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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Hobart was the only capital city to notch up an increase in online property listings during August, jumping by 2.2% to a total of 3,536.
The total national online residential listings decreased by 3.8% during August to a 362,793 total.
But despite the monthly declines in the seven other capital cities, SQM Research says stock on market sits 23% higher year-on-year – an increase of 69,229 properties since August 2010.
Perth recorded the largest monthly decline, with listings down by 7.1% or 1,546 during August to a 20,207 total.
Melbourne had the largest year-on-year increase in stock.
With 44,522 listings, Melbourne’s listings are up 56.8% or 16,127 over the year.
SQM managing director Louis Christopher noted no capital cities experienced a yearly decline in stock, however Perth recorded the most modest year-on-year growth at 17.8%.
Sydney’s increase of 18.8% or 4,837 listings since August 2010 puts its total listings at 30,606.
“The results for August have been surprising,” Christopher says.
“We were expecting a rise in listings and instead we have had a noticeable fall.
“This still could be a seasonal effect and it also could be vendors withdrawing their properties on the hope of relisting during better market conditions. Nevertheless, our base case here is that listings will rise during the spring selling season.
“If that were to not materialise or only rise marginally, this would be one signal to us that the peak in supply would be reached,” he says.
<img src="/images/stories/sqmsept14.gif" style="border-style: initial; border-color: initial;">
Photo courtesy of Tourism Tasmania
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jchancellor-FAypfDUnLy

Property listings decrease in all capitals but Hobart in August, but stock still up for the year

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Australian dwelling prices have, generally speaking, demonstrated what could be most accurately described as a controlled moderation since the middle part of 2010. For example, according to RP Data-Rismark (the most closely watched dwelling price series), the seasonally adjusted hedonic price series for capital city house values declined by 2.6% year on year as of June 2011. Similarly, national “rest of state” house values fell by 2.5% year on year.
This recent example of a softening of dwelling prices in Australia is in stark contrast to the trend evident over the year to June 2010. According to RP Data-Rismark, capital city house values were up by 10.2% year on year as of June 2010, while national rest of state house values were up by 5.2% over the same period.
HIA has held the view for a considerable time now that the short-term outlook is for a flat to modest downward trajectory in dwelling prices, which in the general sense is what is occurring. The variance within this generalisation is, of course, enormous. At present, dwelling prices are rising, steady, falling, and dropping quite sharply, depending on the local geographical market and dwelling type being observed. Note also that, at the moment, the trading market for property is relatively thin, with the volume of transactions well down on recent years.
Despite the strong performance in housing starts over 2009-10, Australia still possesses an aggregate housing shortage, albeit not everywhere, despite ignorant and spurious claims to the contrary. Australia also maintains a healthy labour market, albeit one that is easing and experiencing not inconsiderable underemployment.
There are a myriad additional and inter-related factors operating in the Australian economy that provide support for dwelling prices avoiding a substantial correction, and we'll get to a few more shortly. Stoking household fears with scaremongering about imminent and substantial corrections to dwelling prices is, of course, not one such factor.
In the post-GFC world, Australian households are a relatively nervous and cautious bunch. Global uncertainty persisted throughout the first half of 2011, which didn't help. At home, widespread expectation of further interest rate hikes amidst confusing commentary on the subject and concern over a carbon tax are but two factors that have severely dented consumer (and business) confidence (and activity). Most recently, debt woes on both sides of the Atlantic have highlighted political ineptitude and selfishness, touched up equity markets, reminded us of how quickly hysterical headlines about the end of the world can re-emerge, and further derailed confidence here at home.
Against this backdrop the downside risks for Australia's short-term economic growth, which HIA has been warning of since late 2010, have increased.
This situation provides a fertile ground for proponents of a property crash to chase headlines with a renewed vigour. They haven’t been shy in this pursuit.
The collapse of the housing market in the United States is often cited as one piece of irrefutable evidence that the Australian housing market will inevitably follow the same path. However, the discussion tends to ignore the important structural differences in our economies and financial systems.
A key difference between the Australian and the US markets is the structure of mortgage lending. Home loans in the US are essentially “limited recourse” (1), meaning a lender's capacity to claw back losses on a bad loan are limited to the value of the home and unlike Australia, lenders have no further claim against the borrower.
This design provides the perverse incentive for borrowers in the US to default on the loan when the size of the loan becomes greater than the value of the property. The contribution that mortgage design made to the extremely high default rates in the US should not be underestimated. Losses as a consequence of this mortgage design would be unlikely to result in the cataclysmic scenario under prudent lending standards and adequately capitalised loans, but when combined with the extremely lax lending standards in the lead up to 2007, lenders left themselves exposed to a significant risk.
Australian mortgages are “full recourse”, hence there is far greater incentive for home owners, in the event of diminished or negative equity, to maintain their mortgages throughout dwelling price fluctuations as lenders are unable to demand additional security or force a foreclosure so long as the repayments continue to be met. The Reserve Bank of Australia has, on a number of occasions, made reference to the fact that Australian lenders were not plagued by the same lax lending standards of many US lenders.
It is also important to note that the profile of housing tenure in Australia is quite different to other countries. Just over 70% of Australian households are owner-occupiers, and only around half of the owner-occupier households have a mortgage. The average level of gearing of owner-occupiers with a mortgage is around 50%, although within this cohort there will be some who have very low gearing levels while some will have high gearing levels. Those with higher gearing levels are typically those who have been in the market for the shortest time.
Home buyers are typically at the greatest risk of experiencing mortgage stress during the early years of home ownership due to the low level of equity and the fact that mortgage repayments typically consume a higher share of household income. In Australia we have in recent times seen a natural increase in levels of mortgage arrears, albeit by a very small amount off an extremely low base. Any suggestion that the rise we have seen is evidence of an imminent market-wide collapse is merely speculation.
Discussion of dwelling prices typically prompts very emotive responses and hence provides easy fodder for sensationalist headlines. Dwelling prices are likely to be flat, perhaps slightly down, over the next 12 months and the rapid price growth experienced over the last decade is unlikely to be repeated, but we are not standing on the precipice of an imminent crash. Those touting an imminent crash in dwelling prices should take the time to reflect on Australia’s inherently sound housing market fundamentals, well-functioning banking industry, shortage of housing stock, reasonably healthy labour market, and above all the importance of avoiding exaggeration at a time of heightened fragility in economic confidence.
Should the current equity market jitters and, at times, widespread hysteria (principally around Europe) of the moment begin to tangibly damage economic activity, then Australia's very sound fundamentals will be tested and the risk to dwelling prices will increase. Australia will stand the test, however, especially when you consider the fact that Australia does not exist in a policy vacuum - we have ample room to move on both monetary and fiscal policy. Indeed HIA is of the view that we should be tapping into this policy capacity now.
Household and business confidence is in danger of being battered further in the absence of immediate action. Exaggeration of the risks to property prices has been a persistent driver of poor sentiment, and if elevated now could hardly be deemed responsible commentary.
Harley Dale is chief economist of the<a target="_blank" title="HIA" href="https://hia.com.au/"> Housing Institute of Australia</a>.
This article is an amended version of a note The Truth about Australian Dwelling Prices posted on the<a target="_blank" href="https://economics.hia.com.au/media/Australian%20Dwelling%20Prices%20-%20August%202011.pdf"> HIA Economics Group website</a> on August 10 by the Housing Industry Association (HIA) chief economist Dr Harley Dale 1: Laws and practices relating to lender recourse in the event of mortgage default vary across US States. Strictly speaking only thirteen states have non-recourse (including California and Florida), although in many other states mortgages are effectively non-recourse owing to the “one action rule”. This rule effectively enables a lender to choose between non-judicial foreclosure (the same as a non-recourse loan) or attempting to obtain a deficiency ruling against the borrower personally through the judicial system. However, if the lender pursues the latter option they forfeit the security. This means the latter option is rarely used due to the cost, time and uncertainty associated with legal proceedings to obtain a deficiency ruling against the borrower. 
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cknowlton-QnEa6ntUYP

