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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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

Joel Robinson

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Every First Home Owner Grant for new property by state

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

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

Staff Writer

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

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

alisonwarters@gmail.com

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

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

Ellen Walker

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

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

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Australian superannuation funds will increasingly look to invest in global real estate in 2015 as they are close to Asian cities that are benefiting from major demographic shifts, while there are fewer opportunities in the domestic market, a fund manager has predicted.
The forecast comes as a separate study by Australian researchers, released by the US-based Defined Contribution Real Estate Council (DCREC), shows an allocation of just 10% of a fund’s portfolio to real estate can match or beat the returns of a fund with less property exposure at a lower risk to investors.
TIAA Henderson Real Estate executive director Nick Evans, who heads the fund manager’s Australian business, said sophisticated investors such as superannuation funds were attracted to creating tailored real estate portfolios that suited their particular risk and return profiles.
Australia’s largest super fund, AustralianSuper has partnered with TIAA Henderson Real Estate to invest in emerging global real estate.
“Major investors are approaching global real estate in a very different way to pre-GFC days and we expect to see more Australian funds building a tailored approach that gives them the flexibility, exposure and returns they need,” Evans said.
He added that Australia’s superannuation funds were searching for better investment solutions for their ageing members who wanted secure income at a reasonable level of risk to support a lengthy retirement.
The study, which was released by the DCREC in the US in early November, found that allocating 10% of a portfolio to a mix of listed and unlisted real estate enhanced the risk-return profile of a defined contribution plan portfolio.
Defined contribution plans are investment vehicles where members contribute set amounts over a period of time, such as Australia’s superannuation funds where members contribute 9.25% of their salary each year.
The study, A Path to Better Retirement Outcomes: Allocating Real Estate Assets to Retirement Portfolios was conducted by researchers at Australia’s Griffith University, professor of finance Michael Drew and Adam Walk, also from Griffith University, and Jason West from Bond University.
It found a portfolio that includes property could smooth fund members' transition from accumulating savings to drawing a pension and could help investors avoid mistakes such as selling risky assets during a market downturn, which locked in losses.
The study noted that funds often used listed real estate investment trusts (REITs) for property exposure due to their liquidity, diversity and valuation cycles that mirrored stocks and bonds, but had been slower to adopt unlisted real estate.
Unlisted property could deliver returns that were closer to those of bonds with less risk than stocks, regular income, low volatility and low correlation to listed markets, the study showed. Some types of unlisted real estate could also act as a hedge against inflation.
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Australian funds looks to Asian property markets as domestic opportunities run dry

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The property developer Crown Group secured a sellout when the initial offering at its Sydney by Crown project were put to the market on the weekend. 
The new $250 million tower will be built at 161 Clarence Street in the Sydney CBD. Prices started at $826,000.
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<div class="ProfileTweet-authorDetails"><a href="https://www.propertyobserver.com.au/https://twitter.com/IwanSunito/status/536035479339012097" target="_blank"><img src="/images/2014/11/24/tweet-12-nov-24-one.jpg" alt=""></a></div>
</div>
Crown Group sold 95 per cent of its first and final release of apartments as more than 500 eager property buyers flocked to the official launch with a total of $173.1 million in apartments sold.
Construction of Sydney by Crown will begin in early 2015 and is scheduled for completion in late 2017.   A selection of less than half a dozen apartments remain available for sale, with prices undisclosed.
It was a residential site long abandoned by Multiplex which had proposed in 2004 a Tonkin Zulaikha Greer-designed building called Atria.
There were <a href="https://instagram.com/p/vsYgllEviO/" target="_blank">same-day launch events</a> in Sydney, Jakarta and Singapore for apartments in the 220-apartment tower, overseen by Crown Group director of sales and marketing Adam Sparkes.
Designed by Koichi Takada Architects, the 25-storey building will feature heritage-inspired lower levels transitioning to a modern glass-and-steel tower, capped with dozens of steel arches.
These are a reference to the iconic Sydney Harbour Bridge and Sydney Opera House, forming a striking addition to Sydney’s skyline, Crown Group CEO Iwan Sunito told Property Observer.
Sydney by Crown will also be home to a collection of Crown Suites serviced apartments.
The apartment sizes (approx) are:
<ul>
<li>
Studio 44-55 square metres from $826,000
</li>
<li>
One bedroom Plus study 50-59 square metres 
</li>
<li>
Two bedroom 64-76 square metres 
</li>
<li>
Two bedroom, plus study 82-89 square metres 
</li>
<li>
Three bedroom 94-104 square metres 
</li>
<li>
Penthouse 142 square metres
</li>
</ul>
The penthouse, 142 square metre on the top floor of the building, will be marketed as likely to sell at just below $50,000 per square metre.
Back into 2004 the abandoned Multiplex proposal came with pricing that failed to excite buyers after the investor frenzy of 2003.
The 106 apartments on offer at Atria came with Multiplex's 2004 pricing:
Studios $358,550 to $433,450
One bedroom (some with studies) $474,700 to $712,050
Two bedroom $691,850 to $798,100
Two bedroom plus study $711,950 to $855,700
Three bedroom plus study $1.75m
 
