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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With demand for self-managed super funds growing, it’s interesting to note that it is the younger generations exhibiting significant growth, even as the older generations slice a bigger piece of the pie. It's also property that is attracting the growth of interest.
A new report, commissioned by the SMSF Professionals’ Association of Australia and Russell Investing points to the 41 to 50 age group to be the area that continues to be the largest source of demand, cited by three quarters of financial planners.
This is followed by 31 to 40 year olds.
“It is this younger demographic that has exhibited strong growth over the past three years. They are interested in the longer term and have a good understanding of the short-term issues versus the longer term opportunity,” notes the report.
Andrea Slattery, from SPAA, said that despite the propoportion of superannuants looking to establish an SMSF in the next five years dropping to 12.3% from 17.3%, there are still high intentions over the longer term.
Despite this overall decline, it appears residential investment is the golden child of those with their assets placed in property. The report said that an expected movement out of cash did not occur, but did see a slight fall. In equities, a slight decline was also seen.
However, residential investment saw a 5.6% rise in 2012, to 9.9% in 2013.
The report was developed by CoreData and interviewed 1,267 Australian consumers, of which 385 were SMSF trustees. This is the fourth consecutive report.
<a target="_blank" href="mailto:jduke@propertyobserver.com.au">jduke@propertyobserver.com.au</a>
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jduke-EHk3XBmHkn

Property the increasing choice of SMSF: SPAA

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Every second new home built today is attached – either a townhouse, villa, ‘plex’, flat or apartment.
Just 56% of the new dwellings approved during 2013 were detached houses.  It was 73% just five years ago.
One in four new dwellings approved are now in mid to highrise apartment towers.
Is this a fundamental shift?
<img alt="matusik_feb_13_one" height="627" width="470" src="/images/stories/2014/02/13/matusik_feb_13_one.png">
What the stats say
The graphic shows that there has been a rapid drop in new detached housing approvals in recent years.  In contrast, there has been a big lift in the number and proportion of mid-to-highrise apartments approved across the country.  There has been little real change in the level of new townhouses or low-rise unit construction.
Australia’s new housing market is now quite polarised between detached homes and apartment towers.
The cost to actually supply a new detached house (excluding land, taxes/charges etc.) is now similar to the cost to supply a new apartment.  It is considerably cheaper to supply a new townhouse or walk-up flat.
Of course, the size of a new house is much larger than a new apartment, with the average cost to build a new project home somewhere around the $1,000 per sqaure metre mark.  The cost to build new mid-to-high-rise stock sits at somewhere between $2,500 and $3,000 per square metre (as a ballpark figure).  It costs about $1,500 per square metre to build a new townhouse or basic walk-up flat.
Most new townhouses are three bed, two and a half bath, with two cars.  Many of the new walk-up flats are in two bed/two bath (with car parking) arrangements.  Many of the new mid-to-high-rise apartments are under 85 square metres and increasingly, one bedroom product.  New detached houses, by and large, remain three or four bedroom affairs.
Current demographic trends strongly suggest the need for more two and three-bedroom attached product.
<ul></ul>
My opinion
We seem to be stuck in the house versus apartment tower mindset.  This is especially the case in Queensland.
The recent changes to the Brisbane Town Plan further push this building form, i.e. traditional suburbia versus mid- to highrise density around select urban nodes.
What is missing – from an affordability and liveability viewpoint – is new housing product in-between.  We need more townhouses, ‘plexes’, terrace homes, granny flats, small lot homes and flexible dwellings.  These need to be supplied across much of the Australian fabric and especially in our middle-ring suburbs.
For mine, we also need one set of rules when it comes to new housing form.  This should apply across an entire state or territory.  Maybe it should even apply across the country, allowing of course for climatic differences.  It is all well and good that Ipswich City Council now permits granny flats.  But why not Brisbane?  Why does Adelaide – yes Adelaide - permit a much finer grain of new housing choice than Brisbane?
Our experience is that many residents want to ’age in place’.  Most don’t want to live in a highrise apartment complex.  They would like to downsize, stay local and have some nexus to the ground. But in the absence of affordable choice, they stay put, often as a couple in large detached homes.
This ‘in-between’ housing would also suit many first home buyers.
There is a real lack of new housing choice in the Australian market.  This is stopping first home buyers.  It is stopping empty-nesters from downsizing.  It is, by default, oversupplying the new high-rise apartment market and stalling detached housing supply.
Public policy is not allowing private enterprise (developers and builders) to supply what the market wants.
Is this a fundamental shift?
Yes.
But the role of the developers and builders is to respond to opportunities and work within planning frameworks (as dysfunctional as they might be) to deliver a product that sells.
The opportunity is that Australians, by and large, want more compact housing.  They are trading ’space’ for ‘place’.
The trouble is that this demand is largely being forced into one new product type – high density apartments.
Many buying this product anticipate strong capital gains and high rental returns.  On paper everything looks rosy. In reality, investment outcomes will be determined largely by supply.
For mine, we are now in danger of oversupplying the mid to highrise apartment market.
And sadly, within this mid to highrise space, apartment choice is increasingly limited.  It’s a race to the bottom – the smaller the better (read cheaper); or as the spin goes, “cheap and cheerful”.
Opportunity to supply a range of new housing types would reduce this propensity to overproduce, reducing the severity of the property cycle.
Michael Matusik is the founder of <a rel="nofollow" target="_blank" href="https://www.matusik.com.au/" style="font-size: 14px;">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.
Read <a rel="nofollow" target="_blank" href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a rel="nofollow" target="_blank" href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a rel="nofollow" target="_blank" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a rel="nofollow" href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
 
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michaelmatusik-49YzLvdmNv

Rush to produce high density apartments is a race to the bottom, and we're risking oversupply

