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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As I have <a href="https://www.propertyobserver.com.au/residential/are-you-being-served-looking-at-how-we-can-better-take-care-of-buyers-needs-peter-chittenden/2013101465686" target="_blank">already suggested</a> the buyer’s experience in the real estate market clearly involves a good measure of emotion and it is the main reason that developers, builders and marketing agents place so much emphasis on the value of their brand. In fact brand sensitivity really extends way beyond those directly marketing projects, it runs across a wider group that can also include architects, interior designers, landscape architects and major suppliers.
In an environment where real estate has to compete just like any other product or service, a great deal of time and money is spent to build brands, and of course we should not over look the role of individual project brands. We now see some major developers doing regular online surveys to measure how their customers view their buying experience and the feedback is being taken to heart. This highlights that it is the buyer’s experience where brands are tested and how the sales path is built around good communications that should all combine to support the buyer’s experience.
Against this high-stakes background I would now like to look at some of the assets available to us helping to create great buyer experiences.
However before doing that I would just like to reflect upon a recent comment reported in one of the main Sunday newspapers.
The report was headlining the somewhat understandable frustration of a young couple looking for a home in one of Sydney’s most competitive and popular suburbs. In the article was a quote that in part said that these buyers felt that some real estate transactions involved less information, less service and less attention than a consumer looking to buy a new car would receive.
And so reflecting these comments against how much we all value our individual and company brands the remarks were very disappointing. It has also been suggested that poor service given to home buyers has in part encouraged the rapid growth of buyer’s agents. I think these are comments we need to be sensitive to and not just brush aside as a reflection of the current market.
The tools we use
Moving on to look in more details at how we manage and enhance the buyer’s experience I think we need to consider how best to use the key parts of the sales journey that every buyer will normally be familiar with.
We are all conscious of the basic tools and systems we use including public relations, digital marketing, data mining, events, VIP and preferred client programs, moving in and residents guides, after sales support, loyalty programs, sales support, display and sales centres and a detailed understanding of buyer demographics. These are all key among the direct communications strategy we can employ and that developers fund.
However there are other essential factors that influence the buyer’s experience and here I feel that a high priority needs to be given to supporting and training the sales team. In this area I would include team sales training, sales manuals and importantly a diverse and structured role for sales mentoring and most importantly how best to recruit the sales team and of course its leaders. 

<hr>
Peter Chittenden is managing director for residential of <a href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx" rel="nofollow" target="_blank">Colliers International.</a>
 
 
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pchittenden-eLqUUC8TWW

Delivering a top buyers experience: Real estate has to compete like any other service

