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

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

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

How Sterling Global designed 623 Collins from Melbourne's history

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

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

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

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

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

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

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

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

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

Every First Home Owner Grant for new property by state

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

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

Staff Writer

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

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

alisonwarters@gmail.com

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

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

Ellen Walker

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

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

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

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The Reserve Bank of Australia has signalled the possibility of further rate cuts in its November monetary statement, saying economic growth prospects for 2013 remain below trend.
On Tuesday, the cash rate was left unchanged at 2.5%.
“Overall, the outlook for the global economy is much as it was a few months ago… The prospect of a pick-up in conditions in many advanced economies is likely to see growth for the world as a whole improve from a below-average pace in 2013 to around average in 2014,” the RBA says.
“It was appropriate to hold the cash rate steady, but not to close off the possibility of reducing it further, should that be needed to support economic activity consistent with the inflation target.”

<hr>
This article first appeared on <a target="_blank" href="https://www.smartcompany.com.au">SmartCompany</a>.
 
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jake-cSmGT7VXVf

RBA says further cuts possible

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A comparison of the performance of prime and secondary office property demonstrates that prime at 9.0% per annum has outperformed secondary office property at 8.6% per annum over the 28 years from 1985 to 2012 by 0.4% per annum. Through cyclical market fluctuations, performance outcomes vary. Secondary property returns are more volatile, however secondary office property can outperform prime property in the stable return periods and the subsequent initial upswing phase of market cycle.

Prime properties are located in major commercial centres with great public transport accessibility, built with quality design externally and internally, which are energy efficient, and have tenants which are financially strong. Absence of any of these criterion means that an asset will generally be rated as secondary property.

Total Return

In broad terms, prime and secondary office returns have followed the same cycle over the past 28 years, indicating that that they are significantly influenced by the same fundamental demand and supply forces. Chart one compares annualised total returns for prime and secondary office property in Australia over the period from 1985 to 2012.

Chart one – Prime and secondary office property annual total return 1985 - 2012

<img alt="niu_nov_8_chart_one" height="279" src="/images/stories/2013/11/08/niu_nov_8_chart_one.png" width="470">

Source: IPD

Table one compares the performance of prime and secondary property over different periods. Four periods have been selected which highlight the different market conditions.

Table one – Prime v secondary office property returns

<img alt="niu-nov-13-chart-one" height="105" src="/images/stories/2013/11/13/niu-nov-13-chart-one.gif" width="470">

Source: IPD

There are three key observations:

<ul>
<li>
	During the stable return period from mid 1990s to mid 2000s, secondary office properties outperformed. The higher risk of secondary office property through higher vacancy was rewarded through the higher returns achieved over the period reflecting the higher income yield of secondary office property.
	</li>
</ul>
<ul>
<li>
	Prime office properties have led the initial recovery in returns, however secondary offices gained more momentum in the later phases of upswings and surpassed prime property from 2005 to 2007. Investors sought higher returns and were willing to accept more risk in the positive market.
	</li>
</ul>
<ul>
<li>
	Returns for prime property have surpassed secondary property in the recovery stage from periods of weak return in the property market. Two examples are recoveries after the “recession we had to have” in early 1990s and global financial crisis (GFC) in 2008. Property market falls led investors to be more risk averse with a preference for prime properties with more secure rental income. As a result, prices of prime office property have recovered from weakness in advance of secondary office property.
	</li>
</ul>
Income return

Income return provides a further performance measure that differentiates prime fraom secondary office property. Chart two tracks the changes in prime and secondary office rents from 1985 to 2012. Secondary office properties have generated a higher income return that is also more variable than prime office properties.

 

 

 

 

 

 

 

 

 

 

 

 

 

Chart two – Prime and secondary office property - income returns 1985 - 2012

<img alt="niu-nov-8-chart-two" height="276" src="/images/stories/2013/11/08/niu-nov-8-chart-two.jpg" width="470">

Source: IPD

The difference in variability between prime and secondary income returns reflects the fact that prime offices fulfils the majority of market demand as an economy rebounds. However, in a sustained economic recovery, with limited availability of prime properties, tenants that could not secure or afford prime office space compromise by securing secondary property. That spill over of demand leads to improved rents in the secondary office property.

\Conversely, in an economic downturn when there is a lot of vacant space, tenants will secure prime office buildings and prime office rents will fall less than secondary rents. Secondary property will suffer more from increased vacancy. Secondary offices are generally let to less financially resilient tenants for relatively shorter terms, therefore downsizing and subsequent non-renewal of leases by tenants in a weak economy is more likely. Secondary property vacancy rates and therefore rental income are more variable.

Investment in commercial property can be implemented in a variety of ways. Prime office properties are larger in size and value and can be invested in through AREITs or wholesale unlisted property funds. Secondary properties can be invested in through retail unlisted property funds or through property syndicates.

Prime office has shown outperformance in the recent market as investors are still relatively risk averse after the GFC. Signs of recovery in corporate earnings in Australia indicate that the market is heading for a stable period. Secondary office properties will be rewarded by stable rental income at higher income yields so that higher total returns are expected in the immediate future.

 

 

<hr>
Ming Niu is an analyst at <a href="https://atchison.com.au/" target="_blank">Atchison Consultants</a>.

 

<h2>Recently listed properties:</h2>

[smartcode_project:default project_id=4939]

[smartcode_project:default project_id=27575]

[smartcode_project:default project_id=24323]
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mniu-gkBe4pvnDQ

Prime v secondary office property: Which one is more likely to outperform?

