High-profile apartment defect cases have changed the way many NSW buyers approach purchasing, putting greater scrutiny on building quality, strata records and the parties behind a development before a contract is signed.

The industry buyers are assessing today, however, is also different from the one in which cases such as Opal Tower and Mascot Towers emerged.

NSW has introduced a series of regulatory measures aimed at strengthening oversight of apartment construction, including Building Commission NSW, the Residential Apartment Buildings Act 2020 and the Strata Building Bond and Inspections Scheme. Under the latter, developers are required to lodge a bond, with independent inspections forming part of the process for identifying defects in new strata developments.

Those changes provide another layer of protection, but they haven't removed the importance of buyer due diligence.

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For purchasers considering an apartment, that means looking beyond the residence itself. Building and strata history, strata reports, the track record of the builder and developer, the condition of common property and any known or planned expenditure by the owners corporation can all form part of assessing a building before purchase.

Whether the development is already complete can also materially change what can be assessed.

An off-the-plan purchaser is necessarily buying before the finished product exists. A completed apartment, by comparison, can be walked through before contracts are signed, allowing the purchaser to see the finishes, common areas and broader building as they have actually been delivered rather than relying solely on plans and renders.

It also removes exposure to some of the uncertainties that exist between an off-the-plan purchase and completion, including construction delays, cost pressures and builder insolvency during the delivery period.

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<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a> National Sales Director Ben Hamblett said that greater focus on tangible evidence is increasingly evident among apartment purchasers.

“The biggest shift we're seeing is buyers wanting proof, not promises,” Hamblett said.

“That's exactly why we deal in completed stock - you can inspect the building before you commit - and why we've backed every purchase with a cash bond against special levies.”

At <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> in Parramatta, that emphasis on a completed, inspectable product is already in place.

The 413-apartment, 46-level tower at 12 Phillip Street is being marketed by Projects by Equitifund, allowing prospective purchasers to inspect the residences, common areas and resident facilities before committing.

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The Lennox also introduces another layer to the due-diligence conversation through Strata Surety.

The vendor-funded arrangement provides purchasers with a cash-backed bond held in their own solicitor's trust account from settlement. According to Equitifund, the bond covers any special levy raised during the applicable cover period and is provided at no cost to the purchaser.

Special levies can create an unexpected cost for apartment owners where an owners corporation needs funding beyond its existing strata contributions. Under NSW strata law, a special levy requires approval by owners at a general meeting.

Equitifund Executive Chairman Greg Huxley said Strata Surety was designed to provide something more concrete than reassurance about that potential exposure.

“Buyers have every right to ask hard questions about strata risk - the industry has given them plenty of reasons to,” Huxley said.

“Our answer isn't a reassurance, it's a bond. Strata Surety puts real money behind that confidence, held by the buyer's own solicitor, not by us.”

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For The Lennox, its completed status also means purchasers can assess not only the apartment itself, but a building that has already been occupied and operating for several years.

Completed in 2021, the $300 million development, designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, comprises one, two, three and four-bedroom apartments, with open-plan living areas extending to private balconies. Interiors incorporate engineered timber flooring, stone benchtops and integrated appliances, while many upper-level residences have views across the river and surrounding district.

Its established amenity can similarly be inspected in operation. Resident facilities include the Watermark precinct with a 20-metre pool, outdoor terrace, barbecue areas, gym, fitness studio and conference room, while ground-floor retail addresses the river walk and surrounding public space.

The Lennox is also home to the Southern Hemisphere's first fully robotic residential car park, which has now operated for several years. Its nine-level basement combines three conventional parking levels with six automated levels, accommodating 327 vehicles using technology from German firm Lödige Industries.

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The riverfront address puts The Lennox close to much of central <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a>'s existing infrastructure, including Parramatta Station, Westfield Parramatta, Parramatta Park, and the Church Street dining precinct.

The remaining apartments form part of a limited release secured by Equitifund, following the sale of the majority of residences before and shortly after completion.

The regulatory environment around NSW apartment construction has changed considerably since the defect cases that reshaped public discussion around the sector. For purchasers, however, regulation is only one part of the equation. The ability to investigate a building's history, review its strata position and, where possible, inspect what has actually been delivered remains central to making an informed apartment purchase.

At The Lennox, its completed status provides that opportunity before contracts are signed, while Strata Surety adds a financial backstop against special levies beyond the protections already provided under NSW strata law.

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Joel Robinson

Buying with confidence: What NSW apartment buyers should check beyond the defect headlines

Too often, heritage buildings become the podium for a contemporary tower. At <a href="https://www.apartments.com.au/new-apartments/623-collins-607-623-collins-street-melbourne-vic-3000">623 Collins</a>, <a>Sterling Global</a> challenged its design team to reverse that process.

The brief to <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> was deliberately simple: "Don't design around the heritage. Design from it." It became the philosophy behind a project that draws inspiration not only from two landmark heritage buildings, but from Collins Street itself, a street layered with architectural history and civic significance.

That philosophy has shaped one of <a href="https://www.apartments.com.au/developments/melbourne-vic-3000">Melbourne</a> CBD's most considered residential projects, where the 1924 State Savings Bank and neighbouring Batman's Hill Hotel have become the architectural foundation for 623 Collins rather than remnants preserved beneath a new development.

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Rather than approaching the site as a blank canvas, <a href="https://www.apartments.com.au/developers/sterling-global">Sterling Global</a> saw the existing buildings as the beginning of the story.

"Sites like this rarely become available," the developer said.

"623 Collins wasn't simply an opportunity to develop a prominent CBD site. It was an opportunity to restore and reimagine one of Melbourne's important heritage landmarks while contributing to the continued evolution of Collins Street. For us, the existing buildings weren't constraints. They were the beginning of the story."

Instead of mimicking the ornate heritage architecture, Plus Studio studied the proportions, rhythm and craftsmanship of the original buildings before translating those characteristics into a contemporary 42-storey tower.

[smartcode_project:default project_id=145324 project_image_fid=372748]

"The brief challenged us to create a contemporary landmark that respected Melbourne's architectural history without becoming nostalgic," Plus Studio said.

"Rather than mimicking heritage, we sought to understand its proportions, rhythm and material language before translating those qualities into a distinctly contemporary architectural expression."

The practice says the State Savings Bank and Batman's Hill Hotel became the project's primary source of inspiration, allowing the heritage buildings and contemporary architecture to exist "in conversation rather than contrast." Generous planted terraces further soften the transition between old and new, creating elevated green spaces while reinforcing the dialogue between the restored podium and the contemporary tower.

That dialogue continues throughout the interiors, where Melbourne designer Fiona Lynch developed a material palette inspired by the idea of alchemy, balancing contrasting materials that reference both the Neo-Grec detailing of the original bank and contemporary urban living. The result is a series of spaces that feel timeless rather than trend-driven.

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The project will deliver 316 residences across four collections, Heirloom, Signature, Reserve and the Penthouse Collection, with each responding differently to its position within the building, from the restored heritage podium through to the upper levels of the tower. The Heirloom Residences retain defining heritage elements including original heritage windows, generous proportions and high ceilings, while the tower introduces contemporary homes with expansive layouts and elevated views.

Amenities have likewise been designed to support long-term city living rather than short-stay convenience. Residents will have access to concierge services, wellness facilities including a pool, cold plunge, sauna, steam room and gym, alongside private lounges, entertaining spaces and dedicated resident clubs.

Sterling Global says that approach is resonating with buyers seeking permanence rather than novelty.

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According to the sales team, purchasers are looking for enduring architecture, generous floorplans, heritage character and long-term value, with many commenting that 623 Collins "doesn't feel like another apartment development" because of the way the architecture has been curated around the site's history.