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On the face of it, a time of predominantly positive data for the residential property markets, although much depends on whether you're a 'glass half empty' person, or of the 'glass half full' persuasion.
<img style="border: 1px solid #ebebeb; position: relative; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="400" src="https://4.bp.blogspot.com/-RurAM9oyohw/UnRG6baJAoI/AAAAAAAAKqg/cy8e1RmvJfE/s400/HIA.jpg" height="235" border="0">
Source: HIA
Private new dwelling sales again jumped to send the data into a promising year-long uptrend, buoyed by low interest rates. The <a target="_blank" href="https://hia.com.au/media/~/media/Files/MediaMicrosite/Media%20Releases/New%20Home%20Sales%20Post%20September%20Quarter%20Gain.ashx">data from the Housing Industry Association</a> showed sales of new homes at their highest level in over two years in the month of September.
As is almost always the case, if you dig deep enough it's easily possible to put a negative spin on the data, particularly if you drill down to the month on month figures by state which are inherently volatile. And we don't want to get dragged into the tired old "our economy is shrinking if you ignore the sectors that are growing" shtick.
The truth is that detached house sales are trending upwards strongly (+25% year on year) yet still remain below their long-term average in four out of the five states (Western Australia being the unsurprising exception), and thus there is still some heavy lifting for low interest rates to do. Sales of new multi-units remain largely flat year on year which is clearly a less than impressive statistic given the low interest rate environment.
Dwelling approvals
Moving on to Thursday's dwelling approvals data set which was more difficult to put a negative slant on, with unit and apartment approvals increasingly dramatically by 31.8% in the month, and, far more importantly, 31.9% over the year to September 2013. Approvals for houses also increased, although less dramatically by 7.7% year on year.
When it comes to Australian Bureau of Statistics (ABS) data, it pays not to become overly swayed by monthly spikes or anomalies (and approvals by their very nature must be a volatile data set), but the trend for total dwelling units approved is now clearly moving in the right direction. As noted, private sector housing approvals are also moving up, albeit at a slower pace.
Total dwelling units       Private sector houses
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="156" src="https://www.abs.gov.au/ausstats/abs@.nsf/a866861f12e106e0ca256a38002791fa/0545ffc6a101264dca25719f007f6f1f/Body/0.1A5C!OpenElement&amp;FieldElemFormat=gif" height="200" alt="Graph: Dwelling units approved"><img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="156" src="https://www.abs.gov.au/ausstats/abs@.nsf/a866861f12e106e0ca256a38002791fa/0545ffc6a101264dca25719f007f6f1f/Body/0.2598!OpenElement&amp;FieldElemFormat=gif" height="200" alt="Graph: Private sector houses">
Source: ABS
Taking a longer term view, total dwellings approved in Australia are once again trending upwards, driven largely by a big uplift in approvals for units and apartments since early 2009.
Total approved                                    Houses approved    
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="200" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/b202f77b5544ca7fca257239007b2a7f/Body/0.542!OpenElement&amp;FieldElemFormat=gif" height="123" alt="Graph: Total dwelling units"><img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="200" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/b202f77b5544ca7fca257239007b2a7f/Body/0.FBC!OpenElement&amp;FieldElemFormat=gif" height="123" alt="Graph: Private sector houses">
 Units and apartments approved
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="230" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/b202f77b5544ca7fca257239007b2a7f/Body/0.19B8!OpenElement&amp;FieldElemFormat=gif" height="141" alt="Graph: Dwellings excluding houses">
Source: ABS
Naturally, fortunes vary by state, but the approvals trends for Western Australia and New South Wales (below) now look good since the trough of 2008/9. With a population growth of 3.4% per annum, Western Australia needs new dwellings, while within a quarter of a century there will be more persons in Greater Sydney than there are rivets in the Harbour Bridge (six million). Approval trends in other states remain less convincing.
NSW dwelling units approved      WA dwelling units approved
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/a146ff16407f4bd1ca25725a001ae9d1/Body/0.20A!OpenElement&amp;FieldElemFormat=gif" alt="Graph: Dwelling units approved - NSW"><img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/a146ff16407f4bd1ca25725a001ae9d1/Body/0.272A!OpenElement&amp;FieldElemFormat=gif" alt="Graph: Dwelling units approved - WA">
Source: ABS
The value of new residential building increased in September by 2.3% and is also now in a clear uptrend.
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/b202f77b5544ca7fca257239007b2a7f/Body/0.2562!OpenElement&amp;FieldElemFormat=gif" alt="Graph: Value of new residential building">
Source: ABS
Economy
From a broader macroeconomic perspective, the data released last week poses some interesting questions, namely whether a pick up in residential construction (especially one which is leaning towards the construction of apartments rather than houses) can plug the hole in GDP which will be left as mining and engineering construction expenditure tails downwards. Estimates for total capital expenditure look set to slip through 2013-14 and beyond, after a booming decade.
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="400" src="https://www.abs.gov.au/ausstats/abs@.nsf/be4aa82cd8cf7f07ca2570d60018da27/1ecf42b5ec12e8bcca2573460014f2df/Body/0.1300!OpenElement&amp;FieldElemFormat=gif" height="152" alt="Chart: Financial year actual and expected expenditure- Total Capital Expenditure">
Source: ABS
The relative size of the dollar numbers in the previous two charts above tell one very clear story: it's going to take more than just an upturn in residential property construction to see stronger economic growth returning should mining and other capex drop sharply.
In this context, it was heartening to see a second consecutive month of growth in AIG's manufacturing index for September, and David Jones (DJS) saw a long overdue 6.6% bounce in its share price on Friday after at last recording a bounce in its Q1 2014 sales. We may even see a post-election bounce in business confidence, although it's clearly far too early to be engaging in any back-slapping yet.
Dwelling prices
RP Data released its property price data for the month of October, recording yet another blinding month for Sydney (median prices up by a further 2.4% in the month, taking quarterly gains to 5.5% and year-to-date gains to almost 13%) but a horror quarter for Hobart where median dwelling prices were recorded as having fallen by some 6.0%.
<img style="border: 1px solid #ebebeb; position: relative; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;" width="400" src="https://4.bp.blogspot.com/-XmrVqTjBk2w/UnRQvfq3fTI/AAAAAAAAKqw/ycj2KZwf8LU/s400/RPD.jpg" height="296" border="0">
Source: RP Data
As I've emphasised previously, this property market recovery <a target="_blank" href="https://www.propertyobserver.com.au/new-south-wales/aussie-property-recovery-appears-to-be-a-sydney-only-affair-pete-wargent/2013100965601">was always likely to be Sydney-centric in nature</a> - largely thanks to the city's relatively weak price performance since its preceding boom through to early 2004 - although there are signs of a moderate upturn in some other areas.
Median dwelling prices are now up since their respective troughs in all of the major capital cities according to RP Data, with Sydney (+16%), Melbourne (+12%) and Perth (+10%) remaining some way ahead of the laggards Brisbane (+4%) and Adelaide (with less than 4% growth).
Interest rates
I've heard the arguments both for cuts in the cash rate (to boost ex-Sydney residential property prices plus the wider state economies) and for tightening monetary policy (seems perhaps unlikely to me until there is some clear evidence of unemployment trending downwards and maybe further data on the likely impact of the so-termed 'mining cliff').
Hang onto your hats, however, because earlier in the week the largest provider of mortgage broking services in the country, <a target="_blank" href="https://www.afgonline.com.au/">Australian Finance Group</a> (AFG),  publicly released its mortgage index data for October showing that it <a target="_blank" href="/news">processed more than $4 billion of home loans in the month</a>. This represents another huge monthly increase of more than 12% from $3,624 million in September and a colossal increase of  more than 61% from its October 2011 figure ($2,509 million).
Even allowing for subtle shifts over time in AFG's relative market share, the monthly index figures tend to represent something of a reasonable belllwether for housing market sentiment, and the official cash rate down at 2.50% is clearly now dragging investors and home buyers back into the market.
Is Australian housing getting cheaper?
Clearly, the property markets are on the move again. In fact, according to RP Data, they have been since around May 2012, as low interest rates have brought buyers back into the fold.
<img width="400" src="https://4.bp.blogspot.com/-hfvxYxBWHoY/Una5OyJu0gI/AAAAAAAAKrM/bDyJpgzpVb4/s400/RPD2.jpg" height="161" border="0" style="border: 1px solid #ebebeb; padding: 5px; position: relative; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;">
Source: RP Data
The low interest rates have also brought a welcome affordability dividend for homeowners, with mortgage repayments becoming very significantly cheaper in recent years. But have the property markets become any more affordable since their peaks in terms of capital cost?
RP Data's Cameron Kusher prepared the below inflation-adjusted chart which shows that the answer is clearly "yes", but only in certain parts of the country. Notably, Brisbane and Hobart remain significantly more affordable city housing markets than they were at their respective previous peaks.
Prices in Sydney, however, are moving sharply upwards and thus affordability is declining, particularly in hot sectors of the market such as the inner west. <a target="_blank" href="https://news.apm.com.au/apm-news/sydney-november-2nd-auction-report-20120423-1xfsg">Australian Property Monitors noted that</a> the harbour city's inner west suburbs recorded another "sizzling" 86% auction clearance rate at the weekend.
<img width="400" src="https://4.bp.blogspot.com/-rMoNEvEAAkw/Una6JWSDVYI/AAAAAAAAKrc/eTIesaDnRPc/s400/2013_11_01_value-change-stats-table.png" height="211" border="0" style="border: 1px solid #ebebeb; padding: 5px; position: relative; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;">
Source: RP Data
The Reserve Bank (RBA) has gone to quite some lengths is recent years to emphasise its belief that while the capital cost of housing is comparatively expensive in Australia, affordability of mortgages is better than it was in the era of higher interest rates two decades ago.
<img width="394" src="https://www.rba.gov.au/speeches/2013/images/sp-so-230413-graph11.gif" height="400" style="border: 1px solid #ebebeb; padding: 5px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px;">
If I was a betting man I'd have a flutter on the cash rate staying right where it is for quite some time to come yet. The futures markets are onto this and have priced out all further rate cuts (albeit with a moderately inverted implied yield curve) while three year fixed rate mortgages have ticked up in the past week. A rate hike is priced in for early 2015, although your guess is as good as mine when it comes to predicting the future.
 