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While Property Observer previously reported about <a target="_blank" href="/news">the Big Four upping their rates on certain fixed products</a>, it appears that new data shows a number of lenders upping their fixed home loan rates under the radar of many.
As investors wonder if they should be fixing soon or risk missing the bottom of the rate cutting cycle, RateCity's latest data pointing to 85 lenders increasing the fixed rates since early October, has CEO Alex Parsons saying they've missed it already.
Longer term fixed rates, such as five year terms, were the first to be adjusted upwards, with shorter terms now following the pattern, said Parsons.
“Fixed rates appear to have bottomed out and are now starting to rise, with 85 lenders increasing some of their fixed rates in the past month,” he said.
“We know fixed rates usually start to rise well before variable rates, and borrowers often miss the lowest point. After all, the banks have a far better chance of predicting future rate movements than the average borrower.”
With fixed rates still below the long-term average, he said that there are still opportunities for those looking to fix soon, with data pointing to a three-year fixed rate average of 5.09%, but possibilities of rates as low as 4.69%, and down to 4.29% for one-year terms. The historic average of three-year fixed rates is 6.94%.
“Fixed rates are starting to go up and it’s likely they will continue to do so. But there is no guarantee they will continue on an extended upward trend – it’s always a bet between you and bank,” said Parsons.
“People often fix their interest rates out of panic; in the lead up to the GFC, fixing got progressively more popular as rates increased, to the point where one quarter of new loans were fixed at over 9% in March 2008.”
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jduke-EHk3XBmHkn

Investors warned: 85 lenders have upped fixed rates

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South Fitzroy has never been short of character or characters for that matter. Everyone from Mary McKillop to Squizzy Taylor has been part of its social history and despite its recent gentrification it still has one of the most ethnically diverse populations in Australia. It doesn’t surprise therefore that its urbanism also has an equally diverse character.

In The Fitzroy Historical Society’s terms South Fitzroy’s “compatible mix of light industry and residential housing”, was developed progressively over time in tune with its cultural and economic history. On the other hand Robin Boyd’s broader fulmination of Melbourne’s inner suburbs as “a dressmakers floor strewn with the snippings of style”, suggests a cacophony of tasteless ignorance.

Both descriptions paint the picture of a diverse urban character, though from diametrically opposite points of view. The operative interpretation used by Yarracity Planning however is based on the South Fitzroy Conservation Study which describes the precinct as one of Melbourne's most historically intact and of a “predominantly nineteenth century character”. This implies a consistency of urban form South Fitzroy simply doesn’t have. The diversity of its nineteenth century character which manifests a broad variety of different styles, building types and scales is all but ignored. Nor does it acknowledge the post war industrial architecture or the subsequent modern expressions that pepper its fabric with increasing regularity as one ventures north. Alas this conservation study which favors a consistency of urban form has been used as the basis for Neighbourhood Character regulation in the precinct.

Having practiced there for twenty five years and conducted urban character studies for numerous projects over that period, my view was that its character is a form of “urban sampling” or “jazz”, where streetscapes are expressed in syncopated rhythms of different architectures and scales. To me its urbanism read as a authentic register of the cultural and socio economic forces that shaped it. Its syncopation was in my view the essential aspect of its character because it reflected the rhythms of a uniquely Australian urbanism, not the shrill of “the violence of artistic conflict”, and the abject lack of taste this Boyd phrase implies.

This was (until the planning profession got hold of it), an honest urbanism unaffected by the dress code of the comparatively refined European urban preferences which planners have increasingly been regulating for since the early nineties. Their preference for more regular rhythms with gradual transitions is as much a nostalgia for European urbanism as it is the denial of Australian identity. Effectively urban character regulation amounts to a form of urban averaging which splits the difference between adjoining heights and set backs for infill development. Streetscapes that have been shaped by in this way read as a form of urban correctness, with upper floor setbacks and chamfers that is neither European nor Australian. The result is twee.

Aside from the differences in aesthetic preference embodied in the urban character interpretations above it is important to note that they predominantly recognise urban diversity as the essential common factor. It is remiss therefore that conservation and urban character studies focus on establishing urban similarities and consistency to determine a particular urban character and it is unfortunate these regulations have been used as a basis for the new Residential Zones gazetted in Victoria on July 1st 2013.

Sceptics could assert all of the above interpretations are on a par with reading tea leaves since they rely more on the bias of the observer than on the observed. They would be correct in reasoning the dilemmas in determining tendencies of either urban similarity or diversity is akin to questions of “is the cup half empty or half full”, since the adjudicator’s preferences rather than accurate measurement determines these answers. It is important to note however that assuming our cities survive the next millennium urban diversity will obviously be impossible to avoid.

The political expediency of the new residential zones which endorse NIMBY activism to limit both densities and heights in inner suburbs whilst promoting them in areas where there are few residents, like Fishermens Bend, Docklands and E gate, for example, could not be more transparent. It concentrates heights and densities where opposition is limited and limits them where opposition is great. This NIMBY legislation is being sold on the basis of democratic principles, and planning innovation. The truth is that Victoria’s planning policy is NIMBY inspired.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/PastedGraphic-4.jpg" rel="gallery-all" title="The Artist"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/PastedGraphic-4.jpg?itok=EBC6zlVx" title="The Artist" width="580"></a>

<figcaption>The Artist</figcaption></figure>Here democracy has been used as the decoy for a lack in political leadership, since the city’s liveability and its cultural and social prosperity depends on its function as a whole, not on the political clout of inner city lobby groups. Ironically it has been the greens who have lead the charge on limiting inner city heights and densities, contradicting their platform on carbon reduction.

These questions of character and how they are determined has prompted the following summary on “NKYA”, akka “The Cheesegrater”, now “The Artist”, dubbed the test case for Labour’s new planning policy 2030 back in 2002, when it made headlines. Then NKYA successfully challenged neighbourhood character regulation which will now become entrenched, gaining substantial legislative force when Residential Zones are implemented in Victoria on July 1st 2014.

In 2002 when the planning application was lodged, Neighborhood Character Policy in Yarracity had been in operation for the best part of seven years and the bulk of proposed medium density projects in the inner suburbs, (irrespective of their compliance or otherwise), were vigorously objected to on the grounds of breaching character guidelines.