Talk of a property crash is unfounded and sensationalist: HIA's Harley Dale

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One of the current social themes is that the consumer is to blame for wanting a big home.  The new social order – excuse me if I get on my hobby-horse (again, you all say) for a second or two – wants us to buy something smaller and magically make our housing problems disappear.  Sadly, too many who clog up the blogosphere with urban commentary don’t understand the economics of new housing nor a rational buyer’s decision-making process.
Recent statistics published by the CBA show that Australia has the largest homes in the world, with the average floor area of a new dwelling (including townhouses but excluding apartments) topping 214 square metres, up from 150 square metres just 25 years ago.  The average floor area of new free-standing houses also set a record at 245 square metres.  Our homes are much larger than those within Europe and even many American cities.
Why has this occurred?
It is simply economics.  The actual land component of a new house-and-land package is very high and fixed.  The land usually costs about two-thirds of the total purchase price.  This is particularly the case for basic or entry-level new housing.  For example, the land component of a basic $375,000 house-and-land package in Queensland could cost as much as $250,000.
In contrast, a 150-square-metre three-bedroom base level house on that land would cost about $135,000 or about $2,500 per square metre as a total price (including the price of the land).  Now, a larger 250-square-metre four-bedroom house with a study might cost $175,000, making the end package cost $425,000.  The buyer gets 100 square metres of extra house for just $50,000 more.  The total end price per square metre has now dropped to $1,700 or 30% less.
Here is the real rub.  Assuming that the buyer can afford to pay the extra deposit and fund a $425,000 house-and-land package, all it costs – assuming a 10% deposit and using today’s rates – is an extra $10 per day in mortgage payments.  The new home buyer can now own a home that is two-thirds larger for just $70 per week.  To upsize the house, as outlined in the example above, would cost the buyer an extra $3,640 per year.
Given the high cost of land in and around our capital cities, the trend towards larger new homes makes economic sense.  Consumers are just acting in their own interests and are making rational decisions to choose a larger and more valuable home for what is a small additional out-of-pocket expense in the broad scheme of things.
Unless there are real economies in the land content – for example the plentiful supply of subdivided land to keep land prices keen – building a small house on a more traditional-sized suburban block of land is often not the best value for money.
PS And yet the large publicly listed development companies continue to peddle that the key to affordable housing is smaller homes (on smaller allotments). Yet at the coalface, agents tell us they are the last to sell and more often than not they resell quite poorly too.  What would really improve housing affordability would be the timely release of land in major estates.  Too often the big boys drip-feed supply onto the market in order to keep the land prices high via the illusion of undersupply.  Yet the mainstream media don’t question the press releases about McMansions and about how we should really live in smaller homes.   I find such particularly rich given that those who are behind these statements live in whopping big digs on large-sized lots in great city locations.
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 title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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michaelmatusik-49YzLvdmNv

