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

<html><body>
Homes were destroyed yesterday as the bushfires raged through Sydney's Blue Mountains, and it isn’t the first time that property owners’ fears have been brought to the surface.
In Springwood and Winmalee in New South Wales, west of Sydney, a number of houses were reportedly destroyed, according to the Rural Fire Service.
Almost 600 firefighters were battling up to 80 bush and grass fires yesterday, 31 uncontained, across the afternoon, The Australian reported.
Around 8,700 homes west, south west and north of Sydney suffered power outages. This morning, reports were coming in from ABC radio with Blue Mountains mayor Mark Greenhill saying a number of properties are lost. ‘‘It’s a scene of utter devastation," Greenhill told the ABC from Emma Parade. "There are at least a dozen home lost right where I'm standing now. We’re seeing just house after house after house that’s gone."
<blockquote class="twitter-tweet">
Salt Ash fire seemed over until this house went up 20 minutes ago. 5 fire trucks now here. But house is gone <a href="https://t.co/T4PRfv3dxP" target="_blank">pic.twitter.com/T4PRfv3dxP</a>
— Sean Berry (@Seanberry7news) <a href="https://www.propertyobserver.com.au/https://twitter.com/Seanberry7news/statuses/389472750659588098" target="_blank">October 13, 2013</a>
</blockquote>
For those currently unsure of where the fires are, this <a href="https://google.org/crisismap/2013-nsw-bushfires" target="_blank">bushfire map</a> is being regularly updated by the NSW Rural Fire Services due to intermittant site outages on their official website.
Even those some distance away from the Blue Mountains reported seeing the “orange glow” of the bushfires. These photos below come from residents in western Sydney suburb, and popular investment spot, Whalan, who shared them with Property Observer (also see our gallery below). While the fire is unlikely to reach these homes, it certainly has many asking how they can protect themselves in case.
<img width="470" height="262" src="/images/stories/2013/10/17/one.jpg" alt="one">
Photo above by Lisa Blundell
<img width="470" height="286" src="/images/stories/2013/10/17/foru.jpg" alt="foru">
Photo above by Nicole Brown
When purchasing a property
Every transaction needs to be entered into with your eyes wide open. That includes knowing the risk of bushfire, floods, cyclones and other natural disasters.
Currently, in Victoria, vendors are now required to <a href="https://www.propertyobserver.com.au/residential/victorian-vendors-to-disclose-threat-of-bushfire-to-residential-land-enzo-raimondo/2012061455127" target="_blank">disclose whether a property is on bushfire prone land</a>. You can also check the details of the land online via this <a href="https://services.land.vic.gov.au/landchannel/content/addressSearch" target="_blank">state government portal</a>.
In New South Wales, a section 149 certificate can be applied for from the correct governing council. This does come at a small cost for the purchaser. For instance, the <a href="https://www.cityofsydney.nsw.gov.au/development/application-guide/application-process/zoning-certificates" target="_blank">City of Sydney charges between $50 and $80</a> for these certificates. If you're intending to develop, rebuild or put a granny flat on the block, the <a href="https://www.rfs.nsw.gov.au/dsp_content.cfm?CAT_ID=1009" target="_blank">NSW Royal Fire Service has some useful information online</a> about which hoops you may need to jump through, and details to be aware of.
Your current property
To create your own property bushfire survival plan, there's a <a target="_blank" href="https://www.rfs.nsw.gov.au/file_system/attachments/Attachment_BushFireSurvivalPlan.pdf">document from the government</a> available that covers everything from clothing to consider, to deciding whether you should leave your home. It’s worth having a read through, particularly if you’re in a more regional area.
The guide recommends that you ask yourself the following questions to determine the property's level of risk.
Ask:
1. Do you live within a couple of streets of bushland?
2. Does your local area have a history of bush fires?
3. Do you have many trees and shrubs around your home?
4. If you need to leave your home, do you need to travel through bushland?
5. Is your Bush Fire Survival Plan more than one year old?
Bushfire maps can also help you determine if your area is potentially at risk.
<blockquote class="twitter-tweet">
Driving through Yellow Rock, rows and rows of gutted homes. Locals guess 150 homes gone on one road. <a href="https://twitter.com/NewsTalk2UE" target="_blank">@NewsTalk2UE</a> <a href="https://t.co/X7IDsQNrwN" target="_blank">pic.twitter.com/X7IDsQNrwN</a>
— Michelle Taverniti (@M_Taverniti) <a href="https://www.propertyobserver.com.au/https://twitter.com/M_Taverniti/statuses/390947028093501441" target="_blank">October 17, 2013</a>
</blockquote>
Preparation tips to protect against bushfires
- Cut back overhanging trees or shrubs and dispose of cuttings appropriately
- Check the condition of your roof and replace damaged or missing tiles
- Non-combustible fences are most effective
- Clean leaves from the roof, gutters and downpipes
- Fit quality metal leaf guards
- Enclose underfloor areas
- Plant trees and shrubs that are less likely to ignite due to low oil content
- Consider installing a Static Water Supply sign if you have a water tank, dam or swimming pool
- Store wood piles well away from the house
- Keep grass cut
- Make sure pressure relief valves on LPG cylinders face away from the house
- Ensure you have a hose long enough to reach your entire home
- Store flammable items away from the house
- Check the condition of external walls/cladding and seal gaps
- Choose a non-combustible doormat
- Metal flywire screens should be attached to the outside windows and doors
When the fires have passed, don't let your guard down. You will need to patrol and ensure no embers or sparks can affect your property.
<blockquote class="twitter-tweet">
Great advice from South Warrandyte Fire Bridgade RT <a href="https://twitter.com/GlobalCareAu" target="_blank">@GlobalCareAu</a>: Help some1 prep their house 4 bushfire season <a href="https://t.co/5X3mZzlWOF" target="_blank">https://t.co/5X3mZzlWOF</a>
— QldFire (@QldFire) <a href="https://www.propertyobserver.com.au/https://twitter.com/QldFire/statuses/390634908735254528" target="_blank">October 17, 2013</a>
</blockquote>
Always ensure that all fire alarms are adequately installed with the correct batteries and that home and content insurance is in place that covers you in the event of a fire. If there are tenants in the property, ensure that they are prepared in the event of a bushfire, and that they are provided with as much information as possible.
Grants from the government are occasionally available for those most badly affected. For instance, in Tasmania these are the <a href="https://www.bushfirerecovery.tas.gov.au/people_and_communities/red_cross_bushfire_appeal/stage2" target="_blank">current listed grants </a>for property owners, tenants and local communities. They include up to $10,000 to assist with rebuilding a property and $5,000 for tenants to assist with replacing their contents.
In Western Australia, this <a href="https://www.legalaid.wa.gov.au/LegalAidServices/publications/Documents/WA%20Bushfires%20Renting.pdf">l</a><a target="_blank" href="">egal aid document</a> lays out the rules between owners and tenants.
"If you own the house and it is now unfit for the tenant to live in, you cannot make a tenant move out immediately so try to work out an agreement with them," the document states. It also covers an outline of the rules surrounding bonds and commercial tenancies.
Observer Jo Chivers has also previously written on the subject of the <a target="_blank" href="https://www.propertyobserver.com.au/developments/the-impact-of-bushfire-zoning-on-your-development-jo-chivers/2013052361604">impact of bushfire zoning on your development</a>. 
Views of the fire around Sydney
{yoogallery src=[images/stories/2013/10/18/fire]}
All our thoughts go to those currently affected.
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Protect your property from bushfires