In expectation of a massive backlash, I completed a comprehensive urban character study immediately surrounding the site also incorporating large tracts of South Fitzroy.

The study comprised a bound volume of several hundreds of photograph’s and a preface that reinterpreted South Fitzroy’s Neighborhood Character as one of diversity. It rejected both the south Fitzroy conservation study and Boyd’s “Australian Ugliness”, proposing an affirmative interpretation of Australian urbanism.

The planning process that followed was punctuated by a succession of name calling that served as a sardonic echo of the contradictions inherent in the administration of the planning process. “NKYA” was chosen in demurral of the status envy branding that real estate advertising revels in. Composed of the first letters of the streets surrounding the site, Napier,Kerr, Young and Argyle, the acronym expressed a neutrality that rebutted the hollow marketing of real estate hype that sells the sizzle and forgets the sausage.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/PastedGraphic-6.jpg" rel="gallery-all" title="The Artist"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/PastedGraphic-6.jpg?itok=OiR3FXrI" title="The Artist" width="580"></a>

<figcaption>The Artist</figcaption></figure>Objectors responded with “The Cheesegrater” which prevailed, until “The Artist” was coined by a new development consortium. This prompted objectors to insert “Bullshit” between adjective and noun on the numerous advertising billboards surrounding the site proclaiming it “The Bullshit Artist”. I would like to think this obvious reflex was in contempt of the expert witness evidence presented at the eight day VCAT hearings where heritage, planning, traffic and architectural witnesses diametrically opposed one another’s views on professional grounds.

The quasi legalese of the VCAT system belies the inherent hypocrisy of the process where experts contradict each others evidence with panache. In this case, against the councils refusal, the wishes of three thousand objectors and the contrary arguments of opposing expert witnesses supporting the South Fitzroy Conservation Study, the panel members were persuaded by the notion of Urban Sampling or Jazz. Controversially, they granted a permit justifying their decision in terms of the supporting neighborhood character study and because in their view, NKYA was an exemplary design.

In 2011 I revisited the ironies of the experience in an exhibition titled “Boyd’s Error Planning’s Curse” expanding on my observations with an essay illustrated with collaged photographs of three kilometers of Fitzroy’s primary streetscapes. The exhibition expanded on the original neighborhood character study with an analysis by comparative reference.

It consisted of three rows of images mounted one above the other. The bottom row speculated on what may have become had contemporary planning regulations prevailed from the genesis of South Fitzroy, thereby promoting greater consistency of period, scale and character. The middle row illustrated the 2011 streetscape current at that time and the top row speculated on what might become if the regulations were relaxed and broadened to embrace the future.

The exhibition audience was then invited to choose between the three rows and on the evidence of their reactions, the overwhelming majority preferred the top row. Obviously, exercising preferences to simulations of theoretical pasts and futures in a gallery is one thing, and deciding on whether to object to a multi storey development next door, entirely another.

This contradiction of human behavior encapsulates the ironies of NIMBY urbanism which has become the subtext of Victoria’s planning regulation. When the democratic process fails in this way it is a sure sign that the system is in need of review. It is unfortunate that our most respected professional institutions, urban theorists and commentators are seldom listened to by government since heir recommendations measured against the weight of public opinion have virtually no political clout.

It doesn’t help that the political prism through which urban affairs reporters project their gaze on the public, makes urban planning policy look like a frightened rabbit in full flight as it dodges hounds from lobby groups on every side of politics zig zagging over the different political terrain of their vested interests. Making this important urban debate look like an intriguing battle between humble residents and ethically bereft developers sells newspapers and though it gives voice to respected urban commentators they remain voices in the wilderness, serving no other purpose than preserving the notion of free speech.

The consequences can be appalling. In this case planning delays were responsible for NKYA’s 30% price hike by the time it was sold off the plan in 2009. The delays were in part consequent of the 2004 housing downturn that spiraled after the spectacular collapse of Henry Kaye’s 120 company property spruiking empire.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/PastedGraphic-5.jpg" rel="gallery-all" title="The Artist"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/PastedGraphic-5.jpg?itok=WAR978lJ" title="The Artist" width="580"></a>

<figcaption>The Artist</figcaption></figure>If the prolonged planning process had not ensued, apartments could have been sold a year prior avoiding the downturn. As a consequence NKYA was shelved until 2006 when a revised development consortium submitted new designs which VCAT refused. Several aborted re-submissions of the new design followed eventually prompting the new consortium to restrict their amendments to the internal courtyard and interiors. Maintaining the integrity of the original street facades they successfully submitted these revisions as an amendment to the originally approved planning permit.

Planning consultant, Tim Biles, described the final outcome as being “so similar to the original as to be considered practically identical”. By this he meant that “the ordinary man or woman in the street” would not be able to tell the difference.

It wasn’t until late 2011 that the construction of its upper levels were completed, marking the tenth anniversary of the year in which its design had begun. By the time sales commenced, inner city apartment prices had risen from six thousand dollars per metre to between eight and ten thousand dollars per metre, a cost that would be borne by the public. To this we can add the substantial taxpayer funded administrative costs of VCAT and Yarra City Council plus their consultant fees paid to opposing planners, heritage architects, barristers and other consultants representing objectors.

If NKYA, the Cheesegrater, the Artist or Bullshit Artist whatever else you may be inclined to call it, was an exception rather than the rule, then the planning process it was subjected to would be no less hypocritical or an outrageous waste of time and money. The tragedy is that minor two storey additions often suffer the same fate.

