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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The first week of February looks to be a busy one for property investors. We look at the dates to keep in mind, and what the indicators might mean for you.
February 2: RPData/Rismark Home Value Index
Marking home price trends by suburb, postcode, capital city and state, the RPData/Rismark Home Value Index is released on a monthly and quarterly basis. CommSec expects that the latest release may show a price lift of 0.8% in January.
February 3: TD Securities inflation gauge (January), ABS building approvals (December), ANZ job advertisement data
The TD Securities and the Melbourne Institute have devised their inflation gauge to indicate monthly movements in the inflation rate, with a one month lag. As always, keeping an eye on inflation will allow investors to have a better idea of future interest rates.
As we’ve <a target="_blank" href="/news">noted before</a>, increasing building approval rates can indicate a possible oversupply of property in the future. It’s expected that approval rates stayed flat in December.
February 4: Reserve Bank of Australia (RBA) board meeting
The RBA cut the official cash rate last August to an <a target="_blank" href="/news">all-time record low of 2.50%</a>.
Since then rates have remained on hold and our <a target="_blank" href="/news">experts predict</a> that the cash rate will remain unchanged this month.
February 6: ABS international trade data (December) and retail trade data (December)
Thursday’s data releases will help investors gauge the state of the economy. We’ll find out the extent of the country’s trade deficit (CommSec is expecting the deficit to near $350 million), and whether retail sales have increased in the last quarter.
February 7: RBA statement on monetary policy
Investors will have a better idea of the RBA’s monetary policy stance after Friday. It remains to be seen whether the RBA is comfortable with the December quarter’s <a target="_blank" href="/news">higher than expected</a> inflation figures. 
jrichardson@propertyobserver.com.au
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jrichardson-uRX5hFdKfN

For the diary: The big dates in property for the first week of February

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All investment and development properties incur a land tax liability annually. The annual land tax liability for a property is derived from the value of the land only and doesn’t include the value of any improvements. In brief, anyone can object to the valuation which is provided by the NSW Valuer-General, however there is only a 60-day window in which this can be done. In some instances there are significant savings to be made.

Property developers and owners of major investment properties are the most likely to be hit with excessive land lax assessments.
What property types incur land tax?
Land tax is paid on most properties that are not a principal place of residence or not used for primary production. Development sites and land banks, retail and commercial investment properties, vacant land, land improved with a dwelling or apartments, a holiday home and many other property types incur land tax.
There are various concessions/exemptions from land tax such as a primary place of residence, the property is intended to be a primary place of residence, some boarding houses, a new residence is acquired while the previous one is yet to be sold, you have a home office but the majority of business is done elsewhere, absence from principal place of residence (e.g. move overseas) or a deceased estate.
How much is land tax and how is the amount calculated?
Land tax is payable over a certain threshold. For 2014 the threshold is $412,000. Land tax is calculated at $100 plus 1.6% of the land value up to the premium rate threshold ($2,519,000) and 2% thereafter.
The amount payable is based on the average of the last three years’ assessments. It is possible to object to any of the three assessments. If you are objecting to a value that has previously been objected to, new information must be provided.
In most instances it is too time-consuming to lodge an objection for a small investment property, as a successful objection may only reduce the burden slightly. However, with major development sites and investment properties land tax liabilities can be reduced by many hundreds of thousands of dollars.
Residential strata buildings and land tax
In order to determine the land value for individual residential apartments the Valuer-General assesses the land value of the site on which the apartment building is erected. The total land tax liability for the building is allocated to each apartment based on its unit entitlement under the strata scheme. Some owners will incur a liability and others will be exempt for reasons detailed previously.
How is land tax assessed and what difficulties impact the assessment process? Why might the assessment be wrong?
To arrive at the land value of a property the valuers working for the NSW Valuer-General analyse recent comparable sales. The opinion of value is arrived at after comparing the identified sales to the subject property based on their various characteristics, such as location, site conditions, zoning, development approval, scale, floor space ratio, view profiles, aspect and proximity to employment bases and infrastructure.
Although this method is the simplest way to determine land value, there are often points of contention as how the characteristics are compared (and ultimately land value assessed) is a matter of opinion. Small oversights in the valuation process can change an assessment greatly.
Ideally a valuer will use sales of vacant land to determine the land value (unimproved value) of the subject property; however in most built-up areas vacant land sales are not available and sales of properties with improvements (units, houses, offices) need to be used. In this instance the valuer will deduct the value of the buildings from the sale price to arrive at the land component of the sale price. This process includes a number of assumptions and a large margin for error, particularly as the buildings are given a value without having been internally inspected.
In addition, sales of properties such as development sites and major commercial office buildings often do not transact under standard/basic conditions. Often sales include conditions such as extended settlement periods, various types of options, rental guarantees, lease backs or staged payments and these conditions can allow a purchaser to pay more for a property for any number of reasons. The value for land tax purposes assumes unconditional sale so it can’t be compared to a conditional sale without making the necessary adjustments. If these adjustments have not been made by the valuer then the identified sale might be contributing to an inflated land value assessment.
Next page: Considerations and tips for making an objection.
 
