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

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

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

How Sterling Global designed 623 Collins from Melbourne's history

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

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

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

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

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

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

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

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

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

Every First Home Owner Grant for new property by state

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

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

Staff Writer

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

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

alisonwarters@gmail.com

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

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

Ellen Walker

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

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

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

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I wrote a few weeks ago regarding the potential stagnation that is likely to affect our property markets into the future, due to an increasing number of first-home buyers failing to enter onto the initial rung of the property ladder - and the evidence continues to mount.
Despite the widely spruiked improvement in ‘affordability’ (which comes on the back of continually low lending rates and renewed optimism from investors, in turn helping transaction figures increase from a very low base), first-home buyers are simply not responding.
As <a href="/news">Larry Schlesinger</a> reported on Property Observer last week, overall numbers for this demographic have fallen to a near eight-year low with the latest ABS data showing a drop of 11% in mortgage commitments between December 2012 and January 2013.
It paints a woeful picture buried in an economy which remains the envy of our Western counterparts, and has subsequently left some wondering: can it continue to rise without a consistent contribution from the first-home buyer sector?
Recent research from RP Data is also emphasising the potential side effects of our stagnated home-buyer market, with the average length of ownership for both houses and units now sitting at 9.3 and 8.2 years respectively.
Cameron Kusher from RP Data assessed the increased holding periods in light of an overall lower volume of transactions. He concluded that high property prices, along with inflated agent commissions and stamp duty charges, were acting as a disincentive for owners wanting to sell.
However, considering there’s been such a marked increase in the length of time property owners choose to ‘stay put’ – periods which have jumped well over 30% on those recorded 10 years ago – I’d suggest deeper concerns are playing into the equation.
For units, the rise in the relative holding period over this ten-year period is even more so than that of houses – pushing towards a 39% increase. As apartments are generally considered the ‘foot through the door’ property type that attracts a younger first-home buyer demographic, and a forthcoming supply of new unit developments has been fairly robust across the major capitals, you could be forgiven for expecting the turnover of home buyers upgrading to larger dwellings to be evidenced by a shorter holding period rather than longer as shown.
However, the vast majority of inner city established unit and apartment stock is investor-owned (close to 70% in some localities), therefore it’s fair to assess the ‘buy and hold for the long term’ mindset is bearing a significant influence in restricting supply for the lower-priced sector of the market. This results in a bottleneck of demand and longer holding periods; demand that a proportion of first-home buyers struggles to compete against.
As I previously pointed out, property to some extent connects together like a flowchart. Supply is fed in from the bottom to allow those upgrading (and then downsizing) a ready market to sell to in order to make the move.
When this flow is intercepted and holding periods subsequently increase, a growing minority of low-income workers find themselves sandwiched between rising rental prices and scant opportunity to exit the merry-go-round of funding someone else’s investment.
It has puzzled some that, regardless of this first-home buyer lull, there’s been a marked improvement in most markets across Australia. The latest RP Data mortgage index is also showing a strong surge in the number of loans advanced over the eight weeks to March 10, reaching “the highest reading since August 2009.”
The question remains whether the upsurge in price growth can be sustained without the first-home buyer sector; can it produce the annual 10% rise for 2013 many ‘economists’ are now all but assuming based on barely three months of daily and somewhat bumpy data?
This would once again push median values past both inflation and wage growth – good for those who already have a property and for the real estate industry as a whole – but increasingly painful for a younger generation who will no choice but to take out increasing levels of ‘debt’ to fund their accommodation.
As the champaigne corks are being popped, a few moderating voices have come to the fore. David Llewellyn-Smith in his piece <a target="_blank" href="https://www.smh.com.au/business/is-australian-property-worth-the-risk-20130308-2fpgd">‘Is Australian Property worth the Risk?’</a> was one such voice to provide a balance to some of the bullish commentary we’ve seen of late - commentary which on the one hand happily informs how ‘affordable’ property is, whilst blithely high-fiving an onward return to ‘peak’ prices with the other.
David suggested that due to APRA enforcing banks to lend dollar for dollar against deposit growth (“growing at 7% per annum and falling”), credit availability was bound to be constrained.
It’s a fair point, although I often wonder exactly what APRA is doing to ‘constrain’ lending, considering individual bank risk models are arguably developed and manipulated behind closed doors.
This aside - inflation to some extent has less to do with the overall money circulating in the system, and more to do with where the current supply of money is being channelled.
In other words, although constrained lending has an impact (particularly for first-time buyers), and GDP data highlights a fall in disposable household incomes by approximately 0.2% over the past year, Australians are still saving more, and aiming to shore-up these remaining funds into ‘safer’ long term assets.
Therefore, as housing acquisition continues to be the preferred model of investment for around 42% of our current buying market – even with constrained lending – inflation can be expected, at least for the short term.
 