Situated on the prominent corner of Collins and Spencer streets, the project occupies one of Melbourne's most recognisable gateway sites, marking the western entrance to the city's best-known street. For Sterling Global, it also reflects a broader shift in city-making.

"Rather than maximising development yield, the project embraces adaptive reuse as a design philosophy, allowing heritage to inform architecture, interiors and the overall resident experience," the developer said.

"The result is a building that feels uniquely connected to Melbourne."

[smartcode_project_cta:default project_id=145324]

How Sterling Global designed 623 Collins from Melbourne's history

Avant Townhomes is adding to Ivanhoe’s family-sized housing options with <a href="https://www.apartments.com.au/new-townhouses/three-82-ivanhoe-382-upper-heidelberg-road-ivanhoe-vic-3079">Three 82</a>, a collection of just 16 four-bedroom townhomes on Upper Heidelberg Road.

The <a href="https://www.apartments.com.au/developers/intrapac-property">Intrapac Property</a> townhome division has taken a contemporary approach to the traditional family home, pairing larger floorplans with the lower-maintenance format of a townhouse.

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Designed by <a href="https://www.apartments.com.au/architects/arcadia-studio">Arcadia</a>, with landscaping by Landsite, the homes feature generous open-plan living and dining areas that connect directly to outdoor spaces, with layouts also designed to maximise natural light and privacy.

Natural stone is used throughout the interiors, including in kitchens that pair stone surfaces with bespoke cabinetry, considered storage and SMEG appliances.

The four-bedroom layouts include built-in wardrobes and a main bedroom with its own ensuite, while family bathrooms service the additional bedrooms. Each home also includes a lock-up double garage and intercom entry.

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Energy efficiency has been incorporated into the design through solar panels, double glazing and reverse-cycle heating and cooling, with the homes targeting 7-star energy ratings.

Rather than incorporating extensive communal facilities, Three 82 has been conceived around private residential amenity, with the 16-home scale keeping the focus on individual homes and their own indoor and outdoor spaces.

The development is located at 382 Upper Heidelberg Road, around one kilometre from Ivanhoe Village's cafés and retail and a short drive from Eaglemont Station and Ivanhoe Station.

[smartcode_project:default project_id=152069 project_image_fid=374393]

Several of Ivanhoe's established schools are also nearby, including Ivanhoe Girls' Grammar and Ivanhoe Grammar School. The address also provides access to the suburb's parklands and the wider Yarra River corridor.

<a href="https://www.apartments.com.au/project-marketer/nelson-alexander">Nelson Alexander</a> has been appointed to handle sales.

Construction is underway and progressing well, with Three 82 currently tracking toward completion in Q2 2027.

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Three 82 brings boutique four-bedroom townhome collection to Ivanhoe

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/graya">Graya</a> has secured a prime Newstead site from fellow developer Fraser, subsequently lodging plans for The Silo, a major mixed-use residential project in Newstead designed around a new public laneway linking the James Street precinct with the wider Gasworks and Newstead neighbourhood.

Proposed for the corner of Chester and Morse streets, the <a href="https://www.apartments.com.au/architects/bureauproberts">Bureau^Proberts</a>-designed project places its strongest emphasis at ground level, where retail, landscaping and a new cobblestone pedestrian connection would open the site to the surrounding neighbourhood. The design team describes The Silo as “more than a residential building”, positioning the development as an extension of Newstead’s public realm rather than a standalone apartment tower.

“A new cobblestone laneway and landscaped connection between James Street and Gasworks unlock a missing pedestrian link, improving walkability and stitching together two of Brisbane’s significant urban destinations,” Bureau Proberts said in its Urban Design Report.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="0ea1b06a-75f5-40a5-b2c5-33c97bc86052" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/silo%20bldg.png?VersionId=KmjsAtNePu57_B31EM_DJ5T6KPJHtcmo" />

The Silo is planned as a mixed-use development incorporating apartments alongside a bar and centre activities including food and drink outlets, indoor sport and recreation, office and retail uses.

Architecturally, Bureau Proberts has conceived the building as a collection of vertically expressed, stepping forms rather than a single uniform tower. The composition rises from an articulated podium before being broken by a triple-height landscaped recreation level, with the upper section becoming more compact before terminating in a landscaped rooftop garden.

The project's name and architectural language draw directly from Newstead's industrial history. Patterned off-form concrete is proposed as the principal façade material, complemented by slender metal rod balustrades and extensive planting. The cylindrical and vertically ribbed elements give the building its silo-like expression, while curved balconies and planted edges introduce a softer subtropical layer.

“The Silo reinterprets its robust forms, scale and materiality through a contemporary subtropical architectural expression, creating a building that acknowledges its industrial legacy, while responding to the way the precinct is occupied today,” Bureau^Proberts said.

The recreation level is one of the defining breaks in the tower. Plans include a lap pool, mature subtropical planting and shared resident facilities within an elevated communal garden. Landscaping continues through the podium and onto the rooftop, where a further garden forms what the architects describe as a “subtropical crown” to the building.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="f8451036-35a4-49a9-8d88-2ef4438eba3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Silo%20Lane.png?VersionId=h8N31_rYmCEqoNrpt4kbYVQhJGZn60LH" />

At street level, the development has been designed to establish a more permeable block. Retail and hospitality tenancies address the public realm, while landscaped pedestrian spaces lead into the new laneway connection. Renders in the design report show the proposed “Silo Lane” as a substantial opening through the podium, framed by cylindrical concrete forms with cascading planting above.

The Silo continues Graya's move into larger apartment developments after building its reputation across high-end residential projects in Brisbane and the Gold Coast.

Graya buys Frasers Newstead site, plans The Silo between James Street and Gasworks precincts

<a href="https://www.apartments.com.au/developers/wickton">Wickton</a>’s completed Linacre Rise development in Hampton is giving Bayside downsizers the opportunity to move into a spacious apartment near the beach, with the developer covering stamp duty for a limited time.

The 27-residence development has been designed for buyers who want to simplify their living arrangements without giving up the space, warmth and quality associated with a long-term family home. Most apartments have already been secured by Bayside locals, leaving a select collection of two and three-bedroom residences and penthouses available.

Two-bedroom apartments are priced from $1.275 million, three-bedroom residences from $2.25 million and penthouses from $3.375 million, with the completed homes available to inspect and move into now.

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<a href="https://www.apartments.com.au/buildings/linacre-rise-hampton-8-10-linacre-road-hampton-vic-3188">Linacre Rise</a> occupies an elevated position on one of <a href="https://www.apartments.com.au/developments/hampton-vic-3188">Hampton</a>’s quiet, tree-lined streets, around 250 metres from the bay and 500 metres from Hampton’s village centre. Its setting gives residents access to the beach, local cafés, shops and Hampton Train Station while retaining the feel of an established residential neighbourhood.

Architecture and interiors by <a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a> draw on the warmth and permanence of traditional brickwork, with the building integrated into terraced landscaping by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>. Ground-floor apartments are elevated above the street and include private garden courtyards, while several upper-level residences have generous balconies and outlooks toward the bay.

Inside, the residences favour natural materials and generous proportions. Herringbone-pattern European oak flooring, natural stone benchtops, premium joinery and Swiss V-ZUG appliances are among the key inclusions, while integrated storage has been incorporated across kitchens, bathrooms, studies and living areas.

The kitchens have been planned as practical spaces for both everyday use and entertaining, with substantial island benches, detailed cabinetry and adjoining dining and living zones. Full-height wardrobes, plush bedroom carpeting and carefully considered lighting reinforce the residential character Wickton sought to retain for buyers moving from larger homes.

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A Linacre Rise purchaser said the completed apartment had delivered the space, outlook and construction quality they had been seeking.