<h2>Postscript</h2>

In asking a former Yarracity mayor who lead the opposition against NKYA what he thought of “The Cheesegrater” a decade on:

<blockquote>
My views of the Cheesegrater are that I think it takes time to bring a community around to accepting change, and that it rarely occurs within the timeframe of any particular individual project.
<cite>Councilor Geoff Barbour</cite>
</blockquote>

The three hundred or so residents who now live at “The Artist”, have formed a strong community, they love it, however if something of the same height was to obscure their views next door, they would all of course passionately object.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/PastedGraphic-7.jpg" rel="gallery-all" title="The Artist"><img alt="" class="image-article-full-width-580px" height="870" src="/sites/urbanmelbourne.info/files/styles/article_full_width_580px/public/pictures/article-images/PastedGraphic-7.jpg?itok=1jCgkE08" title="The Artist" width="580"></a>

<figcaption>The Artist</figcaption></figure><a href="https://en.wikipedia.org/wiki/Ivan_Rijavec">Ivan Rijavec</a> is an acclaimed Australian Architectural and Urban Designer and managing director of <a href="http://www.rijavec.com/">Rijavec Architects</a> and <a href="http://www.citiniche.com.au/?refer=urbanmelbourne">Citiniche</a>. He has received numerous Merit Awards and been widely published in numerous books, journals and web platforms. He is fellow of the Australian Institute of Architects and is a sessional tutor at RMIT.
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IvanRijavec

Ivan Rijavec on a question of urban character

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I'm sure most readers don't want another tedious run-down on the negative gearing debate. I don't want to see another one myself. We've all read the articles declaring that the tax legislation is unethical and must be abolished. And correspondingly, we've all read the dismissive replies of vested interests.
Accordingly, we also already know that abolition is unlikely to happen in one fell swoop since there is a risk of rapidly increasing housing waiting lists and spiralling rents, such as occurred in the areas of low supply and vacancy rates back in the 1980s, especially Sydney and Perth. Proponents must surely know deep down that scrapping the negative gearing in such a manner risks hurting the very sector of the population that they are trying to help: 'Generation Rent'.
Disclosure: I own a few negatively geared properties myself, and clearly when I bought them my motives were not concerned for whether the outcome would be an increased supply of dwellings for first home buyers at the low end of the market. Rather, like most rational investors, I was centred upon optimising returns, and thus in Australia have looked towards Sydney's established stock, in the inner/middle ring suburbs within the $500,000-$800,000 range.
Whilst on the subject, it remains baffling to me how yield-focussed investors continue to suggest that the highest future capital growth will be in the outer or fringe suburbs and regional centres, particularly when <a href="https://petewargent.blogspot.com.au/2013/09/outer-suburbs-better-or-worse" target="_blank">study</a> after study (and <a href="https://www.dailytelegraph.com.au/business/jessica-irvine/renting-versus-buying-in-defence-of-generation-rent/story-fnj45kvd-1226740576912" target="_blank">article</a> after article) have concluded that Australia's capital cities - like so many others in the world - are instead building iniquitous "cones of wealth" in the desirable and centrally-located suburbs. Meanwhile, under-investment in outer suburb infrastructure and dwellings is gradually yet surely wrenching the gap between the haves and have-nots into a a "yawning chasm".
For my money, although the negative gearing legislation likely increases the supply of housing in aggregate, the gnawing issue is that it doesn't necessarily increase supply of affordable housing which is most appropriate for first homebuyers. We'll come back to the solutions shortly.
Perhaps more importantly than even this, the negative gearing legislation is not the reason for Australia's relatively high dwelling prices, although it has surely not helped. The main issue concerns the word highlighted above: supply. Other countries have tax deductions on mortgage interest on the principal place of residence yet relatively lower house prices. In fact, historically, negative gearing has not even represented the most significant section of tax legislation at play in distorting dwelling prices - instead, that has been...
Australia's capital gains tax legislation
By far and away the most significant sections of the tax legislation which have impacted Australian house prices and the trend towards an abnormally high rate of Australian home ownership have been the capital gains tax (CGT) rulings.
It was perhaps possible in days gone by to overcome the ongoing impracticalities of being a long-term renter. But there was little incentive to do so when Mr. and Mrs. Jones next door were continually crowing about the financial benefits enjoyed from being aboard the so-termed "housing escalator" on their suburban quarter acre plot. And how galling must it have been when the Joneses were able to sell their house capital gains tax free and thus trade up to a bigger house in a 'better' neighbourhood? The vision of being a long-term renter must have been pure anathema.
While the 'fairest' way to balance up the tax system might therefore appear to be to assess homeowners for imputed rents reflecting the manner in which landlords are assessed for rental income (perhaps surprisingly, this has been done in Australia before between 1915 and 1923 <a href="https://www.treasury.gov.au/~/media/Treasury/Publications%20and%20Media/Publications/2010/Economic%20Roundup%20Issue%202/Downloads/PDF/06_Tax_expenditure_considerations.ashx" target="_blank">as noted by Australia's Treasury</a>), I believe that a tax reform of such a nature is unlikely to materialise, and the probable best solution lies in a recurrent property tax as I'll explore below.