<hr>
 Pete Wargent is the co-founder of <a rel="nofollow" target="_blank" href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a rel="nofollow" target="_blank" href="https://petewargent.blogspot.com/">blogger</a>.
 
His new book '<a rel="nofollow" target="_blank" href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>' is out now.
 
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pwargent-M4siyDbqQY

Glass half full or half empty? The latest property news is all about perspective

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Melbourne is the auction capital of Australia. Each year over 50% of all auctions held nationally are conducted in Melbourne. As a result, Victorian auctioneers have extensive practical experience in running an auction. So if you are thinking of selling at auction, it is important to select the best auctioneer for your auction. The REIV offers some tips to assist in selecting the right auctioneer for you.
Firstly, do your homework and watch a few local auctioneers in action. The best auctioneers should be able to balance the need to engage potential buyers with the critical aspect of achieving the best outcome for the seller. The auctioneer is a key part of the selling team and must be able to conduct the auction using their experience and must know and understand the legal requirements, regulations and codes of conduct of an auction.
Shop around and compare the fees of each agency, the marketing plan and who the auctioneer will be, before you commit to one. When comparing, you need to keep in mind that you should not necessarily choose the agency with the lowest fees or the highest estimated selling price.
Speaking with friends and neighbours who have sold their property at auction provides you with information on the experience they have had and seeking advice from people you trust is an important source of information.
Finally, the quality of an auctioneer is directly linked to their experience, education, training and understanding the market conditions. REIV Members undertake continuing professional development to maintain their membership and have access to Victoria’s most comprehensive market data.  This ensures REIV member auctioneers keep up to date with changes to regulation, industry standards and practice and market trends.
You can contact the REIV for a list of accredited auctioneers. They receive advanced training and regularly update their skills and knowledge or search for an REIV member at <a target="_blank" href="https://www.reiv.com.au/">www.reiv.com.au</a>.
 
<hr>
 Enzo Raimondo is CEO of the <a rel="nofollow" href="https://www.reiv.com.au/" target="_blank">Real Estate Institute of Victoria</a>.
 
 
 
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Choosing the best auctioneer for your auction

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Mortgage broker AFG had its biggest month ever in October, processing more than $4 billion in home loans.
The figure is 12% greater than the $3.624 billion processed the month before, which was itself a record.
The biggest increase in activity was recorded in South Australia, up 19%  for the month, followed by Victoria at 18.8%, Queensland at 11.8%, Sydney at 10.9% and last Perth at 5%.
“Low rates and intense competition amongst lenders are making the home loan market not only more attractive, but also more complex. Consumers are increasingly turning to brokers to help locate the overall package best suited to them,” says AFG’s Mark Hewitt.
Fixed home loans accounted for 27.7% of all home loans processed.
First home buyers accounted for 23% of loans in WA, 16% in SA, 11% in Victoria, 6% in Queensland and 4% in NSW.
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awalsh-7Ub9EypybQ