Bigger houses make economic sense

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How do you like change? Change is not all that popular, is it? 
Most of us would prefer a predictable future in terms of our job security, for our businesses and for our investments. But currently we are experiencing a time of change and unfortunately these are all subject to the whims of the markets and the economy and therefore are not predictable. 
Successful investors not only adapt to change; they exploit it. 
While the majority of Australians will sit on the sidelines feeling sorry for themselves, successful investors are looking for and buying investment opportunities created by the change. That’s right, some people will thrive not just survive in these difficult times. 
While this may seem hard to believe given the amount of negative news bombarding us in the media, the truth is fortunes are always made in times of change. 
Over the next few years the gap between the rich and the average Australian is going to widen. It’s not because the rich will somehow be luckier than everyone else, it’s because they will be able to weather the economic storms better than most because they are financially fluent (they understand how money works.) 
What have you learned from the world economic crisis?
If we have learnt anything from the recent years of economic crisis, it’s that life will always provide you with challenges and obstacles to overcome. One of the big differences between successful investors and the average person is that successful people see these obstacles or setbacks as opportunities to grow and learn from, rather than insurmountable problems or personal failures. They persist through them, seeing them as challenges to overcome and strengthen their conviction as they move forward. 
There’s no denying that the world’s economic crisis is currently creating issues and glitches for our nation and our own personal finances. And this is unlikely to change in the short term. 
We’re experiencing a weakening of market confidence, a hiccup for our economy and a downturn in our property markets, but just like the GFC a few years ago, this is just part of the economic cycle and does not mean the end of capitalism or bankruptcy for Australia. 
The problem is that the media loves to play on our fears and keeps feeding us a slanted view with a bias towards the bad. 
I remember reading and hearing similar doom and gloom prognostications in the early ’70s, during the recession of the early ’80s, in the late ’80s after the stock market crash and again in the early ’90s during the recession we had to have. They said that the less than perfect financial situation back then spelt the end of capitalism, the “end of the world”, and that our property markets would collapse. In fact similar things were said in the early 2000s and again only three years ago when the GCF hit.
It didn’t happen then, and it’s not going to happen now. 
Let’s face it: the financial world around us is in turmoil. The news is full of stories of recession overseas, companies going bankrupt and even countries failing to pay their debts. 
There’s no denying that things are probably going to get worse before they get better. 
Don’t get me wrong, I’m not suggesting this because I’m a fearful person or because I think negatively – I’m not and I don’t. I understand and firmly believe that all progress comes from change. I believe destruction allows for creation – oftentimes of something bigger and better (if I didn’t subscribe to this theory I wouldn’t be a very good property developer, would I?) It’s part of the economic cycle. 
This is a time for cleaning up the excesses of the past and getting our financial houses in order to move on to the next stage of the economic cycle, which is the recovery phase. 
Things are never as bad as they seem
I’ve found that when things are bad people believe they’re going to be bad forever and when things are good people forget the bad times ever existed and think that things are going to remain good forever. 
Neither case is true! 
In fact during booms people are most confident when they should probably be the least confident, as things can’t continue travelling at breakneck speed and above average rates of growth. Similarly, during less prosperous times, things have to eventually turn around. Ironically, people have the least confidence when it’s more likely that things are going to improve...that is, when markets are near their lowest point. 
When prices of properties boomed, the way they did a few years ago, the charge is often led by people who have no real idea about what was going on or what they were doing. They saw something good and wanted to go along for the ride. In reality, the frenzied craze to make big bucks that coincides with a boom means we’re setting ourselves up for the inevitable fall. 
Conversely, when fear makes property values drop significantly below their intrinsic value, we’re unwittingly setting the stage for the next upturn. 
I realise times are tough and you may be having a difficult ride at the moment. But the fact is, this is the right time to educate yourself and get set to take advantage of the opportunities this stage of the cycle presents. Remember that when things are bad they’re never as bad as they seem and when they’re good they’re never as good as they seem. And in reality, it’s primarily human nature that dictates economic and/or market booms and busts. 
The tale of two vendors
Yes, the world’s financial markets are currently having a difficult time, but that doesn’t mean you as an individual, your business or your investment business can’t still prosper. Nothing illustrates this better than a story I heard many years ago about two friends, John and Phillip.  They both lived in the same town and owned and operated hotdog stands on different corners in the middle of the busy CBD. 
John’s hotdog business was going gangbusters. He stood by his stand and yelled to people walking past, “Buy a hotdog! Get your hotdogs here!” and sure enough, people bought his hotdogs. In fact they bought so many hotdogs that he increased his order for sausages and buns and eventually had to buy a bigger cart so he could serve more customers. 
One weekend his son, who was an economic student at university, told him, “Dad, don’t you watch television or read the papers? Don’t you know the world is in a recession and we’re having an economic meltdown? People are losing their jobs; we’re having the worst financial crisis we’ve had since the Great Depression.” 
John thought, “My son is smart, he goes to university, he knows all about economics, I guess he knows what he’s talking about.” 
So John reduced his order for sausages and buns and went back to using his old smaller stand. He stopped yelling out to people to buy his hotdogs, because surely they couldn’t afford them anymore and wouldn’t be interested. Not surprisingly, his sales dropped dramatically and the next weekend when John caught up with his son he said, “You’re right; we certainly are having a serious recession.” 
In the meantime Phillip, who owned the hotdog stand across the other side of town, and didn’t have a son who went to university, and didn’t bother reading the papers (and was blissfully ignorant of the recession or hard times people were experiencing), just kept buying more and more sausages and buns. He kept promoting his hotdogs to the passers by and not surprisingly, his hotdog business continued to grow bigger and bigger. 
So what am I doing now, in these confusing economic times? 
Well, I’m continuing to invest the same way I’ve always done. I’m still looking for investment opportunities and while others are sitting on the sidelines. 
I’m looking to buying more properties below their intrinsic value, so that if values fall further, I’m still protected. By the way I only buy properties in areas that have outperformed the averages in the long term and properties to which I can add value through renovations or redevelopment so that I can create my own capital growth. 
I’m currently involved in two property developments where I am manufacturing capital growth at a time of minimal capital growth. Then I’m keeping these properties as long term investments because I’ve acquired them at “wholesale.” 
Yes some investors will thrive, not just survive in these changing times. 
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
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myardney-DFoGhGbSJX