<hr class="system-pagebreak">
In essence, it’s the investor demographic that is primarily placing a floor under the ‘affordable’ bracket of our “estimated $4.86 trillion” (RPData) housing market, thereby preventing any setback in price growth resulting from a lack of first home buyer participation.
Last week <a target="_blank" href="https://propertyupdate.com.au/property-investors-blamed-for-housing-affordability-woes/">Michael Yardney</a> defended investors against any suggestion that large numbers choosing to invest in inner city terrains were adversely affecting first home buyers.  Michael Matusik was another voice that came to the fore suggesting first-home buyer expectations are ‘out of whack’ considering 60% of those purchasing last year chose properties with four bedrooms or more.
In light of the low percentage of first home buyers overall, and taking into account that most take loans around the $300,000 level, I’d suggest those purchasing 4 bedrooms or more are likely to be couples taking advantage of various stimulus grants to purchase in fringe localities - the price point of which is often comparable to a small inner city unit.
Albeit, this should not overshadow core trends which hold the potential to lock up ownership between a reducing number of owners and investors, who in turn have to provide accommodation for an ‘increasing’ number of renters.
To sit on the sidelines and argue that a growing percentage of investors have not played a substantial part in the dramatic growth of capital city property values and consequently placed a strain on first-home buyer numbers is lunacy in light of the data we have to hand.
It’s not a case of labelling individual property investors as ‘greedy’ – the majority are not – they are simply responding to, and taking advantage of, current government policy which assists using property to provide an income stream into retirement - an issue we all need to attend to through the course of our working lives.
It’s also important to understand that as a proportion of any property market, investors are absolutely essential.
However, a report by the National Housing Supply Council titled <a target="_blank" href="https://www.nhsc.org.au/content/publications/housing_supply_affordability_2013/default">‘Housing Supply and Affordability’</a>, released last week, states:
“Couples, both with and without children, have experienced the largest falls in home ownership. There has also been an increase in the share of those approaching retirement age that still have a mortgage. Many of these changes are likely to have been at least partly driven by the increase in house prices over the decade, making it harder for people to get onto the housing ladder and taking out proportionately larger mortgages when they do.”
Surely everyone with an interest in the health and wellbeing of their children and grandchildren should be actively seeking solutions to problems which threaten to adversely affect their future, at the expense of pumping up prices and labouring them with an ever-increasing mountain of debt.
In the UK, there has been a focus on forcing better use of existing homes with policies such as a ‘bedroom’ tax and ‘mansion’ tax – however taxing people who choose to pay more to live in larger properties, or assessing a single individuals ‘need’ for ‘2’ bedrooms rather than ‘1’ without an understanding of their personal circumstances is not the solution.
Rather, the answer lays in making sure lower priced stock that comes to market is directed towards the ‘buying’ demographic most in need – and currently, this is not the investor, it’s the first home buyer.
Under current policy, we’ve managed to lock the established housing market up in a hotbed of ‘speculative’ demand, producing a weak construction sector which is further impacted by years of poor planning for population growth.  This has consequently resulted in an increasing number of ‘potential’ first home buyers pushed into a rental market of rising yields.
Only through a number of changes to current government policy is it possible to slowly reduce inflation in the established sector and open up the potential to provide feasible and affordable ‘new opportunities’ in both inner and outer suburban regions. However, if we sit back and do nothing, then warnings coming from organisations such as The National Housing Supply Council, or McKell institute, will increasingly come to fruition.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
 