Mortgage broker AFG has biggest month ever, but NSW first home buyers AWOL

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The complexities of urban zoning by state governments, who openly advocate affordable housing initiatives, are in truth are doing quite the reverse.  
The debate about house prices rises or falling, and what is, or isn’t a good for the economy, continues to dominate headlines – and not just in Australia.  
Indeed, the cost of accommodation in most developing nations, is often coupled with wide spread reports of a growing divide between those who entered ownership early enough to reap the financial rewards stemming from a substantive period of healthy capital gains, against a generation who are finding the challenge of funding vastly higher capital prices, is coupled with less than desirable choices resulting from poor supply side policies.  
Yet the governance of housing supply is hamstrung firstly by the idea that everyone should stay centrally located, squeezed into an area parallel to existing transport networks, which although already over capacity, results in intensive development of high density, low grade, accommodation.  
In part this is based on the faulty logic that a larger percentage of residents not only want to live in the city, but if located adjacent to tram and train routes, would ditch the car in preference of either for their daily commute to work.  
Whilst my experience as a buyer advocate bears evidence that the concept of being close to public transport is desired by the vast majority of purchasers, various studies have dispelled the myth that an increasing percentage are using the crowded networks for their daily commute.  Not to mention the difference between living ‘walking distance’ from public transport, or feeling the house rattle as the train or tram trundles past.  
In Melbourne - unless you work directly in the CBD – travelling by rail usually entails a second trip by either bus or taxi at the other end. And as around 81% of jobs are located outside this area, with most being scattered broadly across the wider metropolitan regions, road networks are still the quickest and therefore preferred option for the larger percentage of residents - (as evidenced in the study Making public transport work in Melbourne, by Bob Birrell, Rose Yip and David McCloskey.)  
This goes some way in resolving the misadvised notion that dense living can reduce pollution, rendering it ‘environmentally sustainable’ – with studies by organisations such <a target="_blank" href="https://www.population.org.au/">Sustainable Population Australia</a> showing:  
“…that highrise housing increases per-capita greenhouse gas emissions by up to 30% due to a total reliance on power switches and being unable to enjoy the natural cooling of shady trees and living sustainability. Department of Planning and Energy Australia study (NSW) and the ACF Consumption Atlas show highrise buildings emit more greenhouse gases per dwelling and per person than smaller blocks of flats, townhouses or detached homes.”  
As for those living in outer suburban districts, any concept of fast public transport to attend a football match, a day at the races, or experience inner-city nightlife, is a long gone fantasy.  
Some of Melbourne’s non-existent train lines were initially mooted as far back as the 1890s – and following numerous feasibility reports which amount to millions of arguably wasted dollars, they’ve become no more than dotted lines in the Melways.  
Obviously units offer a cheaper entry point into tightly constricted markets.  The price difference in median values between an apartment and house ranges from around 12 to 30% (dependant on area and size – RP Data.)  
However, In Melbourne, the challenge of keeping apartment prices low is complicated by new zoning regulations, rendering some neighbourhoods immune from dense development, whilst others have the green light.  This further limits the concentration of land where construction can occur, and escalates already inflated land values.  
Additionally, to get planning and building approval for an apartment block is a costly venture, requiring 100% debt cover and often resulting in a period of years from concept to ‘lock up.’  
The complexities include levies for funding of communal facilities (such as underground parking, street lighting and so forth), which contributes significantly to the cost of the product.  
Getting council approval can involve a lengthy period to resolve protests from existing residents and local councils, who fear the social and economic impact on their neighbourhood culture and local environment, and all of the above adds to developer holding costs until the project is finalised.  
To obtain the necessary funding, the larger percentage is marketed to overseas buyers using vastly inflated commissions, who face no restriction when purchasing off-the-plan.  
They are constructed with a squeeze as many as possible mindset, compromising natural light and storage space along the way, and providing the finished product at an affordable price point (below existing unit medians) is no easy task.  
High owner corporation fees to fund the required security features, lighting in corridors, lifts, lifestyle amenities (such as a gym or roof top garden for example) equates to at least a few thousand a year. Rental guarantees are often marketed to promise a return not possible once the guarantee has expired. – And if the developer encounters financial difficulties during this period, there is no government legalisation backing up any promise of payment.  
Hence the supply of high-density accommodation is mostly purchased by the investment sector who find it easier to obtain funding, than the first home buying demographic, yet it seems a significant proportion sit vacant for periods of time.  
For example, Melbourne’s Southbank has a vacancy rate close to 8% (SQM) which also falls in line with data obtained from Prosper Australia’s speculative vacancy report, which analyses water usage to assess residential vacancies across the metropolitan region over a 12 month period – the methodology of which is explained in detail <a href="https://www.prosper.org.au/2013/11/01/speculative-vacancies-in-melbourne-2013-report/">here.</a>  
The research shows 7.9% of accommodation in the suburb uses no water at all, and over 22% less than 50 litres per day (a statistic which may be influenced by some being serviced apartments.)  
All of the above, works on the assumption that most people like to live close to the city and whilst this may apply to residents in their early years, who delight in the hub and bub of an inner city lifestyle, including student renters who need to locate close to nearby university campuses, there isn’t much evidence that the rest of us are prepared to give up space, to live in the type of accommodation provided.  
The idea that demographically we’re becoming a nation of downsizers is somewhat mythological, but it doesn’t stop the flow of regular articles suggesting we’re all becoming a nation of ‘happy strata dwellers,’ where “families are increasingly flocking to high-rise apartments.”  
Whilst there’s no doubt we’ll see an increasing shift to apartment living due to lack of feasible alternatives, there is no evidence to suggest this is desired by the vast majority of home buyers.  
It’s been shown the elderly overwhelmingly downsize to medium density accommodation thereby avoiding highrise developments altogether – younger generations in their 20s and 30s have a better propensity towards high density living and the proportion is increasing. However, figures still only peak around 14% at the age of 27, and the trend across all age groups is marginal, with only one in 20 choosing this form of accommodation nationwide (as of the 2011 census).  
Obviously, most local home buyers prefer houses to apartments – and for the highrise price tag of a two-bedroom flat, there’s far more bang for buck in established accommodation that doesn’t come with the additional risk of a view being built out, queues to exit the car park, and 150 immediate neighbours traversing through various stages of their housing career.  
Extra supply for the buy to let market should not be diminished, and it’s not my intention to do so.  However, there’s a broader need to establish quality accommodation for a larger proportion of home buyers who will accept townhouse living if locating inner city, but reject high density developments. And contrary to popular belief, it is possible to accommodate an equal number of residents in medium density dwellings without building to the skies.  
Movements such as <a href="https://www.policyexchange.org.uk/images/publications/create%20streets.pdf" target="_blank">Create Streets</a> in the UK are at the forefront of pushing low rise initiatives, and Robert Dalziel – the London-based architect for Rational House, who visited nine cities around the world, including Mexico City, Shanghai and Berlin, has comprehensively examined how high-density can be made agreeable for a broad demographic of home buyers.  More information can be found in his book –commissioned and published the Royal Institute of British Architects: entitled <a href="https://www.propertyobserver.com.au/https://www.amazon.com/House-In-The-City-Architecture/dp/1859464521" target="_blank">A House in the City — Home Truths in Urban Architecture.</a>  
However, families require houses (not apartments) gardens, green areas and local schools. They need community facilities, a local doctor on hand, good public transport and nearby shopping centres – and they need it all at an affordable price point.  
It’s probably for this reason, that the major part of Victoria’s growth has been evidenced in fringe localities such as Wyndham, Melton and Whittlesea. And one thing we’re not short on in Melbourne is land. Yet regulatory constraints in outer suburban localities cause their own complexities that increase land prices making the entry point for such developments effectively double what they should be.  
As <a target="_blank" href="https://ipa.org.au/people/alan-moran">Alan Moran</a> recently pointed out in the <a target="_blank" href="https://www.heraldsun.com.au/business/strong-political-will-needed-for-cheaper-housing/story-fni0dcne-1226732571096">Herald Sun</a>: “Without government restrictions on (the) city edge, land … would cost under $100,000. Regulatory-driven scarcity adds $100,000 to $150,000 to costs which the new homeowner must bear.”  
Even within a wide expansive boundary as mooted in Melbourne’s new urban growth strategy, the government limits land use until they have gone through a lengthy process of mapping out areas for infrastructure known as a <a target="_blank" href="https://www.gaa.vic.gov.au/precinct-structure-plans/">precinct structure plan</a> (PSP)– and as soon as you restrict the supply of anything, scarcity inevitably inflates values.  
Larger developers are not slow to purchase swathes of acreage prior to rezoning, and then once PSP’s have been finalised, drip feed it onto the market.  
Consequently, government bodies have little understanding how released plots respond to consumer demand or control over unnecessary land banking.  
There’s little sense creating new suburbs without the necessary infrastructure. However, such facilitation is currently financed via hefty development overlays, which are passed onto the buyer rather than initiatives such as bond financing, where residents pay back proportionally over a lengthy period of time, thereby bypassing an upfront fee which is piled onto the capital cost of their initial purchase (the detail of which I’ll go into in a future column.)  
Additionally, a broad based land value tax, as advocated in the Henry review, would recoup a percentage of the windfall developers advantage, as prices increase though urban zoning, providing further encouragement to bring the plots into effective use and provide further funding for essential amenities.  
The subject deserves deeper analysis, but the above touches on some of the measures we’re unwantedly subject to, by state governments who spruik how they’re bringing affordable housing onto the market, yet in truth are doing quite the reverse.  