“The unit is very light, has views to die for over the bay, all construction materials and fittings are premium quality, we have secure parking for three cars, EV charging at very competitive rates, the neighbours are friendly and there is just a lovely ambiance about the place,” the purchaser said.

Environmental features include solar panels, shared electric vehicle charging stations, rainwater harvesting for toilet flushing and landscape irrigation, double-glazed windows and water-efficient fixtures and appliances.

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The development was built by Balmain &amp; Co, with Wickton managing the broader development process through its in-house team.

For downsizers, the project’s completed status removes much of the uncertainty associated with buying off the plan. Purchasers can inspect the finished apartments, understand their outlook and proportions, and move in without waiting for construction to conclude.

The remaining selection includes north-oriented balconies, corner configurations and penthouses with elevated bay views. The developer-paid stamp duty initiative is available for a limited time, with potential savings of up to $200,000 depending on the residence purchased.

[smartcode_project_cta:default project_id=95289]

Limited-time stamp duty offer at completed Linacre Rise apartments in Hampton

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?

For most Australians, buying an apartment is one of the biggest financial decisions they'll ever make

The location, floorplan and price are often the first considerations, but in recent years another question has become increasingly important: who is actually delivering the project?

A series of high-profile builder collapses, construction delays and defect concerns have fundamentally changed how many Victorians approach buying off the plan. The collapse of Porter Davis in 2023, which reportedly left around 1,700 homes unfinished, became one of the most visible examples of the risks that can emerge when a construction company fails. <a href="https://www.equifax.com.au/sites/default/files/lpassets/pdf/Final-Business-Market-Pulse-June-Sector-Deep-Dive-Report-2.pdf">Similar challenges across the broader construction sector</a> have left buyers asking more questions before signing a contract.

As Victoria continues encouraging higher-density housing to address supply shortages, transparency is becoming just as important as location or price.

One tool increasingly entering the conversation is the <a href="https://icirt.com/">Independent Construction Industry Rating Tool (iCIRT)</a>, an independent assessment framework designed to help buyers better understand the developer or builder behind a project. Originally developed by Equifax in consultation with government and industry as part of NSW's Construct NSW reforms, the system has since expanded nationally.

<h2 data-end="1519" data-section-id="7nmx3" data-start="1492">What is an iCIRT rating?</h2>

Most Australians are familiar with independent ratings in everyday life.

We compare ANCAP safety ratings before buying a car. We look at Health Star Ratings in supermarkets. Banks rely on credit assessments when lending money.

Until recently, however, there has been very little independent information available to help apartment buyers assess the business responsible for delivering a residential project.

That gap is what iCIRT was designed to address.

Builders, developers and other construction professionals with an iCIRT rating have demonstrated high-trust characteristics through an independent, evidence-based assessment across six criteria: Character, Capability, Conduct, Capacity, Capital and Counterparties. This involves a rigorous review of financial health, past project track record, and ethical conduct. Crucially, an iCIRT rating could help provide property buyers with confidence that they are working with a professional who has demonstrated the capability, capacity, and willingness to return and rectify issues.

Importantly, iCIRT is not a recommendation to purchase a particular property, nor is it a traditional credit rating. It is an independent assessment framework designed to provide objective information about a construction business using a <a href="https://icirt.com/sites/default/files/2025-08/iCIRT-Methodology-Issue1-May-2021.pdf">published methodology</a>.

The system has been widely adopted in New South Wales, where more than one-third of medium and large residential builders and developers now hold an iCIRT rating, representing over two-thirds of the state's residential building market by value as of 2025/26.

<h2 data-end="3126" data-section-id="h6ohtj" data-start="3084">Why buyers are doing more due diligence</h2>

For many buyers, particularly those purchasing off the plan, the biggest risk isn't whether they'll like the kitchen finishes.

It's whether the project will be delivered on time, to the expected quality, and by a company capable of completing the development.

<a href="https://icirt.com/sites/default/files/2026-07/iCIRT%202025%20Consumer%20Survey%20Report%20v05.pdf">Consumer research commissioned by iCIRT</a> found more than half of respondents believed current protections do not adequately safeguard buyers from builder insolvencies or defective projects. Other research found 88 per cent of prospective buyers would seek independent ratings or due diligence before purchasing, while 90 per cent said trust in construction professionals is essential.

That doesn't mean buyers should rely on a single rating alone.

Independent legal advice, understanding the contract, and seeking financial advice all remain important parts of the due diligence process.

However, an independent assessment can provide another source of information alongside those traditional checks.

<h2 data-end="4138" data-section-id="pquzxc" data-start="4094">Trust is becoming a competitive advantage</h2>

The conversation isn't only changing for buyers.

Developers are also recognising that trust has become an increasingly important part of the sales process.

Five years ago, purchasers typically asked about floorplans, finishes and settlement dates.

Today, sales teams are increasingly being asked about the developer's experience, financial stability, previous projects and construction partners.

For companies with strong governance and established delivery records, an independent iCIRT rating provides another way to demonstrate those credentials before buyers even visit a display suite.

According to Equifax, the assessment can also help businesses drive sales and <a href="https://icirt.com/resources-for-business/icirt-rating-helps-scion-secure-high-value-projects">secure high-value projects</a>, as well as identify operational improvements and <a href="https://icirt.com/resources-for-business/mirvac-reinforces-brand-trust-and-quality-independent-icirt-rating">attract top talent</a>.

<h2 data-end="4962" data-section-id="1j54ng5" data-start="4912">Beyond buyers: lenders are paying attention too</h2>

The influence of independent construction ratings is also extending beyond consumers.

According to Stamford Capital's Real Estate Debt Capital Markets Survey, an increasing number of lenders now incorporate iCIRT ratings into their due diligence processes when assessing residential development finance applications.

The survey found lender adoption has continued to rise, with many respondents saying independent assessments provide additional insight into governance, counterparties and delivery capability beyond traditional financial analysis. Some lenders also reported declining funding applications where businesses had poor or no ratings.

As construction costs remain elevated and access to development finance becomes more selective, demonstrating credibility is becoming increasingly valuable.

<h2 data-end="5801" data-section-id="1qazuxs" data-start="5772">What it means for Victoria</h2>

Victoria's apartment market is entering a new phase.

The state is seeking to accelerate higher-density housing while simultaneously introducing reforms aimed at improving confidence in residential construction.

For buyers, that means there are more tools available than ever before to research the businesses behind a project.

For developers, it signals that transparency is becoming another point of differentiation in an increasingly competitive market.

Buyers are asking more questions than ever before and increasingly expecting independent information, not just marketing material, before making one of the biggest financial commitments of their lives.

Find out how to get iCIRT rated <a href="https://www.icirt.com/sites/default/files/2025-08/iCIRT-Infographic-Assessment-Process-Final.pdf">here</a>.

<hr data-end="6469" data-start="6466" />
The information contained in this article is general in nature and does not constitute personal, financial, legal or tax advice. It does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it and, where appropriate, seek independent professional advice.

This article contains links to third-party websites. These links are provided for convenience only. Equifax Australia does not control and is not responsible for the content, accuracy or privacy practices of external sites.

Copyright © 2026 Equifax Australia Information Services and Solutions Pty Ltd. All rights reserved.