<hr class="system-pagebreak">
There are any number of reasons a property owner might disagree with their assessment and these may be reasonable cause for an objection. Any objection needs to have supporting evidence based on analysis of the sales used by the Valuer General or sales not considered. Some reasons to object might be:
<ul>
<li>My development site has been given the same rate/square metre in value as all the comparable sales but it is in an inferior location and with inferior amenity.</li>
<li>There have been a number of sales around my property that have not been used by the Valuer General and I am of the opinion they are the most comparable and they support a lower land value for my assessment.</li>
<li>My land is heritage listed and the valuer general did not take this into account in their assessment.</li>
<li>Two of the sales used by the Valuer-General were between related parties (e.g. family members) and as such cant be relied upon. I have new sales that support a lower value. </li>
</ul>
How long do I have to consider an objection?
A period of 60 days is provided in which an objection can be lodged. This can be lengthened at the Valuer-General's discretion. This is only a narrow time to object and it is in the objector’s best interest to object before the end of the 60 days.
Notwithstanding the above as previously mentioned your land tax liability is based on the average of the previous three years and it is possible to object to any of the three years that appear on the notice. As such, if you miss the 60 day window you will have another chance to object to the value the following year.
Things that ought be taken into consideration before lodging an objection?
<ul>
<li>How much of my time will it take to lodge a professional and well researched objection?</li>
<li>Should I appoint a valuer/property professional to prepare the objection on my behalf? If so, what fee should I expect?</li>
<li>By what amount do I estimate I can reduce my liability by? After considering the time and cost to lodge an objection, is it worthwhile?</li>
<li>Who is a property consultant that can provide some guidance/advice in this?</li>
<li>Do I have the expertise to properly lodge an objection?</li>
<li>The assessment is based on an average of three years and this should be taken into account when deciding what years out of the three can be objected to.</li>
</ul>
What increases the chance of success?
<ul>
<li>Properly analyse the sales identified by the Valuer General so that all details of the sale are known and their impact on the value explored.</li>
<li>Identify any key sales not used by the Valuer General.</li>
<li>Provide a clear and concise objection.</li>
<li>Instructing a qualified valuer and/or land economist to prepare an objection for you.</li>
</ul>
Determining objections and how to appeal. Is it worth appealing?
After an objection is lodged it will be reviewed by an independent valuer appointed by the Valuer-General. Once the objection has been reviewed a notice of determination of the objection is sent to the relevant party. If a notice is not received within 90 days of lodgement then the objection is deemed to be disallowed.
If an objection is not successful then you have 90 days to lodge an appeal with the Land and Environment Court of NSW.
The cost of an appeal can be significant due to the inclusion of lawyers and property valuers. The high cost of an appeal is part of the reason it is important to lodge a professional objection.
Sam Barrow is an Associate Director for <a target="_blank" href="https://www.landsburys.com.au/">Landsburys Property</a> providing strategic advice and property valuation services. Sam has experience in all property types, however specialises in residential and mixed use development projects and master planned communities throughout New South Wales.
 
 
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sbarrow-W3PnSwsfJs

Land tax 101: Time is ticking on the NSW 60-day objection period - is it worth appealing?

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Metro Development’s Madison Heights project has reached $105 million in sales, after settling 246 of its 308 apartments in five weeks.
The Bowen Hills apartment complex was developed by Metro Property Development in conjunction with Pearls Australasia. The development, set over 30 storeys, also includes 760 square metres of retail and dining space in addition to outdoor entertaining areas.
Metro Property Development’s managing director Luke Hartman noted the importance of Madison Height’s location in Brisbane’s growing market.
“Although the Brisbane market is picking up, quality apartments in the inner-city are still a rare commodity,” he said.
According to Hartman, the project’s situation in Bowen Hills has also attracted retailers, with IGA, Subway and liquor retailer Cellabrations signing long term leases.
<a target="_blank" href="mailto:jrichardson@propertyobserver.com.au">jrichardson@propertyobserver.com.au</a>
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Madison Heights development sells 80% of stock

