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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2013 was the year of sensational events that never happened.
We heard about a bubble, but there wasn’t one.
We read that the Australian property market was white hot, but with rare local exceptions it wasn’t so.
There was much discussion about an affordability crisis, when all the statistics showed the opposite.
We were told yet again about the mythical housing shortage crisis, but neither the vacancy figures nor the rental growth data supported the notion. According to the REIA, six of the eight capital cities have vacancy rates ranging from 2.7% to 4.5%.
Some reported that the market had peaked, despite the lack of supporting evidence.
So what really happened in 2013?
It was year in which nothing remarkable happened at all. It was a year “full of sound and fury, signifying nothing”.
Some of our biggest markets sparked to life for the first time in many years. Sydney produced its first year of meaningful growth in a decade, though well short of the runaway boom depicted by an irrational media.
Perth produced its first year of solid price growth since its previous peak in 2007. Melbourne showed some life as well, but annual growth in the median house price was moderate, around 6-7% according to three major research sources. (We ignore the inflated figures published by the REIV).
Elsewhere among the capital cities, there was little to shout about. Darwin started the year as the market leader but its numbers moderated throughout the year. Brisbane showed the first glimmers of a return to price growth, but only 3-4% in annual terms.
Adelaide, Canberra and Hobart were largely non-events. As usual, it depends on whose figures you believe. Using the ABS House Price Indexes as a guide, annual growth was around 1% for all three cities.
All in all, it was a year that at no stage warranted the hysterical headlines it generated. The average result across the state and territory capitals was annual growth around 6% or 7%, with most of that figure generated by just three of the eight cities.
The real star performers were places we never heard about because they were out in the regions. Some regional centres recorded median price growth above 15%, including Port Lincoln in South Australia, Narrabri in New South Wales and Miles in Queensland.
So what did we learn this year?
The greatest lesson is that there is no such entity as “the Australian property market”. There are thousands of local markets, moving in various directions and at different speeds.
We learnt that boom-style growth is more often a curse than a benefit, as developers have an extraordinary ability to destroy those markets with over-supply. Central Queensland was surplus central in 2013, with Gladstone, Mackay and Emerald all experiencing declining markets because of over-building. We have previously seen high-population growth locations like Wyndham City and the Gold Coast go into sharp reverse, weighed down by too many new dwellings.
We learnt that developers don’t really care if major city markets are over-supplied as long as they can flog off their apartments in China. Melbourne is a stark example and inner-city Sydney and the Gold Coast are poised to follow suit. Smart investors will avoid these places.
We also learnt that the worst place to go for balanced and accurate information on real estate is the metropolitan newspaper industry.
So what of 2014?
I expect a solid year, with the price growth more evenly spread than in 2013. Brisbane will rise through the pack to be a market leader in 2014. Sydney and Melbourne will moderate somewhat but still have positive years, while Adelaide will produce its best growth since 2010.
The big struggler will be Canberra. It has an over-supply of dwelling, particularly apartments, and the public service cuts by the new federal government will hurt.

<hr>
Terry Ryder is the founder of <a target="_blank" href="https://www.hotspotting.com.au/" rel="nofollow" style="font-size: 14px;">hotspotting.com.au</a> and you can contact him via <a href="https://mailto:%20ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://twitter.com/hotspotting" target="_blank" style="font-size: 14px;">Twitter</a>.
 
 
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terryryder-YECXbqmri2

2013: The year of crises which never were

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After we find a development site for our client, one of the most important processes is to negotiate not only the purchase price, but the terms of the purchase.