 
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Sydney by Crown on Clarence Street secures sellout in four hours

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Foreign property ­buyers in Australia will not be slugged extra stamp duty, as modelling by the Parliamentary Budget Office has concluded the charge would be self-defeating.
But the federal government is being asked to consider a $1,500 application fee to process their purchasing paperwork.
Kelly O'Dwyer's parliamentary committee has concluded the prospect of additional stamp duties would likely kill off the market for foreign buyers.
The stamp duty issue will not be formally recommended by the parliamentary committee into housing affordability and foreign ownership when it publishes its long-awaited report on Thursday, the Australian Financial Review has reported.
The review is expected to recommend the establishment of a single database of property purchases across states and territories and linking that information to customs data.
The Treasurer Joe Hockey recently said the federal government was prepared to go it alone after resistance from state bureaucracies.
The $1,500 application fee would raise $600 million over the first decade, News Ltd papers reported.
The funds would help track compliance for unauthorised acquisitions.
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A $1,500 application fee, but no higher property stamp duty for foreign buyers

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Melbourne’s weekend auction market continues to report moderating results from high late spring auction volumes.
The Melbourne weekend auction market reported the lowest clearance rate this year.
The weekend result of 67.1% was well below last weekend’s 72.1%, according to Australian Property Monitors.
A surge in late spring auctions numbers is impacting market activity with buyers increasingly spoiled for choice.
Some 1,154 properties were listed for auction, almost identical to the previous weekend’s 1,153 and well ahead of the 931 auctions conducted over the same weekend last year.
There are over 1,300 auction expected this Saturday. 
Melbourne’s west hosted the most number of auctions with 187 closely followed by the inner south with 186, the inner city and the inner east each with 157, the outer east 152, the north east 142, the north 91 and the south east  49.
The most popular suburb for auction listings on the weekend in metro Melbourne was Glen Waverley in the outer east with 22 followed by Reservoir in the north-east.
Melbourne’s four weekend average clearance rate has fallen to 72.7% well down on the previous four weekend average result of 75.%.  
Melbourne’s outer east suburban auction market remains resilient recording clearly the highest clearance rate of all the regions at the weekend with 82.%.
The next highest was the inner east with a rate of 71% followed by the inner south 70.%, the north 66.2% and the north east with a clearance rate of 66.0%.
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Melbourne weekend clearance rate dips to 2014 low

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A converted Erskineville Methodist Church sold at weekend auction for $2.05 million.
The home and office space space with courtyard is positioned on the corner of Amy Lane, at 1a Macdonald Street.
More than $1.7 million was being tipped for <a href="https://www.raywhite.com/nsw/erskineville/1214016/" target="_blank">the four bedroom, three bathroom 1890s building</a> that was renovated in 2012.
The church sits on 275 square metres.
It was offered through Shaun Stoker and Ercan Ersan at Ray White having last traded for $247,000 in 1991.
The highest recorded house price in <a href="/news">Erskineville</a> over the past year has been $2.86 million for 146 Rochford Street in November 2013.
CoreLogic RP Data puts its median price for houses at $975,000, a record level.
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Converted Erskineville church fetches $2.05 million at weekend auction

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High auction numbers continue to test the Sydney market with another weekend of elevated activity.
Record numbers of late spring auctions are impacting results, with buyers spoilt for choice as sellers surge into the market before the end of the year shut down.
There was a weekend 73.5% initial clearance rate, but the revised prior weekend success rate slipped to 69%, according to Australian Property Monitors (APM).
The weekend’s 73.5% result was the lowest recorded for four months and the third consecutive result below 80% this spring.
Sydney commenced the spring selling season this year with nine consecutive clearance rates above 80%.
"The market has clearly lost that early energy with five out of the last seven weekends below the 80% benchmark," APM's senior economist Dr Andrew Wilson noted on the preliminary Saturday night figures.
November is still set to record the highest number of auctions ever conducted in Sydney over a month, with 29 November shaping as close to an all-time record day for auctions with over 1,000 properties listed.
There were 870 homes scheduled for last Saturday, similar to last weekend’s 875 but well ahead of the 754 listed over the same weekend last year.
This time last year there was an auction clearance rate of 80.6%, which took the spring scorecard to 17 weekends out of 19 with auction clearance rates above 80%.
There are four weekends to go until the close of the property market for 2014.
At this time last year Sydney's spring weekend auction clearance rates had averaged 83.3%, compared with just 63% over the same period in 2012.
The current four-weekend average clearance rate has fallen to 76.4% which is well down on the 80.6% average recorded over the previous four-weekend period.
Sydney’s northern beached reported the highest clearance rate at the weekend at 82.6%.
The next best region was the city and east with 82.4% followed by the north west 79.3%, the lower north 76.9%, the upper north shore 76.1% and the inner west with a relatively low 74.5% from the most number of sales at 79.
The most popular suburb for auctions last weekend in Sydney was Mosman on the lower north shore and Randwick in the city and east each with 13 auctions listed. 
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Sydney clearance rate slips into the high 60s as record spring auction Saturday looms