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Almost all market analysts appear to believe that Australian property prices will rise in 2014, and looking at the most recent housing finance data I can't disagree, broadly speaking. In the true spirit of a market cycle, it follows that analysts have suggested that there are <a href="https://www.propertyobserver.com.au/trends/overheated-markets-set-to-see-a-2015-correction/2014012267272?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=mostread" target="_blank">likely to be price corrections in 2015</a>.
Despite being a preternaturally optimistic property spruiker, that to me sounds like a reasonable base case scenario. The corrections will, of course, likely be more severe in 'looser' markets than those where appropriate stock is tight. However, as always, the 2014 picture will no doubt be fragmented.
Strugglers
I find it hard to picture much in the way of growth in Canberra/ACT, for example, given the likely impact of public sector cutbacks. Asking rents in the city have been plummeting with houses -8.4% year on year and units -5.3% year on year per <a href="https://www.sqmresearch.com.au/RentalVacanciesClimbDuringDecember.pdf" target="_blank">SQM Research</a>, which suggests that in 2014 prices will follow a downward trajectory. <a href="https://www.smartcompany.com.au/finance/investment/35181-alan-kohler-tips-strongest-2014-property-price-growth-for-canberra-darwin-and-brisbane" target="_blank">Alan Kohler recently predicted</a> 10% plus growth for Canberra in 2014 - I don't know what he's on, but I want some of it! I'll take a bet that growth is lower than double digits, though, and wouldn't be surprised if there's a minus sign or two somewhere in this year's data.
The optimistic Kohler also <a href="https://www.smartcompany.com.au/finance/investment/35181-alan-kohler-tips-strongest-2014-property-price-growth-for-canberra-darwin-and-brisbane" target="_blank">predicted 10%+ growth for Darwin</a>! Now, despite having lived in Darwin, I don't pretend to understand too much about the property markets up there except that the supply always seems to be outrageously tight and rents bordering on the extortionate. In spite of that, after a confounding run over the last decade and more, I've heard a number of analysts suggest that 2014 won't be a great year for property in the city.
I'll take their word for it, as my track record on working out what goes down in Darwin is mostly balderdash, but I do note that Darwin has been a massive outperformer in terms of 2013 asking rents growth (houses +5.9% year on year for houses and +7.7% year on year units per <a href="https://www.sqmresearch.com.au/RentalVacanciesClimbDuringDecember.pdf" target="_blank">SQM again</a>). It's always seasonal in the tropical north, remember. I'm a little ambivalent, so let's wait and see on the NT capital - Darwin has proved people wrong before and it might again.
As I've detailed in previous posts, <a target="_blank" href="https://www.propertyobserver.com.au/south-australia/adelaide-market-still-failing-to-launch-pete-wargent/2013092665307">Adelaide has ongoing problems</a> of an economic nature, which is one of the likely reasons why the city's property market has been the weakest of the major capitals. It's hard to see that changing too much in 2014 given recent adverse news on the automotive industry, although in certain sectors of the market vacancies appear to be reasonably tight.
On a recent visit to the city, it did appear to me that land release, if it were to be or could be facilitated, could actually bring dwelling prices down (always a big 'if' in Australia's capitals). Recent dwelling price data for Adelaide has yet to show any meaningful pick-up and investor interest, relatively speaking, appears to be quite substantially lower.
Hobart's economy is fundamentally rather weak, with unemployment in Tasmania comfortably, and for some time, the highest of any state. Yet there are rumours that, with attempts to stimulate the market via grants, the property market may finally turn or have turned the corner. Keep a close eye on SQM's <a href="https://www.sqmresearch.com.au/graph_median_weeks.php?region=tas%3A%3AHobart&amp;type=c&amp;t=1" target="_blank">vendor sentiment index</a> for our best leading indicator on likely changes, though there doesn't seem to have been a material improvement to date.
Regions
As for regional markets, I certainly don't pretend to follow them all, but note that in my home state of New South Wales any pick-up has been pretty subdued. Asking prices on the NSW south coast, for example, have been flatter than the England cricket team morale for some years (and that's pretty flat).
Also, as Louis Christopher of SQM Research has been warning lately, watch out for the impact of steepening vacancy rates in certain Queensland towns and mining towns (follow <a href="https://twitter.com/@LouiChristopher" target="_blank">his Twitter account</a> for more details). <a href="/news">Bowen</a> (seasonal), <a href="/news">Mackay</a>, <a href="/news">Gladstone</a>, <a href="/news">Townsville</a>, <a href="/news">Karratha</a> and <a href="/news">Port Hedland</a> each face challenges of varying magnitudes. Read more about this concerning trend.
Performers
Perhaps unsurprisingly, given the tight nature of our capital city planning regulations, the strongest 2014 capital growth seems likely to be in Sydney's inner and middle ring suburbs, with Melbourne, Perth and Brisbane vying for second place. 
Certainly, the first inspections I've been to in 2014 had 'seemingly interested' buyers crawling all over them - four dozen people virtually queueing out the door in one instance - and that was midweek! I'm not sure I'd buy the line that the market is going to show slowing growth in the early part of the year just yet.
Impact of low rates
If you hark back a year or so before the market took off there was plenty of reverse-spruiking (if that's even a thing) which claimed that falling interest rate cuts would not impact the property markets favourably. I have some sympathy with the viewpoint because historically dwelling prices have at times moved in concert with the interest rate cycle (i.e. rate cuts being reflective of a weakening economy and deteriorating confidence and thus prices falling...and vice-versa), and not only in Australia.
However, what looking too much in the rear view mirror fails to observe - and why I disagreed vehemently with that view - is that, certainly in capital city markets such as Sydney where I live, the market is largely now being driven by yield-seeking investors. Perhaps around 50% of mortgages are being written for that sector of the market rather than for home buyers in recent months. And, for that reason, the inner/middle ring capital city markets are interest rate sensitive, whatever anyone tries to claim to the contrary.
What this means, naturally, is that these investor-led markets will likely be sensitive on the way back up as well as on the way down, at least as much in terms of future expectations as actual interest rate hikes. Therefore, much interest will be shown towards the Reserve Bank's monetary policy in the first half of 2014.
For my cautious money, interest rates are going nowhere for some time yet, and with the cash rate stuck at a generational low of just 2.50%, any moderate hikes back towards a neutral cash rate won't be enough to stall the property markets until at least 2015. That's my best guess anyway, and, let's face it, it is a guess.
Article continues on next page. Please click below.
 