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There was once a time when the start of a house-hunt was signalled by the quiet chime of the bell over a real estate agent’s door. Things have changed.
Searches that once took weeks can now be done on the train to work. Processes that didn’t seem possible are now every day events.
Progress marches on and almost every aspect of the property market now has an online presence. There is now a website, app or tool for every imaginable facet of real estate.
These make dealing with property easier, faster, more efficient and can help save money. There is so much more to working online than posting ads on big property portals.
There are a multitude of websites, apps and tools to help people buy, sell, market, discover and manage properties – so many that it’s easy to get overwhelmed by the deluge.
The vast legion of online tools available allow one to snoop on property prices, go on holiday, make money, spend money, get price estimates, make plans, break plans, play, hunt and stay up to date.
So many aspects of property have been covered online that Property Observer made this A-Z of online property sites and apps. Here is part one of Property Observer’s favourite online websites and apps, to help you with all aspects of property.
Alerts 
There’s no excuse for missing that perfect property now. Websites will alert you every time a property that fits your criteria pops up. With alerts, you can be the first to know about a new listing before it gets snatched up. The various real estate portals all offer their different flavours of alerts.
<a href="https://domain.com.au" target="_blank">Domain.com.au</a> allows some very specific alerts to be sent. If you have a problem with cemeteries, you can specify homes at least 5km away from them, but within 1km of a park. You can choose to be close to the train station, but away from gaols and power stations. You can search for a home within those constraints, but also make sure you’re only sent three-bedroom properties that have a balcony and a shed within the inner city region. A daily or weekly alert with all these properties is easily set up through their search function. 
<a href="https://realestate.com.au" target="_blank">Realestate.com.au</a> has a similar offering, but it’s not quite as powerful. While Realestate.com.au does have more properties listed, we found the filters on Domain to be more refined. We welcome the environmentally friendly search options such as solar panel and energy efficiency filters, but these are not enough to set it apart from Domain. The email alerts are quite useful however, and you can set up multiple searches to the same address.
<a href="https://www.propertyobserver.com.au/Realestateview.com.au" target="_blank">Realestateview.com.au</a> can also send property alerts. The search feature can’t discriminate properties quite as well as Domain or RealEstate.com.au but the filters are tolerable. However, to save a search listing you must create an account or sign in with Facebook.
Alongside these portal websites, most individual real estate agency websites have the ability to send alerts on specific searches. If there are just two or three agencies active in your area it might be better to subscribe to their individual alerts.
Article continues on next page. Please click below.
 
<hr class="system-pagebreak">
Augmented Reality
It can often be quite hard to visualise the vast reams of data available online. You can easily access 20 pages of hard data on a suburb and come away without a clear idea of what things are worth in an area. This is where augmented reality comes into play.
Augmented reality is a relatively recent development where real world information is overlayed over a camera’s output. It pulls information from the web based on your location and superimposes it over whatever you point the camera at.
<a href="https://itunes.apple.com/au/app/commbank-property-guide/id375054462?mt=8" target="_blank">CommBank Property Guide</a> uses this free technology to overlay past sales history, current property listings and recent sales over a real world view through the iPhone’s camera. They say it works on more than 95 per cent of residential properties in Australia but Property Observer has found some of their data lacking. It takes its information from RP Data and realestate.com.au.
If you don’t have any luck with Commbank’s app try the free <a href="https://itunes.apple.com/au/app/anz-property-tracker/id393053333?mt=8" target="_blank">ANZ Property Tracker</a>. It has a similar feature-set but pulls its data from Fairfax’s domain.com.au and Australian Property Monitors. Again, it’s a great idea, but we found it to be a little less than perfect.
Article continues on next page. Please click below.
<hr class="system-pagebreak">
Banks
If you’re buying property, you’re going to have to deal with a bank at some point. It’s just how these things work. The banks all have their various online offerings and some have some quite nifty apps.
<a href="https://www.anz.com" target="_blank">ANZ</a> have been lauded for their latest mobile banking effort. The ANZ goMoney app is a simple to use but quite powerful app. It has a great new development where you can pay someone just with their phone number, which ANZ markets as an easy way to split bills. If you’re torn between ANZ and another offering, this app might be a deciding factor. Their website isn’t quite as slick but it’s a solid offering.
The <a href="https://commbank.com.au/" target="_blank">Commonwealth Bank</a> website has all the usual features, with quite an intuitive front page. Their website has the usual features. The page isn’t too cluttered but still has quick access to quite a few useful tools.
They’ve just launched a new mobile banking app that’s got a few people excited. Its claim to fame? It makes paying people incredibly easy. The app even lets you pay for drinks at a bar simply by waving your phone over a Mastercard PayPass terminal, which are gradually being rolled out across Australian businesses. Take note, this option does require buying an iCarte iPhone case. This latest app is a huge improvement over their earlier efforts.
<a href="https://www.stgeorge.com.au/" target="_blank">St Georges Bank</a>’s mobile banking app has a good reputation. It was frequently regarded as the best mobile banking offering until ANZ released goMoney and Commonwealth released their new app. The website is strictly utilitarian and doesn’t have too many flashy banners to divert your attention.
<a href="https://www.westpac.com.au/" target="_blank">Westpac</a>’s website does have quite a lot of information online. If you feel like a bit of light reading, they do regularly release economic updates, including information on the property market. Their mobile banking app is a well made piece of software and is regularly updated.
<a href="https://www.nab.com.au/" target="_blank">NAB</a>'s website has quite easily accessible information on their home loan offerings. In fact most of their website is quite intuitive. Their app is a standard issue banking app that does that job reasonably well.
Article continues on next page. Please click below.
 