Buying off-the-plan in Melbourne? How independent iCIRT ratings are set to change Victorian property

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In the dress circle of Bellevue Hill, Sydney’s most prestigious non-waterfront suburb, two magnificent heritage homes are on the market. Known as Rovello and Barford, both residences are designed by Wilson, Neave and Berry, the leading architectural firm of the 1920s and 1930s era.
With double digit millions price tags, these grand residences have fascinating histories linked to prominent Australian families. Their hertitage status doesn't preclude further contemporary living renovations.
Our property contrarians, Jonathan Chancellor and Margie Blok, discuss their pick of the pair.
HE SAID:<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/09/06/jc-silhouette-5.jpg" alt="jc-silhouette-5" width="100" height="150" style="float: right;">
Rovello is my choice. The superbly proportioned circa 1937 two-storey residence is described by the Australian Heritage Commission as "probably Wilson, Neave and Berry’s finest extant piece of architecture” – and I agree.
A few years younger than Barford, Rovello is classified by the National Trust as an item of heritage significance.
{yoogallery src=[images/stories/2014/02/28/bell1]}
Set on the highest point of <a href="/news">Bellevue Hill</a> and facing north over Sydney Harbour, Rovello was built for Dr Vincent Flynn and wife, Jean Flynn, a great-niece of George Adams, the founder of Tattersall’s Sweepstake. A trust fund established some years after the 1881 introduction of Tattersall’s sweepstake generated vast wealth for the Adams family.
Flynn chose a site on Ginahgulla Road, considered one of the suburb’s finest streets, as the location for her new home. And then she commissioned Wilson, Neave and Berry to design the house in the colonial Georgian revival style favoured by Hardy Wilson who was the company’s leading architect. Apparently, Flynn requested the architects to design the house to somewhat resemble Barford. The old timers tell me it was Neave who was mostly responsible for it.
Next door, built in the same year, is a house designed by Professor Leslie Wilkinson for the Hordern family. It was therefore among the new crop of homes on the hill taken up by the pioneers at Leura, Rona, Trahlee and Carlyeon. On the other side is a house designed by Espie Dodds for the Alberts.
Rovello remained in the hands of Flynn’s family until it was bought by the property developer John Lyons who sold it in the mid-1980s to the merchant banker James Yonge for $3.45 million in 1986. Yonge sold it for $8.24 million in 1991 through eastern suburbs estate agent Jane Ashton to the current owners, Michael Darling and his wife Manuela Darling-Gansser.
{qtube vid:=g4O35hoeyQw}
Centred around a courtyard modelled on the colonnaded Roman atriums, the house stands on more than 2,800 square metres of grounds with a tennis court, swimming pool, sweeping lawns and sun-drenched terraces. From the property are panoramic northerly views to Manly and The Heads, as well as westerly views to the Harbour Bridge. I am told the main sitting room has comfortably accommodated 70 people at cocktail parties and with the use of the adjoining library that number rises to over 100.
Echoing its Mediterranean name, the traditional Italian-style villa has two wings enclosing a large pergola and an enclosed loggia.  Featuring wide windows framed with elegant external shutters, Rovello has an impressive two-storey entrance hall and 675 square metres of living space including stately living, dining and entertaining areas opening onto the north-facing terrace. Howard Tanner oversaw its last renovation.
Featuring a gracious provincial-style marble kitchen, the five bedroom, five bathroom residence also has a self-contained apartments, a state of the art pilates studio and a steam room. The  exercise area and steam room was added in the last five years designed by architect Nick Tobias.
Not surprisingly, the cooking and food storage areas are a feature of the house as Manuela is a food author.
I love the unusual feature on a ground floor flower room - which was apparently a fashionable inclusion of the time.
Also reflecting Mediterranean style are the gardens, which were re-designed in 2006 by leading landscape architect, Myles Baldwin. Featuring old stone walls, a parterre garden and a vegetable garden, the grounds have wide terraces leading to sweeping lawns and the tennis court. I am told the garden now follows the traditional pattern for major Italian houses with a sequence of terraces - the main living terrace outside the house, the parterre below it, the water garden (in this case a swimming pool) and then the park.
With price expectations around $20 million, <a href="https://www.realestate.com.au/property-house-nsw-bellevue+hill-116195747" target="_blank">Rovello is for sale</a> by expressions of interest closing March 28 through Ray White Double Bay agents, Elliott Placks and Ashley Bierman.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/09/06/mb-silhouette-4.jpg" alt="mb-silhouette-4" width="100" height="150" style="float: left;">SHE SAID:
It’s Barford for me - but I think the $60 million price hopes are extremely ambitious. The agents say the interest has already been $50 million plus in the first week of local marketing.
On the Register of the National Estate, <a href="https://www.ballardproperty.com.au/Buying/Search/residentialresult/residentialdetail.aspx?id=WOOLLAHRA%202012236&amp;wlid=a377ef22-7919-4fbc-8bd3-3783704585b6" target="_blank">Barford</a> is the grand dame of Bellevue Hill.
Owned by businessman Ian Joye, the Barford estate occupies a 5,527 square metres holding with a front entrance on Victoria Road, and rear access from Rupertswood Avenue.
{yoogallery src=[images/stories/2014/02/28/bell2]}
Named after a village beside the River Leam in Warwickshire, England, Barford was built in 1931 for Sir Warwick Fairfax, shortly after his marriage to his first wife Marcie Elizabeth ('Betty') Wilson. It was the childhood home of their children, James Fairfax and Caroline Simpson.
The elegantly proportioned two-storey house is strongly influenced by the Georgian Revival style of the 1920s. Its design shows the influence of William Hardy Wilson, a partner of Wilson, Neave and Berry who retired from the architectural firm in 1927.
The house is built on an L-shaped plan with a sandstone columned courtyard and fountain. The entrance, which is central to the almost symmetrical main elevation, is elaborately highlighted with Tuscan columns and front door with sidelights and a large fanlight. A side entrance has a porte cochere.
Sir Warwick Fairfax resided at Barford until the late 1960s when he sold the property to former Melbourne car salesman, Emmanuel Margolin. In 1980 Margolin sold it for just under $2 million to property traders, Maurice Bernhardt (a former Double Bay estate agent) and Max Franks.
During the early 1980s Bernhardt and Franks sold Barford to Barry and Wendy Loiterton who operated their tourist-marketing business, Leisuremark, from the property. The Loitertons sold it in late 1986 for $9,875,000 to Ian Joye. The deal made headline news in January 1987 for it was near enough Sydney’s first $10 million sale.
Entered through a a timber-panelled foyer, the elegantly proportioned two storey Georgian style mansion has seven bedrooms, seven bathrooms, elegant living and dining rooms (both formal and casual), a library, cinema, billiard room, white-marble kitchen and a caterer's kitchen featuring a walk-in cool room.
With panoramic district views to the harbour, the estate’s expansive grounds have a tennis court, 20-metre heated swimming pool, separate three-bedroom cottage and two one-bedroom apartments.
Long a preferred rental property for celebrities seeking a luxury mansion with exceptional privacy, Barford was rented to actor Will Smith in 2001. He reportedly paid $4,000 a week during the time he was here to support his wife Jada Pinkett-Smith, who was in Sydney to work on the movie The Matrix Reloaded.
Pop star Bono was among the more recent renters – in 2010 he reputedly paid the advertised price of $40,000 a week for the Bellevue Hill property.
Barford is for sale through Ryan Watsford of Ballard Property, and Christopher Joye, a son of Ian Joye, is understood to be controlling the sale on behalf of his father.
Ryan Watsford even describes the property as like Buckingham Palace, which is a bit of a stretch.
<a href="mailto:news@propertyoberver.com.au" target="_blank">news@propertyoberver.com.au</a>
                     
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jchancellor-FAypfDUnLy

Rovello v Barford, showdown of 1930s Wilson, Neave and Berry-designed Bellevue Hill trophy homes