<hr class="system-pagebreak">
Lowest rung problems
The downside to all this is that in those four major capital city markets which look set for capital growth, and particularly properties at the bottom end of the market, is that the goalposts are likely to move unfavourably away from them. Typically, one and two bedroom units are also often the dwelling types which appeal to investors.
I have a great deal of sympathy for those genuine home buyers who are stampeded or beaten to the mark by return-seeking investors, and it's a problem with seemingly few easy answers. I note that there are answers, just not easy ones to implement.
The more heartening news is that the most recent data from Rate City showed that well over four-fifths of today's mortgage products are now offering 95% LVR products - at least, to those who are able to qualify for them. This presumably helps to bring down the required deposit for those who can obtain such a loan, even in the most expensive metropolis of Sydney, to a more manageable level, with the added bonus that mortgage repayments are at the cheapest levels we've seen in a generation right now.
Remember that first timers who are being realistic shouldn't be looking at buying median-priced property. If, collectively, they are looking at the middle sector rather than the lower rungs of the ladders, then essentially our market dynamics are truly stuffed beyond repair.
I'd caution, though, that if you aren't in a position to save such a deposit comfortably, it's probably not a great time to buy, for interest rates close to the zero bound only realistically have room to move significantly in one direction over the medium term, and that's not down. If saving a deposit is not a manageable task at this point, taking on a 25 year mortgage is probably too risky a financial decision and in the absence of wage increases would leave the potential buyer massively exposed to default as and when the official cash rate reverts to the mean and borrowing rates follow.
Clearly, in today's markets, the dice are firmly loaded in favour of the dual income household, which is one of the reasons I expect that first home buyers in the future are likely to be in their early 30s rather than 20s.
In a generation we've seen a tremendous shift in the labour force towards both young men and women earning salaries, which most people agree is a great thing and representative of progress. The clear downside has been that, in trying to 'keep up with the Joneses', we've collectively lifted the deposit hurdle by using two incomes instead of one to 'get ahead' and to lift dwelling values higher. Unfortunately, with two incomes now as much the norm as the exception, those of us in dual income households really aren't all that much ahead. Ah, the fallibility of it all.
All of the above said, I do believe that ultimately the market will speak, and as and when property prices cannot be afforded they will not be, and dwelling prices will correct themselves. Presently, our major bank data shows that non-performing loans are running at low levels in Australia. If that changes, I believe, so will market prices.
Monetary policy
Watch out for any changes in the wording in the next policy statement from the Reserve Bank, and expect to see the first meaningful references towards noting a shift in real estate speculative investment activity. The December 2013 statement appeared remarkably flippant towards the sector, seemingly implying that an uplift in prices should encourage more investment (i.e. dwelling construction, rather than speculation) with little in the way of caution expressed.
Here's what RP Data reckons has happened to dwelling values over the past 12 months. Not much cop in Adelaide, but prices recovering in most other cities to either close to or above previous nominal highs.
In inflation-adjusted terms RP Data's <a href="https://www.propertyobserver.com.au/trends/inflation-suprisingly-strong-while-adjusted-home-values-below-previous-peaks/2014012367305" target="_blank">Cameron Kusher has prices at about 5% below previous respective peaks</a>. I'd probably normally say that an adjustment for household incomes rather than a basket of CPI goodies would be a superior measurement criterion, but given that wages growth has been subdued, the results would probably be fairly similar in any case.
Pete Wargent is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' was released on 1 September 2013.
 