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Calculators
Real estate is all about money, and money needs maths – sometimes, quite complicated maths. Thankfully, there are some kind souls out there that make these things easier, with a range of intuitive calculators for smart phones.
<a href="https://itunes.apple.com/au/app/tapmortgage-australia-mortgage/id402187202?mt=8" target="_blank">tapMortgage</a> is an Australian made app to calculate stamp duty, transfer fees, first home concessions and more. It hasn’t been updated since August 2011, but it's a great tool to calculate mortgage costs.
<a href="https://itunes.apple.com/au/app/real-estate-master-iiix/id398247923?mt=8" target="_blank">Real Estate Master IIIx</a> is a calculator for estate agents. It allows you to calculate mortgage insurance, amortization, FHA, ARMs, rent/buy comparisons and more. It can do just about any calculation a real estate agent might need to do. There are videos on Youtube to help with the more complicated sums one can do with the app.
<a href="https://itunes.apple.com/us/app/property-evaluator-real-estate/id335518202?mt=8" target="_blank">Property Evaluator</a> is an iPad app that gives comprehensive estimates on property costs and returns for investors. It allows you to input every imaginable piece of financial data about a property and then crunch the numbers to give estimated returns over the next 30 years. It’s a useful tool and might be instrumental in demonstrating the real value of a property.  This comprehensive app allows you to graph and table all the generated information and email this on. It’s not designed purely for the Australian audience so there may be a couple of hiccups along the way, but for basic projections the app works well.
Article continues on next page. Please click below.
 
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Depreciation
Depreciation is an easy way to claim some money come tax time but it’s often regarded as a bit of a mystery area with property – but no longer.
<a href="https://itunes.apple.com/au/app/wb-dep-calc/id448589647?mt=8" target="_blank">Washington Brown Tax Depreciation Calculator</a> calculates the tax depreciation of a property. Under Australian tax rules, investors can claim the depreciation of their investment properties against their taxable income. If it’s something you find yourself doing quite often, this app might come in handy.
<a href="https://www.aiqs.com.au" target="_blank">The Australian Institute of Quantity Surveyors</a> is the national professional standards organisation for quantity surveyors. It’s a good resource for finding a local professional to help you with all your quantity surveying needs including depreciation.
Article continues on next page. Please click below.
 
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Environmental Concerns
Houses are designed to take the occupiers out of the elements and put them into a safe place, but you can’t just ignore the environment. Real estate affects the environment, and conversely, the environment affects real estate. There are tools out there to help make homes more sustainable and liveable. A big part of living in Australia, especially in rural areas, is the threat of natural disasters. So we’ve included a series of tools that inform users about risks associated with the Australian environment.
<a href="https://www.ecoeasy.com/index" target="_blank">Eco Easy Home </a>is a new Australian app that grades the environmental credentials of a property. It allows users to rate their home on a number of factors through its clean interface. The app allows users to work out the orientation of a home and the future sun paths around a property. The app is full of drawings, diagrams and helpful information to assess a home. The rating system is based on a system used by architect Gareth Cole and NSW councils. The app is useful for vendors hoping to spruik the environmental credentials of a home and buyers looking to discriminate between various choices. Overall, its a very comprehensive app aimed at Australian usage. There is an iPad edition coming somewhere down the line.
<a href="https://www.liveability.com.au/" target="_blank">Liveability.com.au</a> is an online resource for owners, renters and landlords on living sustainably. The site publishes advice on how to make property more environmentally friendly.
Our country is prone to disasters. Sometimes nature decides to shake things up a bit. When investing in a new area, especially in more remote or rural areas, it’s important to know what to expect.
<a href="https://itunes.apple.com/au/app/disasterwatch/id484402725?mt=8" target="_blank">Disasterwatch</a> is the ultimate app for the perpetually nervous. Created by the Australian Emergency Management Institute, this app gives real time updates and warnings on all possible disasters in Australia. You can check fire safety warnings before deciding on buying that nice house in the bush.
<a href="https://home.iprimus.com.au/foo7/menu" target="_blank">Romsey Australia</a> is well worth a read. It catalogues the history, threats and nature of areas all around Australia. It’s the work of an independent organisation who disseminate freely available information in an easily digestible form. It’s not the most beautiful site but it’s a favourite of ours.
Queensland really copped a beating in 2011. People died and many homes suffered severe flood damage especially around Brisbane. It was a tragic time but what happens now? How do you know if a home for sale suffered flood damage. It might look fine but there could be rot lurking beneath. Or if it was rebuilt, how can do you know if it’s in a flood prone area. These tools will help.
<a href="https://flood.brisbane.qld.gov.au/floodwise_property_report/" target="_blank">FloodWise Property Report</a>: If you’re buying in Brisbane this government run website has flood history of all Brisbane areas. Sometimes agents don’t volunteer flood information so it’s best to check this website first. Given the recent floods this really is a sensible idea when buying in Brisbane.
<a href="https://pdonline.goldcoast.qld.gov.au/masterview/modules/propertymaster/default.aspx?page=home" target="_blank">Planning and Development Online</a>: This is a similar tool for the Cold Coast. You can search by property address and check for flood reports. Without this tool it might not be immediately apparent that a property is prone to flooding.
Article continues on next page. Please click below.
       