Smart investors know how to thrive in difficult times

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The retail industry has suffered under the worst conditions in 20 years and things are about to get worse, according to the latest Deloitte Access Economics Retail Forecasts report, which predicts sales will grow by only 1.5% in 2011-12.
The predictions come as the Productivity Commission continues to hold public hearings in order to hear from businesses and industry bodies on how the government should help the industry as it battles the shift to offshore sales.
The new Access report recognises 2010-11 has been a "disastrous" year for the retail industry, with sales growing just 1.3% in the worst result in two decades. Although incomes have risen, Access says the real problem is a lack of willingness to spend money across all sectors.
Only "other retailing", which includes newsagents and chemists, have performed well with sales up 5.1%. And household goods are performing well, but elsewhere, the report states the retail sector is "barren".
"Retailers now face the prospect of going from bad to worse. Share market falls have eroded some wealth and seen consumer confidence plummet further. Recent data on jobs growth has also been less than encouraging."
Economists have warned volatile share markets are likely to erode confidence, especially after local shares plummeted 3.5% yesterday in one of the worst one-day trading sessions seen in recent years.
There are only two possibilities – volatile share markets cause the RBA to cut rates, or consumer confidence slowly returns over time. Access says the latter is the more likely option, but it means businesses will have to suffer until next year at the earliest, and until 2012-13 when a 3.3% growth rate is predicted.
A number of factors are keeping sentiment down – share market and housing prices falling, jobs growth losing pace, falling housing activity and lower consumer confidence.
"More worryingly for retailers, consumers are now much more concerned about their own job security than they were a few months ago," the report says.
"Recent significant layoffs by large Australian companies Qantas and Bluescope Steel may further affect the confidence of future employment by Australian consumers. Workers who are concerned about their future employment prospects are more likely to save rather than spend."
Forecasts for individual sectors indicate the pain is widespread. Speaking in terms of volumes, food retailing is set to grow only 2.4% this year, with department stores up 2%. Clothing and footwear will grow 0.5%, household goods by 1.9%, and "other retailing" and "non-food" both up 1.6%.
Cafes and restaurants will contract by 1.4%, Access says. "Unlike most other areas of discretionary retail spending, this sector does not reap the benefits of a rise in the Australian dollar."
"Cafes and restaurants are also facing the possibility of higher wage costs in the service sector. On the other hand, a subsiding of the spike in food prices will help relieve pressure on margins, while the Australian dollar may start to depreciate a little from current lofty levels over the next year."
However, despite the negative outlook, there is still hope. Access says positive growth from outside the retail sector will eventually boost jobs and income growth, which will lead to a recovery in some retail sectors.
On the positive side, it says, commodity export prices remain high, while it also notes that many businesses are beginning to invest more – there are $832 billion worth of major projects underway or in planning, up by 14.7% over the past year.
Further support also comes from the fact interest rate hikes are nowhere to be seen, with the RBA ready to cut rates if the need arises.
"By financial year, following the two-decade low of 1.3% real inflation-adjusted retail sales growth in 2010-11, there may be a modest improvement to 1.5% growth in 2011-12, with the bulk of that growth occurring the other side of Christmas.
"A more solid rate of jobs growth and easing of consumer caution might then see retail growth lift to 3.3% in 2012-13."
Specific sectors are set to enjoy higher growth as well during that time, such as "other retailing", set to grow 4.9%, along with non-food up 3.7%, clothing and footwear up 3.5%, and household goods up 3.4%.
Cafes and restaurants, however, are only set to grow 1.7% during that year, and only by 2.7% over the next five years.
"Other retailing" will grow the most over the next five years at 4.4%, followed by clothing and footwear at 4%, non-food at 3.7%, and food at just 2.1%. Department stores will grow the least, looking at only 1.3% growth over the five-year period.
State-wise, only Western Australia and Queensland will see sales growth over 3% this year, at 4.8% and 3.1% respectively. New South Wales will grow just 0.4%, while South Australia, Tasmania and the Northern Territory will grow 2.1%, 1.9% and 2.9% respectively.
Victoria will see retail sales fall by 0.1%.
However, conditions will improve in 2012-13, with NSW up 2.7%, Victoria up 3.3%, Queensland up 4.1%, South Australia up 2.1%, Western Australia up 4.1%, Tasmania up 2.9%, and Northern Territory up 2.6%.
Access also predicts good times next year, saying the current slowdown in the rate of jobs growth may have run its course, and that the household savings rate may be stabilising.
"Pockets of the Australian economy are still going very strong and this will support a reasonable rate of GDP growth in 2011-12. That should allow jobs growth to re-gather pace over the next year and provide a better support for retail spending."
This article originally appeared on <a target="_blank" title="SmartCompany" href="https://www.smartcompany.com.au/economy/20110913-retail-growth-on-the-other-side-of-christmas-but-it-s-still-not-going-to-be-very-strong-access-economics">SmartCompany</a>.
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Meagre retail growth forecast after Christmas