Addressing supply issues
So if the negative gearing legislation has done little to increase the supply of housing appropriate for lower income tenants, how is this issue to be addressed? Through subsidies most probably, such as have been employed in the past by German governments by making discounted loans available to commercial housing companies to meet social and lower income housing objectives.
With a colossal $1.5 trillion in Australia's superannuation coffers <a href="https://www.treasury.gov.au/PublicationsAndMedia/Speeches/2012/Australias-Superannuation-System" target="_blank">according to the Treasury</a> - "equivalent to our national GDP" - there are vast reserves of pension fund capital available for this purpose should it be considered a desirable objective.
With self-managed super funds (SMSFs) controversially also now enabled to borrow and invest in residential housing, one wonders whether we are presently missing an opportunity here too? This is particularly so now that SMSFs have some ~$500 billion under management (figure recorded as at 30 June 2013 according to the <a href="https://ato.gov.au/" target="_blank">Australian Taxation Office</a>). Due to the substantial deposits commonly required by lenders, SMSFs are frequently only empowered to invest in residential housing at the lower end of the market in any case.
Funding of subsidies - tax reform
Assuming that Treasury would desire any such reforms to be fiscally neutral, how should any shortfall be funded? Given that homeowners have effectively received a material 'wealth dividend', a substantial element of which has been derived from state investment in infrastructure and urban development, it strikes me that the common sense answer would be through a progressive and recurrent property tax (i.e. one which is charged annually, with owners of the largest dwellings attractive the most tax).
As Australia has an elevated rate of home ownership when compared to many equivalent developed countries, such a tax could be spread widely enough not to be damaging, and if accrued annually the impact could also be spread over time too. It's likely that such a tax would be best introduced with an exemption in the early years of ownership for first time buyers, and perhaps with a lower level of tax to be levied on certain types of required dwellings (i.e. medium/higher density units and apartments).
Why moderation is best
I'm not hugely enamoured with concept of drawing straight-line comparisons between Australia's most expensive cities and America's cheapest large equivalents. I'm referring to humid Houston, of course, the largest city in Texas, famous for its oil, and now being promoted as Australia's model solution for affordable housing.
I've never even visited Texas, although I've gleaned from friends who live there and via the Fifth Estate (the group in modern society promoting weblogs, not the movie) that apparently Americans who relocate to the city are frequently "disgusted" to discover that their expected income tax savings are swiftly clawed back through <a href="https://www.chron.com/woodlands/extra/article/Highest-property-taxes-The-Woodlands-4460379.php" target="_blank">immoderate property taxes</a> of 2.5% (in some cases even up to 3.5%) of the assessed property value. By contrast, in Australia, material stamp duties are currently levied upon property acquisition.
Easier zoning restrictions must surely play a role in Houston, yet if housing is so affordable, then why are home ownership rates in Houston so low? Presumably because the incentive to buy a home is also diminished by a high annual property tax levy. Assuming that Houston is held up as a model housing system in order that more Australians can achieve home ownership...well, that doesn't work, because we have far higher home ownership rates in Australia already then Houston, or, for that matter, Germany (in fairness, this could be something of a circular argument - do higher home ownership rates cause higher prices?).
If three of the principal financial reasons for Australians wanting to own a home are (1) to participate in future capital gains (2) benefiting from a capital gains tax exemption allowing them to trade up the housing ladder, and (3) owning an unencumbered home in retirement, then elevated or excessive property taxes instantly remove the very financial reasons for home ownership.
Strong capital growth will not be experienced, and even where growth is attained the unfortunate owner will continue to be zinged by escalating taxes until the day they drop off. If you do aspire to paying off your (albeit 'cheaper') mortgage debt by the age of, say, 50, you still could face another half a century of paying a high ongoing cost for your right to home ownership.
It's see easily possible to see some real-life examples of what high recurrent ownership costs can do to housing developments in certain parts of, say, Sydney. There are a number of warehouse-style buildings and older apartments blocks with incredible harbourside locations or water views where the potential entry costs appear too good to be true. And indeed, they are. Where strata schemes have fallen into disarray and quarterly maintenance costs spiral, defaults and elopements inevitable follow, owners look to sell at almost any price, and buildings decay into tomorrow's slums.
The very reasons for home ownership can be quickly stripped away by excessive property taxes, and thus tax reform should be appropriately considered and any proposed property taxes levied reasonably moderate.