 
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Floor Plans
We have no time for people who post online real estate listings without floor-plans. Impress people and make friends by producing your own floor plans with one of these great tools. Your clients will love you.
<a href="https://itunes.apple.com/au/app/magicplan/id427424432?mt=8" target="_blank">MagicPlan</a> allows you to automatically create a floor plan of a house within minutes just by taking photos. Walk around a property with your phone and take photos of every corner in the house and it will automatically create a floor plan. One of the few genuinely ground-breaking apps, and free, this is great news for agents or buyers when there are no floor plans available.
<a href="https://floorplanner.com/" target="_blank">FloorPlanner</a> is a powerful online tool for creating easy floor plans and furniture placement. You can add floorplans from possible purchases and see how your furniture fits in. Brilliant. As of May 7, they have added an iPad app.
<a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
 
 
 
 
 
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The A to Z of property apps: Part one

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<img src="/images/stories/2013/10/29/KF_STACKED_RGB.jpg" width="200" height="75" alt="KF_STACKED_RGB" style="max-width: 480px; display: block; margin-left: auto; margin-right: auto;">
Name: Ashley Moffat<img style="float: right;" alt="ashley_moffat_feb_17" height="125" width="100" src="/images/stories/2014/02/17/ashley_moffat_feb_17.jpg">

Position: Associate director, retail leasing

Company: Knight Frank

Office Location: Brisbane





How long have you been in the industry?
21 years
What’s happening in the area you specialise in?
Plenty – the sands are shifting constantly in retail leasing and sometimes hard to keep up with the latest trend/fad/concept. At the moment, it’s all about very specific fresh food concepts. Rather than just opening an Italian restaurant, restaurateurs are instead opening up a “Meatball” restaurant which may roll out 10 different varieties of meatballs. It’s all very exciting.
Describe the most interesting property you have sold
I’ve spent most of my career leasing or developing shopping centres. Probably the funniest transaction was when I was in the pub talking to a complete stranger who, after sharing a couple of drinks, asked me whether I was interested in buying a piece of land he had an interest in. 12 months later I completed building a BI-LO Supermarket and specialty shops on it which resulted in a few million dollar profit for the company I was working for at the time. Goes to show, networking does work!
What are the ingredients to being successful in your job?
You have to love it, because it shows if you don’t. There are plenty of people that just go through the motions; they are also the first people to complain they haven’t received a promotion or aren’t making any money.
What aspects of your role do you enjoy the most?
Every day is different, every hour is different – it never gets boring.
Where would you invest a spare $750,000?
I’m a big believer in the Gold Coast at the moment – it’s clawing its way out of the mud and there are just some unbelievable opportunities to pick up. I would choose a two bedroom, two bathroom unit overlooking the ocean, in an older style building, for mid to high $400,000s. Spend $50,000 modernising it and to me, that is a smart investment for the boom that is on the horizon.
Which football team do you support?
Broncos (don’t hit me!), Roar and the Lions. And of course the Reds. Any ueensland team with the exception of the Titans – my brother and sister support the Titans so I automatically hate them just to be annoying! Makes for interesting dinner table conversation when we catch up.
What’s your favourite app or techno gadget?
“Kaching”, which is the Commonwealth Bank app. Obviously only handy if you bank Commonwealth, but I use it all the time, it’s just eliminated so much time wasted getting online or going to the bank.
<ol></ol>
How do you use social media?
I admit to being a little “slow” to embrace these mediums. I don’t have Facebook because I like to maintain some form of private life. However, I am starting to embrace <a target="_blank" href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/ashley-moffat/79/971/975">LinkedIn</a>, which I think is a very handy tool for professionals to communicate and share information. But I’m still a little “old school”, and believe nothing beats picking up the phone and talking to somebody, or better still, face to face contact.
<a target="_blank" href="mailto:news@propertyobserver.com.au">news@propertyobserver.com.au</a>
Correction: Ashley Moffat's title has been updated to associate director of retail leasing since initial publication.
         
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In profile: Knight Frank's associate director of retail leasing, Brisbane, Ashley Moffat

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Total industrial vacancy on Australia's eastern seaboard surged to a near three year high in the 12 months to January, as the Melbourne and Brisbane markets were swamped with additional space.
Fresh figures from Knight Frank's Quarterly Eastern Seaboard Industrial Vacancy report showed that the total industrial vacancy on the east coast rose 2% over past quarter and 10% in the past six months to 1.84 million square metres as at January 2014, reflecting a 28% increase over the same time last year.
<img alt="chart_of_the_week_feb_18_one" height="316" width="470" src="/images/stories/2014/02/18/chart_of_the_week_feb_18_one.png">
Source Knight Frank
Inflating that result was a jump in available industrial space in Melbourne, which was up 26% to 626,848 square metres over the past six months - the highest vacancy in more than three years.
The vacancy rate in Brisbane soared 17% to 551,433 square metres - the highest recorded by the survey, which started in early 2007.
Taking a 12 month perspective, the vacancy rate was more pronounce in Melbourne and Brisbane - up 75% and 67%, respectively.
Sydney was the bright spot in the results, with the vacancy rate falling 7% to 662,661 square metres, down 7% over a six month period and 12% over the year.
Prime space across the Australian east coast market remained relatively scarcer than secondary, however the proportion of prime space had increased marginally over the past year, from 34% to 44% of the market, said Knight Frank's head of research and consulting Matt Whitby.
The highest proportion of available prime space is within the Sydney market with 49%, equal to 322,350 square metres of total available stock.
"The proportion of total vacancies made up of prime stock is now at its highest level since the series began although the majority of these options are in the sub 10,000 square metres range," Whitby said.
Better placed was the secondary market, which has fallen 40% since its peak down to 340,300 square metres.
“This is expected to correct sharply over the coming quarter with a strong pipeline of 35,000 square metres of vacant stock in Sydney currently under offer, 20,000 square metres of which is speculative builds,” said Whitby.
"This is another sign that confidence is returning, particularly within the Sydney market, as much of 2013 was dominated by shorter term leases in secondary accommodation as a hold over measure until corporate confidence improved and longer term, higher grade accommodation is sought.”
Commenting on the tenant demand, Knight Frank national industrial director, Greg Russell, said that the take-up across the eastern seaboard had softened for the second quarter in a row, following the July 2013 quarter record result, with 34 buildings over 228,493 square metres absorbed.
“There is some scope for leasing demand to pick up, as enquiry levels suggest a degree of improvement, however there remains a lack of urgency from tenants to finalise premises related decisions,” Russell added.
The Knight Frank research also pointed to the firmer tenant demand for prime grade stock, with 78% of gross absorption in the second half of 2013 dominated by prime accommodation. The take-up of secondary accommodation over the past quarter - some 49,400 square metres - is significantly less than the 273,800 square metres absorbed in the July 2013 quarter.
<a target="_blank" href="mailto:news@propertyobserver.com.au">news@propertyobserver.com.au</a>  
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East coast industrial vacancy surges to near three year high: Knight Frank