Terms are the conditions you want to use when purchasing the property - and terms can be very powerful for you.
As a property developer, one of the first terms we always negotiate is an extended settlement. Property Bloom wants to ‘buy’ as much time as possible to get as much done before our client settles on the land. Once settlement takes place holding costs come into play in the way of interest payments on their loan.
We will often achieve a twelve week settlement and permission from the vendor to lodge a development application (DA) during the settlement period.  So after exchange, we swing into action and order a contour survey, within a few days this is with our builder and they are working on plans and the DA preparation. We can have a DA lodged with council within a few weeks of exchange and then we manage council as best we can to try and have the DA consent before or as our client is settling on the land.
Another key term is a low deposit, for the very same reason as a long settlement, to minimize holding costs.  Most sales contracts will ask for a ten percent deposit, we have been able to achieve a five thousand or even a one thousand dollar deposit.
A quick calculation based on purchasing a development site say at $250,000 and paying a ten percent deposit or $25,000 will cost $146 a month in interest over a three month settlement period based on 5.5% interest rate. Yet a $1,000 deposit over the same period and interest rate will cost just $4.58 a month so we can save about $424 over the settlement period – every little bit helps. You can get a bigger saving right now from the NSW government under their new home grant which will save you $5,000 off stamp duty if buying land to build on or a brand new or off the plan property, check it out <a href="https://www.osr.nsw.gov.au/grants/nhg/about" target="_blank">here</a>.  
Another term Property Bloom usually throws into the negotiation process is to waive the cooling off period. By the time our client is ready to exchange, we have done all our checks and research and our client has an unconditional loan approval, so there is really is no reason to ‘cool off’ as our client has committed to the project weeks before. To waive the cooling off period adds weight to your offer and gives the vendor piece of mind that there won’t be a last minute change of heart.
We will always make offers subject to pest and building inspections (if there is a house on the land) and to conditional loan approval (which our clients have up to a level even before we make an offer).
Another term we’ll use is to release the deposit to the vendor once exchange has taken place. We usually save this one as a final tool to leverage the sale depending on the vendor’s situation. We will gauge this from the selling agent.
You can also offer the vendor two or three different purchase prices at the same time - each with different terms. We may offer a higher price but with a longer settlement period and ask for access to the property during the settlement period to start renovations. We’ll include a lower offer but with a fast settlement – as long as we are sure that our client does have fast access to finance. This gives the vendor options or choices which empowers them.
The vendor may not quite be ready to move out of their home so you can offer them a rent free period or reduced market rent to sweeten the deal.
Maybe there is a lot of rubbish lying around the property and if your plan is to renovate or demolish the house, you can tell them that you’ll remove the rubbish at your cost, anything like this that makes their life easier and the sale process quicker will help you so be creative and think about how you can meet the needs of the vendor.
After the offer is accepted then you can also negotiate on the terms in the contract of sale. Many of the terms in the sales contract will be standard, which means that they’ve been in use for a long time and are fair to both seller and buyer. Your solicitor will check the clauses of the contract to make sure they do suit you and if not, they will ask for changes to be made.
In order to cut the best deal on your property purchase, be creative with your terms and if you show sympathy to the vendor then this may give you the edge over other buyers.

<hr>
Jo Chivers is director of <a style="font-size: 14px;" target="_blank" rel="nofollow" href="https://www.propertybloom.com.au/" title="Property Bloom">Property Bloom</a>, which manages property development.
 
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jochivers-wq5Bp59R5a

Sweeten the deal by negotiating terms of purchase

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Hi Margaret, 
 We own a five acre block near Darwin with a four-bedroom house under renovation. 
 My hubby is a 65 year-old self-employed tradesman and as we are not overly endowed with super, had the idea that if he built a small residence (granny flat) on same block with separate power, water etc, we could base ourselves there and rent out the main dwelling for income.
We would also caretake the block, e.g. mow lawns, remove palm frond,s etc. (There are a lot of properties this size in this area which build granny flats /dependant units and rent those out seemingly with no trouble planning-wise it seems.) We can’t subdivide five acres here. 
 Can you please advise if our idea is even feasible tax wise before we look into it further? I realise it is a pretty broad query! 
 Many thanks, 
 Jane 
 