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GUEST OBSERVATION
If there is one thing that I see on a daily basis that I get frustrated with it is that decision-making is a skill which few people have learned to do very well. And this, not one's salary or profession, is the primary reason why few people achieve anywhere near as much as they are truly capable of.
When taking on important projects, a lot of people's focus is too heavily weighted on how they can complete it at the lowest cost rather than focus on the outcome that they hope to achieve.
Good decisions are made with a clear mind and with a focus on 'why' you are doing it in the first place – the long-term objective as opposed to the current task. Tapping in to the best resources you can find, including input from someone whose core business is conducive to your longer-term objective, enhances decision-making quality. Regularity of good decisions is the cornerstone to success.
Getting something done is an accomplishment. Getting something done well is an achievement! Many people can lay claim to the accomplishment of buying a property. Fewer people have truly astute investment decisions on their list of achievements.
Those whose default behaviour is to save money ahead of doing something as well as they can are destined to compromise outcomes. We've all heard that saying "you get what you pay for". The first question that people ask when making enquiries about goods or services is "what does it cost?” when it should be “how can you assist me to achieve my objective?”
The client who appoints the accountant because he/she is the cheapest will never know that there were more creative strategies which would have saved them a lot of money.
I find it amusing when people chose to take that DIY option instead of paying a specialist.
Outsourcing to specialists creates more time to do more of the things that you are truly good at, enables you to make more money, and enhances the quality of your accomplishments.
The person who uses a DIY diagnosis for that constant sneeze and keeps going back-and-forth to the chemist, might have been able to overcome it very quickly from a trip to an allergy specialist – skill comes at a cost but the net result is usually worth it. A majority of property investors are like that DIY patient who never consults a true specialist!
There are only 24 hours in the day; it's what we do with them that counts! We can all make more money if we really want to but no one can make more time. No one!
If we want to achieve the very best that we are capable of for something that is important enough to do, then I suggest that's where the focus should be most, not on the easy option or the cost.
Instead of focusing on tasks associated with buying an investment property, focus on the primary objective of increasing your potential to make the most money possible. Are you a ‘property buyer’ or a ‘property investor’?
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Seven common examples of poor decision-making made by property investors:
<ol>
<li>
Property selection Tax advantages and emotions dominate property selection decisions to the detriment of capital growth potential over the longer term. Hardly a day would go by without me hearing someone tell me that they want to buy a brand new property because of the extra tax incentives; or an attractive looking property to get a better tenant. A structurally sound established property, in a strategically chosen location, at a significantly lower entry-price has much more upside capital growth potential, whether it looks dated or beautiful. 
</li>
<li>
Building and pest inspections Why are some buyers so quick to terminate a purchase contract after an inspector discovers defects? The inspector’s job is not to comment on what they like; he / or she is only going to comment on the 1-2% of the property that might benefit from some best-practice attention. The long-term primary objective is to invest in a property in the right city, the right street, the most suitable dwelling style, and priced right. If you’ve already found that property and it happens to have several defects why would you be so keen to walk away? Good decision-making would be to explore how significant the defects are, the likely cost to fix them, and whether a deal could be done with the owner. What most see as risks, could actually be opportunities.  
</li>
<li>
House v apartment I wish I had a dollar for every time someone told me that they “don’t want to invest in an apartment because they don’t want to pay body corporate fees” or “land appreciates but buildings depreciate”. Narrow-minded statements such as these are living proof that too often people get distracted by small things which they don’t want at the expense of the real objective, the end result that they hope to achieve. The dwelling types within my own property portfolio have been strategically-chosen as a result of demographic and supply-demand research conducted within each city.  
</li>
<li>
Applying for an investment home loan The objective should be to get the most suitable type of loan, which compliments a professionally designed overall debt structure, has a strategy to deal with good debt and bad debt, and avoids cross-collateralising. In spite of this, the first question people usually ask is “what’s your interest rate?” A lot of borrowers are also creatures of habit who go back to the same bank because ‘it’s easier’. Banks are good at explaining features and benefits however their strategy skills generally leave a lot to be desired.  
</li>
<li>
Property management Property managers play an important role in helping investors to get the best out of their profit and loss statement. Why is it the first question investors ask is “what do you charge?” This is a classic example of how so many people lose sight of the primary objective - property management fees are only one line entry in the P&amp;L. When I interview property managers I enquire about office systems, staff turnover and ratios of properties to property managers. I ask questions about their processes to minimise vacancy periods and arrears, how they handle maintenance requests and I review samples of their rental advertisements. As with a majority of business decisions, it’s not so much as what a property manager charges, but what they do (or don’t do) for it.  
</li>
<li>
Organising insurance The point of having insurances is to protect ourselves from loss in the event of an unforeseen event. The focus should therefore be on what needs protecting, how much protection we need, and what the policy wording says that the insurer will / will not do in certain situations. When organising insurance, an overwhelming majority of people do little more than ring around and ask price-related questions (“what’s your premium, what’s your excess?”). How would you feel if a claim for flood or malicious damage was denied, or the payout following a major fire was insufficient to rebuild the entire house? If the insurer doesn’t come to the party at time of claim all of those insurance premiums that you’ve paid over the years are little more than a donation.  
</li>
<li>
Rental renewals Refusing to be flexible with the amount of rent charged without even contemplating current market forces is another example of poor decision-making which is all too common amongst property investors. What is the sense in insisting on a particular rental figure at the expense of a longer vacancy period? It is irrelevant how much rent you ‘want’, or how you justify it, unless the market is prepared to pay it. Astute property investors make good decisions through understanding that there are generally three factors which determine whether or not a property is rented: price, presentation, and promotion. Every market’s vacancy rates will fluctuate up and down from time to time and sometimes the best decision is to advertise the property for 5% less than your competition.  80% of something will always be more than 100% of nothing!
</li>
</ol>
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014)
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spressley-sBoeMhannA