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Back in 2004, when Crown Group began showing interest in Parramatta, there were a number of naysayers about this growing city. However, the vision behind what is now the most recognisable and central hub for the western Sydney suburbs is being born out through the council, keen developers and buyers who are jumping onto what they see as an opportunity for growth.
The new $309 million V by Crown development will be the tallest in Sydney's <a target="_blank" href="/news">Parramatta</a>, at 29-storeys, just beating the B1 building that is 28-storeys high.
However, Property Observer has heard suggestions that it may soon face competition for this title, a comment that may be unsurprising for those who have seen the heavy presence of cranes in the skyline.
Today, the slabs will be set for Crown's residential tower – 30 metres wide, 50 metres long and one metre thick for those who haven’t yet grasped the size of the soon to be realised building.
{yoogallery src=[images/stories/2014/02/18/par2]}
Photographs taken on site by Property Observer
The letter ‘V’ from the name 'V by Crown' is prominent – it stands for vertical, but also for ‘vision’, which Parramatta Lord Mayor, John Chedid, put particular emphasis on. It appears to align with his vision of Parramatta as well.
<img width="470" height="481" alt="parramatta-feb-18-one" src="/images/stories/2014/02/18/parramatta-feb-18-one.jpg">
Parramatta Lord Mayor John Chedid, left, Crown Group CEO, Iwan Sunito, right. Photograph taken by Property Observer
“[The city of Parramatta is] delighted to have a company like Crown investing,” Chedid said on site yesterday, behind him the massive excavation site.
Chedid said the development sends a strong message of Crown’s commitment and belief in the future of Parramatta, the “economic hub of Western Sydney”.
The CEO of Crown Group, Iwan Sunito, appeared to agree. He said that back in 2004, when Crown Group started building and developing in Parramatta, he was regularly told that the plans were too ambitious for this area.
He was building one of the largest buildings at the time with more than 90 apartments, all of which has sold on completion in 2009.
This is his next important milestone, and he repeated his oft-quoted mantra: “Build it, and they will come.”
{yoogallery src=[images/stories/2014/01/23/par]}
And it seems they have already started pouring in for this development before it has been built. Of the 519 apartments at V, <a target="_blank" href="https://www.propertyobserver.com.au/developments/v-by-crown-development-reaches-%24150-million-in-sales/2014012367334">there have already been $150 million worth of sales</a>, a total of more than 270 apartments since the 2012 launch.
It was officially <a target="_blank" href="https://www.propertyobserver.com.au/developments/stamp-duty-handout-expiry-helps-sell-out-first-stage-of-v-development-in-parramatta/2012061855159">launched in Singapore in April 2012</a>, presumably attracting a significant amount of offshore interest.
Prices start from $428,000 and on offer are studios, one-, two- and three-bedroom apartments with a variety of floor plans, including some with studies.
The median unit price in Parramatta, according to RP Data, currently sits at $450,000.
Inside, it appears as though it will be everything a new development should be. Neutral palettes, modern amenities, space-maximising designs and careful consideration around the placement of rooms in the floor plan. This comes from the skills of Allen Jack + Cottier architects, along with the renowned architect Koichi Takada – arguably one of the most influential in Sydney.
{yoogallery src=[images/stories/2014/02/18/par1]}
Photographs taken on site by Property Observer
The current popularity that has led to the significant number of sales may be to do with the location, sitting on Macquarie Street and a very easy walk from Parramatta station. It may also be the promised facilities – a pool, gym, sauna, conference facilities, a music room, a theatrette and a library - amenities that were previously laughable for this area.
Discussing the area of Parramatta after the presentations with those attended, it appears that most are surprised with how quickly the city has emerged. It’s not, however, surprising that many buyers in the area are also first timers considering purchasing investments in the "second CBD" of Sydney. Sales manager for this project, Anthony Falas, previously provided us his thoughts on what will make these apartments a solid addition to an investors’ portfolio.
<img src="/images/stories/2014/01/23/v-by-crown-jan-23-breakout.jpg" alt="v-by-crown-jan-23-breakout" height="264" width="470">
It seems Crown Group is confident this will pave the way for the longevity of the area. With two three-storey ‘V’ shaped steel columns that peer over the entire site, it’s uncertain if they will ever be moved. In fact, Property Observer is told that roads needed to be closed to bring in the cement with which to fill them up.
V is set for completion in 2016 and it’s not clear yet where Crown Group will look for its next project.
When Property Observer asked, Sunito laughed. He said he’s just looking to get through this project first, but he hopes for a lot more to come for what he describes as the city of culture, connectivity, commerce and vision.
jduke@propertyobserver.com.au
For the latest development listings, brought to you by Property Observer and partners, see our <a rel="nofollow" href="https://showcase.propertyobserver.com.au/">Investor Showcase</a>.
 