 
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FHBs still struggling to enter the market: Catherine Cashmore

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Prices are on the move in some cities, it seems, with data provider indices showing some “growth”.
A couple of commentators have again highlighted the risks inherent in mining towns, noting the possibility of land being released. I wholeheartedly agree with this assessment, although I note that this risk extends to many regional towns in general: land being available for release introduces a risk of very weak real long-term price appreciation.
Over here in the chilly south-east of England, it’s very noticeable how so many former greenfield sites have been developed on the fringes of provincial towns and the smaller satellite cities in recent years.
New property developments are sprouting up all over the place in fringe suburbs, with the UK Government and Bank of England pushing things along with its ‘Help to Buy’ scheme and ZIRP respectively.
While UK median prices have shown a very moderate uptick (this can happen when new builds come online), in many areas outside London the prices of existing properties remain way below where they were in 2007.
Remember that the physical growth of a town or city does not necessarily equate to price growth in existing properties, and this is especially the case where new land is being released.
In London, the dynamic is markedly different. Not only is there a massive, growing population and almost no prime land available for release, investors from Britain and overseas who were spooked by share market crashes during and after the financial crisis are simply throwing money at the property market, pushing prices up to unheard of levels, way ahead of their previous peaks.  
Some commentators say that investors should buy in the cheapest quartile of the market where properties have “more room to grow”.
But properties do not “grow”, unless of course you are investing in building them to make them bigger. No. Instead, properties, just, well…kind of sit there.
Plants grow. Trees grow (though, as the saying goes, trees don’t grow to the sky). My nieces grow.
But properties do not grow.
And besides, why on earth should each successive generation pay more for property than its immediate predecessor? Particularly now that the deregulation of lending standards and products is well in the past and interest rates have fallen to as close to the zero bound as they hopefully ever will be in Australia.
If you want investments to grow – like my nieces – they need to be fed. You need to re-invest in them.
If you want a term deposit to grow, re-invest the interest.
How do companies grow? Because companies tend to only pay out a small portion of their net earnings as dividends and they retain sufficient capital to re-invest in the business.
This is why value investors and Buffett-types seek businesses with strong and growing owner earnings (reported earnings with depreciation and amortisation added back, less capital expenditure for plant and equipment) – they want companies which can be self-perpetuating and are able to re-invest in their own futures.
If you want to grow your own share portfolio, re-invest your dividends via a dividend re-investment plan (DRP).
But, I’m afraid to say, properties do not “grow”, especially if you take the approach recommended by some pundits of not maintaining properties to a reasonable standard.
In fact, if you don’t re-invest in a property regularly through paying for repairs and maintenance (as the chaps do at Kings College in Cambridge nigh on continually) then eventually the property will fall down and you will be left with a pile of rubble and some earth (such as exists at Bolingbroke Castle in rural Lincolnshire).  
 