 
 
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The strugglers, performers and signs to watch out for in 2014

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The ANZ Bank has refunded $70 million to 235,000 home loan customers, with some errors dating as far back as 2003 and leading to the bank to review all its home loan, savings and small business accounts.  
“Part of our ongoing program of work at the moment is to make sure that all of our accounts are performing in accordance with the terms and conditions documents that are out there,” ANZ’s Australian head, Phil Chronican, says.  
“When you discover an issue of this nature, you want to be 100% sure that you haven’t got anything else of that nature in your business, so we’ve been reviewing all of our products.  
“We literally are going through every product, every terms and conditions booklet, and checking the systems against the products <a target="_blank" href="https://www.theage.com.au/business/banking-and-finance/anz-review-after-glitch-forces-70m-in-home-loan-refunds-20140129-31m3z" rel="nofollow">against the terms and conditions</a>.”
This article first appeared on <a target="_blank" href="https://www.startupsmart.com.au/">SmartUpSmart.</a>
 
 
 
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ANZ refunds $70 million to home loan customers after major glitch

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In 2013 the property market had a bumper season. House prices in major cities rose substantially, investors bolstered the Sydney market to new heights and clearance rates in Melbourne and Sydney returned to three-year highs.
The median house price in Sydney rose by 15.1% to $793,000 and in Melbourne the median price jumped 8.6% to $569,000, according to Australian Property Monitors (APM).
With house prices through the roof and predictions first home buyers are being locked out of the market by the skyrocketing values, 2014 is set to be an interesting year in property.
APM chief economist Andrew Wilson gave us his five predictions for 2014.
1. House price growth to slow
Sydney and Melbourne were the hot markets in 2013, but this is set to change in 2014.
Wilson says house price growth peaked in Melbourne and Sydney in the December quarter last year.
“Sydney reached record-level price growth rates, the best in 10 years, and was overall very high by historical standards, but economic headwinds are blowing against medium-term growth in house prices now,” he says.
“The lower dollar will impact inflation, wage growth has slowed and this will impact living standards.”
Wilson says the level of growth reached in 2013 will be difficult to sustain.
“Markets will start well, there is still a lot of energy in the market, but this will moderate and we’re looking at likely growth rates of about half of what was achieved in 2013 in Melbourne and Sydney,” he says.
“There is more pessimism than optimism about the New South Wales and Victorian economies. The Sydney market will also have issues to do with affordability because of low income growth.”
2. Brisbane and Perth – the new hotspots
While Melbourne and Sydney slow, Brisbane is tipped to bang.
“The Brisbane market is still in catch-up mode, but the Queensland economy is ramping up with regional centres recording growth. There will be an increase in job seekers in Queensland too, as they shift from Melbourne and Sydney where the jobless rate is higher,” Wilson says.
“Investors will be more interested in Brisbane real estate because of its potential for high yields and prospects of high capital growth.”
Wilson says the Adelaide market is resilient, despite there being issues with its local economy.
“It doesn’t have that volatility in the housing market, so modest growth of about 3% is expected. Canberra is a similar story with jobs being shed in the public service, so house price growth of around 3% to 5% is expected in 2014.
Hobart is starting to show some improvement in its property sector, so modest house price growth can be expected.
Wilson says Perth is tipped to perform well, continuing its strong run in the property sector with growth between 6% and 8% for 2014 predicted.
3. Clearance rates to moderate
The cause and effect between clearance rates and house price growth was observed in 2013, with strong clearance rates reflecting higher prices.
Wilson says one of the early signals of the market starting to moderate will be clearance rates falling back from high percentages in Melbourne and Sydney.
“I expect to see that as a forward indicator of moderating buyer activity. This will be apparent in the June quarter, rather than March and it will be interesting to see if they can be maintained in Sydney,” he says.
“Clearance rates started to fall away in November-December last year, but there was a lot of stock going into the market. With record levels of properties auctioned, this could have easily caused clearance rates to fall slightly, so we’ll see how it pans out over March.”
4. Suburbs to watch
Sydney’s prestige market had lagged behind the rest in 2013, but it’s expected to pick up pace in 2014.
“It started to pick up toward the end of the year and it will take advantage of that increased confidence,” Wilson says.
“Sydney’s northern shore and eastern suburbs will do well. Growth levels were modest in 2013 and there is room to grow there. If we see strong results from the sharemarket, the prestige market will keep bubbling along.”
In Melbourne, the expensive areas of the eastern suburbs were the best performers of 2013.
“The eastern suburbs have been the star performers of 2013, but there are questions as to whether they’ve reached affordability barriers,” he says.
“They still have some upsides like Sydney’s premium markets, but generally there will be a moderation of price growth. Declining numbers of first home buyers is also likely to impact the outer eastern suburbs.”
5. Owner-occupier versus investors
Each city has its own property market characteristics and in 2013 investors dominated the Sydney market, while owner-occupiers were more prevalent in Melbourne.
“In NSW there were record numbers of investors recorded by the Australian Bureau of Statistics,” Wilson says.
“But we have to be mindful of overshooting the rental market in Sydney and I question if there’s enough demand. We’re already seeing rents flat lining and vacancy rates start to rise.”
Wilson says this will put pressure on investors looking for cash flow.
“The only hook will be prices growth, but I think investors will start to look at Brisbane instead, and possibly Adelaide to a lesser extent.”
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany.</a>
 