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Higher density housing is often viewed as an investment opportunity but like all property the outcome depends heavily on a range of factors.
This is apparent when the suburbs of Melbourne are ranked by their indicative gross yield over the past year for units. Using the RP Data Scorecard, the data applies to the year ending September and only includes suburbs with at least 500 dwelling to reduce variability.
Inner city <a target="_blank" href="/news">Carlton </a>tops the list with a yield of 6.9%. The neighbouring <a target="_blank" href="/news">CBD</a> is fourth on the list with a strong 5.9% which underscores why demand from investors is helping to drive the inner city high rise market.
Carlton has a lower rent than the CBD with a median asking price of $360 compared to $450.
The other three suburbs in the top five are at the more affordable end of the market from the perspective of median asking rents but still provide healthy yields. <a target="_blank" href="/news">Broadmeadows</a> has a median rent of $310 per week and a yield of 6%, <a target="_blank" href="/news">Melton</a> a median rent of $255 and yield of 5.8%. Neighbouring <a target="_blank" href="/news">Melton South</a> a median rent of $240 and yield of 5.6% has been recorded.
Does this make these suburbs good investment opportunities? That really depends on the actual property on offer and whether you are seeking a high weekly rent or a larger capital gain.
 
<hr>
 Robert Larocca is Victorian housing market specialist for <a rel="nofollow" href="https://rpdata.com/" target="_blank">RP Data</a>.
 