<hr>
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
 
 
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catherinecashmore-6LXia3pPQj

Urban zoning does more harm than good in fight for affordable housing

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Make sure you know the upfront and ongoing costs involved in achieving the new loan.
One thing you should consider is the difficulties of refinancing into a “bells and whistles” loan.
These are characterised by numerous extra features, such as credit cards or different accounts thrown in.
Often these can seem attractive upfront with low rates or free honeymoon periods, but can be expensive if not used wisely.
If you want one of these products, ensure that it fulfils your actual requirements.


<hr>
This article is from Property Observer's free ebook <a target="_parent" href="http://propertyobserver.com.au/ebooks/free-ebook-mastering-the-art-of-refinancing-12-tips-for-success-and-key-things-to-consider">Mastering the Art of Refinancing: 12 tips for success and key things to consider</a>.
 
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po-LsXgBTHBmX

Understand the costs of your new loan

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Westpac chief Bill Evans anticipates a continuing stop-start recovery for the housing market.
He says house prices have only just returned their 2010 peaks as income levels increased 10% and says further recovery will be uneven.
"We expect Australia's housing recovery to continue to be a 'stop-start' and uneven one," Evans says in a weekly update.
“There are headwinds that are yet to fully impact with some markets facing increases in new dwelling supply (VIC, WA) and the mining downturn to play through fully to housing (WA, QLD).” 
He says the housing market has experienced a diverse performance best illustrated by changes in six month annualised price increases compared to three months ago - Sydney prices are up by 14.7% compared to 8.2% in July, Melbourne is up 4.5% v 5.1% in July; Perth is up 6.8% v 10.5%; Brisbane is up 1.7% v 1.2%; and Adelaide is up 0.2% v 2.4%.
Westpac expects households will be more restrained with their balance sheets with a reluctance to increase debt.
And they will be more cautious about job security which would impact first home buyers and upgraders.
On Friday the RBA will release its monetary statement policy which will give an indication of its economic forecast.
Evans says if the RBA maintains its forecast of 2.5% GDP growth for the year to June 2014 it will effectively be confirming it expects growth in the first half of 2014 to be stuck at a below trend annual pace of 2.5%.
And if the RBA maintains its expectations of 2.5% to 3.5% growth for the year to December 2014 it will effectively be forecasting a lift in growth pace in the second half of 2014 to a 3.6% annualised pace.
“That is a big call – the growth pace lifting from a 2.5% annualised pace in the first half of 2014 to a 3.6% annualised pace in the second half,” Evans says.
“Our forecast is for a more reasonable 3% annualised pace in the second half of next year. Nevertheless we expect the Bank will maintain a somewhat upbeat outlook.”
Westpac expects the RBA to maintain its view that the economy is growing at sub-trend pace and will continue to do so to mid-2014.
“We expect that over the course of the next few months it will have to temper that bullish view on the second half of 2014 and see the need for more policy support to arrest the current sub trend growth momentum,” Evans says.
Westpac is more than confident the RBA will keep rates unchanged.
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Westpac's Bill Evans predicts stop-start housing recovery