 
 
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Andrew Wilson's five property predictions for 2014

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Property buyers of Chinese descent find no shortage of coverage in the Australian press. Chinese investors are accused of inflating house prices and developing huge, tasteless properties. Wherever they go, they leave swathes of weeping would-be first home buyers in their wake, while bloggers want to make sure they don’t get their hands on <a href="/news">our heritage properties</a>.
According to Fairfax’s Paul Sheehan, the mere sight of Chinese buyers at an auction is enough to make one’s heart sink; even if one happens to be a high-income executive, with a partner on a good income.
As we’ve <a href="https://www.propertyobserver.com.au/news/letter-from-the-editor-talking-about-foreign-buyers/2013112966687" target="_blank">noted before</a>, when people write about “Chinese buyers”, they never quite seem to be sure whether they’re referring to Chinese residents, Australian born buyers of Chinese descent, Chinese expats who have Australian citizenship, or just people who show up to auctions with black hair. But whoever they are, we do know that they are “cashed up”, they “swoop” on properties and “attack”, “rock”, “take over” or “flood” the market.
Australia’s Foreign Investment Review Board (FIRB) approved $4.09 billion worth of real estate for purchase by Chinese citizens in 2010-11, placing Chinese buyers behind those from UK (non-Australian citizens), who made $4.61 billion worth of approved property acquisitions in the same period.
However, the FIRB’s figures don’t make a distinction between commercial and residential property investment, nor does it take into account the unapproved foreign investment – from China and elsewhere – that undoubtedly occurs. Despite the fever pitch commentary around Chinese buyers (whoever they may be), there are very few statistics available on the prevalence of property investment from buyers of Chinese descent. There is even less empirical evidence to support the claim that buyers of Asian descent are pricing Australian citizens out of the market.
In the face of such a dearth of evidence, media outlets are required to maintain a certain delusion in order to continue trotting out the same tired lines about Chinese investors crippling Australian buyers (who might be struggling first home buyers, or luxury investors, depending on who you ask). The fiction that all buyers of Asian descent are the same – Chinese born, non-citizens, and wealthy  – has to remain if we’re to characterise the increase in property investment by buyers of Asian descent as something that renders “real” Australians victims.
Alternative narratives – the long history of Chinese migration to Australia dating back to the gold rush, Australia’s own situation in the Asia-Pacific, or the benefits of increased activity in the property market to the national economy – are quickly forgotten.
Joseph Ngo is the branch manager of LJ Hooker Glen Waverley. His wife, Judy Thanh Truc, is the branch’s director. Their team, which is expanding with a new branch opening in Doncaster and another in Box Hill, is comprised entirely of bilingual staff. Thanh Truc and Ngo opened the Glen Waverly branch after noticing a gap in the provision of real estate services in suburbs with significant Chinese-speaking populations.
“Of the buyers we encounter, about 90% would be Chinese-language speakers,” said Ngo. But of the Chinese speaking buyers LJ Hooker Glen Waverley caters to, not all are foreign residents.
“At least 30% of those buyers would be from overseas, about 30% are Australian residents, and 40% would travel back and forth.”
Ngo says that of the Chinese speaking buyers his team has encountered, many are looking to purchase properties to rent out, or to redevelop.
His office has also seen its share of mysterious investors.
“We’ve had some foreign buyers who are here for maybe a week – then they disappear for three months. Even their lawyers can’t find them. Then, one or two days before settlement, they rock up and pay,” says Ngo.
Despite the occasional unpredictable buyer, Ngo says that foreign investment has been overwhelmingly positive for his branch.
“The good thing about these buyers is that they’re unconditional. They’ve got the cash to pay upfront, which is fantastic for us. A lot of them do know that they’re buying over market prices, but they want that particular land, or location, or house number – whatever it is. And they’re willing to pay the higher the price.”
According to Australia’s foreign direct investment laws, non-residents can purchase new dwellings directly from developers. They are also able to purchase single blocks of vacant land to build a new home, so long as they commence continuous construction within 24 months of receiving approval. The same conditions apply to buying a block for the development of multiple residences. They cannot purchase a second-hand or established property unless it is uninhabitable and they intend to redevelop.
Temporary residents are able to purchase established residences, so long as they live in the property for the duration of their ownership and don’t rent any part of it out.
Of course, there are ways around this. It’s unclear who exactly is responsible for checking a buyer’s citizenship status when a property is purchased. And with many foreign investors with family members living in Australia it isn’t difficult to park a property under a relative’s name. But according to Esther Yong, the director of ACProperty.com.au, an Australian Chinese-language property listings site, the foreign investors she’s encountered are meticulous about obeying Australia’s regulations.
“We get a lot of calls asking about regulations. They ask a lot of questions and they call the agent to double check, then us again,” said Yong.
But Yong says that there is no single type of buyer that visits the website, which was launched 12 months ago.
“Our main intention was to be a local Chinese website, and our target market is local Chinese speakers,” said Yong. She identifies three main groups in ACProperty’s audience.
“Most are parents, wanting to buy something for their children while they study. Their kid might be starting at Melbourne Uni (sic) and they want to buy around the area. Or maybe their kid is two years old and they’re looking 10 years ahead, trying to get into a good school zone.
“The second type: family migrants. They’re ready to move over, their visa is on the way, with that they’re looking for a family home, mostly in the suburbs. That’s when you hear people asking about the Chinese community in the suburb.”
While suburbs with established populations of people of Chinese descent are popular on Yong’s website, which currently lists properties in Melbourne, Sydney and Queensland, family migrants are beginning to consider neighbourhoods that haven’t been marketed to foreign buyers, like Melbourne’s northern suburbs.
“We’ve noticed that suburbs like <a href="/news">Preston</a> and <a href="/news">Reservoir</a> weren’t very attractive places for buyers - but over a while, buyers tend to notice those areas. They’re quite near the city and they’re not hard to get to,” says Yong.
“Sometimes they call and ask us, ‘but why is it that <a href="/news">Doncaster</a> is more popular? The houses look the same, and they’re the same distance from the city.’”
“The third type is pure investors. They don’t really care about what they’re buying; they just want to move their money to Australia, because it’s a safe investment. They might want two properties in Brisbane, one in Adelaide, and one in Melbourne. They’re after a variety of property.”
Pure investors, says Yong, are motivated by the perceived stability of the Australian economy and the rising price of property in big Chinese cities like Shanghai.
“Some sell their properties in Shanghai and buy here. There are a lot of rules and regulations that have been introduced in the last year that are making these people move their money out of China. But contrary to reports of reckless spending, Yong says that the buyers she encounters are considered and do their research on Australia before jumping into the market.
"Late last year, we were at an expo in China, in a second-tier [smaller] city," Yong says. "There were about a group of 10 people we were speaking to. Then one asked me if the trains were running at a new station in the Western suburbs - and I had no idea!"
It's hard to deny that demand for Australian property from Chinese speaking investors is up. But instead of  reporting on "frenzied" buyers and comparing Chinese speaking investors to "bulls in a China shop", the media should try a diffeArent story.
<a href="mailto:jrichardson@propertyobserver.com.au" target="_blank">jrichardson@propertyobserver.com.au</a>
 
