Most marinas in Australia are owned by small companies or family companies, the Marina Industries Association of Australia has said.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/property/20110927-100m-queensland-resort-complex-owned-by-developer-and-marina-group-meridien-in-administration">SmartCompany</a>.
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