<hr>
Pete Wargent is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
 
 
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How to fix Australia's affordable housing problem

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Last month Queensland Premier Campbell Newman <a href="https://www.theurbandeveloper.com/developments/new-casino-for-brisbane-cbd-qld-government-announces-eoi-process-for-new-precinct-development/" target="_blank">called</a> for expressions of interest to develop a major integrated resort casino precinct within the Brisbane CBD. The vision is for a new casino surrounded by six star hotels and upmarket retail, restaurant, convention and entertainment facilities.
This will potentially be one of up to three integrated resort casino projects planned for Queensland. Deputy Premier Jeff Seeney suggested the developments would provide a significant boost to the state’s economy through the construction and future tourism that would flow.
The initiative comes on the back of plans by NSW for a AU$1.5 billion integrated resort casino project at <a href="https://www.smh.com.au/business/packer-casino-gets-goahead-to-proceed-to-next-stage-20130704-2pdrv" target="_blank">Barangaroo</a> in Sydney.
This project was awarded to James Packer’s Crown Limited and is to include a 60-storey tower, a six-star hotel and associated facilities. Writing in the <a href="https://www.smh.com.au/business/barangaroos-competitive-tension-a-joke-20130705-2pfus" target="_blank">Sydney Morning Herald</a>, Michael Pascoe described the bidding process for the Barangaroo project as “flawed” and far from best practice stating that:
“Crown successfully manipulated the system from the outset to avoid going to tender against the world’s top casino operators for Sydney’s second ‘VIP gaming facility’ licence.”
Rather than seek an outcome that would represent international best practice in integrated resort casinos, the NSW government has opted for a duopoly that favours local incumbents who influence large sections of the media.
So why the sudden rush into casino projects?
The key factor is the desire to achieve economic benefits. A <a href="https://www.auscasinos.com/pdf/media/CasinosandtheAusEconomy.pdf" target="_blank">study</a> undertaken by the Allen Consulting Group in 2009 for the Australasian Casino Association painted a highly positive view of casinos. According to this report casinos are a major provider of tourism infrastructure and play a key role in the rejuvenation of urban environments.
Casinos are also major employers and they attract over one million international tourists to Australia each year. These same tourists spend around AU$5 billion during their visits. Individually each international casino visitor spends about twice as much as those who don’t visit casinos. In addition to these benefits, casinos provide substantial gaming taxes and licensing revenues to state governments.
A further <a href="https://www.crownresorts.com.au/CrownResorts/files/1d/1db9d9a2-3de5-4072-9a4a-486bb427cf8c.pdf" target="_blank">report</a> was undertaken by the Allen Consulting Group in 2012 into Crown’s proposal for the Barangaroo casino. This pointed to the need for such developments to help salvage the tourism sector.
Over the past 10 years Australia’s tourism sector has suffered due to the high dollar exchange rate. From a peak in 2000 at the time of the Sydney Olympics, Australia’s inbound tourism trade has steadily declined. While the number of Australians travelling overseas grew from 3.6 million to 7.4 million between 2001 and 2011, inbound tourism grew from 5 million to only 5.9 million in the same period.
Competing with Asia’s casino precincts
For many Australian state governments and their local casino operators the role model is Singapore. Two major integrated resort casinos have been developed at Marina Bay adjacent to the city’s CBD, and at Sentosa Island. At a cost of around AU$13 billion, these casinos opened their doors in 2010 and have been experiencing steady growth. Tourism revenues have reportedly grown by around 49% over the past three years. In 2011 tourism was <a href="https://thr.sagepub.com/content/12/3/139.short">contributing</a> US$14.8 billion, or about 4% of Singapore’s GDP.
The Marina Bay Sands resort complex covers 15.5 hectares and has 581,400 square metres of floor space. Only 3% of this is devoted to the casino. There is a 55 storey triple tower luxury hotel surrounded by retail, restaurants, plus convention and entertainment facilities, operated by the Las Vegas Sands Corporation.
Other major integrated resort casino developments are planned for Macau, Vietnam and the Philippines. All of these will seek to take advantage of the rapidly expanding flow of tourists from China.
According to the Allen Consulting Group the number of outbound Chinese tourists has grown from 10.5 million people in 2000 to 57.4 million in 2010. It is expected to grow to around 100 million and be worth US$838 billion by 2020. However, combine the growth in Chinese tourists travelling to Australia with this heightened interest in casino projects and there may well be some trade-offs to consider.
Casinos demand a holistic approach to integrated tourism
Not surprisingly as a stand-alone concept, casinos attract a fair share of adverse commentary on their social, political and economic impacts. However, there is a growing literature on the economic benefits of casinos to national economies.
Research has <a target="_blank" href="https://thr.sagepub.com/content/12/3/139.short">shown</a> a significant rise in the number of problem gamblers in Singapore since 2010, and police have noticed a sharp rise in crime relating to the presence of the casinos. Amongst these criminal activities are petty theft, cheating and prostitution.
Rosalind Stefanac writing in the <a target="_blank" href="https://business.financialpost.com/2013/04/02/can-casinos-spearhead-economic-development-efforts-in-canadas-cities/">Financial Post Magazine</a> critically poses two questions. First, are the economic benefits from casinos sufficient reason to offset the potential for detrimental social impact? Second, is the casino a viable source of ongoing revenue for a community?
For Australia the economic development potential of integrated resort casino developments is significant. As Deloitte has reported, tourism is one of five “super growth” industries that Australia can potentially develop as part of a “post-resources boom” economy.
However, the success of developments such as Singapore’s casinos is due to the strategic vision that lies behind their design. As “integrated resorts” these casinos must emphasise more than just a venue for gambling.
The purpose of the integrated resort within an economic plan is to advance the economy, generate employment and attract export earnings. This means integrated resorts must have an appeal for hosting many types of tourism and be attractive to a great many gatherings, conventions and exhibitions of a scale that generates ongoing attraction.
According to Andrew McEvoy, Tourism Australia’s Managing Director:
“… for success and long-term sustainability Australian tourism requires more than just effective marketing campaigns. It requires physical investment in tourism infrastructure, particularly hotel stock, as well as improved air links and increases in aviation capacity.”
Infrastructure and planning are critical
For some the inclusion of a casino within the resort complex becomes problematic due to the concerns over problem gambling and crime. However, any major tourism development must involve the building of significant infrastructure and this must be paid for either by the government or industry.
Research has <a href="https://ieeexplore.ieee.org/xpl/articleDetails.jsp?reload=true&amp;arnumber=4362212" target="_blank">suggested</a> a large scale systems engineering (LSSE) approach was critical to the development of that Singapore’s highly successful integrated resorts.
The focus of a successful tourist destination should be on the word “integrated” in an integrated resort casino. Singapore’s approach to its casino development was strategic and built upon a foundation that sought to deliver a strong economic benefit to the island state’s overall economy. Its vision was to “develop Singapore as a regional tourism hub”.
It is still too early to pass judgment on the nature of the casino developments being planned for Queensland. To date no Australian casino development has reached the same standards as that of Singapore, and none can be truly classified as representing integrated resort models. This is the case for Sydney’s Barangaroo development which does not appear to have been subject to the same level of scrutiny and global competitiveness that took place in Singapore.
Major casino developments of the type proposed for Queensland will attract significant international investment and have the potential to generate substantial returns to the local economy. However, they will also attract many critics and may have socially undesirable impacts if poorly managed.
Get things right and their impact on the economy, tourism and transport sectors and the enhancement of urban environments can be highly positive. Get things wrong and the outcome can be profoundly undesirable. Let’s hope the Queensland government gets it right.
 
<hr>
 Tim Mazzarol is Winthrop Professor, Entrepreneurship, Innovation, Marketing and Strategy at <a href="https://www.uwa.edu.au/" target="_blank">University </a><a href="https://www.uwa.edu.au/" target="_blank"></a><a href="https://www.uwa.edu.au/" target="_blank"></a><a href="https://www.uwa.edu.au/" target="_blank">of Western Australia</a>
Tim Mazzarol receives funding from the Australian Research Council, CBH Ltd, Capricorn Society, Ravensdown, Co-operatives WA and the WA state government. He is also President of the Small Enterprise Association of Australia and New Zealand (SEAANZ), a not-for-profit organisation dedicated to the advancement of research, education, policy and practice for small to medium enterprises.
 Antoine Musu is DBA Candidate at <a href="https://www.uwa.edu.au/" target="_blank">University of Western Australia</a>.
This article was originally published at <a href="https://theconversation.com">The Conversation</a>.
 