Dear Jane,
This is an interesting question and one which is not often asked, and so I referred to Julia Hartman, a great expert on these more obscure scenarios.
She has said that there are many things to consider, the main one being the capital gains tax exemption for your principal place of residence. Once the granny flat is built, if you moved into it immediately, then from a tax point of view this would be treated as two separate properties. Once you rent out the former family home, the cost base of that property is considered to be the market value at the time. The granny flat and the land underneath it would also be given a market value.
At this point you would have to choose which one you wanted covered by the main residence capital gains tax (CGT) exemption – and ahead of time it can be really hard to work out which of the two is likely to have the greatest amount of growth.  If you choose the former family home to have the exemption, then the granny flat and its land will have CGT from its determined market value, and if you choose the granny flat, then the family home will attract CGT from the market value established upon you moving out.
If you don’t want  the property to be treated like two separate assets,  then you need to live in both the granny flat and the house, combined as your home, for the first three months at least.  This way, the two houses are seen as one dwelling,  and for CGT purposes the treatment would be just the same as if you were renting out rooms or part of your home.  This of course exposes the whole property to CGT from the market value of the whole property at the time the granny flat is built, but only for the portion of the home which was rented out – and so it’s done on a pro rata basis.
As you can see – its complex! It’s going to be really hard to actually work out which pathway is the best one to take, since you can’t really estimate future values.  Make sure that you have an accountant who can help you work out some ballpark figures and don’t make any decisions until you have a clear understanding of what could potentially happen in the future.
Regards,
Margaret.
<hr>
Margaret Lomas is a best-selling author and writes and hosts the popular Property Success With Margaret Lomas and heads up the panel on Your Money, Your Call, both on Sky News.
She is the founder of <a href="https://destiny.com.au/dotnetnuke/en-au/home.aspx" target="_blank" rel="nofollow">Destiny</a>.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
 
 
 
 
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mlomas-KC9MUPZ6Ca

How will building a granny flat work out tax wise?

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Consolidating multiple debts into a mortgage is not necessarily the ideal way to manage your finances, according to mortgage broker firm Smartline.
“It’s very uncommon for someone with a home loan to get into financial trouble,” Smartline Director Joe Sirianni says. “Unless they get sick and can’t work or they lose their job, it’s unusual for that to happen. “It’s when people have a home loan, two credit cards, an interest free loan and a car loan – that’s when they start getting into real financial trouble as having to service all these debts proves increasingly expensive and stressful.”
Consolidating that debt into your mortgage is an option only if there’s enough equity in the property, says Smartline adviser Shawn French.
 “It’s not something you can keep on doing – your house isn’t a limitless ATM, particularly in light of the flat property prices experienced in recent years,” French says.
 “This isn’t a problem faced just by people on certain levels of income. It’s a problem for anyone who consistently spends more money than they earn and it’s something that most mortgage brokers regularly see.”
They advise people to set goals and priorities to avoid the temptations of spending too much money; to have a budget; to work out the true cost of things like making your own lunch; to save for things rather than pay on credit card; to pay for things with cash and to structure your finances.
Someone with a $350,000 mortgage at 5.25% for 30 years could shave more than seven years off their loan by buying a $15 lunch and coffee just once a week instead of five and diverting the savings to their mortgage.
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awalsh-7Ub9EypybQ