 
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rlarocca-zWhvjay44N

The best Melbourne suburbs for unit and apartment yields: Robert Larocca

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A few weeks ago we completed a dual occupancy project for our client. It was a typical corner block development where we built two freestanding, three bedroom, single story villas and a two lot Torrens title subdivision (pictured below). Our very studious client chose to sell one and keep one as after completing a law degree, she decided she’d like to start a degree in medicine (bless her).  So she asked Property Bloom to help her appoint a selling agent and assist in the process of sale.
<img src="/images/stories/2013/10/17/chivers-oct-17-one.jpg" width="470" height="231" alt="chivers-oct-17-one">
The villa she kept was leased quickly. I’ve calculated she took about a 15% discount in rent than she would have achieved about 18 months ago (before the ‘mining slowdown’). Not too bad really.
For the villa she was selling, the first thing we did was get three sales appraisals.  Not surprisingly, they were all a little pessimistic (due to the ‘mining slowdown’) but one agent was more optimistic and open to achieving the valuation figure than others.  Next we managed the styling of the villa to present it in its best way.  I’m a strong believer in styling or staging when selling.
Within one week of listing she had an offer very close to the asking price which was higher than the independent valuation. I was very pleased and it made me reflect on reports that the Hunter Region was now at the mercy of what everyone seems to be referring to as the 'mining slow down'.
Terry Ryder <a href="https://www.propertyobserver.com.au/news/do-your-research-newcastle-is-still-a-great-place-to-investterryryder/2013101465694?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=copyofhotspotting'sterryryder" target="_blank">most eloquently addressed</a> this week a question from an investor asking about what to do given the ‘end of the mining boom?’
The end of the mining boom?  Property Bloom has worked in the Hunter Region for over 10 years and I love to research the local economics closely.  What I’ve found recently is interesting.  I’ve heard comments bantered about: "we’re headed for recession”, “there’s no jobs”, “the mining boom is over” and the most bizarre: “China’s stopped growing!” 
In the meantime, every time I drive to Muswellbrook, I am seeing nonstop coal trains heading for Newcastle Port. Someone is digging this stuff out of the ground and loading it on the trains.
What the Hunter Region is doing is adjusting to the ‘new normal’.  
We’ve seen over the past few years a response to the large increase in commodity prices and the terms of trade, and investment and employment in the resource sector grow strongly. This placed upward pressure on prices and wages. Wages rose more rapidly in the mining industry than in the rest of the economy since the beginning of the terms of trade boom.
All of a sudden, young trade apprentices were being lured to the mines by outrageous pay; this was key in facilitating the reallocation of labour between sectors.  The mining industry could afford to pay the higher wage rate and so draw labour away from other sectors.
This saw builders and other industries that utilised tradies suffering the loss of labour.
Now the mines have moved from the more labour intensive expansion phase where we saw a vast investment in transport infrastructure, such as the soon?to?be?completed Hunter Expressway and the upgrading of the rail links for coal, and considerable private investment in community infrastructure such as shopping centres and also in the expansion of some mines.
Now that phase is coming to an end, we move to the less labour intensive supply phase. I hear that the other sectors, mainly construction are enjoying a choice of highly skilled labour (thanks to the training in the mines) which may mean these other sectors now have capacity to increase production.
So I think there is a redistribution of labour going on, rather than a drain on the region. Whilst some mining employees will move away to other mining locations, others will stay and find new employment (or go back to their old jobs). Their new jobs may not be paying the high rates as the mines had in the past and so the property rental market must adjust, tenants can no longer pay the ever increasing high rents investors were happily achieving over the past few years.
The region is effectively experiencing the downside of the preceding exceptional upturn. The purchasers of our villa are first home buyers who are happy to get the $15,000 NSW First Home Owners Grant as they are buying a new dwelling, and both are working in good, local jobs that are not in the mining industry.
In reality what we are seeing is less growth than we’ve had over the past few years, but still growth.
And investors are also adjusting their expectations. But you know what? The yields being achieved now are still higher than they were before the mining boom, plus there has been some good capital growth so what’s the big deal?  We all need to adjust to the 'new normal' and put things into perspective. Simon Deeming, director of Research of the Hunter Valley Research Foundation, coined the phrase ‘new normal’ in the <a href="https://hvrf.com.au/images/HVRF_Publications/UHEI_June2013.pdf" target="_blank">Upper Hunter Region Economic Indicators, June quarter 2013</a>.
As my friends from the <a href="https://hvrf.com.au/download-publications" target="_blank">Hunter Valley Research Foundation</a> so well summarise below:
“The economic outlook for the Upper Hunter requires perspective. Relative to the construction phase of the coal industry’s expansion, the prevailing period and the short term outlook, feels profoundly soft, as the stimulus for suppliers and construction employment wanes. The passing of the construction phase is being overlaid with the cost efficiency drive...The Region is effectively experiencing the downside of the preceding exceptional upturn and the indirect benefits for other sectors are now being felt as losses. In line with this transition, business expectations for the Region’s economic outlook over the next three and 12 months remain pessimistic. However, relative to business activity prior to the boom, this perspective seems exaggerated.
“The Hunter Region is emerging from this cycle with a larger productive capital base in the mining, trade and accommodation sectors, a more highly-skilled workforce, which is increasingly cost-sensitive, and a larger employment and population base from which to progress. In the meantime, a period of adjustment remains before the ‘new normal’ becomes established. Assuming this rationalisation is modest, the economy will emerge larger than pre-boom, albeit that this base, the ‘new normal’, is yet to be found.”  
Here’s to the new normal, a strong emerging economy and to my studious client for such a quick sale on her villa. Now all she needs to think about are her medical studies.
 
<hr>
 Jo Chivers is director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.propertybloom.com.au/" title="Property Bloom">Property Bloom</a>, which manages property development.
 