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There’s a history of heart disease among my ancestors and I tend towards high blood pressure, but no one’s pronounced me dead just yet.
I know someone with a condition that may require drastic surgery some time in the future, but no one’s pronounced him dead either.
I’m wondering why so many have declared Geelong a dead duck.
Major industries, notably Ford, Toyota and Alcoa, have announced shutdowns which affect Geelong. Toyota has said it will halt manufacturing in 2017 and Ford plans to shut down in 2016. The Alcoa shutdown is more immediate, expected to happen in August 2014.
None of this is good news for Geelong, but it’s not terminal either.
Newcastle was written off when BHP left town in the late 1990s with the loss of 2,000 jobs, but the city fought back strongly and quickly. Today Newcastle is a thriving city and, together with the Hunter region, runs a diverse economy which supports half a million people.
Some believe the BHP exit was the best thing to happen to Newcastle, because it forced the city to diversify and it has benefited from the process.
Another regional city to have the last rites performed prematurely is Wollongong. The city has been hit by a number of economic reversals, including job cuts by BlueScope Steel, which are estimated by the University of Wollongong to have cost the Illawarra 2,500 jobs, $208 million in household income and a loss of $740 million from the local economy.
But Wollongong continues to be a thriving city and its property markets, contrary to earlier predictions, are rising at the moment.
In 2011 when BlueScope announced its cutbacks, some of the more hysterical media coverage predicted property values would drop 20-30%. Nothing of the sort happened. I wrote in The Australian in 2011 that Wollongong would absorb the BlueScope Steel cutbacks and move on – and it’s done just that.
Indeed, the Illawarra region, encompassing the neighbouring Wollongong and Shellharbour municipalities, emerged in my research for the Price Predictor Index as the number one growth star for markets in regional New South Wales.
Cities can take significant blows and fight back, sometimes by reinventing themselves. The thing Geelong has in its favour is that the reinvention process has been going on for years.
Geelong’s economy and employment base these days is more about the education, medical and IT sectors than it is about manufacturing.
While the impending plant closures have made headlines, there have been several good news announcements for Geelong as well. In February alone, we’ve learnt that Geelong will host a major statewide tourism conference, that there are plans for a factory where cars are converted to LPG fuel, that the new suburb of Lara West has been approved to house about 10,000 residents, that the Shell refinery has been bought with Swiss oil company Vitol, that a new call centre for EnergyAustralia will be based in Geelong and that a high-rise building with student accommodation is planned by developers.
Geelong is, and will continue to be, a happening city.
A key factor is that the car plant closures are two to three years away. The city has time to respond ahead of the greatest impact. If Geelong community and business leaders sat around and did nothing in the interim, the impact would be considerable.
But they won’t. My visits to Geelong in recent years have shown me that this is a vibrant city with proactive leadership.
If you own property in Geelong, I wouldn’t be selling it just yet.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank" rel="nofollow">hotspotting.com.au</a>.
You can contact Terry via <a href="https://mailto:%20ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://twitter.com/hotspotting" target="_blank" rel="nofollow">Twitter</a>.
 
                
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terryryder-YECXbqmri2

I wouldn’t be selling in Geelong just yet

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The famed professor and statistician W. Edwards Deming once said: “In God we trust. All others must bring data”. For anybody interested in real estate, from the property professional to the armchair investor, this maxim is more relevant today than it has ever been.
Thanks to mobile and online technology, the average Australian is overwhelmed with access to a huge realm of data – from macro-economic trends such as interest rate changes to the in-depth granular property statistics on transactions and suburb details. There really is a smorgasbord of information at our fingertips.
The information is an invaluable tool. Data can help inform people’s property buying decisions and it can make us feel confident about –those decisions, by providing us with a guide to what will occur in the future.
But the important thing for us to realise is that not all information is created equally, particularly the statistics.
There are various sources of property information in the market. These include sales and listing records, auction clearance rates, various statistical measures from parties such as the Australian Bureau of Statistics, and many other non-government organisations. While some of this data is open and public, much is not.  Taken together however, this data is extremely valuable, because of its multitude of applications:
<ul>
<li>
Financial organisations use to it determine valuations for mortgages;
</li>
<li>
Investors and buyers can use data to pinpoint potential areas for investment;
</li>
<li>
The Reserve Bank and Federal Treasury uses it to identify when markets are too hot and need cooling or stimulating;
</li>
<li>
State governments use it to help predict their annual revenue as a large percentage comes from duties on property.
</li>
</ul>
For the consumer or property professional, there are a host of third party sources that capture this data and present it in various forms. But not every source presents the same information.
Broadly, the challenges facing property information providers can be broken down into two areas: the accuracy and method for collecting the source data and the application and analysis of the data to provide real insight.
When it comes down to the first challenge – the freely available public data is obviously the first go-to source. It then comes down to  enriching it that with deeper information, and this can be something as simple as having a team picking up the phone to real estate agents to find out who sold what. Obviously a lot of this process is automated, and will vary by provider. For example, sources closely aligned with media companies will use that media company’s listing data as a primary source.
However, while having accurate data is clearly vital, information without context is useless. 
That, in essence is the challenge for all property data companies. It has moved on from who’s data is more accurate and who has more records, to how it can be used to provide value and confidence to the person on the street. It’s not just about finding the data, it’s about turning it into intelligence and bringing it to the right people, in the right way.
John Edwards is consulting analyst for <a target="_blank" href="https://www.onthehouse.com.au/" rel="nofollow">Onthehouse.com.au</a> and founder of <a target="_blank" href="https://www.residex.com.au/" rel="nofollow">Residex</a>.
Onthehouse.com.au has launched a new Investor Centre, a free source of property information. 
             
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jedwards-8kHM8GNY6d

In data we trust: How data informs smart property buying decisions

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Record sums are being invested in bricks and mortar – but novice investors often fail to fully realise the necessity of managing risk.
Failure to manage risk is one of the key reasons so many property investors sell within a year, frequently at a loss after transaction costs are taken into account.
There are risks at every point on the property journey, from an initial decision to invest, to property selection, financing and tenanting.
Here are a number of risks both novice and experienced investors should be aware of, maximising their chances of a successful investment.
<img style="float: left;" alt="number-1" height="30" width="20" src="/images/stories/2014/02/27/numb/number-1.jpg">Opportunity cost. Property investment can be financially rewarding but it’s usually negatively geared, at least to begin with, reducing your opportunity to invest in other asset classes or different properties. Can you argue the merits of a property you are considering buying over others in the marketplace and over other types of investment?
<img style="float: left;" alt="number-2" height="30" width="26" src="/images/stories/2014/02/27/numb/number-2.jpg">Overconfidence. Everyone’s an armchair property expert, but successful property investing requires a commitment to learning, research, patience and planning (a little bit of luck also helps). Property management is also not as easy as it sounds, and investors who attempt DIY tenant selection and management need to be careful not to stray outside the law.
<img style="float: left;" alt="number-3" height="30" width="22" src="/images/stories/2014/02/27/numb/number-3.jpg">Fear. Committing hundreds of thousands of dollars to a single asset is scary. Sometimes it seems “safest” to buy something near your home – even if that’s not such a great area for investing. While research is vital, fear can also lead to “analysis paralysis”. If you never take the plunge, you’ll never profit.
<img style="float: left;" alt="number-4" height="30" width="22" src="/images/stories/2014/02/27/numb/number-4.jpg">Naivety. There are plenty of property spruikers happy to take advantage of the unwary, pushing them towards poor investments which leave the adviser with good commissions and the investors with lemons. Do your own research – don’t just rely on your accountant, financial planner or mentor.
<img style="float: left;" alt="number-5" height="30" width="22" src="/images/stories/2014/02/27/numb/number-5.jpg">Over-ambition. Banks sometimes lend investors more money than they can comfortably repay, particularly if their financial circumstances change. Property investors should consider the need for: access to a cash buffer to shield them in case of unemployment; income protection insurance in case of injury; buildings and contents insurance; and landlord insurance.
<img style="float: left;" alt="number-6" height="30" width="22" src="/images/stories/2014/02/27/numb/number-6.jpg">Failure to plan. Things change. You need to go through the major “what ifs” to avoid a situation where you may be forced to sell. What if you have a child? What if interest rates rise? What if you can’t find a tenant for several months? What if your tenant absconds or, accidentally or deliberately, damages your property? What if you need a new car?
<img style="float: left;" alt="number-7" height="30" width="22" src="/images/stories/2014/02/27/numb/number-7.jpg">Lack of a coherent strategy. In order to choose the correct investment property for you, you need to know what you’re hoping to achieve from it. Even well-respected property commentators and authors use very different approaches, so it’s important to read everything you can and choose a strategy which suits your circumstances.
<img style="float: left;" alt="number-8" height="30" width="22" src="/images/stories/2014/02/27/numb/number-8.jpg">Getting side-tracked. Buying for negative gearing or depreciation benefits alone is a bad idea. The aim of the game is to make money long-term, while managing the risks to ensure you are never a forced seller.
<img style="float: left;" alt="number-9" height="30" width="22" src="/images/stories/2014/02/27/numb/number-9.jpg">Impatience. Property is a long-term investment. Your property won’t necessarily grow at a steady pace. There will be years where its value remains static or even goes backwards.
<img style="float: left;" alt="number-10" height="30" width="53" src="/images/stories/2014/02/27/numb/number-10.jpg">Herd instinct. Buying with the herd, when property prices are reaching records, can leave you in danger of several years of sub-par performance. In the words of legendary investor Warren Buffett: “Be fearful when others are greedy and greedy when others are fearful.”
Sharon Fox-Slater is general manager of <a href="https://www.rentcover.com.au/" target="_blank">RentCover landlord insurance</a>, which insures more than 120,000 tenancies around Australia, and is a division of EBM Insurance Brokers.
                            