Consolidation of debt is not necessarily ideal: Smartline

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<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">If there was any residual doubt about whether low interest rates would push more investors into Australia's housing markets...well, there isn't now.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">I'm not sure I understand all of the reasons why everyday Australians are more inclined to invest in residential property than, say, our counterparts in the US, but regular readers will recall that I was confident that this would be the outcome of lower interest rates (in the face of a chorus of articles and commentators suggesting in no uncertain terms that the housing markets would not respond to monetary policy, and that buyers should 'sit it out' and wait for an inevitable price correction).</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">It seems to be part of the Australian psyche, as well as a reflection of our tax system. Investors with surplus capital have seemingly been spooked by the share market crash rather than welcoming the wonderful buying opportunities, and instead turn to the property markets to seek returns in the low interest rate environment ("I've always done well in property").</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">In my opinion, and in that of others, the long-run outcome of this will be iniquitous "cones of wealth" surrounding our major capital city centres - in particular Sydney and Melbourne - just as we have seen unfolding in London and elsewhere over the past few decades. I don't expect that outer suburbs and regional centres, where the percentage of investors is much lower, will be impacted all that much.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">Finance data</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">The Housing Finance data for October from the Australian Bureau of Statistics (ABS) showed a very substantial 4.1% seasonally adjusted increase in total dwellings housing finance.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div class="separator" style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; clear: both; text-align: center;"><a href="https://1.bp.blogspot.com/--O0y9m6RS0w/Uqd_bs-p0ZI/AAAAAAAALEE/rc-Pe742TYw/s1600/ABS+housing+finance.jpg" imageanchor="1" style="text-decoration: none; color: #7f7f7f; margin-left: 1em; margin-right: 1em;"><img border="0" height="120" src="https://1.bp.blogspot.com/--O0y9m6RS0w/Uqd_bs-p0ZI/AAAAAAAALEE/rc-Pe742TYw/s400/ABS+housing+finance.jpg" width="400" style="border: 1px solid #ebebeb; position: relative; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></a></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;">Source: ABS</div>
 <div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">As you can see above, owner occupied housing finance increased by 1% through October, seasonally adjusted, and the recent data has sent the total number of owner occupied dwelling commitments well above their long run averages.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"><img alt="Graph: No. of dwelling commitments, Owner occupied housing" src="https://www.abs.gov.au/ausstats/abs@.nsf/a866861f12e106e0ca256a38002791fa/05dbce56402ec566ca25723d000f2999/Body/0.29FC!OpenElement&amp;FieldElemFormat=gif" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;">Source: ABS</div>
 <div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">The total value of dwelling commitments is in a roaring uptrend, the most recent sector of the chart almost vertical.</div>
 <div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"><img alt="Graph: Value of dwelling commitments, Total dwellings" src="https://www.abs.gov.au/ausstats/abs@.nsf/a866861f12e106e0ca256a38002791fa/05dbce56402ec566ca25723d000f2999/Body/0.1FEE!OpenElement&amp;FieldElemFormat=gif" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;">
 Source: ABS
</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"> </div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">The real driver and the real story of this release is the level of investor activity, which has increased massively over the month of October (+8%) and over the past year (+29%).</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">Note that this is easily the highest level of investor activity ever recorded in Australia.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"><img alt="Graph: INVESTMENT HOUSING - TOTAL" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/d672cf4ebe195f15ca256e910077d9c2/Body/0.A0E!OpenElement&amp;FieldElemFormat=gif" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;">Source: ABS</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"> </div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px;">
<div style="text-align: justify;">Combined with other data which shows that New South Wales is leading the levels of financing activity, this clearly suggests to me that the types of property which will 'outperform' the national averages will be those favoured by investors, in particular those located in the inner/middle ring suburbs in Sydney.</div>
</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">Meanwhile, there was positive news for the new dwellings sector, with he number of commitments for new dwellings strong.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"><img alt="Graph: Purchase of new dwellings" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/d672cf4ebe195f15ca256e910077d9c2/Body/0.3C46!OpenElement&amp;FieldElemFormat=gif" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;">Source: ABS</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"> </div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">
FHB activity There is little point in analysing first homebuyer activity in great detail. We know that the numbers are low, but, in NSW at least, we also know that the numbers are incomplete.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">I missed out on a property myself to a first homebuyer a fortnight ago, but I'm doubtful that he was recorded as such. Notably, he was somewhat older than first homebuyers from generations gone by, a trend we might expect to see continuing. New dwellings construction
</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">And finally, finance for the construction of new dwellings is definitely moving strongly in the right direction with 11 consecutive monthly increases, but it would be fair to say that there is still a good deal of heavy lifting for low interest rates to do before it could be called a construction boom.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">In particular, much of the activity has been in NSW and Western Australia to date, so other states have some way to go.</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">"The number of finance commitments for the construction of dwellings for owner occupation (trend) rose 0.7% in October 2013, following a rise of 0.6% in September 2013. </div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"> </div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;">This is the eleventh consecutive rise since December 2012. The seasonally adjusted series rose 1.0% in October 2013, following a rise of 1.7% in September 2013."</div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: justify;"> </div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"><img alt="Graph: Construction of dwellings" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/d672cf4ebe195f15ca256e910077d9c2/Body/0.317E!OpenElement&amp;FieldElemFormat=gif" style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;"></div>
<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18px; text-align: center;">
Source: ABS <div style="text-align: left;">
Summary 
<div style="text-align: justify;">Housing finance is a useful indicator as to what is coming in the future, and the indicators suggest more of the same in 2014 while interest rates remain low.</div>
<div style="text-align: justify;"></div>
<div style="text-align: justify;">Over the past 12 months, Sydney has recorded 14% growth, Perth around 10.5%, and Melbourne 7.5%. Even Adelaide, which was is my least favoured capital city suggestion due to there being a weaker supply/demand dynamic, has scraped together a tiny amount of capital growth, although the city's dwelling prices have comfortably underperformed inflation for years and years now.</div>
<div style="text-align: justify;"></div>
<div class="separator" style="clear: both; text-align: center;"><a href="https://2.bp.blogspot.com/-1eWOm-EVNXE/UqekuSqMLEI/AAAAAAAALEU/QTI74rZkIz0/s1600/RPD.jpg" imageanchor="1" style="text-decoration: none; color: #7f7f7f; margin-left: 1em; margin-right: 1em;"><img border="0" height="207" src="https://2.bp.blogspot.com/-1eWOm-EVNXE/UqekuSqMLEI/AAAAAAAALEU/QTI74rZkIz0/s320/RPD.jpg" width="320" style="border: 1px solid #ebebeb; position: relative; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;"></a></div>
<div class="separator" style="clear: both; text-align: center;"></div>
<div class="separator" style="clear: both; text-align: center;">Source: RP Data</div>
</div>
<div style="text-align: left;">In summary, we are heading into a giant and unprecedented investor-led property boom in Sydney. But if you've been a long-term reader of my books (and my blog), you already knew that...years ago.</div>
</div>
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Australian housing finance to the moon (record investor activity)