Seven common examples of poor property investment decisions

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Earlier in the year we were contacted by a rep from a group of overseas investors from Asia with a punchy nine-figure sum to invest in Australian commercial real estate, seeking an office property investment in the harbour city.
Upon meeting at our office, we tactfully pointed out that, even as visible from our very office window, Sydney is busily in the process of constructing an impressive oversupply of office space. With some of the biggest developments in Australian history well underway (the <a href="https://petewargent.blogspot.co.uk/2013/11/cranewatch-barangaroo-emerges-as" target="_blank">LendLease Barangaroo "T1" tower</a> will be Australia's largest ever commercial tower, for example) better office investments must surely exist in other cities well away from Sydney's oversupplied Central Business District (CBD).  
There will be far more Sydney office space than demand for it, and rents must inevitably fall, yet the message conveyed back to us was that Chinese investors are familiar with and like Sydney, and therefore they be would progressing to seek out a Sydney office investment anyway. Dollar Declines When I wrote my first book back in 2011, the Aussie dollar was trading way above parity. I put forward the viewpoint that as and when the dollar declined materially we would see an inflow of foreign capital to Australia, although the impacts could be somewhat different to what we might expect and may be felt most acutely in the respective CBDs of Sydney and Melbourne and the immediate fringes thereof.
With commodity prices now getting whacked across the board, finally it does not seem unreasonable to expect that we might see an Aussie dollar with a "70 handle" some time in the not-too-distant future, which would provide some welcome respite for our exporting economy.
<img src="https://2.bp.blogspot.com/-TS4jgN0zDaM/VG3yvZRixoI/AAAAAAAARWo/GreEQf5jhKE/s1600/CHINA1.jpg">
Australia and China have this week signed a <a href="https://petewargent.blogspot.co.uk/2014/11/china-completes-trifecta-of-free-trade" target="_blank">Free Trade Agreement</a>, and so with China news and views all the rage at this time, let's take a look at three macro trends which we might expect to see that could impact investors in Australia. <img src="/images/2014/07/04/yellow-one.jpg" alt="" style="float: left;"> Land Prices
As <a href="https://petewargent.blogspot.co.uk/2014/11/china-completes-trifecta-of-free-trade" target="_blank">noted here earlier in the week</a>, under the terms of the ChAFTA, the threshold of Foreign Investment Review Board (FIRB) screening for Chinese investors wishing to buy commercial real estate has been lifted from a comparatively trifling $54 million to a massive $1,078 million, in line with limits on private business investments.
Meaning? To all intents and purposes, Chinese investment groups wanting to mop up Australian commercial property can target anything they want.
In theory this could ultimately add to the housing supply in Australia as prime location commercial sites are acquired and residential developments are instead brought to the market. In reality what is happening is that Chinese investors are paying <a href="https://www.canberratimes.com.au/business/property/the-chinese-buyers-property-developers-dont-want-20141120-11q915" target="_blank">way above market price</a> to gain access to prime sites in our two largest cities, and then are proceeding to landbank them.
As also noted by <a href="https://www.businessspectator.com.au/article/2014/11/12/property/great-australian-land-grab" target="_blank">Business Spectator</a>, almost exactly mirroring my own anecdote above, this is only really happening in inner Sydney and inner Melbourne ("mainly around the CBD and their fringes"), where Chinese investors pay "at least 25% more" for sought after areas pushing development site prices "35 to 40% higher".
It's something we can see first hand in Sydney's inner west where I personally have long owned investment properties, including in Erskineville where former warehouses and printing shops are seen as ripe for new development, sending land prices are soaring. Back to <a href="https://www.businessspectator.com.au/article/2014/11/12/property/great-australian-land-grab" target="_blank">Business Spectator</a>:
"Goodman sold an industrial park in Erskinville [sic] in South Sydney [technically it's in the inner west region], a large potential residential site, for $350 million to Hong Kong’s Golden Horse Holdings -- reportedly the highest price yet paid for a residential site in Australia. 