 
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Demand from Chinese speaking investors is up - but that's not the whole story

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<img src="/images/stories/2014/01/30/robina-jan-30-brekaout.jpg" width="470" height="264" alt="robina-jan-30-brekaout">
Construction began earlier this month at the Robina CityVillage project in Queensland. Condev Construction has been appointed to build the first two stages of the $200 million development, comprising 65 of the total 130 terrace homes. The entire development, situated on a four-hectare lakefront site, will be built in four stages.
The second stage of terraces is currently selling, with prices beginning at $449,000. Terraces are designed with open plan interiors, with stacking doors opening to covered outdoor entertaining areas. Stage one terraces have sold out.
The first two stages of the CityVillage project expected to employ around 800 workers across 50 sub-contractors over the next eight months. According to Condev Construction director Steve Marais (pictured below), the company is working to keep pace with the momentum set by sales.
<img src="/images/stories/2014/01/30/robina-jan-30-one.jpg" width="470" height="286" alt="robina-jan-30-one">
“We have an ambitious target to complete the project’s first stage in 20 weeks,” said Maias.
Condev previously completed the Robina Group’s $40 million Paddington Terraces development.
<a href="mailto:jrichardson@propertyobserver.com.au" target="_blank">jrichardson@propertyobserver.com.au</a>
 
 
 
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Construction begins on Robina's CityVillage terrace home development