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Oh dear – the lunatics are trying to run the asylum! Mosman has always had its individual niche suburbs – Balmoral (not Balmoral Beach), Clifton Gardens, Mosman Bay and Beauty Point. Although at the end of the day it is Mosman 2088 so I see the attempt to subdivide Mosman into five new identities is nothing more than bureaucracy gone mad.
Further confirmation is the media outlets are having a field day at the expense of Mosman –<a target="_blank" href="https://www.smh.com.au/nsw/five-uneasy-pieces-as-mosman-faces-splitup-20131030-2whgw" title=" Five uneasy pieces as Mosman faces split – up"> five uneasy pieces as Mosman faces split–up</a> which makes it sound like an ugly divorce. <a target="_blank" href="https://www.smh.com.au/comment/smh-letters/return-to-sender-mosman-change-of-address-a-pretence-20131031-2wlyf" title="Plan to lock suburb out of its harbour fronts ">Plan to lock suburb out of its harbour fronts, </a>so on the one hand you have a new suburb Balmoral Beach although your home may front onto Chinamans Beach? Has this actually been thought through?
<img height="300" width="250" src="/images/stories/2013/11/06/mosman_division.jpg" alt="mosman_division" style="display: block; margin-left: auto; margin-right: auto;">
Source: Mosman Council
When I go  to look at the houses listed in Mosman that is exactly where you find every house. As For Balmoral Beach – 0, Clifton Gardens – 0, Beauty Point – 0 and Mosman Bay – 0. So it’s not that hard to see what the consumer thinks and simply shows how confusing and ill-informed such a proposal is. As they say “if it isn’t broken don’t try and fix it” and I believe there are plenty of other issues at which Mosman Council would be better directing its resources instead of again carelessly wasting taxpayer money.
<img height="354" width="470" src="/images/stories/2013/11/06/mosman-nov-5-one.jpg" alt="mosman-nov-5-one">
Photo: A suggested name change map for the Mosman Council (digitally altered)
Last week I read with interest an article that appeared in the Australian Financial Review – <a target="_blank" href="https://www.afr.com/p/national/why_this_bn_fund_manager_won_touch_eaK1Mbv4DRp3lqKKZRo8fJ" title="Why this $80bn fund manager won’t touch Australian banks.">Why this $80bn fund manager won’t touch Australian banks.</a> I liked this question to First Eagle portfolio manager Matthew McLennan by Christopher Joye. “You are clearly very knowledgeable on the Australian economy – what are your views on the resurgent Aussie housing market? It is interesting to me when you hear a politician saying this is not a housing bubble – that is just a supply – constrained market. At the end of the day, I think the Australian housing market is instinctively on the full side of fair value in a situation where the natural constituency, the marginal buyer, is already quite levered.”
I thought interesting analysis; then I thought let’s see what this so called bubble looks like and just exactly what is causing this ‘bubble’. It can be explained quite easily – supply.
The average Mosman agency today has approximately 5% of the properties on their rental lists available. Ten years ago that figure was 10-15% and twenty years ago it was 25%. Very few practicing agents today would ever remember how rental properties were once offered with rent – free inducements to prospective tenants.
<img height="285" width="470" src="https://www.rwm.com.au/files/2013/10/29-10-2013-12-38-47-PM.jpg" alt="29-10-2013 12-38-47 PM" class="aligncenter size-full wp-image-8258" style="margin: 0px auto; padding: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; display: block; max-width: 100%;">
There are just 90 houses in Mosman available for purchase today, this time last year 114, and this time two years ago 155. For apartments we have 55, this time last year 92, and this time two years ago 110. So you can see a pattern forming where the last time Mosman reached 100 houses was back on May 23 of this year – and in our peak selling season spring/summer we are struggling to reach triple figures.
So again it is supply that is controlling the market and whilst it remains at record lows it is fair to say that Mosman does not have a bubble or alternatively if it does have a bubble there is next to no air in it. Cremorne houses available are 9, and twelve months ago there were 15 and two years ago 16. Cremorne apartments you have a choice of 15, and twelve months ago 15, and two years ago 36. Neutral Bay houses offer 11, and twelve months ago 20 and two years ago 18. Neutral Bay apartments offer 26, twelve months ago there were 56 available and two years ago you had 98 apartments for sale – so there is a very clear pattern evolving.
<img height="415" width="470" src="https://www.rwm.com.au/files/2013/10/28-10-2013-9-31-44-AM.jpg" alt="28-10-2013 9-31-44 AM" class="aligncenter size-full wp-image-8259" style="margin: 0px auto; padding: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; display: block; max-width: 100%;">
I prefer to offer a handkerchief analysis of the market as against media outlets who offer the blanket analysis although it would be correct to suggest that the two bear absolutely no resemblance.
So then you have the constant innuendo that our banks are fast – tracking a sub – prime experience yet the ANZ posted this week a $6.498 billion profit up 11% from the previous year. NAB announced yesterday a profit of $5.940 billion profit up nine per cent on the previous year. I did note immediately following the profit announcements the Australian Prudential Regulation Authority (APRA) advised Australia’s largest banks to limit their dividend payouts to investors to allow the banks to comply with the new rules requiring them to maintain higher capital thresholds.
Whatever currency takes your fancy or whatever name you want to call it – the Mosman dollar still looks very, very impressive.