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po-LsXgBTHBmX

10 risks first time property investors need to overcome

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The economics textbooks will tell you that markets are self-correcting. Is that true?
When markets becomes overvalued buyers will become scarce and the the market will fall back into equilibrium, say the rule books. And when they are undervalued rational profiteers will buy them back up to their point of fair value.
The tech stock bubble of the late 1990s and early 2000s was a favourite case in point.
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;" width="400" src="https://4.bp.blogspot.com/_bc5xYfGMSII/R1S3vOTxt3I/AAAAAAAAEb8/Z5HAYSkDf_o/s400-R/Growth_Page_3.jpg" height="231">
A lot of technology stocks, some of which never even made a profit in their entire lifespan, had PE charts that looked something like this.
For a period of time, the market wanted to own anything which was remotely related to technology or the internet and valuations soared.
Even experienced heads said that the rules had changed and you had to be "in to win it".
Companies with no profits were instead valued on number of page views ("price per click") and other strange metrics.
When the bubble burst, the market returned more or less to where it was before the bubble - valuing companies on their earning potential.
Ultimately, an asset or company which has no cash-generating ability has no value. If a company cannot generate profits then eventually it will have to sell its assets to survive and will ultimately be worth zero.
Free markets?
The rule books say that loss-making companies will fail and markets will value companies and assets accordingly.
But do we live in a free market world? Not really. When you stop to consider the news of recent weeks, there are no end of market distortions.
For years, car companies have recent subsidies, Qantas is set to receive a bailout, in the US and the UK we saw banks being bailed out, and so on.
Markets are not free in the textbook sense. We have a minimum wage and wages awards, copyright laws and patents, trade unions, distorting taxes, state-supported monopolies, and, rather importantly for asset price valuations, an inflationary monetary policy.
The answer?
The answer, then is that markets are indeed self-correcting to a point. The economics textbooks are correct, but they are not really talking about the world which we live in. Markets are self-correcting, but only within the existing framework and market distortions.
Australia's big banks will never be allowed to fail, for example. A lot of people don't seem to like that, but the economy could not function without bank liquidity, so the banks receive an implicit guarantee. The cost of that should probably be tighter regulation.
In the traditional free market, struggling companies would be allowed to fail, with the idea that in the long run, the stronger companies will survive and make the economy more efficient.
That's not how the real world is.
Real estate
In a similar fashion, property markets are also distorted by tax incentives and policies such as stamp duty, negative gearing rules, and land taxes.
Markets are also distorted by first home owners grants, land zoning rules and supply constrictions, and a whole range of other factors.
But even within this distorted framework, markets are self-correcting to a point.
If prices become too low, rational profiteers appear and push them back up again.
Periodic corrections are welcomed by governing bodies, but prices which fall continually for years are considered poisonous to economies and intervention becomes likely, in the form of low interest rates or other incentives.
If prices rise too, high, on the other hand, buyers become cautious or even disillusioned, and gradually drift away.
Where is the evidence for this? The RBA has shown that repayments on new housing loans have tended to comprise between a fifth and a third of household incomes for decades.
At times, repayment levels have jumped to over 30% of household disposable income, but that appears to be about as far as Aussies are prepared to go.
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;" width="315" src="https://www.rba.gov.au/speeches/2013/images/sp-so-230413-graph11.gif" height="320">
Similarly, for all the debate and counter-debate, since home ownership became common after the war, ownership rates have barely shifted. Most people elect to own a home, and some never do, but the ratio hasn't changed a lot.
If anything, the chart is most remarkable for how consistent it has been in a country with a growing population.
<a style="text-decoration: none; color: #7f7f7f; margin-left: 1em; margin-right: 1em;" imageanchor="1" href="https://1.bp.blogspot.com/-nxM2TNavZwg/Uwu7YivdIVI/AAAAAAAALn0/r5DeJVfxbtc/s1600/Census.jpg"><img style="border: 1px solid #ebebeb; position: relative; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;" width="320" height="189" src="https://1.bp.blogspot.com/-nxM2TNavZwg/Uwu7YivdIVI/AAAAAAAALn0/r5DeJVfxbtc/s1600/Census.jpg" border="0"></a>
The net result of this is home prices tend to rise with incomes over time. You could try to be clever and time the market, but over the past 15 years, there have been crash warnings every year, many of which never eventuated.
However, it remains true that markets are self-correcting to a point.
If the RBA's chart shows that repayments on new loans are starting to fall outside that 20-30% band, this may be a signal that the market may become due to self-correct.
Pete Wargent is the co-founder of <a rel="nofollow" target="_blank" href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a rel="nofollow" target="_blank" href="https://petewargent.blogspot.com/">blogger</a>.
His new book '<a rel="nofollow" target="_blank" href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>' was released on 1 September 2013.
                  
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Are property markets self-correcting?