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Slab to be set on highest residential tower in Parramatta, V by Crown, today

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SCA Property Group (ASX code: SCP) announced on February 14, 2014, its intention to undertake an on-market buy-back of up to 5% of its shares at a price of up to its current net tangible asset value (NTA) which is currently $1.59 per share. The buy-back will be funded from cash and drawing down on debt facilities. The current share price is $1.555 which is up 3.5 cents from the price prior to the announcement.
Companies buy-back issued capital as part of a capital management strategy. This is appealing when the stock is trading at a discount to NTA as it is investing at a discount.
A buy-back of shares can increase earnings per share, NTA per share and return on equity. A buy-back will reduce the equity on issue and increase the gearing level. This can be positive when borrowing costs are low. SCA Property Group’s earnings yield is 7.05% per annum and its borrowing rate is 4.8% thereby creating a positive outcome from gearing for the company.
Table one (below) shows how SCA Property Group’s earnings per share (EPS), NTA per share and return on equity (ROE) following a buy-back of shares. It is assumed that the full 5% of shares are bought back at the close price on 17 February 2014.
Table one – SCA Property Group buy-back
<table style="width: 470px;" border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="bottom" nowrap width="143">
 
</td>
<td valign="bottom" nowrap width="132">
Pre buy-back
</td>
<td valign="bottom" nowrap width="142">
Post buy-back
</td>
</tr>
<tr>
<td width="143">
Share price
</td>
<td valign="bottom" nowrap width="132">
$ 1.520*
</td>
<td valign="bottom" nowrap width="142">
$ 1.555**
</td>
</tr>
<tr>
<td width="143">
Total net assets
</td>
<td valign="bottom" nowrap width="132">
$ 1,031m
</td>
<td valign="bottom" nowrap width="142">
$ 981m
</td>
</tr>
<tr>
<td width="143">
Shares on issue
</td>
<td valign="bottom" nowrap width="132">
648m
</td>
<td valign="bottom" nowrap width="142">
616m
</td>
</tr>
<tr>
<td width="143">
Reported earnings
</td>
<td valign="bottom" nowrap width="132">
$ 43m
</td>
<td valign="bottom" nowrap width="142">
$ 43m
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="143"> </td>
<td valign="bottom" nowrap width="132"> </td>
<td valign="bottom" nowrap width="142"> </td>
</tr>
<tr>
<td valign="bottom" nowrap width="143">
ROE
</td>
<td valign="bottom" nowrap width="132">
4.2%
</td>
<td valign="bottom" nowrap width="142">
4.4%
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="143">
NTA (per share)
</td>
<td valign="bottom" nowrap width="132">
$1.590
</td>
<td valign="bottom" nowrap width="142">
$1.592
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="143">
EPS
</td>
<td valign="bottom" nowrap width="132">
6.7%
</td>
<td valign="bottom" nowrap width="142">
7.1%
</td>
</tr>
</tbody></table>
Source: IRESS, Atchison Consultants
* Close price on February 13, 2014
** Close price on February 17, 2014
As shown in table one the return on equity would increase from 4.2% to 4.4%, NTA per share would increase from $1.59 to $1.592 and earnings per share would increase from 6.7% to 7.1% following the buy-back.
Paul Easton is a senior analyst at <a href="https://atchison.com.au/" target="_blank">Atchison Consultants</a>.
 
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SCA Property Group buy-back: How will it work out? 

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I appreciate Arek Drozda’s very thoughtful piece in yesterday’s Property Observer (“<a href="https://www.propertyobserver.com.au/trends/revisting-steve-keens-40-property-price-fall-prediction/2014021667812/Page-1" target="_blank">Revisiting Steve Keen’s 40% property price fall prediction</a>”), and this note is intended to clarify some hazy issues.
My 40% claim indeed has become part of the folklore, and as with folklore, the tale is very different to the original event. Arek is quite correct that it was not a prediction, but an analogy to overseas trends, in response to an unscripted question (from memory in a 7.30 Report interview) about what my economic predictions meant for Australian house prices. It was also based on Japan, not the USA, since at the time the USA bubble hadn’t burst. I commented that house prices in Japan had fallen about 40% in the 10-15 years since their bubble economy burst, and I “saw no reason why Australia would avoid the same fate”.
Arek comments that at the time he treated this call “with a fair dose of scepticism since I could not find corroborating evidence for such a substantial fall in prices using indicators from my own analytical toolkit”.
In fact, it appears that I understated Japan’s experience (and by sheer chance picked the level that USA prices would fall by). The <a href="https://www.bis.org" target="_blank">Bank of International Settlements</a> — the only formal body to warn of the crisis before it happened— recently released <a href="https://www.bis.org/statistics/pp.htm" target="_blank">a data series on house prices across the world</a>. Using that data for Japan, Shiller’s data for the USA, and the ABS’s data for Australia gives the picture shown below in Figure 1. Japanese house prices actually fell almost 60% in the 15 years after their peak in 1988, while US prices fell 40% in six years (before the rebound began in 2012).
Figure 1: House prices after financial bubbles burst
 <img src="/images/stories/2014/02/18/keen-feb-18-one.gif" width="470" height="411" alt="keen-feb-18-one">
However at the time of my answer to a “question without notice”, I hadn’t done any serious analysis of house prices; my focus was on the level and rate of growth of private debt and its implications for the macroeconomy—and on that analysis, in contrast to the vast majority of economists, I believed that a serious crisis was imminent (and that would affect asset prices as well as the real economy).
Mainstream economists ignored private debt on the argument that “one person’s debt is another person’s asset” (Paul Krugman 2012, End this Depression NOW!, p. 43), so neither banks nor debt (nor money!) existed in mainstream models. In contrast, private debt played an integral role in <a href="https://www.debtdeflation.com/blogs/wp-content/uploads/papers/Keen1995FinanceEconomicBreakdown_JPKE_OCRed.pdf" target="_blank">my non-orthodox “Minsky model” of the economy</a>. In December 2005, when I saw the trends in private debt in Australia and the USA (see Figure 2 below), I went public with the warning that a serious debt-induced economic crisis was inevitable in the near future:
At some point, the debt to GDP ratio must stabilise–and on past trends, it won’t stop simply at stabilising. When that inevitable reversal of the unsustainable occurs, we will have a recession (see “<a href="https://www.debtdeflation.com/blogs/2007/04/30/debtwatch-may-2005-booming-on-borrowed-money/">Debtwatch May 2007: Booming on Borrowed Money</a>”).
Figure 2: Private debt trends and my warnings of a crisis when they reversed
 <img src="/images/stories/2014/02/18/keen-feb-18-two.gif" width="470" height="402" alt="keen-feb-18-two">
The crisis that I expected duly arrived in 2008, when the rate of growth of private debt began to fall (see Figure 3 below). As Arek points out, my measure of aggregate demand includes the contribution from the change in debt (<a href="https://www.debtdeflation.com/blogs/2014/02/02/modeling-financial-instability/">an argument I’ve since proven here</a>), so my analysis implied that simply a slowdown in the rate of growth of debt can cause a crisis.
Bear in mind that at the same time, mainstream economic advisors like the OECD were telling governments that “<a href="https://www.oecd-ilibrary.org/economics/oecd-economic-outlook-volume-2007-issue-1/achieving-further-rebalancing_eco_outlook-v2007-1-2-en;jsessionid=l84e3jqj65oa.delta" target="_blank">the current economic situation is in many ways better than what we have experienced in years</a>”.
Figure 3: The rate of change of debt and the onset of the crisis
 <img src="/images/stories/2014/02/18/keen-feb-18-three.gif" width="470" height="336" alt="keen-feb-18-three">
Article continues on the next page. Please click below.
 