"Mr Williams believes that those entering the market at the current point in the price cycle will have to build the higher land cost into the price of the end product."
When folk see diggers and cranes they instinctively associate the machinery with an oversupply of dwellings, but while there is plenty of construction happening, vacancy rates in Erskineville have been under 1% (effectively nil for any half-way decent property) for the past decade, while across the inner west region the vacancy rate is closer to the city's average at 1.%.
It is important not to underestimate the potentially limitless scale of Chinese investment. Take the example of Greenland, constructors of the 600 unit <a href="https://www.greenlandcentre.com.au/team/" target="_blank">Greenland Centre</a> tower in Sydney's CBD, a behemoth group which has generated an astonishing $78 billion in revenue in the last 12 months. To put that in perspective even the mighty Commonwealth Bank could only muster $44,312 million. Reports the <a href="https://www.afr.com/p/special_reports/opportunityasia/china_greenland_to_make_fta_agriculture_kkcz4WZyJYMhSVIwF3WgRJ" target="_blank">AFR</a>:
"Chinese state-owned property developer Greenland sees “no ceiling” on the amount of funds it is prepared to invest here, declaring it will expand into agriculture, a day after the free trade agreement with China was signed."
The merits of foreign investment in development sites are forever mixed, and land prices around the centre of Sydney and Melbourne are undoubtedly now being pushed higher by Chinese investment. As the investor group suggested to me, however, Chinese developer interest in most other parts of Australia is considerably lower, and probably immaterial in the majority of cases.
<img src="/images/2014/07/04/yellow-two.jpg" alt="" style="float: left;">Share Price Indices
China's construction boom has already distorted Australian share indices, although a good deal of the impact is now to be seen in the rear view mirror. The huge explosion in Australian mining investment was threatening to make a nonsense of my contention that industrials and financials make for a better long term play than Australia's resources companies.
However, as our updated chart packs will confirm next Thursday, mining and engineering construction is now set to drop like a stone over the years ahead, and the resources index is at long last following commodity prices down to earth with a thud as supply ramps up.
<img src="https://3.bp.blogspot.com/-JtigSL_0v9c/VG3ywRLTk9I/AAAAAAAARW4/YvlA640soGg/s1600/SPI.gif">
Industrials and financials as an index tend to be more self-sustaining and can pay stronger dividends through the cycle than the resources explorers and producers which exhaust their reserves and incur heavy reinvestment costs in the form of exploration and construction spend. Remember too that yield and income are not the same thing (aka. beware the "yield trap") and thus the listed property trusts (today known as "A-REITs") which have often paid the highest yields may be better suited to those in the income phase of their lives such as retirees, with high payout ratios stunting growth. The best long-term bet for both growth and dividend income has generally been a diversified share portfolio weighted to industrials and financials and by next month's chart pack we may see that the financials index has finally eclipsed the resources index (which since 1999 in particular has been performing way stronger than long-term history suggests is normal). It is feasible that lower interest rates and a lower dollar could make share indices more attractive to foreign investors, who already own a sizeable chunk of Australian shareholdings, but forecasting monthly index movements is essentially a fool's errand, so I'll pass on that for today.
This article continues on the next page. Please click below.
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<img src="/images/2014/07/04/yellow-three.jpg" alt="" style="float: left;"> Residential Property One way or another Chinese investors will inevitably have an impact on Australian residential property. Consider the inexorable rise in the number of Chinese visitors to our shores.
<img src="https://4.bp.blogspot.com/-GgqASg4ms5k/VG3yvpimevI/AAAAAAAARWs/UsTaBDexz-o/s1600/China2.jpg">
And, indeed, Chinese permanent settlers. 
<img src="https://3.bp.blogspot.com/-gkF7OoZdAA4/VG3yv7BRNhI/AAAAAAAARWw/SPGQqZca3_o/s1600/China3.jpg"> 