 
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jochivers-wq5Bp59R5a

The next phase of the mining boom, Hunter Region adapts to the new normal: Jo Chivers

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Last week’s employment data showed a fall in Australia’s workforce participation rate to 64.9%, the lowest for seven years.
If the rate had been maintained at the level of three years ago, unemployment would have been around 6.6% in September, according to some estimates. Labor thus left office with workforce participation having peaked and begun declining on its watch. It’s now a challenge the Coalition has inherited, and a significant one.
The reasons why fewer of us are in, or seeking, paid employment?—?in particular, whether it’s the long-awaited impact of ageing on the workforce?—?aren’t clear (theAFR’s David Bassanese <a rel="nofollow" target="_blank" href="https://www.afr.com/p/business/companies/ageing_only_one_part_of_workforce_RdlA0fb6pyjz3lRSaDpC1M">had a good go this week</a>). In a speech nearly a year ago on the labour market, Reserve Bank Deputy Governor Phil Lowe <a rel="nofollow" target="_blank" href="https://www.rba.gov.au/speeches/2012/sp-dg-091012">told an audience in Hobart</a> that:
<blockquote>
“One interesting aspect of the recent outcomes is that despite only modest overall employment growth, the unemployment rate has not moved up, as had been widely expected. Part of the reason for this is that there has been a decline in labour force participation?—?that is, in the share of the working-age population either with a job or looking for a job. While one always needs to interpret short-run movements with caution, the current participation rate is around half a percentage point lower than the average of the past five years. This stands in contrast to the general upward trend in participation over the past 30 years. “The Reserve Bank has recently spent some time trying to understand what is happening here and what it says about the balance of supply and demand in the labour market.”
</blockquote>
Some of this work looked at demographic changes, high levels of structural change in many industries delaying the re-entry of workers (especially men) and the weakness in construction which traditionally has high levels of self-employed workers. But from the lack of a firm conclusion in this speech, the RBA remains as puzzled, as are many other economists.
Tuesday’s minutes of the <a rel="nofollow" target="_blank" href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2013/01102013">Reserve Bank’s October meeting</a> carried this tantalising paragraph:
<blockquote>
“Members were briefed on longer-run changes in the industry composition of output and employment. The share of economic activity occurring in service industries had increased over time. Employment in services had recorded a greater increase than in goods-related industries, in part reflecting slower productivity growth in service industries. Over the past decade, the bulk of the increase in employment had been in service industries.”
</blockquote>
This is understood to have been a briefing based on an earlier request from the board. There’s no research being prepared for a later article in the quarterly bulletin or a speech by a senior official, such as Governor Glenn Stevens (who speaks in Sydney on Friday) or Lowe, who is out in public in Melbourne the following week.
The reason for the request isn’t known, but it could be linked to the way the labour market has softened since mid-year, especially with a noticeable fall in the participation rate. The minutes made this observation about the labour market:
<blockquote>
“The labour market had softened further in recent months. The unemployment rate had increased to 5.8 per cent, the participation rate had declined and the level of employment was little changed from earlier in the year. Members noted that hours worked had increased. Although the hours worked data are volatile, possible explanations for the increase included changes in sectoral employment shares, increased hours for existing staff as firms attempted to contain labour costs or reluctance of firms to take on new staff. Forward-looking indicators of labour demand remained soft and the Bank’s liaison suggested that employment intentions had been subdued in recent months, most notably in mining and mining-related sectors.”
</blockquote>
The Howard government was aware of the need to continue to push participation. Joe Hockey defended government assistance for working women in the face of opposition from social conservatives on the basis that “we’re running out of workers”. That government also tried to reduce the price of labour, via Workchoices, thus bringing underskilled workers into or back into the workforce (which had, as Treasury predicted, a negative impact on productivity).
With Workchoices dead, buried, cremated, staked through the heart and shot into space by Tony Abbott as opposition leader, that option isn’t currently available. Now in government, the Coalition does see its PPL scheme as providing a greater participation incentive than the Labor scheme it wants to replace. But addressing participation traditionally requires the rather mundane work of improving training, making jobs more interesting and lowering barriers to older workers (something Labor tried to do) and increase mobility, something Abbott has flagged previously via clunky incentive schemes to encourage workers to move to mining states?—?now useless given mining is shedding workers. And bear in mind high property prices in Sydney and Melbourne might be an increasing disincentive all of their own.
In many respects the weak participation rate is more important than abolishing the mining tax or the carbon tax. In the medium to longer term, higher levels of workforce participation boosts employment, standards of living and tax revenues (especially from the GST) and helps underwrite a higher level of demand in the economy. What the Coalition Employment Minister Luke Hartsuyker does on the issue will have a significant bearing on future budgets and economic growth.
 
<hr>
 This article first appeared on <a target="_blank" rel="nofollow" href="https://www.crikey.com.au/">Crikey</a>.
 
 
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Economists stumped as Australia's participation rate falls to a seven-year low