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When I started my career in property development marketing about a decade ago,over 50% of enquiries would come from on-site signage and having a website was optional. A lot has changed in the industry.
In fact, thinking back 10 years a lot was different in all aspects of life. I had a Nokia phone with a two-tone screen, I certainly couldn’t check out my own groceries at the supermarket and I watched normal TV.
When we launched projects a decade ago the aim was to target local markets, build urgency, hype and with quite a bit of secrecy get people to wait and wait for project launch day. On one such occasion we managed to get people to camp out overnight to secure the property they wanted (now I feel this is quite disrespectful to your customers). This ‘almost’ still happens in Sydney and certainly people still do physically queue for hours in stores to get their hands on the latest gadgets like iPhones, but these days there are a lot of changes in the way products of all kinds are bought and sold.
The birth of the internet and online shopping means consumers now have access to products from all around the globe from the comfort of their own homes and certainly without any interaction with salespeople. It also means that local Australian businesses can now market their products internationally without necessarily leaving their domestic office. We are certainly living and working in a global marketplace.
So what does the technology revolution offer the Australian property industry? We can’t ship property around the world like we do iPhones.  And what impact does it have on our domestic sales people and how we go about marketing projects these days?
The answer is that the technology revolution is transforming the property industry like it has many other industries and for the better!
Obviously salespeople are vital to executing sales. The property industry is a people’s business and that certainly isn’t changing any time soon. But technology now offers property developers, project marketers and salespeople, opportunities that they previously never had.
Today’s buyers are both national and international and developers and agents need to take projects to the international marketplace, particularly the booming Asian market. Currently, most marketers do this by hiring a meeting room in a five star hotel, shipping models and brochures half way around the world and running a traditional campaign. But this is slow, expensive and often the sales teams on the ground are not well briefed and don’t feel they have a strong relationship with the key personnel from the developer.
Today’s innovative technology means that the geographical constraints domestic sales people currently face can be alleviated considerably.  Internet speed is now making it possible to stream events live to international audiences and even facilitate online audience participation. Called hybrid events these online interactive experiences have been taking the business world by storm, but until now property has been pretty much left behind.
Launched late last year Investorist has already run three successful hybrid events with members attending in person and online nationally and internationally. The major benefit of a hybrid event is that the key people in a property development organization can actually communicate directly with the international audience and therefore the ability to foster relationships is much stronger. It also means that the team on the ground internationally can be better briefed and in turn more enthusiastic.
Hybrid events benefit developers, project marketers and sales people by opening up new sales channels and offering a way of building trust and rapport with prospective international clients.
Technology is adding to the power of the project launch by providing greater access to information and empowering sales people making them even more effective than before. I envisage a day where even the public are logging in, probably on their phone and watching project launches in real time.
The growth of international buyers in the domestic property market opens up many opportunities for developers and property marketers. Those who leverage new technology to expand their markets and networks will continue to thrive in this global marketplace. The others will undoubtedly become just as redundant as my old Nokia.
Jon Ellis is the founder of <a target="_blank" href="https://www.investorist.com/">Investorist</a>.
    
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How are project launches and the sales process affected by the internet?

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Last weekend was the first big auction week back for 2014, a Super Saturday in fact (around 150 $1 million plus auctions in Bayside and the inner east).
Has the mood changed from the good times for buyer (<a href="https://marketnews.com.au/tag/choice/" class="st_tag internal_tag" rel="tag" title="Posts tagged with choice" style="border: 0px; margin: 0px; padding: 0px; text-decoration: none; color: #000000;">choice</a>) and seller (competition and price) pre-Christmas times to a more challenging market?
Absolutely not – in fact it has gone up a notch for now and especially at the higher end!
What we saw this weekend can be read no other way than "bang!" A very strong start. If the market continues at this level, prices will rise quickly and substantially.
Of course, we do need to wait and see what happens once the traditional first flush of the new year dissipates a little. But it is certainly the case that this time, leading up to Easter, is a good time to be selling a $3 million plus home.
Why?
Well, because after the long Christmas break, after Australia Day has been and gone, a number of buyers and sellers are fired up ready to do something, anything, just to get a home sold or buy a home now. Last weekend’s Super Saturday proved this commonly-known fact within the industry.
So the old girl (the market) has started like a train, house on fire, out of the blocks fast, whatever cliche you want. But let’s see how she settles before we declare that the sky has fallen in, or you’ve hit the jackpot – depending on which side of the transaction you sit.
Let’s see how she settles now that this first wave of activity has satisfied a number of the early birds.
Mal James is principal of<a title="James Buyer Advocates" href="https://www.jamesbuyeradvocates.com.au/" target="_blank" rel="nofollow"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. 
Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
             
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maljames-vHwm28JUAa

Early birds out in force at the year's first Super Saturday

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A stronger presence from domestic purchasers, yield compression, improved leasing conditions driving demand and investors moving up the risk curve to access stock are expected to be the key forces driving higher investment in Australia's CBD office market in 2014.
Colliers International’s latest CBD Office Research &amp; Forecast Report for the first half of 2014 showed that more than $8.1 billion worth of CBD office buildings changed hands in 2013 - 16% above the previous year and the highest level of investment since 2007. 
Australian and offshore institutions dominated buying activity and China emerged as the country with the strongest growth, purchasing $580 million of CBD office property in 2013, said the report. 
"Growth in Chinese investment is expected to continue to define the market in 2014," said John Marasco, Colliers International managing director of capital markets and investment services.
"To date, most of the activity has been private Chinese investors purchasing secondary CBD office buildings however this started to change at the end of the year with the sale of Centennial Plaza to China’s sovereign wealth fund China Investment Corporation." 
"We are now seeing growth in institutions from China purchasing offices for investment, as opposed to development."
While offshore interest is expected to remain strong Colliers believes 2014 will be the year that domestic purchasers make their presence known.  "We are already seeing local demand competing, and in some cases winning, against the force of the offshore investors and this is set to continue further in the year ahead," said Mr Marasco. 
"On the back of increased activity by A-REITs, superannuation funds and privates, we will start to see the pendulum swing towards the locals in 2014."
Colliers is forecasting yields to tighten further this year on the back of increased competition for assets and the weight of money. 
Prime CBD office yields currently range from 6.75% in Melbourne CBD to 7.94% in Perth CBD. By the end of this year, Colliers is tipping yields will become firm in all markets with the exception of the Perth CBD.
Improved leasing conditions are also likely to drive demand for CBD office assets, noted the report. 
“The ‘disconnect’ between a strong investment market and a weak leasing market has been a key feature of Australian CBD office markets over the past two years,” said Nerida Conisbee, Colliers national director of research. “We now consider that incentives have peaked in most CBDs and prime net effective rental growth is likely to occur in all markets with the exception of Brisbane". 
Mr Marasco said that almost all indicators pointed towards increases in the amount of funds targeting Australian commercial property in 2014.
“Australia continues to be an attractive investment destination and provided that stock continues to come to market, total investment volumes should be greater in 2014 than they were in 2013,” he added.
<a target="_blank" href="mailto:news@propertyobserver.com.au">news@propertyobserver.com.au</a>
             
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kjiminez-eaYKfU7qd2

Chinese investment growth will continue to define commercial market: Colliers International