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Melbourne leads the country in industrial rental growth as developers consider new projects in key transport hubs. 
CBRE’s latest Asia Pacific Industrial and Logistics MarketView shows that the overall trend was for a slowing in rental growth. 
Melbourne was standout in the CBRE Logistics Rental Index with the city recording the strongest quarter-on-quarter and year-on-year rent growth in Australia of 0.7% and 6.8% respectively. 
This was close to double the 3.9% year-on-year rent growth recorded in Perth, which had the second highest rental growth over the period, followed by Brisbane at 3.3%. This was followed by Adelaide at 1.7% and Sydney at 0.9%. 
On a quarterly basis, rents were stable in most markets, with the exception of Melbourne. 
CBRE industrial and logistics services senior director Dean Hunt says underlying demand from the import and retail trade sector has underpinned activity in the Melbourne market. 
“Further assisting is the reduction in vacancy, which is creating greater competition for space and the beginnings of a re-emergence in the speculative development sector,” Hunt says. 
In Sydney, the report shows that high Australian dollar was continuing to put pressure on local manufacturers. 
The movement of a number of large south Sydney tenants to cheaper markets in the western suburbs has kept a lid on Sydney rent growth in 2011. 
“In Sydney, a shortage of supply in the outer west is spurring development in response to the emerging trend for a number of larger South Sydney tenants to relocate to the sub region to lower their real estate costs,” says CBRE industrial, logistics and investments regional director Joshua Charles. 
Small-scale development has returned to Adelaide as demand for smaller units and sites increases in well-located areas. 
In Brisbane there was little change in rents as the market continued to absorb existing stock and companies took longer to negotiate lease agreements. 
However, with the Brisbane development pipeline having dried up, the report tips some upward pressure on rents for large facilities in coming months and re-emerging interest in design and construction options.
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Melbourne industrial rental market booming thanks to transport projects

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NSW has recorded a 5.4% rise in building approvals on a seasonally adjusted basis in July, helping the nation limp to a 1% increase, according to ABS figures released today.
The 5.4% increase follows a 3.8% increase in June, but comes after two big drops in May (12%) and April (15%).
Victoria suffered the biggest drop of the eastern seaboard states, down 3.1% in July, following a 6.6% gain in June.
Tasmania suffered a 26% drop in building approvals in July
The 1% increase to 12,227 dwellings nationally was the result of an uptick in public sector approvals, which increased by 77% from 256 units to 454 units. Private sector approvals were down 0.7% during July and have fallen for three consecutive months.
Queensland suffered a 14.5% decrease in private sector housing approvals – the biggest fall across all states – and the fourth straight month that housing approvals have fallen as new home builders awaited the start of the state government’s $10,000 building boost, which kicked off on August 1.
<ul>
<li>The seasonally adjusted estimate for private sector houses fell 0.2% in July 2011 to 7,600 houses following a fall of 3.3% in the previous month.</li>
<li>The seasonally adjusted estimate for private sector dwellings excluding houses approved fell 1.4% to 4,173 dwellings following a fall of 4.5% last month.</li>
<li>The seasonally adjusted estimate of the value of total building approved fell 4.4% in July following a fall of 1.4% last month.</li>
<li>The seasonally adjusted estimate for the value of total residential building fell 1.2% and the value of non-residential building fell 9.7%.</li>
</ul>
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lschlesinger-FZcF9M3vE6