<hr>
Robert Simeon is a director of <a target="_blank" rel="nofollow" href="https://www.rwm.com.au/" title="RWM" style="font-size: 14px;">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a target="_blank" rel="nofollow" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
 
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robertsimeon-hRNTwJyXkQ

The lunatics have taken over the asylum: Attempt to divide Mosman is bureaucracy gone mad

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For those of us that live and work in the inner city areas of our capital cities, we think that public transport infrastructure is a must across the city.  The reason being that it is essential for those of us in suburbia to be able to travel to and from the city in an efficient and timely manner, notwithstanding the fact that so many of us still drive.  But I question whether or not public transport is actually that important.
According to data from the end of June 2013 from the Property Council of Australia, the total floor space across the CBD office markets is 17,263,536 square metres.  If we were to assume that the typical office has a workspace ratio of say 20 square meters for every one worker, this would mean that if these offices were fully occupied they would house 863,177 workers.  If we include the nearby fringe areas, which I have defined as: Brisbane Fringe, North Sydney, St Kilda Road, Southbank, West Perth, Crows Nest/St Leonards, Adelaide Fringe and East Melbourne, there is an additional, 4,396,603 square metres of office space.  Again assuming a 1:20 ratio these offices if fully occupied would house 219,830 workers.  Between the CBD and fringe office space, if we assume one worker for every 20square metres of floor area, there is enough space for 1,083,007 office workers nationally.
At the moment, office vacancy rates are quite high across the country, sitting at 10.1% across the CBDs and 10.2% across these fringe office markets.  Based on these figures and our ratio assumptions there are 775,945 workers within our CBD markets and 197,484 workers within the fringe areas.
Of course not everybody that works in the CBD or fringe areas works in offices there will be a mixture of retail, services, industry etc that also offer employment in these areas which would also increase the overall working population in these areas.
If we look at the labour force data from June 2013 we see that at a national level, there were 8,138,418 persons employed full-time and 3,519,841 persons employed part-time for a total of 11,658,258.  Of course the nature of part-time employment is such that jobs are at times shared so given this I will assume that half of the part-time positions are travelled to each day (reflective of job sharing) resulting in my total employment figure of 9,898,338 persons.
Based on this 9,898,338 persons figure and the current occupied CBD and fringe office space, these inner city area offices are providing employment for just 9.8% of the nation’s workforce.  Now of course most of those people that live outside of the respective capital cities are not going to travel to the closest CBD for employment (yes there are some exceptions) so it is beneficial to analyse the proportion of the capital city workforce that travels to the inner city area for employment.
Demographic data to June 2012 showed that 15,015,290 persons lived within a capital city which equated to 66.1% of the nation’s population.  Now we know that unemployment tends to be slightly higher outside of capital cities however, if we assume simplistically that 66.1% of the 9,898,338 persons are employed within a capital city that provides a capital city employment figure of 6,542,801 persons.  Based on this figure, 14.9% of all capital city jobs are situated in a CBD or fringe office markets.  As I mentioned, there are other forms of employment in these area other than just that within an office.  Given this, let’s assume that a further 5% of the total capital city employment is located within either the CBD or the fringe areas taking the figure to 20%, leaving four out of every five employed persons not being employed in the inner city area and therefore not having to travel centrally each day.
Of course there are those that need to travel centrally that aren’t workers that would rely on public transport, this includes: students, shoppers, tourists and those who require government services that are located within these areas.  We would estimate that overall, this proportion of population is quite small.  Outside of this, although users of public transport may not necessarily be travelling all the way into the inner city areas of the capital cities, they do utilise it to travel to other working and retail nodes along the transport system.  Despite this, a majority of the population is unlikely to be relying on public transport to reach their destination each day with even fewer using it to tavel to the inner city areas for employment.
The implications of this is quite significant, although the roads and public transport are undoubtedly congested, a large proportion of the population are simply not commuting centrally on a day-to-day basis.  It also means that public transport is only benefitting a small proportion of the overall community.
From a future development perspective this also has some repercussions.  It is clear that in our larger capital cities there is a significant focus on densification of the inner city areas and those along transport spines.  Although this is the case, demand for these higher density inner city properties is likely to be strongest amongst those who actually work centrally.  In fact, it is probably fair to say that for those who do not work centrally that higher density housing in the inner city areas would likely be highly undesirable.
The push for higher density in the inner city means that you can squeeze more residents into a smaller area.  From government’s perspective it also means that you can rely on existing infrastructure which tends to be most abundant in inner city areas rather than having to provide new infrastructure such as that which is required when development takes place on the outskirts of the city.
Nevertheless, it certainly appears that public transport infrastructure such as rail lines and busways connecting suburbia to the inner city areas only benefits a small overall proportion of the population.  Of course, of the estimated 20% of people that travel to central areas of the capital city, you only have to look at the roads of a morning to see that for many the preferred way to commute continues to be via the private car.
The other aspects of public transport to consider are the cost and the coverage.  The overall cost of public transport is expensive and acts as a deterrent for many to use on a more regular basis.  I live in Brisbane and to travel just one zone costs $4.80 if you don’t have a go card.  The trip to the city from my house is only two zones which is $5.60 by paper ticket and $3.95 if I use a go card .  I live relatively close to the city centre however, if I lived four zones away and purchased a paper ticket the cost is $7.50, if you have a go card the cost reduces to $5.13.
In my opinion, those costs are extremely excessive.  Yes it is probably slightly cheaper than the cost of running and maintaining a car on a week-to-week basis however, the differential is likely to be minimal.
My overall conclusion is that public transport is not as important as many of us believe it to be, particularly for those of us that believe we all need to have public transport to commute to work in the inner city.  This analysis shows that the majority of the working population actually don’t work in the central areas which tend to be the areas best serviced by public transport.
The main reasons that public transport it is not as important are due to: public transport being over-priced, services are generally irregular and unreliable and the services do not effectively cater to the overall needs of the wider community with the main focus of the service to transport people from the suburbs to the central areas of the city.  If the system was expanded, run on a more regular basis and made more affordable, I am sure that it would be more widely used, especially if it was more cost effective and efficient than using a private vehicle.  Sadly, at this stage it is generally a long way from delivering these benefits.
 