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Changes in sales volumes are usually a forerunner to changes in prices, both when markets are rising and when they are falling.
On that basis, Queensland can expect good price growth. The state has recorded big changes in the number of house sales over the past 12 months or so.
The REIQ’s market report for the June Quarter shows sales activity in the state improving. House sales statewide rose 22% in the June Quarter, compared to the March Quarter and were 40% higher than the June Quarter of 2012. (We don’t yet have figures for the September Quarter but anecdotal evidence indicates the trend has continued).
“This is the fourth consecutive quarter of positive news,” said REIQ spokesperson Anton Kardash. “The September Quarter last year was a particularly strong one for the Queensland market and that momentum has been sustained in the following three quarters of sales activity.”
The numbers of house sales in Brisbane increased markedly in the June Quarter: up 32% on the March Quarter and up 44% over 12 months. The median house prices in Brisbane City, Logan City, Moreton Region and Redland City all increased in the June Quarter.
In the regions, Toowoomba posted yearly median house price growth of 4.5%, the Gold Coast rose 3.1% and the Sunshine Coast grew 2.3%.
“REIQ estimates of Queensland investor activity also shows that the numbers of investment dwellings financed is tracking at about the historical average,” says Kardash. “No doubt, investors have recognised the strong rental market, including low vacancy rates and are taking the plunge while first home buyers remain relatively absent.”
The Home Value Indexes published by RP Data show that Brisbane’s house price index has risen 1.7% since the start of 2013, lagging some of the other capital cities but nevertheless showing signs of growth. The unit price index has recorded a similar rise.
Most of that rise was in the past three months, confirming the usual pattern whereby prices rises follow increases in sales volumes, but with a lag six to nine months.
Brisbane’s market declined overall in 2011 and 2012, in line with the capital city trend, but with the double whammy brought by the 2011 floods. There has also been impact from the state government’s cost cutting and sacking of large numbers of public servants.
Brisbane is not an auction city so it has not been caught up in the short-term frenzy that periodically afflicts Sydney and Melbourne.
It is, nevertheless, showing signs of a return to price growth – which is inevitable following the significant increase in the number of home sales.
Outside the state capital, we can expect growth in Rockhampton, Townsville and Toowoomba, as well as some of the tourism-based areas that have been poor performers in recent years but are now mounting revivals, headed by Cairns and the Sunshine Coast.
Locations moving in the opposite direction, mostly because of over-supply by developers, include Gladstone, Mackay and Emerald.
<hr>
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank" rel="nofollow" style="font-size: 14px;">hotspotting.com.au</a> and you can contact Terry via <a href="https://mailto:%20ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://twitter.com/hotspotting" target="_blank" style="font-size: 14px;">Twitter</a>.
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With sales volumes rising Queensland can expect good price growth: Terry Ryder

When it comes to choosing the right investment property, there are a number of different approaches and it can understandably be a confusing environment for many. Emails continually come in to the Property Observer editorial inbox from readers looking at buying in different states, unsure about locations, or just wanting some guidance.

Here, we will briefly run through how to start considering your approach to selecting an investment property. Over the next few weeks, the Property Observer team will tear apart each part in the process to show you just how to replicate the process.

1) Your personal situation

- What are your goals in life?

- What do you hope to achieve with property?

- How will you achieve this?

Figure out what this look like in terms of a time frame (how long do you have?) and how much you need (what return does it need to give me?). Consider cash flow and capital growth, and decide whether you&#39;re requiring a positive cash flow right now, or in the future, or if you&#39;re willing to pay out each week and hope for some capital gain.

Understanding what the property needs to do to fit into your portfolio is absolutely critical. There is little point buying a property that has terrible cash flow, but fantastic long-term capital growth potential, if your plan is to improve your current living situation. Similarly, if you have your heart set on renovating for capital gain, it&#39;s unlikely you&#39;ll want to be buying in a brand new estate. You might want to read Margaret Lomas&rsquo; response to an investor who <a href="https://www.propertyobserver.com.au/residential/ask-margaret-should-i-buy-off-the-plan-or-an-existing-property/2013062862801" target="_blank">asks whether they should buy established or new</a>.

Consider your appetite for risk - are you willing to buy in a mining town that may experience a significant downturn for the chance of strong cash flow? Your &#39;sleep at night&#39; factor is a critical part of this.

You will also want to assess your borrowing capacity, current financial situation and similar. This may require the services of some form of adviser, broker, financial planner or investment mentor. Investors are advised to ensure they check carefully about who they do business with.

2) Turn to the &#39;macro&#39;

- Are you comfortable buying in another state?

- How are the states/territories performing?

- Where do they sit on the property clock?

There are thousands of suburbs across Australia, and there&#39;s no way you can check them all. Property buyers should become familiar with the concept of the property clock and try to place each of the different states and territories onto this diagram as part of their initial analysis.

For investors wanting to learn more about the property clock, observer Jo Chivers wrote about <a href="https://www.propertyobserver.com.au/developments/learn-where-your-region-sits-on-the-property-clock-before-you-begin-your-development/2011110252187" target="_blank">working out where your region sits on this clock</a> before considering development.

Remember that buying low and selling high is a common investment mantra, but that it can be difficult to see where the bottom is and when the top has passed until later down the track.

You will also want to cultivate an understanding of the different overall forces within each state and territory. Understand how changes in the public service may affect the ACT, for instance.

3) Digging down

- What can you afford versus what is available?

- What are the overall plans for the state/territory selected?

- How do the areas stack up based on your statistics?

Here, your price point and borrowing capacity will become even more important. As you try to choose a region or more localised area (such as, for instance, Sydney&#39;s western suburbs) you may find that your price point helps you refine this quickly. Other statistical indicators, relating to your strategy, can also help you shortlist. This may include rental yield, proportion of houses v apartments, income growth and a number of other statistics that investment experts regularly hang their hats on.

You will want to be taking the list of wider areas that you can afford and going through them, checking for overall drivers and growth prospects in the areas. If they&#39;re largely driven by tourism, then you&#39;ll want to understand the potential fluctuations in this labour market, and how this may flow-on to your investment property.