Funds might flow into Australian residential property either legally or illegally as is debated ad infinitum. My contention has always been that inner Sydney, inner Melbourne, and to some extent inner Brisbane, will be the locations impacted by the trend towards the globalisation of capital city property markets. <a href="https://www.afr.com/p/business/property/the_top_suburbs_for_asian_investors_5zZJDau39TShWuaJzSAS1J" target="_blank">Reports the AFR</a>, offshore interest from Chinese buyers is very heavily focussed on a few inner Sydney, Melbourne and Brisbane areas, with $1.35 million the average price bracket of interest and average purchase budgets ranging from $3.36 million to $3.7 million. Unsurprisingly the most popular suburbs include Mosman and Bondi Beach, prime location Sydney suburbs with access to beaches, as well as other locations in the eastern suburbs and lower north shore from Coogee to Cremorne. Melbourne and Brisbane suburbs also feature prominently.
The "blue chip versus blue sky" suburb debate was discussed <a href="https://propertyupdate.com.au/blue-chip-versus-blue-sky/" target="_blank">over at Property Update</a> earlier this week. As an investor in Bondi myself, I always tend towards the blue chip choices. While it's not everyone's cup of tea, we have seen median apartment price growth in Bondi Beach of 45% in the past five years or $231,000, while median unit prices in Bondi Junction, where I'm an investor (generally, I like train lines), are up by 50.4% or $234,000. Granted this is not the fastest rate of growth in Sydney. As previously cited, another example I'm familiar with as an investor is the inner west suburb of Erskineville, where we've seen median unit prices rise by 56.7% in the past five years, or $243,000. Quality investments have done better than median price growth. Whatever your view on Bondi, and there are no doubt a fair few detractors, I'll take a bet that there are plenty of investors around Australia who would chew your arm off for results of $250,000 plus in capital growth over the last five years. Beware the Yield Trap in Real Estate It may seem counter-intuitive that prime location suburbs are the long-term outperformers, since there is ever a tendency to feel that the best of the growth must always lie in the past. However, in common with all commodities, it is demand outstripping supply that moves prices as capital city real estate becomes a more global product. We have seen this play in London over the decades, with house prices in Kensington &amp; Chelsea <a href="https://allenwargent.com/wp-content/uploads/2013/04/AW-LONDON-BE-SP13-031.pdf" target="_blank">easily outperforming</a> all other property types in Britain, and continuing to do so throughout the financial crisis and beyond. Despite a thousand crash predictions over the years, the average asking price today is <a href="https://petewargent.blogspot.co.uk/2014/11/london-prices-surge-past-600000" target="_blank">more than £2.2 million</a>...and we are talking an entire London borough here, not only Egerton Crescent. Buying cheap property in outer areas (where there is more land available for release) because prices seemingly "can't get cheaper" can often be a more risky approach. My bookshelves at home are strewn with UK "Buy-to-Let Bibles" written a decade ago before the financial crisis, many of which stressed the importance of seeking 8% yields since capital growth was apparently impossible to predict. Yet the high-yielding 8 percenter suburbs listed therein now read like a retrospective list of where to find property which has crashed in value, from the north-east of England to the Potteries. Yield in itself is rarely a reliable indicator of the quality of an investment, and higher yield can often represent higher risk. With Australian household debt nudging up against its likely effective ceiling from around 2006 onwards, one wonders whether the chat forums will begin to be filled with yield-focused property investors from around Australia who are beginning to question whether property is even a worthwhile investment at all as the current property cycle eventually reaches its peak. Capital growth has been very weak and even negative for years in many areas, since spiralling household debt can no longer lift all boats as it once did.
<img src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6tl-hhfin-small.gif?accessed=2014-11-20-17-15-04" alt="Household Finances graph">
If income was your goal then for the past five years, you need have looked no further than Australian <a href="https://petewargent.blogspot.co.uk/2014/11/monthly-macro-housing-market-update" target="_blank">bank stocks</a>. Investing in residential property predominantly for its yield is akin to attending an AC/DC concert in order to appreciate Phil Rudd's drumming prowess. It's important - integral to the overall result even - but it's not the main event. Capital growth is.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' .
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Chinese funds seeking a home: The three macro trends that could impact Australian investors