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Investors looking to build a portfolio and hold their current property, or their home, are constantly looking for ways to jump into the next opportunity. While selling one property and pouring the funds into another can be a possibility, those wanting to build a portfolio may see themselves benefiting from holding on to their purchases - particularly when a significant amount of growth has been seen over a long period of time, or when the prospects for the property are favourable.
When property prices rise, as we have recently been seeing them do around the country, it’s only natural that investors will start wondering whether it’s enough to leverage them into investment number two. This is known as using your home's equity (or your property's equity) and pouring it into another purchase. You may also see this regularly referred to in investment circles as "tipping" equity into another property or "pulling" equity.
A number of experts, including those that write for Property Observer, such as Cameron McEvoy, have <a target="_blank" href="https://www.propertyobserver.com.au/residential/know-the-purpose-of-the-properties-you-buy-cameron-mcevoy/2013040359825">used this technique to build their property portfolio and their initial wealth</a>.
Pulling equity allows you to hold onto an asset that may still grow, avoid exit costs and free up funds that may otherwise cause you to miss an opportunity. However, it does mean that you're looking at holding on to a substantial amount of debt - a concept you will need to become comfortable with should you be looking at holding multiple properties.
But where do you start?
To begin, you need to know how much equity you have available - a quick back of the envelope calculation will help you figure out if it’s even going to be viable enough to begin speaking to your lender.
This comes down to two different factors:
<ol>
<li>
The property’s value – You can work this out through a number of different options. Online valuations, calling local experts such as real estate agents, checking out online comparables or getting a valuation undertaken, can all give you a rough guide. Have a read of this <a target="_blank" href="https://www.propertyobserver.com.au/residential/property-valuation-101/2012022153484">Property Valuation 101 guide</a> to give you a leg up when undertaking this part of the process.
</li>
<li>
How much you owe – Check your statement for what the balance looks like on your mortgage.
</li>
</ol>
The equity you have iis the balance left when you take away what you owe from the value of the property. Let’s assume the property value is now $400,000, and your balance owing is $200,000. This leaves you $200,000 worth of equity.
If you don’t have a substantial amount of equity remaining, you will want to try and push one of the two equations more favourably by either paying down your mortgage more quickly, or by increasing the value of the home. Hopefully, if you've been selective about the area of purchase, you will have seen some capital growth that will have increased the equity without you needing to lift a finger. Those that haven't been so lucky will need to look towards these other value adding measures.
There are a number of guides for doing both of these things. Here are <a target="_blank" href="/news">25 tips from Yellow Brick Road on paying your mortgage off faster</a>, and a number of <a target="_blank" href="/?option=com_googlesearch_cse&amp;q=adding%20value">ways to add value to your home</a> (either through renovations, additions or other improvements).
How much equity can you pull out?
You cannot just tip the entire $200,000 into another property, as this will leave your “owing” balance at 100% on the current property. You also want to ensure that you have enough equity as a buffer in case you see any downturns in value – you <a target="_blank" href="https://www.propertyobserver.com.au/residential/negative-equity-hurting-mcmansion-owners-but-most-home-owners-neednt-worry-catherine-cashmore/2012032654006">do not want to be left with negative equity in any situation</a> (where you owe more than the property is worth).
"If you don’t have any spare funds aside from the equity in your home, then do not use all your usable equity to invest in property, just in case you need to draw on it in the event of an emergency. Even if it means you can’t invest for a while, it is always important to keep yourself protected," NAB warns in their guide to using equity.
With this in mind, you then need to look at how much to leave in the current property for when you refinance. Leaving 20% of the property’s current value (or $80,000), provides you with $120,000 of equity available to play with.
You may be able to use $80,000 of the equity to move into another $400,000 investment property. The back of the envelope calculation in this situation stacks up. Note: Don’t forget that if you want to borrow the amount for the costs as well, this may further erode the amount of equity you have to play with.
Refinancing, cross-collateralisation and finance
To release the equity, a lender will send around a valuer for a new bank valuation. This may be different to your own calculations and will determine the amount you have available in their eyes.
You’ll be looking to refinance your property so that you can have a new mortgage, with a new LVR. Firstly, read our <a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-mastering-the-art-of-refinancing-12-tips-for-success-and-key-things-to-consider">free eBook guide on refinancing</a>.
We also have <a target="_blank" href="/news">a freely available webinar presentation on the ‘Dos and Don’ts’ of refinancing</a> with chief executive of the Mortgage and Finance Association of Australia, Phil Naylor.
By this point, you’ll likely have heard the term cross-collateralisation, as well as the associated warnings that many will provide you about this type of structure. Certainly, it isn’t for everyone; however there are some significant benefits to this type of loan.
Cross-collateralising, or where you use one property’s equity as security for another, rather than taking out a separate loan, has certain benefits. Investors Choice Mortgages’ Jane Slack-Smith explains that one of the upsides is that you do not have to pay mortgage insurance, and that it allows you to get in when, for any number of reasons, you may not be able to achieve a second loan.
However, it does make it more difficult to leave the lender in the future, and can leave your properties “tied” to one another so that if your entire portfolio stays stagnant as a whole, yet one property has increased in value, you may see yourself unable to release the equity in the future.
You can read Slack-Smith’s thoughts on how you should be structuring your finances when using your equity in <a target="_blank" href="https://www.propertyobserver.com.au/residential/spare-upper-right-ytc-jane-slack-smith/2012101557172">this how to article</a>.
When it comes to borrowing for the next investment, you need to be aware of your borrowing capacity. The same concerns for when you took out your initial mortgage still apply. While this varies from person to person, a generally rule of thumb provided by NAB is to multiply your available equity by four.
Finally, remember that equity can be used for a number of different things. You may want to consider tapping into your equity to fund renovations, new builds or <a target="_blank" href="https://www.propertyobserver.com.au/residential/the-10-must-know-facts-about-the-advantages-and-disadvantages-of-reverse-mortgages-loans/2012112657879">even fund your retirement</a>. Some are more comfortable just paying down one property and aiming for a debt-free asset, rather than using any growth to jump into another property.
How, when and if you grow your portfolio is, ultimately, up to you as an investor.
Are you looking to release equity?
jduke@propertyobserver.com.au
            
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jduke-EHk3XBmHkn

How to: Use your equity to buy your next property

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Investors always seem to want just a little bit more and as house prices move, many investors will start to think of ways to maximise their returns.  
One of the strategies that will raise its head is property flipping. That is buying a residential investment property, renovating it, then selling it to make a profit. It’s a common strategy, but unless you plan carefully it may not bring the kind of return you were hoping for.  
When you buy a residential property, the state government asks you to pay stamp duty worth around 5% of the purchase price.  
If you’ve borrowed to purchase the property and undertake the renovations, you are paying interest on the loan without receiving any rental income during the renovation period to offset the loan repayments.  
When you sell the property, you’ll lose 2-3% of the sale price in the commission you pay the real estate agent, plus another 1% in advertising costs.  
In short, not only are you paying interest on an investment loan out of your own pocket, but you are losing close to 10% of the property’s value merely by entering and leaving the market.  
And, when you actively add value to a property, you are taking a gamble that the sale price will equal the price of the renovations plus your profit margin. Most property grows in value over time, but not all sectors of the market grow at the same rate.  
If there isn’t sufficient demand for your style and location of property, you may not make enough money to cover the entry and exit costs, outstanding loan balance and renovation costs, let alone make a profit. If you do make money on the transaction and you sell the property, you will also be liable for capital gains tax. It’s like taking two steps forward and one back.  
I am not saying that buying to renovate and sell is a poor strategy in itself. It can be highly successful, but only if the capital growth outstrips the buying, holding and selling costs. Even in locations where capital growth is strongest, this may take several years. And capital growth compounds, so the longer you hold the asset, the greater the amount of growth. If you sell the property as soon as the renovations are complete, you may not have allowed enough time for capital growth to take full effect — substantially reducing your potential profit.  
In other words, the substantial entry, exit and holding costs mean residential property should not be traded like shares, but held for the long-term (at least seven to 10 years) to ensure the capital growth justifies all the expenses you’ve incurred along the way.  
If a real estate agent is advertising a property as perfect for adding value, ask yourself whose interests they are promoting — yours or theirs? Remember, they stand to make a commission on selling the property for the previous owner, followed quickly by another commission on selling the property for you after it has been renovated.  
If you still believe that buying to renovate and selling quickly is the right strategy for you, make sure you calculate all the likely holding and transaction costs.  
Then, research the local market to determine the property’s likely selling price. Look at other properties in the area that have been renovated to the same standards as yours and sold in the last three months.  
It’s also important to factor in the cost of your time. How much you would have earned from your normal job if you weren’t at the property supervising or undertaking the renovations? And what about your leisure time? How much time will you spend away from your family and friends?  
For example, if the project is going to take up six months of your evenings and weekends when you would otherwise have spending time with loved ones, will the expected financial profit make that lost time worthwhile?  
If the holding, transaction and time costs add up to more than the property’s likely sale price, you may need to reconsider whether it’s worthwhile undertaking the project.    
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
       
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