 
<img src="https://counter.theconversation.edu.au/content/19558/count.gif" alt="The Conversation" height="1" width="1">
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Tourism and casinos: Can we gamble our way to prosperity?

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Today I met with an old friend. I’d coached his son in soccer (yep I am a junior soccer coach – but only up to under 10s!).  He is a very successful local real estate agent. His business on Sydney’s Northern Beaches has been growing from strength to strength over the past few years.  But he was here to see me to discuss his personal investment options.
He said “Jo, despite me being in the industry, my focus hasn’t been on growing my own wealth – more growing my business and getting the best results for our vendors and landlords – I’ve been selling property not buying it.  Now I need to start planning for my retirement”.  Whilst still a way off, retirement is rightly so on his radar.
Property on the Northern Beaches of Sydney has become expensive; it’s hard to consider it from an investment perspective as the entry point is high. The rental yields low but capital growth prospects are ok tracking at around 5% but on a high base, this can be impressive.  So if you are investing in this location, it means you need to be able to support your investment with surplus cash as the rent just won’t cover the costs. The costs include interest payments, council and water rates, insurances, repairs and management fees. It’ll be a negatively geared investment.
My friend was looking for was a project where equity can be created but also an investment that would be cash flow positive. This would let him keep moving forward on his investment journey and continue to focus on growing his real estate agency business.
I presented an affordable dual occupancy development concept to him. We looked at the numbers and he said “Jo, I don’t think you can create that kind of equity within one year by just buying and holding.”
Within a year we can create around $100,000 in equity through a development like this.  I said, "Of course not because what we are doing is creating equity via the development process – from adding value and building two dwellings on one piece of land and subdividing it to create two properties.”
Not only are we creating equity, the gross yield from the rents on completion means the properties are easy to hold as they may be cashflow positive. So the rent combined with the tax benefits means that you shouldn’t need to contribute extra cash (depending on your taxable income – seek accounting advice).
But another important element to this dual occupancy development opportunity is that the regional cities we develop in have good capital growth rates currently tracking at 7% + annualised.  As a comparison, the historical growth rate of the Northern Beaches suburb I live in is 5%. Hmmm, this is looking more interesting.
This dual occupancy project would be valued at approximately $760,000 on completion – that is two freestanding three-bedrooms, two-bathrooms, single lockup garage villas at $380,000 each.  If the properties receives 7% annual growth then around $53,000 capital growth should be realised in year one. This will increase year on year based on the annualised growth rate.
Creating some equity, a strong yield and good depreciation benefits with a small development in a location with good growth prospects seemed to make sense to my real estate friend.  His next step is to take a drive around and conduct his own due diligence. I’m expecting his call back soon.

<hr>
Jo Chivers is director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.propertybloom.com.au/" title="Property Bloom">Property Bloom</a>, which manages property development.
 
 
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Is it quicker to build equity from development or buy and hold in a high capital growth location?

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With an almost ‘perfect storm’ environment in the Australian residential property market at the moment, there is a new generation looking to get in to the real estate investment market. Many first time investors will not always be aware of which costs really should be paid, and those to avoid.
This is because few first-time investors actually calculate on a spread sheet their overall initial and continual commitment costs to a property in relation to the return it is giving them. This is high-risk because if you do not know the costs associated with procuring investment property, you could be building a portfolio that reads well on paper on weak foundations.
Successful investors know that minimising all unnecessary purchase (or acquisition) costs is one of the most crucial things they can do. Remember, a dollar saved here and there is a dollar re-invested later on when you wish to grow a small portfolio into a big one. And, as we know, a dollar invested will ultimately return bigger dividends, and this compounding effect is what really enables a portfolio to accelerate in the early years.
So today I thought I’d draw on some personal experience and share with you some ways to avoid paying unnecessary up-front and ongoing costs on an investment property. Remember, good habits formed when starting out will help you throughout your investing career will pay dividends when you really ramp things up in a few years’ time.
In some instances, saving even one thousand dollars up front can make the difference between having a good investment property in your portfolio that can unlock future equity access and one that weighs down your portfolio, costing way more than it should to hold.
It is also important to note the economies of scale that can be achieved when employing some of these capital-saving strategies. Why? Because the more exponential saving you can make as you add properties to your portfolio; the more exponential growth you will get.
Avoid lenders mortgage insurance (LMI) – At (and excuse the pun) all costs!
This is absolutely dead money that should never be paid, no matter if you are a new investor, or a seasoned investor holding dozens of properties. If your deposit isn’t enough to meet that 20% threshold for the property you wish to purchase. I recommend to re-think your strategy and opt for a more affordable property that still presents similar gains offerings, but allows you finance at 20% deposit, not 12% or 15% deposit.
There will be others who will disagree with this stance on LMI arguing that paying a small amount of LMI on a property loan can get you in to your investment property sooner. However this exposes you to much more risk. Say you pay the LMI and instead of saving 20% deposit, you save just 5%. Should you fall on tough times and need to unlock some equity in this property to use elsewhere, you will not have the flexibility to do so, with such a small deposit remaining in the property. The costs involved to restructure your mortgage at this point could be substantial.
Find a good conveyance/solicitor and ask about return customer rates
Finding a good solicitor who can work efficiently and does not cost an arm or a leg is an important part of the property investment process.  However, few investors consider the value they actually add to a solicitor as a repeat customer. It is therefore worth asking and potentially negotiating up front, if they offer discounted rates for repeat customers.
When selecting a professional, you should mention up front that you are a new investor with very big ambitions and are looking for a conveyancer who can help you grow a large portfolio. You may be able to negotiate discounted professional services rates for successive new property purchases
 