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The $3 billion battle for the Commonwealth Property Office Fund further intensified today after the Dexus consortium matched the rival offer from the GPT Group.
Dexus and partner the Canada Pension Plan Investment board raised the value of its original bid from $1.21 to $1.27 per Commonwealth Property Office Fund (CPA) unit - matching that of GPT.
The revised offer includes a cash payment of 77.45c and 0.4516 Dexus stapled securities.
GPT is offering $0.75325 in cash and 0.141 GPT securities for every CPA unit.
In making its revised offer, Dexus said the offer would not be subject to a minimum acceptance condition and would only have "limited customary conditions".
Commenting on the revised offer, Dexus chief executive Darren Steinberg said "the due diligence process has enabled us to confirm our view on value".
Dexus said it intends to exercise its right to take physical delivery of 350,000,000 CPA units under the forward contract with Deutsche Bank on January 3, 2014.
But Dexus suggests that based on its closing price on December 10, 2013 its offer valued at $1.27 is a 2.6% premium to the GPT offer on a comparable basis.
<a target="_blank" href="mailto:news@propertyobserver.com.au">news@propertyobserver.com.au</a> 
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Battle over Commonwealth Property Office Fund intensifies

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A former mortgage broker has now been convicted of providing false information to banks, which led to securing approvals for home loans totalling $7.5 million.
The NSW, Dural mortgage broker, Hee Seng Lee, 58, plead guilty to the six charges which included making false statements and providing false documents.
The loans Lee was involved in ranged from $160,000 to $1.5 million. There were 12 in total, including some in his own name. The false information related to the income and/or employment of the applicant, and included falsified documents such as payslips, tax returns and notices of assessment purportedly issued by the ATO.
Currently, more than 20 investigations are underway by ASIC involving falsification of loan documentation and loan applications.
On December 6, 2013, Lee was sentenced to two years imprisonment to be served by way of an Intensive Correction Order. This was at his appearance at the Sydney District Court.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
He <a href="https://www.propertyobserver.com.au/industry-news/former-sydney-mortgage-broker-pleads-guilty-to-submitting-false-documents-to-support-%2475-million-in-home-loan-applications/2013080263817" target="_blank">plead guilty to the charges back in August</a>.The loans were submitted between April 2006 and March 2011, during which time he was a director of A &amp; H Vision Mortgage Group Pty Ltd, trading as H Lee's Finance Co and Loan Care &amp; Co. The credit licence for this company was cancelled on 3 January 2012.
ASIC Deputy Chairman Peter Kell said that any attempts to falsify loan documents and applications will not be tolerated.
"These actions can be significantly detrimental to clients," said Kell.
"We will continue to shine the spotlight on broker misconduct around loan fraud and false loan applications."
Just today, ASIC also announced a permanent ban of a former mortgage broker from engaging in credit activities or providing financial services following a criminal conviction in January.
Daniel Minh Tuan Nguyen, of Panania, had been convicted of 10 offences, including providing false information and documents to banks to secure home loans. These loans totalled in excess of $3 million over five months.
Nguyen plead guilty to these charges. He was the sole director and sole employee of M.A.I Pacific Pty Ltd (MAI Home Loans), Bankstown.
"Mr Nguyen’s conduct was not inadvertent or the result of a momentary lapse. It was a deliberate, ongoing course of conduct that he knew to be in breach of the law," said Kell.
"The banning of Mr Nguyen continues ASIC's actions to protect the public from the harm associated with falsifying loan documents and loan applications."
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jduke-EHk3XBmHkn