NSW building approvals up: ABS

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In the standard literature, the so-called “equity risk premium puzzle” refers to the substantial outperformance of listed shares over safer government bonds. The magnitude of the differential in returns generated by these assets suggested to some that investors were inconceivably cautious, or risk-averse, and thus demanded exceptionally high returns from equities in order to compensate them for the market’s sizeable volatility, or risk of loss. 
There are at least three other explanations that I am more sympathetic to. The first is that there is, in fact, only a small – indeed, far too small – equity risk premium over government bonds when you run the right numbers. I will return to that later. 
The second (related) argument is that investors’ portfolios have actually been plagued by quite irrational and poorly compensated “risk-seeking” asset allocations, which have underestimated the probability of loss in, and relative valuations of, shares compared with far more secure fixed-income assets like cash and government bonds. 
I suspect that this irrationality was itself influenced by investor ignorance about corporate capital structure risk and, more fundamentally, the important differences between debt and equity. I have little doubt that these misconceptions continue to prevail at the retail punter level. I would venture they also exist amongst more sophisticated institutional investors. 
One concern is that this equities’ “obsessive-compulsive disorder”, as I like to call it, appears to be a peculiarly Australian affair, which is most endemic in our superannuation system. It is an interesting sociological question as to whether this is somehow linked to our unusually pervasive gambling culture. 
According to the OECD, Australian super funds have far and away the highest exposures to listed equities of the 31 countries they survey (see first chart below). This has manifest in inferior performance vis-à-vis other pension systems around the world. Click to enlarge
 
<a href="/images/stories/joyesept131.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/joyesept131thumb.gif"></a>
Here the OECD finds that over the last three years,“the worst [pension] performance was observed in Spain (-2.0% nominal, -3.8% real), Australia (-2.8% nominal, -5.6% real), Portugal (-3.1% nominal, -4.1% real), and Estonia (-3.7% nominal, -7.7% real). The average, yearly net return over the period [for all 31 countries] was 5.4% in nominal terms and -0% in real terms [ie, dramatically higher than Australia’s results] 
As I have explained before, debt ranks ahead of equity, commits to repay you the dollar value of your original investment, and promises a predetermined rate of return. 
Equity does not offer you a guarantee to return your capital, is subordinate to debt in the event of insolvency (i.e., you get paid last), and directly exposes you to the risk of loss in concert with the prospect of non-specified gains. 
One of the great ironies of the asset-allocation puzzle that has led to excessively high weights to shares in Australian portfolios is, as I explained <a href="https://www.businessspectator.com.au/bs.nsf/Article/fixed-interest-corporate-bonds-equity-returns-pd20110530-HC8N2?OpenDocument&amp;src=srch">here</a>, that debt is, by its construction, far easier for punters to understand, analyse and value than equity. 
The lay observer would not, however, think this given the vast industry complex that has been built up around promoting the share market –with countless online retail stockbrokers and media backers – that in turn make investing in shares seem like it need no more qualification than a functional index finger. 
But as any professional analyst understands, the highly uncertain assumptions and complex discounted earnings models required to estimate the equity returns that may or may not materialise from a listed company are orders of magnitude more sophisticated than valuing a floating-rate debt security.
 
<hr class="system-pagebreak">
 It is even more bizarre that the regulator, ASIC, makes it harder for mums and dads to invest in debt than equity, given the greater certainty, security and transparency of the former over the latter (the minimum direct investment is $500,000).
Any chump can create an online trading account to gamble, on say, unsecured <city>Bendigo</city> &amp; Adelaide Bank shares, but heaven forbid if you want to invest in <city><place>Bendigo</place></city> &amp; Adelaide Bank’s senior or subordinated debt securities. 
Chalk that one up as a win to the banking cartel that does not want to be disintermediated from the supply of business credit by an ascendant retail debt capital market, and the hordes of share market salesmen relentlessly spruiking the “value” and purportedly high returns associated with this company or the next. For what it is worth, Aussie government bonds have outperformed global equities over the last 30-plus years. That is to say, there has been a negative equity risk premium between global shares and Aussie government debt. 
Another way of thinking about this is by considering the risk in your own home. When you buy a home, you provide the cash deposit, which is your equity. The bank supplies a home loan, which ranks ahead of your deposit in the capital structure. If things go belly up, the bank’s debt ranks ahead of your equity. The bank gets to sell the home, recover its principal and any unpaid interest, and only then to you get the left overs, assuming there are any. 
Now consider a listed company. Would you prefer to be the bank, or the secured lender to that company, by investing in its debt, or be the mug who provides it with the risky equity capital, equivalent to the deposit for your home? 
A second, related explanation of the equity risk premium puzzle is that the difference in total returns delivered by shares and government bonds is not as great as some claim. For example, Challenger Financial’s actuaries have run analysis that shows once you control for measurement mistakes in the academic literature, such as forgetting that government bonds have a ‘total return’ including both capital gains and income, the performance gap between Australian shares and Australian government bonds has only been about 2% per annum (our numbers are similar). On a risk-adjusted basis – i.e., controlling for the probability of loss – shares look like a comparatively poor investment. In the technical jargon, the so-called “Sharpe Ratio”, or risk-adjusted return, attributable to shares is about half that yielded by Aussie government bonds.
This actually inverts the entire equity risk premium puzzle on its head: could it be possible that, in <country-region><place>Australia</place></country-region> at least, the question is why listed shares have not offered more (rather than less) compensation for their very high risks? Now I have never heard or read that question before. An ensuing query, therefore, is whether in Australia the equity risk premium puzzle is about understanding if investors have had too much – as opposed to too little – risk tolerance. This arguably fits more comfortably with the academic research literature on investors’ behavioural biases.
 One issue that the Challenger analysis has yet to address is the subject of “survivorship bias”, which, if it exists, would further reduce the disconnect between bonds and shares. 
There are at least two forms of survivorship bias. The first is the likelihood that before 30 to 40 years ago, Australian share market indices only included “winners” – or the companies that survived – and do not retain data on the performance of “losers” – i.e., those that have delisted due to corporate distress. 
A second more insidious bias that remains to this day is that when a company goes into insolvency, trading in its shares is suspended, and the last price recorded by the ASX is the pre-insolvency value. Oftentimes the company’s shares will never trade again. Yet as the so-called “residual claimants”, shareholders get paid out last after all other creditors, and their realised returns are, as a result, frequently a fraction of the value implied by the last traded price. 
Following the circa 50% losses experienced in the global share market collapses in 1987, 2001, and 2007-08, and the more recent turbulence wrought by the North Atlantic sovereign debt crisis, Australian retail and wholesale investors are beginning to make some belated changes to their asset-allocations that will see them reduce their equities exposures in favour of higher cash and fixed-income weights. While this could take years to fully implement, it may further depress equity valuations until such a point as the expected future returns implicit in prices offer adequate compensation for shares’ extraordinarily high risk. 
There is also a case that this dynamic will be amplified even more as the population ages and risk-aversion increases: that is, demographic change will drive greater appetite for cash and fixed-income securities.
<hr class="system-pagebreak">
 