It will also be worth looking at government plans on a wider scale to try and pinpoint areas of growth. If, for instance, a rail line is being put through a whole area and there is significant infrastructure investment, then you may want to consider it more highly. Be wary though, sometimes these initiatives are reactive, rather than proactive - that is, they are put in as a result of growth rather than in expectation of it.

Understand where these areas sit in relation to the rest of the state/territory. Understand its distance from major employment hubs, and how it differs or is similar to other areas.

4) Localising your knowledge

- What are the plans for the areas?

- How do the dynamics work within the local government area (LGA)?

- What are the locals saying?

- What are the statistics saying? We have free data available here.

When you have chosen a broader area, such as an LGA, in your price point, you&#39;ll want to become aware of how the individual suburbs work and the reputations of each.

For instance, in Sydney&#39;s Hills District, Castle Hill is a more expensive suburb with a busy, mini-city like atmosphere where the properties are tightly held. Beaumont Rise, however, is a brand new estate with smaller plots. In quickly developing areas, such as these ones, you&#39;ll want to know the inner-LGA dynamics.

One way to do this is to speak to the locals yourself, discuss with real estate agents, buyer&#39;s agents and property managers, and to call the local council. Ask about upcoming plans for the area, any new developments and similar. Get to know what the people, on average, tend to be like across the region. Jump onto the <a href="https://www.abs.gov.au/websitedbs/censushome.nsf/home/quickstats" target="_blank">ABS&#39; QuickStats Census data</a>, or <a href="https://home.id.com.au/" target="_blank">.id informed decisions</a>&nbsp;to get a statistical understanding, but start reading into the local culture as well. Crime statistics and reading the local paper can also be quite revealing.

Getting an idea for how quickly properties can be developed in the local area is important, as supply/demand statistics will underpin much of your investment strategy. If there is endless developable land, then you might want to have a closer look.

5) Understanding your specific suburb

- What is the good v bad side?

- What is the price ceiling and what are different properties worth?

- Which properties are most desirable?

- Check the level of amenity

When you have a small area to deal with, there is still a &#39;good side&#39; and a &#39;bad side&#39;. Some suburbs have streets where prices range from $1.2 million plus to $500,000, often due to views or busy streets or a combination of factors. This is often referred to as &#39;pricing disparity&#39;.

You need to get a quick knowledge of the worth of properties in the suburb so that you don&#39;t pay too much and can identify a deal quickly when it comes along. You&#39;ll also want to ensure you&#39;re on the right side of a suburb, or the street that doesn&#39;t have an inbuilt &#39;value ceiling&#39; due to unchangeable factors, such as a noisy train line.

To do this it&#39;s worth looking at comparable sales, visiting home opens and, again, speaking to local experts. You will also want to attend auctions if it&#39;s a popular selling method within the suburb. Keep your eyes and ears open, and keep detailed records of what has been selling, comments that other buyers have been making and their reactions to different types of properties. Ideally, you will want to know how the addition of a room, or a pool, or a car space, affects the value of a property.

Observer David Airey wrote about <a href="https://www.propertyobserver.com.au/residential/what-is-the-best-way-to-judge-the-value-of-your-property-david-airey/2013072863556" target="_blank">how to figure out the value of a property</a> in a recent column, while Patrick Bright also told us that <a href="https://www.propertyobserver.com.au/residential/how-to-determine-a-property-s-true-value-patrick-bright/2012121258406" target="_blank">inspecting 100 comparable properties</a> is one way to do this due diligence.

Find out where most of the renters live, and what the renter/owner occupier split looks like. You&#39;ll also want to know how this suburb compares with the averages of the wider area you previously researched.

Get to grips with the local demographic. See how this differs from what you saw in step four. If your chosen suburb is filled with families, then you&#39;ll potentially want to be looking at family-friendly stock. But are they a young family? Do they tend to have two children or three? Are the parents professionals? In different suburbs, the desire for certain types of properties differs. Understand what is desirable currently, but also down the track when you might be inclined to sell.

Check out the local development applications. If there&#39;s a big apartment block going up in the suburb, this isn&#39;t necessarily a negative thing for you. However, you&#39;ll want to know what the impact may be.

Consider tools such as WalkScore, Google Maps and NearMaps to shape the area&#39;s dimensions in your mind. Decide where the &#39;best&#39; pockets of the suburb are - where demand is highest. Then consider how your investment requirements fit around this. It&#39;s often worth heading out there yourself for a look, but remember not to be blinded by emotion.

The next steps

Remember to keep all your details together so you can refer to them when necessary. Every investor has a different strategy and a unique approach to the type of property they buy, and the reasons behind it, and the savviest investors regularly refine their process.

Which parts of the process would you like fleshed out more? We&#39;ll be delving into the different research techniques for you, how to decide the good versus the bad side of a suburb, and how to tell if a property really is comparable.