Mortgage broker convicted of providing banks false info to secure $7.5m of loans: ASIC

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A Cairns local is facing a 10-fold increase in their strata insurance premium following Cyclone Yasi, and Shine Lawyers is now investigating the situation.
Claiming that an increase in the strata insurance has caused a 30% drop in their clients' property value, Shine Lawyers noted that this is a wide-spread issue in North Queensland, with an online petition calling for fair insurance premiums netting more than 5,500 signatures.
Property Observer gathers that the strata insurance increase for this case, a unit in a block of 16, was from $3,600 to $36,000. The owner bought the property six years ago for $165,000, and a similar unit recently sold for $98,000.
Head of disaster recovery team, George Newhouse, provided the following tips for property owners in natural disaster areas who may also be fearing premium increases.
1.    Shop around – Don’t accept exorbitant premiums. Shop around and take advantage of any competition in the market by comparing quotes and asking insurers to ‘do one better’ than their competitors.
2.    Limit the scope of your insurance – Have a close look at your insurance cover and reconsider any aspects or extras that aren’t necessary. Seek professional advice if you need it.
3.    Use an Insurance Broker – Seek out the assistance of a reputable insurance broker with the skills and experience to locate appropriate cover at competitive premiums.
4.    Apply for alternative arrangements – Where a body corporate is unable to comply with their legal requirements to insure, apply to the Body Corporate Commission to have alternative insurance arrangements put in place. 
5.    Contact your local MP – Call on your local representative to look into the issue and consider whether wider government intervention is necessary. The options from here may be to call for an enquiry from the ACCC, request for the government to place a cap on the premiums that can be charged or provide funding to areas facing insurance hikes following natural disasters.  
Source: Shine Lawyers' George Newhouse The <a target="_blank" href="https://www.change.org/en-AU/petitions/help-north-queenslanders-get-fair-and-affordable-insurance-premiums">petition, currently available on change.org</a> notes that premium increases are "driving homeowners to the wall" with units, large complexes and resorts often facing 200 to 800% increases and house premiums beginning to rise.
The petition is asking people to sign the following letter addressed to insurance companies and politicians.
These are the major problems we want you to address: 1. Increases in premiums of 200-800% for unit owners, and now house owners in North Queensland 2. Withdrawal of insurance companies from the North Queensland market 3. Transparency of commissions and payments on insurance invoices 4. Lateness of advice, in one case 36 hours to raise over $100,000
These are the effects on communities of the problems above: 1. Inability of owners to pay body corporate fees and insurance premiums 2. Strata properties needing special levies required to cover insurance premiums 3. Loans set up to pay Body Corporate insurance premiums, involving more cost 4. Owners either moving out of their homes entirely or into different accommodation and renting their properties 5. Mental anguish and depression 6. Marketing properties has been close to impossible, even though mortgagee in possession sales increased dramatically 7. Reduced purchasing power and rent increases
We need: 1. An environment created in which insurance companies can return to the market and offer affordable insurance premiums to the people of North Queensland. 2. The recommendations resulting from the Cross Party Federal Parliamentary Inquiry held in February 2012 to be actioned in full - all 9 of them 3. The Insurance Council of Australia to concede there has been market failure in North Queensland
We want: 1. Sensible and affordable insurance premiums for all types of properties in North Qld 2. Transparant insurance invoices showing all payments to anyone concerned 3. Competition in the marketplace 4. Insurance premium rises to be capped (as with rents) and backdated to 2010-2011 5. At least 4 weeks notice of renewal premiums to allow for the monies to be raised and paid
YOU MIGHT ALSO BE INTERESTED IN: <a target="_blank" href="https://www.propertyobserver.com.au/queensland/queensland-targets-homeowners-put-off-insurance-by-premium-rises/2013113066678">Queensland targets homeowners put off insurance by premium rises</a> <a target="_blank" href="https://www.propertyobserver.com.au/news/insurance-premiums-to-see-some-reductions-due-to-flood-maps-qld/2013101665752">Insurance premiums to see some reductions due to flood maps</a> <a target="_blank" href="https://www.propertyobserver.com.au/queensland/most-home-owners-lack-flood-insurance-as-claims-rise-above-%24120-million/2013012959015">Most home owners can't afford $8,200 flood insurance premiums as claims rise</a>
<a target="_blank" href="mailto:jduke@propertyobserver.com.au">jduke@propertyobserver.com.au</a>
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Cairns insurance hike causes property to drop 30% in value: Shine Lawyers investigating