Get professional independent valuations, not just bank’s internal ones
Oftentimes in business, in order to save money, you need to spend money. Many times throughout your investment career, you will need to refinance properties to draw down on the equity created in your portfolio, to enable you to acquire more properties. Every time you do, lenders will need valuations done to prove that the properties have increased in value. Inexperienced investors are easily fooled by the lender they go with offering a free valuation by their internal team. This however could cost you money in the long run. More often than not, lenders’ internal valuation team will low-ball property values, in the pursuit of protecting their company’s bottom line (not yours).
Paying a small amount (say $50-$200 depending on the property) for an independent valuer to review your property, will pay big dividends. For instance, a lender’s internal valuer may only appraise your property at say $255k, whereas an independent valuer might give a higher valuation like $265-$270k. The small outlay cost of an independent valuation has just added potentially $10-$15k of additional equity, and that is enough to cover the closing costs on your next investment purchase!
Source a specialist accountant or one who is experienced in property investor clients – don’t do it yourself
In the same vein as above (spending some money to make or save you a stack of money); if your strategy is to acquire dozens of properties and hold them over a long time, you need to plan in advance your taxation minimisation strategies by speaking with professionals who are experienced to guide you in doing so.
Many new and inexperienced investors who have just one or two properties think they can do it all themselves (the tax minimisation part, I mean). And maybe for that first couple they can. As you grow the portfolio, however, you could have made structural mistakes in setting up the first ones that will hurt you later on as you grow. Smarter instead to pay a professional who will uncover tactics that could save you thousands of dollars you may not have realised that you could have saved, by doing it yourself.
Land tax – the tax that sneaks up on you
As above, a good accountant will work with you in regard to land tax minimisation and avoidance. This is a big – and highly unnecessary – cost that investors face and really should not pay. Well, at least for the first couple of dozen properties.
For those not in the know, land tax is accessed every December for investors and is payable every year; meaning that if you qualify to pay this tax it is not a one-off payment. You can imagine how that annual payment could hurt your bottom-line over five, 10, or 20 years of property holding. The tax is payable when the value of the ‘land’ of all your owned properties in a given state or territory, exceeds a certain threshold, for that state. For instance, in NSW the current annual threshold is $406,000. This means that if the value of the land parcels that each of your physical dwellings sits on top of (i.e. not the dwelling value itself), is higher than this amount, added up, you are up for extra tax. This tax varies per state also.
Best way to avoid it? Structure a growth acquisition strategy that ensures a multi-state approach (spreading your taxation ‘risk’), as well as multiple-dwelling-types approach. For instance, units in large blocks of hundreds of units, have minimal land value, because the percentage of land value each unit owner is entitled to, must be divided up between many other occupants. However, smaller blocks of just, say, six units, in very land-value-high suburbs will likely have a much higher land-value per owner and this will push up their land tax closer to that threshold.
As a rule of thumb though, and taking the abovementioned NSW example in hand, you’d likely be able to own around six to seven modest or average units (in line with general median unit prices in NSW state, encompassing Sydney and all other regional areas), before breaching that tax threshold. Still, this is generic only and something you need to investigate with state taxation offices annually.
Needless to say, if you are only acquiring houses and not units or apartments, in just one state, land tax will become a serious concern for you and a cost that over time, will really hurt your bottom line.
 
Buyer’s agents aren’t always a good idea
Buyer’s agents have a paramount role in the real estate industry. For home buyers, they enable people who have very specific suburb/dwelling/pricing needs to access more appropriate properties, and usually before they come on to the market. For starting out investors, they enable time efficiencies by taking on many of the due diligence items you’d have to carry out yourself, if you didn’t have them on board. So, for the time-poor, amateur property investor, I do not doubt a buyer’s agent’s value add.
With that in mind; the costs are very high, in regards to the fee they charge for their services. Again, when starting out, this may be a justified cost because the buyer’s agent may get you a deal where the cost or equity saving is greater than their professional fee for doing so. However, over time, as you move on to the second or third property purchase you’ll have been around the traps long enough to have confidence to procure properties without a buyer’s agent. Or, at least you should. We are all time-poor these days but if you want to be a successful and profitable property investor, you need to know how to do the due diligence yourself, have confidence in that ability and avoid paying someone else to do that for you.

<hr>
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://propertyspectator.blogspot.com.au/">Property Correspondent.</a>
 
 
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Saving money in property investing: the costs to avoid and the habits to maintain

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A clear accounting link between the initial mortgage to acquire the property, and the refinanced amount, must be maintained if investors wish to offset the interest paid on their investment mortgage.
Be wary of refinancing and including home and investment properties under one mortgage, which may cause the Tax Office to raise a red flag. Speak to your accountant before you refinance.
<hr>
This article is from Property Observer's free ebook <a href="http://propertyobserver.com.au/ebooks/free-ebook-mastering-the-art-of-refinancing-12-tips-for-success-and-key-things-to-consider" target="_parent">Mastering the Art of Refinancing: 12 tips for success and key things to consider</a>.
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Watch the tax implications when refinancing investment loans

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This week my words of wisdom are to ‘be careful’ because there is a lot going on out there right now in real estate land.
It is exciting to see investors back in the market. It’s great to see auction clearance rates at continuing record levels and our team is achieving great results across the high end apartment mark.
The momentum is definitely there and if you needed any further confirmation you can tell the Sydney market is strong when the newspapers start headlining talk about a crisis in housing affordability!
But after weeks of going gangbusters we are now starting to see a little bit of pull-back. Nothing dramatic but certainly there is not quite the same level of interest out there as we were seeing even a couple of weeks ago. I think we have hit a little speed bump.
I think some buyers are a little spooked by property hype. Add to that a percentage of buyers who have determined it will require too much effort to meet a pre-Christmas deadline so have decided to wait until the new year. That means there are less active buyers out there right now.
The market is without doubt still strong but a speed bump does slow things down a little and it is another timely reminder for sellers to remain realistic and to consider sensible offers.

<hr>
Ewan Morton is managing director of the Sydney based <a rel="nofollow" href="https://www.mortonandmorton.com.au/" target="_blank">Morton &amp; Morton</a>.
 
 
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