<hr class="system-pagebreak">
It’s common to talk of “market value” or “intrinsic value” in the world of real estate.
But what is market value? It’s really only what another individual or entity will pay for the title at a given point in time.
Imputed rents don’t make for a great measure of fair value in residential property for they take little account of the emotional factors impacting homebuyers. In property, price is perhaps a far more appropriate word to use than value.
All things being equal, the price of a property should only move in line with inflation: as the currency becomes gradually worth less over time, the price of property should slowly tick up accordingly, but no faster than inflation.
A property in strong demand might potentially move rather in tandem with the growth in household incomes over time, with the effective speed limit for price growth being the ability of the populace to service mortgage repayments.
So how does an investor source price growth which outperforms inflation over the long term?
Ultimately, unless you are a skilled renovator (and, let’s face it, most property investors definitely aren’t) there’s only one way that it is possible to do this, by finding a property which:
<ol>
<li>
is in an area with a strongly increasing population, with real wages appreciation and booming demand;
</li>
<li>
is in an area where there is little or no land available for development or release and thus supply does not keep pace; and
</li>
<li>
where investors are pushing up prices through seeking returns on their capital.
</li>
</ol>
This discounts most regional markets and fringe suburbs where land is available for release, demand is very low and price-to-income ratios remain subdued.
The markets which are fitting the criteria for price growth at present are Perth, Sydney and Darwin and prices are increasing accordingly.
Investors tend to prefer capital cities and the combination of land-locked suburbs and growing populations tend to be a happy one for investors and an unhappy one for homebuyers, pushing the price of the prime-location land ever higher.

<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 released on 1 September 2013.
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A property does not "grow", but your investment portfolio can: Pete Wargent 

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Bids for a portfolio of about 560 residential, development, industrial and rural mortgages from the failed rural lender Banksia are due later this month.
Bidders for the estimated $200 million portfolio are reported to include Bendigo Bank, Deutsche Bank, Goldman Sachs and Macquarie Group, the Australian Financial Review noted.
The $650 million collapse of Banksia prompted the Australian Securities and Investments Commission (ASIC) last month to release new guidelines.
The $4 billion debenture sector must now have a minimum capital requirement of 8% for certain debenture issuers that accept retail investments.
In February <a href="/news">Property Observer reported</a> the receivers of the failed Victorian debenture issuer and mortgage lender Banksia expect to make a “significant” second payment of between and 20 and 35 cents in the dollar to investors by June 30 if it can successfully realise a portfolio of 565 loans.
In addition, the receivers will also seek to sell freehold property owned by Banksia to raise additional funds to repay debenture holders.
A first distribution payment of 20 cents in the dollar was paid to investors on December 7 out of cash holdings, the first part of an estimated total repayment to debenture holders of between 50 and 65 cents in the dollar.
Banksia operated from 10 branches across Victoria and NSW with its head office in Kyabram.
The loans have a face value of $270 million and represent the best performing loans out of a total portfolio of around 1,000 loans, which have a total face value of $537 million.
A return of between 55 to 70 cents is expected for investors in a smaller Banksia-managed fund, Cherry Fund Limited, also in the hands of the receivers.
<a href="https://www.propertyobserver.com.au/industry-news/victorian-non-bank-lender-banksia-securities-collapses/2012102657456" target="_blank">Banksia collapsed in October</a> putting $660 million of small investor debenture funds at risk.
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jchancellor-FAypfDUnLy

Offers due by late March for loan book of failed Victorian mortgage lender Banksia 

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Research the background of the developer and its track record.
Have there been court actions against the developer? Does it have a historyof delivering what has been promised and settling disputes quickly and neatly?
“Banks are strict on who they lend to. Banks also look for a good track record before handing over construction finance,”says Tim Rees, director of CBRE residential projects.
The internet is a good tool for research, and look for blogs and newspaper articles.
Do not judge a developer solely by its website, and ensure there is an office where you can meet people face to face.
It is also a good idea to visit the property site and check the location. You may find other construction in the area, which may affect your view.
You should also carefully inspect the display home, models and plans as well as the fixtures and fittings.
For great tips on buying off the plan, download Property Observer’s free ebook – <a target="_blank" rel="nofollow" href="https://propertyobserver.us2.list-manage.com/track/click?u=24bd0766a834290948593f5aa&amp;id=14e9848476&amp;e=7a53fc6dd9">14 tips for buying off the plan: The 2013 guide for investors and owner-occupiers.</a>
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Make sure the property developer has a good reputation