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There's often a culture of loyalty that has property buyers heading to their bank for loan, solely because they've been with since they first opened their savings account back in school. Sometimes, those looking to purchase also like to do all the legwork themselves, comparing loans and deciding which is best for them.
Undertaking all this legwork should always be something every investor or home buyer looks to do, however having a savvy broker on your team is a consideration.
Aussie Mortgage broker Renee Taggart explained that having a liaison between the borrower and the bank means that you might not have to be involved in the negotiations.
“There are many benefits of using a mortgage broker over a bank, with an obvious benefit being time saved by the homebuyers; a broker can do in minutes what may take a buyer several days to achieve in regards to comparing and choosing options,” said Taggart.
While investors will want to ensure they're choosing the right mortgage broker - that is, checking their credentials, their panel of lenders and their experience - it might just be a useful step to consider.
“A mortgage broker will research the best product and service offerings in the market, to enable buyers to find the solution that is right for them," she said.
“Brokers can guide buyers through what can often be a daunting process, and the best part is that they’re free! The costs for the broker’s service is borne by the lender that the buyer ultimately chooses to proceed with. ”
Five reasons to consider a broker 1.     Brokers do the legwork 2.     You have one point of contact 3.     You have on-hand support throughout the entire process 4.     They’ll get you the best deal possible 5.     It saves you time, money and stress
Source: Aussie Mortgage, Renee Taggart
There are situations where heading to a bank can get a better result, with one reader noting that they'd used a broker and, being self-employed, still struggled. They went and discussed their situation with their bank manager (in a regional area) and came to a solution.
While, typically, a payment is given to the broker by the lender, there has now become an increasing trend of pay-for-service from property buyers to brokers. This cost should be weighed against the potential benefit.
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Why consider a mortgage broker?

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When Australia’s biggest underwriter of lenders mortgage insurance rules a line through an entire asset class of property then investors should take note.  
Recently Genworth announced that from December 19, 2013 they would no longer accept off-the-plan or new properties as security when purchased in self-managed super funds. The announcement reads:
“Off-the-plan purchases and new properties that have been completed for less than 12 months are no longer acceptable. A “new property” is defined as being any property (including any house, unit, villa or townhouse) that has been fully completed for less than 12 months and/or has not been previously sold since construction (i.e. the vendor is a developer/builder or a related party of the developer/builder).”
Genworths’ role in the finance world is to ensure a bank does not lose any money if a borrower cannot meet their loan repayments. If the bank is forced to sell the property and is still left short the mortgage insurer fills the gap.  
Lenders mortgage insurers are very conservative by nature and they are sending a clear signal that they do not see a positive capital growth outlook for these types of properties.  
Genworth is looking to protect its own bottom line and are ruling out allowing their SMSF clients to invest in properties they think are risky investments. While the main reason for this is self-preservation it does provide a level of protection for these investors.  
At the same time that Genworth is waving a red warning flag to wealthy SMSF investors the government is still encouraging first homebuyers to buy this exact kind of property.  
Our government knows how important the building industry is to our economy so they are making it appealing for first homebuyers to invest in new properties only.  
For example a payment of up to $10,000 is available for eligible first home owners in Victoria for contracts entered into on or after July 1, 2013 to build or purchase a new home valued at up to $750,000.  In NSW the grant is currently $15,000 for first home buyers who build or buy new property.  
The government is leading first home buyers to focus on one particular type of property. Again the focus is to underpin the building industry but the byproduct is many first home buyers are in danger of being placed in a dangerous position.  
This is because new properties tend to have a low land to asset ratio meaning most of the value is tied up in the building not the land. It is land that appreciates in value and buildings depreciate. The result is capital growth that is more likely to fall behind the rest of the market. In addition new homes and apartments tend to be clustered together and can often be located in areas where there is an over supply of similar property.  
The current first home buyer policy solves a short-term problem by creating jobs in the building sector. However in the long run it is likely to place young first home buyers under financial pressure. The policy fails to acknowledge the dynamics of the property market and lures them into buying properties that well educated investors are avoiding.    
 
<hr>
 Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
 
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