The funny thing is, the more the North Atlantic financial markets crap themselves, and the more pressure that is brought to bear by investors, economists, commentators, politicians and ‘policymakers’ on the RBA to cut – or, in extremis, hold – interest rates, the more bullish I feel on both housing and shares! 
As of this morning, the interest rate futures markets are pricing in 5.7 cuts – of one quarter of a percentage point each – to the RBA’s official 4.75% target cash rate by July  next year. That would bring the cash rate down to one hike above its GFC nadir of 3%, and slash mortgage rates back to near-40-year lows (see chart). Click to enlarge
 
<a href="/images/stories/joyesept132.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/joyesept132thumb.gif"></a>
Now I don’t really pay much attention to the financial markets’ precise predictions, because they are so consistently wrong. They are, however, informative in a directional sense. And what makes them more credible is that many smart and thoughtful economists (and investors) are jumping on the doom-and-gloom bandwagon with some notable exceptions, including yours truly. (I am probably the only person in <country-region><place>Australia</place></country-region> who thinks the RBA will still nudge rates higher this year.) 
AMP, Deutsche Bank, Goldman Sachs and Westpac all believe that the RBA will cut rates by between one and two times before we move into 2012. Macquarie Bank forecasts there will be four rate cuts by the end of next year. 
Concurrently, there is mounting pressure being placed on the RBA’s staff by its own board, members of which are reported to have been calling for rate cuts for months, and by untold vested interests – union officials, retailers, exporters, politicians, and share market investors – to, in effect, look past, the RBA’s official 2% to 3% per annum inflation target in the name of “shoring up” employment and growth. As the accountant Anthony Bell argued, why shouldn’t we be allowed to run a Chinese-style inflation rate? 
Since November last year, the RBA has acquiesced, ignoring consecutive way-above-target “core” inflation results in the first half of 2011 that would ordinarily have led to reflexive hikes. Yet the RBA has not simply overlooked the official ABS inflation numbers, and the two measures of “underlying” inflation that the RBA itself designed (which remove the effects of the floods and so forth). 
The RBA has also disregarded its own official forecasts for underlying inflation over the next three years. In the two editions of its Statement on Monetary Policy published this year, the RBA has projected that core inflation would remain materially above the mid-point of its target 2% to 3% per annum range out to 2013. Indeed, it is predicting that inflation pressures will rise over time while also acknowledging that its historical forecasts have had a worrying tendency (the RBA’s characterisation, not mine) to under-club the ultimate strength of <country-region><place>Australia</place></country-region>’s inflationary pulse. 
In his most recent parliamentary testimony, Stevens argued that: “There are periods of tremendous turbulence when I think it is a very good thing for policy to just sit still…You can only do that if you feel that you are in some sense ahead of the game on inflation, which I have felt.” (emphasis added) 
Now noting my points above, and that Stevens and his colleagues went on to describe the underlying inflation pressures reported in the first half of 2011 as “troubling”, “broad-based”, “surprising”, and not directly due to the resources boom, it is an arduous task to understand how the governor can possibly claim that the RBA currently feels “ahead of the game” on inflation. 
This statement seems to fall into the same camp as his claim several testimonies ago that, “[I]n my experience the Reserve Bank never has leaked and, if I can help it, it never will.” As the commentator Alan Kohler wrote at the time, “Yeah, right, and Tiger Woods is gay.” 
 
Historian Stephen Bell of the University of Queensland has documented the problem of RBA leaks using the example of former RBA board member Hugh Morgan: 
“In mid 1997 the Bank's apparent confidence in an 'ethical fix' was questioned when it was revealed that Western Mining Corporation had quadrupled its forward sales of gold [to hedge the risk of price falls] at the same time as the RBA was secretly selling two-thirds of its gold reserves. Hugh Morgan, the CEO of Western Mining, was a member of the Bank's Board at the time. He did not, and was not required to, absent himself from the Board meetings, which dealt with the gold sales.” 
A related irony here is that the RBA and its governor have for years been criticising investors for spending too much time focusing on the North Atlantic economies, and paying insufficient attention to the developing world. This is because a remarkable 65% of all Australian goods exports now go to emerging (as opposed to developed) countries, with 75% sent to Asia alone. 
It is also because over 70% of global GDP growth during the last decade has been created by countries outside of North America and <place>Europe</place>. Even if we ignore growth and simply examine shares of global output measured in US dollars, we find that over half of the world’s output does not derive from the G7 economies. 
 