<hr>
 Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
 
 
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ckusher-ujnxiKuFQs

Is public transportation infrastructure really that important?

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Much was made of the September building approvals data yesterday <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/8731.0?OpenDocument" target="_blank">from the Australian Bureau of Statistics</a>, and with a 14.4% surge in approvals for new homes (seasonally adjusted), they certainly appear to remove any doubts that the home building sector has turned and has been accelerating (remembering this is historical data).
That’s critically important to the transition of the economy from the mining investment boom to a more traditional, housing-driven growth pattern sought by the RBA.
But there are a couple of points that need making. Much of the increase came from an 31.8% jump in new home units, townhouses and apartments, which is a very volatile part of the series. The same month in 2012 produced a big increase, with a 7.8% jump in total approvals, including an 18% rise in new home units and apartments. In July of this year, there was a 24.4% surge in new units, apartments and townhouse approvals and an overall rise of 10.8%. But in June there was a sharp fall of 12.6%, with approvals in home units, etc, down 37% for the year to June (the 2012-13 financial year).
This series depends heavily on approvals by local councils and tends to appear in the ABS data in bunches?—?as the above numbers indicate, it’s either feast or famine, and for that reason, the overall series is difficult to analyse. Even the trend series, which tends to smooth out the month-to-month changes, can be left behind by the big surges and falls in approvals in this area.
On trend, the September rise was 2.5% for all approvals (not 14.4%) and the year-to-date rise was 15.1%, not 18.6%. For the volatile apartments, etc, group, the trend increase in September was 5.6% for approvals against 31.8% for the seasonally adjusted figures. The year-to-date increase was 20.9% for the trend series against 31.9% for the seasonally adjusted.
The second point to be made is that the action is still in existing homes, not new home building, despite the latter hitting a three-year high in September, according to the Housing Industry Association. It’s the surging price of existing homes in Sydney that is catching the eye at the moment as competition between different groups of investors and private buyers are running into each other.
That’s why Reserve Bank governor Glenn Stevens specifically mentioned Sydney as the hotbed of investor competition in <a href="https://www.rba.gov.au/speeches/2013/sp-gov-291013" target="_blank">remarks made in Sydney on Tuesday</a>:
<blockquote>
“Investor participation in housing in Sydney, in particular, is becoming noticeably stronger. Over the past year, the rate of finance approvals for this purpose has increased by 40%.”
</blockquote>
When Stevens singles out one particular market, it’s a good idea to pay attention.
ABS figures show investors now account for 53.2% of all loans in New South Wales. In August, they borrowed more than $3.7 billion to invest in property. And the <a href="https://www.rba.gov.au/statistics/frequency/fin-agg/2013/fin-agg-0913" target="_blank">RBA’s credit data for September</a>, released yesterday, also confirmed the sharp growth in investor lending. According to the bank, investor lending for households grew 0.6% in September for a fourth successive month. That an annual rate of 7.2%, or twice the overall rate of growth in private lending and 50% faster than the 4.8% annual growth rate in all home lending the year to September. That helped total lending grow slightly faster than the 4.2% rate in loans to owner-occupiers in the year to September.
Data today from RP Data-Rismark showed a 1.3% rise in house prices last month in eight capital cities. Prices were up 7.9% for the year to October?—?but Sydney house prices jumped 2.4% in October, according to the survey. Prices rose 1.2% in Melbourne and 1.4% in Brisbane. But they fell 2.3% in Hobart reflecting some of the highest unemployment in the country in some areas). Prices in Perth dipped 0.2% in October and the annual growth rate fell to 9.4%. But in a separate survey yesterday, RP Data pointed out that adjusted for inflation, house prices still had a way to go. And compared to the stockmarket, property prices are still well behind. The ASX 200, the main index, was up 17% in the 20 months to October 31, and more than 20% in the past year.
And there are anecdotal stories of strong investor demand from offshore. <a target="_blank" href="https://www.crikey.com.au/2013/10/29/tips-and-rumours-996/">Crikey reported a tip</a> earlier in the week of a house that sold for $1.5 million above the reserve price (it went for $5 million) thanks to a bid from an offshore investor. It is easier for foreigners investing $5 million or more in Australia to secure an Australian visa. On top of this, there are also stories that Meriton, the country’s biggest apartment builder, is receiving strong demand from offshore (mostly China) for home units off the plan.
This is the sort of detail, by the way, that gets ignored in one of our favourite sub-genres in local financial reporting?—?the slavish reporting of views on<a href="https://www.afr.com/p/business/companies/central_banks_in_denial_about_asset_n251DLS54X6OedKno7G6wK" target="_blank">the Australian property market by foreign analysts</a> who assume that whatever applies in the UK or the US automatically applies here and therefore Australia?—?in its entirety?—?must have a property bubble.
In fact, the RBA is focused on how low interest rates are driving new home construction (its intended policy goal, along with hopefully driving the Aussie dollar down) versus driving higher prices for existing stock, and in Sydney in particular, which is the country’s biggest market but also one where the previous state Labor government oversaw a collapse in residential building. Talk about bubbles misses the point that the central bank is trying to engineer a transition from an investment boom back to Australia’s normal housing-led growth.
It’s a very different policy challenge to one facing banks in the UK, Europe and the US, where the problem is to create and sustain any growth at all.
 
<hr>
 This article first appeared on <a target="_blank" href="https://www.crikey.com.au">Crikey</a>.
 
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