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Of all the policies employed by the government to exacerbate Australia’s housing affordability crisis, our inequitable tax system, which includes negative gearing, is top of the list.
Negative gearing has reduced Australia’s housing supply. Over 92% of investors chase the capital gains associated with second hand dwellings rather than increase the stock of housing through investment into new supply. We replace properties for sale, with properties for rent.
<img src="/images/2014/11/20/cashmore-nov-20-one.jpg" alt="">
Negative gearing has pushed up the price of housing and widened the gap between price and yield. High and rising house prices naturally put upward pressure on rents and assist in keeping first homebuyers locked out the market.
<img src="/images/2014/11/20/cashmore-nov-20-two.jpg" alt="">
Negative gearing has turned us into a nation of speculators. Today, the investor share of the market is close to 50%. Investor finance commitments are rising at their fastest pace since 2007. 65% of loans to investors are on interest only terms and an estimated 95% of all bank lending is being channeled into real estate – mostly residential. Negative gearing costs the government billions in lost tax revenue each year. Around 1.25 million taxpayers (approximately 13% of the total) now have at least one negatively geared property. <img src="/images/2014/11/20/cashmore-nov-20-three.jpg" width="676" height="440"> Negative gearing employs one rule for the landowner and another rule for the worker. Investors that negatively gear can deduct non-work-related property losses against wages and salaries.They can lower their taxable income as much as they wish by simply by buying enough negatively geared dwellings. The wage earner has no such advantage – why work when you can speculate? Negative gearing favours the wealthy rewarding high-income earners handsomely. Notwithstanding, the property lobby use artificially reduced taxable incomes to falsely claim that most investors are “<a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-09-24/janda-the-myth-of-mum-and-dad-negative-gearers/5766724">mum and dad</a>” average income earners.
Negative gearing merely scratches the surface of Australia’s inequitable tax system. 
Investor tax incentives and their effect on house and land values have been repeatedly clarified by independent tax reviews, as well as previous Senate Inquiries into housing affordability.
The first inquiry conducted by the Productivity Commission in 2004, determined that prices had surpassed levels explicable by demographic factors and supply constraints alone. They stressed that a large surge in demand had rather been “predicated on unrealistic expectations (in a 'supportive' tax environment) of on going capital gains”.
The second inquiry overseen by a Select Senate Committee in 2008, found that the average house price in capital cities had climbed to over seven years of average earnings and once again, they identified inequitable disparities in the overall fairness of the tax system, that had lead to “speculative investment on second and third properties.”
Australia's Future Tax System review conducted in May 2010 stated that tax benefits and exemptions had been capitalised into higher land values, encouraging investors to chase ‘large’ capital gains over rental income and landowners to withhold supply.
The Future Tax System review recommended allowing only 40% of interest (and other expenses) associated with investments as a deduction.
This would reduce the amount investors are able to claim against negatively geared dwellings and provide a good starting point for phasing out the policy altogether.
Negative gearing as well as stamp duties (which are a volatile source of revenue, dependent on the volume of housing transfers in addition to the transacted price), should be replaced by a broad-based SLT (state land tax) – as I recommended <a href="https://catherinecashmore.com.au/wp/?p=414" target="_blank">here</a>.
Under this scenario, the upfront cost of land would fall, the higher tax base would blunt potential capital gains from speculation, and housing supply would naturally increase as land would need to generate an income.
An enhanced land tax would also provide a steady source of revenue for state government giving them greater control over public finances for the provision of essential infrastructure.
Moreover, study after study demonstrates, that basing a system on the collection of resource rents and monopoly profits, for the direct application of facilitating local and community services, can reduce the tax liability on most households whilst also maintaining complete revenue neutrality.
Unfortunately, 95% of our federal MPs own investment properties. Collectively, the are in possession of an estimated <a href="https://blog.australiaboomtobust.com/2014/08/propertied-federal-political-class/" target="_blank">$300 million</a> personal portfolio of residential dwellings. 
It is therefore unsurprising that all recommendations from previous Senate inquiries for meaningful and equitable tax reform have been studiously ignored.
This is an extract from Property Observer's exclusive article where the experts were asked: <a href="/expert-insights/investing/exclusive-negative-gearing-what-needs-to-change">Negative gearing – what needs to change?</a>.
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Negative gearing merely scratches the surface of Australia’s inequitable tax system