<hr class="system-pagebreak">
 
In short, the world is a much bigger and more diversified place than the financial markets seem to believe. The risk is that the RBA itself has fallen for the same trap by setting Australian monetary policy on the basis of US and European capital market turbulence. It explicitly acknowledged as much when it reported in the last minutes that the board would likely have raised rates in August were it not for the US debt ceiling crisis. 
While it is not my own central case, if the financial markets and the more bearish economists are right, and the RBA has come to the end of this tightening cycle, Australia’s most interest rate sensitive sector – housing – is likely to be a good place to be. 
We have had no house price growth across <country-region><place>Australia</place></country-region>’s combined capital cities for 19 months now. At the same time, household disposable incomes, as measured by the ABS’s quarterly National Accounts, have grown rapidly at a circa 7% to 8% per annum pace (see chart). Click to enlarge
<a href="/images/stories/joyesept133.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/joyesept133thumb.gif"></a>
If the bears prove correct, and mortgage rates come down 140 or so basis points to around 5.6%, we are likely to see the return of quite healthy house price growth as savers are punished – via lower cash returns – while geared investors flock to the perceived security of bricks and mortar.
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

The worse the world gets, the better housing will: Christopher Joye

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The Rydges Wollongong will undergo a startling transformation from February next year when it converts from a 70-room hotel into a 90-bed private psychiatric facility. 
The redevelopment of the hotel located at 112 Burelli Street follows a “complex” lease agreement being negotiated between the owner of the building, Australian Property Trust, and new tenant Evolution Health Care. 
A development approval will be lodged by Australian Property Trust with Wollongong City Council within the month to undertake a $4 million refit of the Rydges Hotel property. 
Evolution Health Care will lease the building on a “long-term arrangement”. 
The deal was negotiated by Colliers International’s national director of transaction services – healthcare and retirement living, Phil Smith, as advisor to the Australian Property Trust. 
Smith says the transaction was a long and complex negotiation, and is a great result for both parties and the broader Illawarra community, which is poorly served in terms of mental health. 
The Australian Property Trust acquired the building in 2004 when it was known as the City Pacific Hotel and appointed Rydges to manage the property. 
In 2005, the trust spent $3.25 million upgrading the hotel, including adding nine new rooms. 
Evolution Health Care chairman and CEO Ben Thynne says Wollongong Clinic will deliver state-of-the-art private mental health services to the Illawarra region. 
“Local psychiatrists have, and will continue to, be involved with the planning of the facility, which will offer vital services such as general psychiatry, depression, bi-polar and post-traumatic stress disorders,” he says.
Thynne says the clinic will add 80 jobs and 90 additional private hospital beds to the Illawarra when fully functional.
The Australian Property Trust is a subsidiary of the Melbourne-based ECS Property Group and includes the Rydges North Melbourne and Rydges Eaglehawk Resort in its property portfolio. 
The expansion into the health sector is part of a move to further diversify the unlisted group. Besides its hotel assets, the trust owns residential development sites, land subdivision and commercial property. 
Australian Property Trust CEO Mark Etherington says the conversion of the existing hotel to a private hospital will allow the group to improve income streams and strengthen profitability.
“We have earmarked further acquisitions that will compliment this current model of asset value-add,” he says.
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Wollongong hotel to become psychiatric facility

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Asia-based buyers continue to invest in the Sydney CBD, with Chinese conglomerate HNA Group the latest to buy prime commercial real estate, following its purchase of 1 York Street for $117 million from Colonial First State.
The 22-storey building formed part of the CFS’s unlisted direct property investment fund and has a net lettable area of 18,400 square metres.
It was acquired by CFS from AMP Asset Management in June 2001 for about $78 million.
AMP Society acquired the building in 1994 as part of a $544 million purchase of UK-based Hammerson Plc's Australian commercial real estate portfolio.
The sale price reflected an initial yield of 8.5% with the deal negotiated by Vince Kernahan, Jon Chomley and Andrew Reed of Colliers International with Aurelio di Napoli from DTZ Sydney advising HNA together with Linda Zhu of DTZ’s Sydney-based China desk.
It follows CFS’s listed Commonwealth Property Office selling 259 George Street in July to the Singapore-based Tay family for $395 million.
Also in July, Singapore's K-REIT fund bought a half share of Mirvac's 8 Chifley Square for about $169 million.
Further purchases are likely from HNA with the group planning to spend around $190 million on real estate purchases in Australia. The company has more than $10 billion in assets under management.
Richard Li, a global investment manager with HNA Group, was reported in The Age as saying the strength of the economy made Australia an attractive place to invest, and ''given the excellent market conditions, HNA is expected to purchase further assets in the future''. The HNA Group is the parent company of Shanghai-based Hainan Airlines.
The York Street building was constructed in 1973 and is a B-grade office building comprising 22 levels of office accommodation, ground floor lobby and parking for 125 vehicles.
 
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