<hr class="system-pagebreak">
Arek also muses about whether the Credit Accelerator was behind my house price call in 2008. It wasn’t, because I hadn’t developed it then—and I didn’t do so until after Biggs, Mayer and Pick developed what they called the “<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1595980" target="_blank">Credit Impulse</a>”, using related but different logic.
The concept itself was an obvious extrapolation from my thinking on aggregate demand: if aggregate demand included the change in debt, then the change in aggregate demand included the acceleration of debt. I simply didn’t develop the idea, because I doubted that economic data would be reliable enough to reveal it, since it would involve comparing a second differential—the rate of change of the rate of change of debt—to first differentials, like the rate of change of house prices.
It turns out that I was wrong: Biggs et al showed that the effect turned up strongly in economic data. I then turned it to asset price data as well—with the approximation that I compared the rate of change of the rate of change of mortgage debt over a year to price change over the year.
As Arek notes, the correlation of the acceleration of mortgage debt with house price change is quite strong: it’s 0.68 in Figure 4, 0.88 since 2010, and 0.63 since 1993 (there was a break in the RBA data in 1991 that stuffs up calculations prior to then).
Figure 4: Stepping on the pedal--mortgage acceleration drives house price changes
<img src="/images/stories/2014/02/18/keen-feb-18-four.gif" width="470" height="320" alt="keen-feb-18-four">
As you can see, the mortgage accelerator indicator was predicting a turning point in house prices from the beginning of 2012. I didn’t make such a call then, partly because I didn’t completely trust my own indicator—which I had only started to develop one year earlier.
But another substantial reason was, in a word, revulsion. I am first and foremost an economist — and a rebel one at that — and I had hoped the world would learn from this crisis that we can’t base our collective economic welfare on borrowing money to buy second-hand houses from each other. But as Figure 5 and Figure 6 indicate (both below), we’re doing precisely that again: mortgage debt is on the rise once more (and it never fell in Australia, with the First Home Vendors Boost being a major reason that it didn’t do so), and this is driving house prices up again in the USA and Australia.
Figure 5: Mortgage debt on the rise again
<img src="/images/stories/2014/02/18/keen-feb-18-five.gif" width="470" height="335" alt="keen-feb-18-five">
I share <a href="https://www.businessspectator.com.au/article/2014/2/14/european-crisis/hair-dog-risks-bigger-british-hangover" target="_blank">Martin Wolf’s lament</a> about this. One might hope we would learn from our mistakes, but instead we seem to be in a rush to repeat them:
"The credit machine is indeed beginning to work, once again … But we have seen this play before. It ended as a tragedy…  Now, in the UK, people are celebrating the restarting of the very process that ended in this huge disaster."
As for how long the bubble can go on in Australia, we now have two additional factors that are driving prices over and above the impact of accelerating mortgage debt. These are the absence of any controls on non-residential purchases of new properties — as if housing is an export rather than, primarily, a consumption item for Australian residents — and the insane decision in 2007 to let self-managed superannuation funds take levered positions on housing and call it saving for their retirement.
Figure 6: Australian vs US mortgage debt; indebted DownUnder
<img src="/images/stories/2014/02/18/keen-feb-18-six.gif" width="470" height="402" alt="keen-feb-18-six">
The ride to the top may therefore last longer than the Credit Accelerator might imply (though SMSF mortgages should turn up in the data, much of non-resident buying won’t), and property speculators may well enjoy the ride, as Arek observes.
But to my macroeconomist’s eye, it will be a tragedy for the commons if all we will have to show for this decade is deeper mining holes, more expensive houses, a hollowed-out manufacturing sector, and an even more indebted society.
Steve Keen is the author of 'Debunking Economics', the blog <a target="_blank" href="https://www.debtdeflation.com/blogs/">Debtwatch</a> and developer of the <a target="_blank" href="https://www.debtdeflation.com/blogs/minsky/">Minsky software program</a>.
 