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Many first time investors do not wish to have property acting as a drain on their finances.
That is, they don’t want to be paying out of pocket every week to maintain the home. While neutrally geared or even slightly negative cash flow may also be acceptable, many want property to actually provide a return.
If you want to know what positive cash flow is, you <a href="/expert-insights/investing/what-is-positive-cash-flow-property-investment-terms-explained">can read our quick guide here</a>.
Whether or not you want a negative or positively geared property is down to your strategy. If you’re still deciding, you can <a href="/expert-insights/investing/positively-or-negatively-geared-property-which-strategy-will-work-best-for-you">read Mark Armstrong’s comparison of the two</a> and how capital growth may vary. Terry Ryder also explains that <a href="/news/qld/you-can-achieve-good-capital-growth-and-positive-cashflow-in-the-same-property-if-you-know-where-to-buy-terry-ryder">it is possible to achieve good capital growth and positive cashflow in the same property</a>, if you know where to buy.
It’s also worth bearing in mind <a href="/expert-insights/finance/why-lenders-are-negative-about-positively-geared-property">this insight from Albertus Waldron that banks can actually be somewhat wary of positive property</a>.
What a cash flow positive property looks like is unique to every investor and their financial situation. Due to negative gearing the tax bracket that you are in will affect your after-tax yearly financial situation. The amount you can afford as a deposit, the interest rate, you decisions around renovations and a number of other personal choices and situation aspects will determine your overall cash flow outcome. For this reason, there is no hard and fast rule, or specific investment property, that it makes sense for every person.
These personal differences are what makes up the final result, or your net cash flow. That is, the amount of money you make once all your own expenses and outgoings are taken into account. The gross cash flow or yield, which is what most people discuss as it is the universal figure, is the money you make without taking into account ongoing costs.
You must reflect on your personal circumstances to see how each of these elements will have an effect.
Similarly, there are things to look for when purchasing, and things to consider doing once you own the property, that can assist your cash flow. These are worth bearing in mind when in this "finding" stage, as you can consider whether they are viable early on.
BEFORE PURCHASING
Rental yield
The first stop for many is to check out the percentage figure called a rental yield – the amount of rent earned as a proportion of the property's price. The higher it is, the more it seems to get investors talking. Consider this an initial barometer, but don’t think low rental yields are enough to rule out areas with otherwise strong drivers.
We regularly discuss the problems with relying on headline figures that are not always specific to an area, and this is no exception.
Know how to calculate the rental yield yourself, and the factors that influence it, if you are intending to use the figure. <a href="/expert-insights/your-weekly-how-to-calculating-rental-yield">Here’s a quick explanation of the rental yield.</a>
Specific high yielding property types and locations may include:
<ul>
<li>Mining towns 
</li>
<li>Regional areas 
</li>
<li>Student-dominated rental areas 
</li>
<li>Furnished rentals 
</li>
<li>Short stay apartments</li>
</ul>
Apartments
With lower price points to purchase, but not always as proportionately low rents, apartments can sometimes be worth consideration. When looking at individual markets across Australia, by and large apartments tend to yield more than houses.
If you have enough capital, buying blocks of units, rather than units individually, can often offer better returns. If you’re still not finding what you’re looking for, then some investors do turn to commercial property. You can read more about investing in commercial property (from retail and leisure to offices and industrial) in our designated commercial pages.
Speak to your broker and accountant
Understand the likely repayments you will need to make and how this can be affected by putting more money down as a deposit. Your broker should be able to assist you with this.
Your accountant will be able to explain to you how the property you are considering may work in terms of your income, and will lay out the claimable expenses. Bear these in mind when purchasing, including depreciation.
Here’s a <a href="/expert-insights/finance/what-can-landlords-claim-on-tax">list of what landlords can claim on tax</a>.
Back of the envelope calculations
Undertake some preliminary calculations for the properties you consider prior to purchasing. This will help you compare the cash flow possibilities in a number of locations. There are a range of <a href="https://www.smartline.com.au/mortgage-calculators/investment-property-cashflow" target="_blank">online calculators</a> that can be used as a rough guide to get you started.
Get to know the rental market
Know the price point that will make your cash flow work, and make offers with this in mind.
You should also understand the concept of a vacancy rate. If the property is vacant for a long period of time then even if the rental yield is high you could face a lower overall cash flow position.
While in some cases a higher vacancy rate through certain periods can be offset by short-term high paying tenants (such as is the case for some holiday rentals), you must be prepared to plan for this in advance. You can see the vacancy rates for free on <a href="https://www.sqmresearch.com.au">www.sqmresearch.com.au.</a>
Remember, rental markets change over time. Rents may increase or decrease, with demand shifting. This will affect your cash flow situation. Even if tenants are willing to pay significant amounts of money now, demographics and demand do change. Be prepared, and aim to be forward thinking in what that rental yield will look like over the time you wish to hold it.
Undertake the necessary inspections
Your outgoings certainly affect your cash flow, so it’s worth knowing what these may be upfront. Be aware of strata costs, <a href="/expert-insights/buying/how-to-navigate-the-building-and-pest-inspection">potential pest damage and any repair work or renovation required</a>. Add these into your calculations.
AFTER PURCHASING
Much of the effort after purchasing will revolve around two things – reducing costs and increasing your income (rent).
Getting more rent for your property
Hiking the rent can quickly lift your cash flow, but it must be done within the bounds of your tenancy law and it must be justifiable – else you will find complaints from your tenant, or a vacant property.
Here are <a href="/expert-insights/investing/how-to-boost-your-rental-yield">some ways you can boost the rent</a> and, in turn, your cash flow.
Common strategies to consider include:
<ul>
<li>Renovations (to either include more desirable features to command a higher rent, or to add an extra room) 
</li>
<li>Adding a secondary dwelling or granny flat to rent separately 
</li>
<li>Furnishing the property 
</li>
<li>Renting by the room 
</li>
<li>Small developments</li>
</ul>
Reducing costs and fees
Much of this will be in the planning and upfront considerations, ensuring no major repairs you haven’t calculated into the equation are required. Remember, scrimping on important repairs is usually a false economy – irritating your tenant and potentially leaving your asset limping for re-sale.
Go through your list of expenses each year and consider where these costs can be minimised. While some are non-negotiable, for instance strata fees, others are up for debate. Some even go so far as to self-manage to avoid the management fee. Just remember, you largely get what you pay for – <a href="/expert-insights/investing/you-get-what-you-pay-for-in-property-managers-who-work-cheap">particularly with property managers that come cheap</a>. If self managing is a consideration, then it will likely affect the location in which you choose to buy.
MUST READ: <a href="/expert-insights/16-ways-to-maximise-your-cash-flow-and-protect-yourself-financially">16 ways to maximise your cash flow and protect yourself financially</a>
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