Email: <a href="mailto:jduke@propertyobserver.com.au">jduke@propertyobserver.com.au</a>

Five steps for choosing the right investment suburb

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Looking overseas at the potential effect of the US financial situation, Finder.com.au’s Michelle Hutchison said that if America raises their debt ceiling, it could impact funding costs in the Australian home loan market.
Warning borrowers to prepare themselves for higher costs, Hutchison explained that if average variable interest rates returned to normal levels of 7%, borrowers would be slugged an extra $755 million of extra repayments collectively.
"Our lenders source about a quarter of their funding from offshore according to the Reserve Bank, so even a small amount of funding pressure will likely impact the cost of home loans as lenders would pass on the costs to borrowers,” Hutchison said.
"It's important for borrowers to be prepared for rising interest rates because it's only a matter of time before rates rise. And the US could be speeding this up much faster than we expected.”
If you’re looking to prepare for any potential rate hikes, she suggests the following tips:
- Reduce home loan costs as much as possible by comparing your home loan to other lenders’ offerings.
- For those looking to buy, factor into your budget a potential 2% increase in interest rates. For a $300,000 loan, this looks like an extra $400 per month.
- Consider fixing your home loan.
"Whatever the outcome of the US financial situation, interest rates will eventually rise to normal levels again so borrowers should be prepared with the right tools and review their home loan situation before it's too late,” said Hutchison.
You may want to consider reading <a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-mastering-the-art-of-refinancing-12-tips-for-success-and-key-things-to-consider">Property Observer’s recent eBook about refinancing</a>.
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Prepare for interest rates rising sooner than expected: Finder.com.au

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When you undertake the process of refinancing, it is similar to when you originally applied for your loan. Essentially, you’re discharging a previous debt and undertaking a new mortgage.
When you choose a lender, choose one who takes the time to understand your financial goals because in many cases a mortgage is the centre stone of an individual’s wealth creation strategy.
This new mortgage will have a brand new set of fees, terms and conditions that you’ll want to familiarise yourself with.
You will be required to fill in an application form, pay associated fees and go through the process again.
These fees can sound daunting; however they’re generally quite straightforward. Ensure your lender explains to you which fees you will be required to pay, including ongoing fees.

<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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Approaching your lender

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I've often been confused by those TV shows where a caller dials in and asks: "Should I buy shares in this company?" or "should I buy a property in this suburb?", particularly when the panellist immeditaley fires back "No, but what you should be doing is...". The obvious problem with this type of financial advice is that there is no consideration of personal needs, financial goals or circumstances. And so it is with the present debate about whether it is a good time to buy a house.
In Australia, renting is usually 'cheaper' than buying in terms of monthly cashflow, so it can definitely make sense to rent where you live and invest your dollars elsewhere. I've long been a strong advocate of this idea, particularly in an age where people are changing jobs and careers far more often than ever before.
One problem is that plenty of people rent and then never invest in anything at all. It would be helpful in Australia if we moved towards longer lease terms or commercial style leases to allow renters more stability and certainty. Another common problem is that, as I specifically warned, it's all well and good to say that you will simply wait for prices to become cheap before buying somewhere to live, but what if prices don't behave themselves? Markets are rarely as predictable as people seem to believe.
And for Sydneysiders, so it is. By the time this cycle is over prices could easily be 40% higher than where they were five years or so ago, pricing many out of our market forever.
Is it a good time to buy if you are likely to have to move in a couple of years, though?
Possibly not. Stamp duty, legal fees and agent fees are material transaction costs that will likely see you fail to benefit from a short ownership period. Sure, you can retain a first property as an investment and some do this well - including my wife in fact, who still owns her first house bought aged 21. This can be great if you're able to buy in a well-located suburb, but the prospects for capital growth in outer and fringe suburbs, in my opinion, are often highly questionable.
The contrast with, say, a 35 year old buying a pure investment property via an SMSF, is stark. Knowing full well that the investment is likely to entail a multi-decade time horizon, the buyer is far less likely to be concerned with short-term market fluctuations. It's not that they would be completely emotionless if there was a sharp market correction, but they would likely be as close to that state as it would be possible to be.
Buying regularly, and buying more in the sales
On one TV panel investment show, the author of Motivated Money (I probably learned more useful information on Aussie share market investment from this one short 130 page book than from many years of reading other information) Peter Thornhill was asked what he hoped for the share markets in coming months. The other pannellists had variously offered the usual platitudes such as "cautiously optimistic for moderate gains", "a stabilising economy" or "firming growth".
Thornhill said simply: "Another GFC". The presenter of the chuckled nervously. Thornhill re-iterated: "I'm serious". He was never invited back on the show.
What Thornhill was getting at, albeit in his usual controversial and confrontational manner, is that market downturns can represent fabulous buying opportunities. His favoured strategy includes buying shares regularly (in particular, in low cost diversified LICs with exposure to financials and industrials, which tend to pay strong dividends and outperform the resources index and REITs over time) rather than obsessing over trying to time the market.
Thornhill warns very strongly that people tend to massively over-estimate their abilities in weather forecasting: "Market timing, for most of us, is no better than genuine guesswork".
Notably, property investors engage in far fewer and generally far larger transactions, so correspondingly buying well becomes far more important. Share investors can more easily average or smooth their results through regular purchases which buy more units when the markets are despondent and PE ratios are low and vice-versa.
And when the market does really tank, Thornhill will simply have some money set aside or in reserve for buying much more heavily, engaging sensible and considered leverage via margin loans at favourable rates, in order to to buy very hard into 'old favourite' stocks like Wesfarmers (WES) and Commonwealth Bank (CBA) when they are 'on sale' at $15 and $30 as the were in 2008/2009.
Thornhill stresses the importance of focussing on the growing income stream from a share portfolio - resulting in an investment strategy rather than price speculation - as opposed to the day-to-say share price fluctuations and unending market commentary. And imagine the dividends yielded from those 2008/2009 purchases today - 10-15% depending on your entry price, not to mention supersonic capital growth.
Dealing with market downturns
Always keen to learn whatever I possibly can about investment pyschology, I felt that this must be a man worth looking up, and over a coffee in Woollahra (actually, over several coffees in Woollahra) I was keen to explore whether Thornhill really dealt with market crashes in such a relaxed manner. His response was that, truthfully, "you would not be human if you did not feel the impact of a market crash". But, rationally, markets do recover over the long term, and after a crash when markets are despondent is often a great time to buy quality investments.
Does it bother me than Thornhill is 100% a shares man and essentially anti-property? Not at all. I've always preferred a balance, and believe that if you are prepared to research property markets thoroughly and buy counter-cyclically (such as in Sydney in 2007 or around London in the 1990s) you will also get great results over the long term.
<img style="padding: 5px; border: 1px solid #ebebeb; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; display: block; margin-left: auto; margin-right: auto;" width="320" src="https://www.rba.gov.au/chart-pack/images/5-6-household-sector/6bl-dwelpri-small.gif?accessed=2013-10-16-06-09-36" height="255" alt="Dwelling Prices graph">
I tend to agree that if you're starting out with several million dollars then the great appeal (yet double-edged sword) of property market leverage is greatly diminished. However, so many of us (including me) started out with absolutely nothing, which is why property markets and the associated leverage available can seem more attractive.
Note the importance of focussing on income-generating ownership assets, such as shares and property. There are plenty espousing the benefits of shorting the market in recent times, yet they are getting their timing badly wrong and getting badly burned time and time again.
Just as bad are the usual swathe of broker "buy recommendations" in speculative mining shares resulting in woeful erosion of capital over a period of several years where simply owning the index has been generating fabulous returns. Before considering broker recommendations, look at what exactly same brokerage firms were tipping over the last 24 months - if you find more than half a dozen 'buys' which have collapsed in price, look elsewhere for advice.
As for gold, which pays no income, how badly is that strategy faring since its peak as compared to Thornhill's outstanding income-generating portfolio? Assets with growing income streams will always dominate over the long haul.