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I often get asked whether you can make some equity in a single house build or a house and land package. It’s a good question and the answer is yes...and no.
Typically a dual occupancy development where two dwellings are built on one lot can create some pretty good equity. It’s fairly simple to understand that if you take one piece of land and put two dwellings on it, each dwelling is basically benefiting from half the cost of the land and this is where a lot of the equity is created. The economies of scale, building two dwellings at once, also contributes.
Lately I started studying some suburbs of the Hunter Region in NSW, where Property Bloom manages developments, for our clients that we would not normally target for dual occupancies or medium density development. This is mainly because there are usually covenants on the land in these new estates, so this type of development is not permissible. I watched the sales on the houses at the premium end and was amazed at some of the results. In some of these suburbs we were seeing house sales exceeding the median price for the local government area (LGA) by around $150-$200,000.
For a single house, the land price may be lower than that of a dual occupancy site, as you don’t need such a large block (although a larger block will add to the end value in some locations so should be considered). You must find a location where homes are selling at a premium and there is good demand. Then you find a way to build them as cost effectively as possible to create your margin.
You need to be very clever with your design, fittings, decoration and landscaping – all are areas that you can cost effectively add value with.
The key to this strategy working is also location. Find land within a short distance to strong sales references and build something similar. You then have a good idea of what your house should be worth and you can work back from there as you get your construction quotes in.
It’s all in the numbers; if you get the land at a good price, in a good location, with strong comparable sales, and the build cost is right, then there is equity to be created. It won’t work in all areas but it is working in the Hunter and that’s why we’ve just launched our new single house build strategy. This strategy allows clients on a budget to dip their toe into development on a single house build and reap some of the rewards of a larger development project.
For around the same cost of a one bedroom unit in Sydney you can build a four bedroom house in the Hunter. Is that worth thinking about?
Jo Chivers is director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.propertybloom.com.au/" title="Property Bloom">Property Bloom</a>, which manages property development.
 
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Can you create equity on a single house build? Well yes... and no

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The publication this week by SQM Research of vacancy rate trends in mining-related cities and towns is a timely reminder to investors to check out supply-demand issues before buying.  
The figures show that, in many important regional locations around Australia, oversupply is the issue, rather than the much touted “chronic housing shortage crisis” – just as it is for inner city unit markets in several capital cities.  
Many investors consider demand factors, such as population growth, but forget to check out the level of supply in the market.  
It’s difficult to imagine a place with more compelling demand factors than <a href="/news">Gladstone</a>, with massive levels of infrastructure development under way. Yet the Central Queensland city has a vacancy rate of 11%, according to Louis Christopher’s figures. Developers seeking to profit from the LNG boom went overboard and the Gladstone market has been sinking for the past 12-18 months.  
Nearby <a href="/news">Mackay</a> has also suffered from an upsurge in new developer product and now has a vacancy rate around 7%.  
Some markets have had a double whammy, with an increase in supply coinciding with a drop in demand. There is particularly true of Queensland coal mining towns, such as <a href="/news">Dysart</a>, <a href="/news">Moranbah</a>, <a href="/news">Blackwater</a>, Clermont and <a href="/news">Capella</a>.  
Moranbah once ranked as the growth star of Australian real estate. In early 2012, its long-term capital growth rate (average annual growth in its median house price over the previous 10 years) was above 33% and its median weekly rent was $1,200. Before the end of 2012 its median house price would reach $750,000 – but, by then, rents were already falling and prices were soon to follow.  
The demise of the Moranbah market was as spectacular as its rise. In the past 12 months its median price has dropped 42% to $435,000 and the median rent is now $520 per week. Median yields, which were 12% not so long ago, are now around 5%.  
All manner of woes hit Moranbah. BHP and its partners refused to pay the astronomical rents being asked by investor landlords. Existing projects were downsized and new projects were deferred or progressed with 100% fly-in, fly-out workforces. And new dwelling supply hit the market.  
Similar events have happened in other mining-related markets across Australia. In <a href="/news">Roxby Downs</a> in South Australia, where many investors bought in anticipation of a $30 billion expansion of the Olympic Dam mine, the vacancy rate has risen to 10% in the wake of BHP’s decision to defer the project.  
Investors need to be aware of these issues because marketing companies continue to pump out promotional material for new developer product at high prices in mining-related markets that are in sharp decline.  
One I received this week was touting two-bedroom units in <a href="/news">Port Hedland</a> for $715,000, claiming they would rent for $1,400 per week, provide a 10.2% return and earn up to $22,000 per year in profit - thereby providing the “perfect investment opportunity” for first-time investors.  
The promo failed to mention that Port Hedland’s vacancy rate is now above 6%, that prices have dropped by up to 10% in the past 12 months and typical yields are now around 7% (and falling).  
Similar propaganda comes in every week for highly-priced new product in <a href="/news">Karratha</a> and <a href="/news">Newman</a> (where the median price dropped from $850,000 to $450,000 in six months).  
This is life in mining-impacted property markets. Many of the locations I’ve mentioned will recover, once the resources sector has finished the current phase of cost-cutting.  
One tactic commonly being used is to shut down a mining project, sack all staff – and then, perhaps six months later, re-hire at lower pay rates and re-start the mining project. One town impacted by that is <a href="/news">Collinsville</a> in Queensland where, according to SQM Research data, the vacancy rate is currently 36%.  
Moranbah, Newman and others will recover as there are big projects in advanced stages of planning. But in the short-term they are dangerous places to buy. Even investors who are happy to have some risk in their portfolio would be wise to wait and watch until the current phase is done and dusted.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank" rel="nofollow" style="font-size: 14px;">hotspotting.com.au</a>.
You can contact Terry via <a href="https://mailto:%20ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank" style="font-size: 14px;">Twitter</a>.
 
 
 
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