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stevekeen-hGRrVP8sYD

Clarifying my 40% price drop call and the factors still driving housing prices up

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Real estate agents and financial planners often encourage purchasers to undertake ‘due diligence’ when purchasing a home or investment, but have you ever wondered what due diligence large-scale developers undertake when searching for potential new development sites?
With so many factors at play such as location, access to amenity and financial viability - then looking at how these factors affect the commercial success of each project - there are many due diligence tips that developers employ which can assist individual investors when assessing the potential of their property portfolio.
For us at ICD Property, undertaking a rigorous due diligence process is vital to ensure we only purchase prime development sites that lead to commercially successful apartment projects which we know will perform well once launched to the public.
We have a strict list of attributes that we look for and if the site in question doesn’t tick all the boxes, we move on.
To give you an example as a general rule our checklist includes things like:
<ul>
<li>
Site location within walking or short driving distance of at least one of the following public transport services: trams, trains and buses
</li>
<li>
Site location within walking or short driving distance of a grocery store and supermarket
</li>
<li>
Site location within short driving distance of restaurants and cafés
</li>
<li>
Site location within a short driving distance of existing medical facilities and commercial precincts
</li>
<li>
Site location within a short driving distance of at least one university
</li>
<li>
The ability to easily access major roads or freeways for the commercial commute.
</li>
</ul>
As a case in point, our new project in Hawthorn sits within 10 metres of tram and bus facilities, 15 metres from a major supermarket, 10 metres from a local shopping strip, one kilometre from a university and 4.5 kilometres from the CBD.
Basically our sites must provide accessibility to each of these elements and if they don’t we simply don’t see the commercial viability of purchasing the site as there is no sense in delivering residents to areas where there isn’t sufficient amenity to support the growth of a suburb.
While of course we are talking in commercial terms, these factors provide great insight into the psyche of the owner occupiers who purchase within our projects in terms of what they deem to be an acceptable level of ‘liveability’.
Now to apply this thinking to mum-and-dad investors and everyday buyers…
For many first-time investors or owner-occupiers, choosing the right property in the right location and the right mix of amenity can be a daunting experience and there’s so much research on the market it can almost feel overwhelming.
It may be reassuring for these home-hunters to know that developers go through a similar process when securing development sites for apartment projects and that these developers hand-pick their sites with the strictest protocols in mind.
Knowing that a particular apartment project has already been through the rigours of a developer’s due diligence can help put investors’ minds at ease knowing the apartment they purchase has been thoroughly vetted and assessed by the developer.
It’s food for thought as there is much to be learnt about the due diligence protocols of large-scale professional developers.
Michael Mai is managing director of <a href="https://www.icdproperty.com.au/" target="_blank">ICD Property</a>. ICD Property is currently marketing YOU AND I in Collingwood and in 2014 it will launch two other new projects.
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mmai-AThrZTppWY

Due diligence the key to securing sites for successful apartment projects

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The Reserve Bank of Australia has noted while weak conditions in the labour market had weighed on consumption growth, the increase in housing and equity prices over the past year had raised the possibility that consumption growth could outpace that of income in the period ahead.

The board members noted in the February minutes that the effects of low interest rates were clearly evident in the housing market, where prices had increased further and turnover had picked up to be just below average.
"These conditions were expected to provide further support to new dwelling activity over the period ahead, and leading indicators of dwelling investment had increased," the minutes noted.
The members also observed that the softness in commercial construction meant that there was labour available to support the strong growth of higher-density dwelling construction.
Growth of housing credit was gradually picking up, particularly so for investors.
The members discussed the staff forecast for the domestic economy, which was a little stronger over the next year or so than at the time of the November Statement on Monetary Policy, in part due to the lower exchange rate.
GDP growth was expected to strengthen a little through 2014, though would be likely to be at a below-trend pace.
Growth was then expected to pick up to an above-trend pace by mid 2016.
But the outlook for the labour market was little changed, as the effect of the softer tone of the recent employment data had been largely offset by the slightly stronger growth outlook.
The inflation forecasts had been revised higher, reflecting a combination of the lower exchange rate and the higher-than-expected December quarter CPI outcome, slightly offset by a softer outlook for wages growth. Underlying inflation was expected to be around 3 per cent over the year to mid 2014 and was then expected to decline towards 2.5 per cent.
Members recognised that conditions in the labour market tended to lag economic growth, and that the labour market had remained weak following the period of below-trend growth in activity.
The minutes noted further signs that the expansionary setting of monetary policy was having the expected effects, with more timely indicators having been more positive for consumption, dwelling investment, business conditions and exports.
"Although inflation in the December quarter had been higher than expected, there were several possible explanations.
"The Board noted that it was likely the inflation reading contained some noise as well as some signal about inflationary pressures, but also presented something of a puzzle in interpreting the mix of activity and price data.
"Also, the further depreciation of the exchange rate since the December meeting was expected to add to inflation for a time, although the outlook for slightly slower wage growth was expected to help keep domestic cost pressures contained over the medium term.
"At recent meetings, the Board had judged that, given the substantial degree of monetary policy stimulus already in place, it was prudent to keep policy unchanged while assessing the continuing impact of that stimulus."
Paul Bloxham, chief economist at HSBC suggests the bottom line was today's minutes reinforced the RBA's shift to a more neutral policy bias and their greater comfort with the current level of the AUD.
"The outlook for the labour market and the degree of persistence of recent strength in inflation will be key factors determining the timing of future rate hikes.
"We see the RBA's easing phase as done and also see it as likely that the RBA may need to lift the cash rate before the end of the year," Paul Bloxham said.
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