<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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Is now a good time to be buying property? Pete Wargent

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Well, the market seems to now be in agreement. We are officially, whatever that means, in a sustained upward phase or “boom”.
By our reckoning Inner Melbourne at the top end has been in a “boom” since October of last year (2012).
As the realisation of this hits buyers, the questions we are getting have changed from: “How’s the market going, Mal?” to: “When is it all going to end, Mal?
Our answer is: “Who knows?”, and also: “We think you’re actually asking the wrong question.”
Well, you’re asking the wrong question if you want an informed answer. Because, if we ‘experts’ had little absolute idea as to when the market started, it’s unlikely we should know when it will end.
In any case, is it that relevant anyway? For all we know, the ferocious rise of this current market phase may have already eased. On the other hand it could run, as per 2009, for 18 months, or for another six to 12 months as in 2007, or another 13 years as it did from 1994.
We leave prognostications of the future to the economists, as well as to the media commentators who manage to expound at length on the market on evidence about as skimpy as that used by pre-game footy commentators.
The really useful and good buying question, in our opinion, is not a general market-based one – it’s a specific property-based one: Is this home you are currently looking at a good buy?
More specifically, is it a good financial buy?
Let’s test some theories on the recent ups and downs of the market. In the previous boom markets, who made the good decisions?
Did those who bought homes in 2002 or 2005 or 2009 make good or bad buying decisions?
Did those who bought on the precipice of the falls in 2007 and 2010 make good or bad buying decisions?
The financial wisdom of proceeding rarely relates to overall timing. It relates more to the individual circumstances.
You can still buy very well in rising markets if you have the right fundamentals – the right land content, the right location and the right floorplan.
These are things you can control – unlike the ups and downs of the market. And these are what determine the wisdom of your decisions. We are happy to provide a solid list of buys we purchased in 2007 that had solid property fundamentals, and that were sold over the next five years with a significantly increased price.
The fact is, we have no idea when or indeed if the current “boom” will end.
Our predictions always relate to a longer term picture, as it is impossible to get the short term right anyway. The longer term picture says that the population increase from China, then India and then Indonesia, is fuelling demand for our schooling, space, minimal corruption, safety of money and person, stable politics, pollution and our relaxed lifestyle.
In terms of supply – well they ain’t making any more land! The auctioneers are right on that one.
And in terms of price – are we as a community going to build to increase or decrease our overall wealth and wealth generation possibilities?
So in this current boom, forget about when it’s going to end, and think instead about whether you are asking the right question with regards to making good decisions and buying well for the long term.
 
<hr>
 Mal James is principal of<a title="James Buyer Advocates" href="https://www.jamesbuyeradvocates.com.au/" target="_blank" rel="nofollow"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million.
Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
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