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Why are such poor-quality photographs used in the marketing of rental properties? 
Already this year I have seen a property marketed with a photo of a clothesline with a pair of underwear on it. I kid you not. And another of a bedroom window. Seriously, what is that trying to show a prospective tenant – that there is a window or the style of window covering it has? But the best I've seen so far was a lovely picture of the back fence. 
There are times when I wish I could make contact with the owners and ask if they have seen the way their investment property is being marketed. Maybe there is a reason why it’s still sitting vacant, and it’s got nothing to do with the asking rent!
But perhaps the fault isn't just with property managers; perhaps owners out there don't really see the benefit of having professionally taken or, at least, high-quality photos. Particularly now, with so many automatic features on both standard cameras and smartphones, it really isn’t that hard to take decent photos, but someone needs to set a standard of what is acceptable and what is definitely not acceptable. 
When an owner isn’t paying for a marketing levy or working with a marketing budget, does it lessen the importance of using good photos? Does it become a part of the service provided by the property manager that doesn’t receive high priority?
And something else that puzzles me is that unless the property undergoes substantial renovations, the photos can be used over and over again.  So why not spend a few dollars and have photos taken both day and night? Inside and outside the property?
Another suggestion is to pay the small connection fee to have the electricity connected; this is especially important during the winter months. Not only can you take even better photos but you can show prospective tenants through after 5pm. 
Remember: it's both a tax deduction and another way of promoting your property differently to the majority of others that you may be competing against.
Sadly, it’s no wonder owners negotiate so strongly when it comes to the fees being charged by property managers, it’s because they really don’t see any differences between everyone out there. 
So who will join me to make the world of property management a little different and a lot better? I want my business to be the Cirque du Soleil of property management!
Leah Calnan is the director of <a target="_blank" href="https://www.metropm.com.au/" title="Metro Property Management homepage">Metro Property Management</a> in Victoria and is the chairwoman of the REIV Property Management Chapter.
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Use quality, underwear-free pictures in marketing your property to tenants: Leah Calnan

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Low interest rates have been supporting the established housing market, and prices have been moving higher in many residential markets across Australia, however they remain below earlier peaks in most markets, the Reserve Bank of Australia has noted.
The general improvement in sentiment was apparent in auction clearance rates, the bank assistant governor (economy) Christopher Kent said in an address to The Australian Institute of Building last night.
"After falling sharply in 2011, these rates recovered to around average levels in both Sydney and Melbourne in late 2012 and they appear to have increased further early this year," he said.
"This move may in part have been helped by a tendency of vendors to adopt more realistic expectations, as evidenced by a rise in vendor discounts – that is, the extent to which a property sells below its listed price.
"These discounts had risen gradually as the market weakened through 2011; more recently, the degree of vendor discounting has returned to more normal levels."
He said with interest rates low and housing prices having picked up in much of the country, "more people are now confident that either housing prices will keep rising or at least not decline."
"We can see this in some of the available survey measures of housing price expectations.
"This is important for prospective entrants to the market, particularly for developers and investors, who might otherwise be wary of undertaking a new venture or purchasing a house for fear of a capital loss.
But Kent advised not all markets across the country were "in the same boat."
"In Melbourne, for example, there is some question as to whether supply has moved ahead of demand, particularly in the market for apartments in the inner-city area.
"This possibility is certainly consistent with the fact that prices for houses and units in Melbourne are quite a bit lower than the peaks of early 2011," citing RP Data Rismark graphs.
Kent said any assessment of what's been happening to housing prices will depend somewhat on which market you are looking at and over what time period.
"For the country as a whole, housing prices have been rising gradually since about May 2012, and are now about 4% higher than they were at that time.
"However, if you were a developer who had made plans and purchased land for development around October 2010, when housing prices last peaked, then you might be forgiven for focusing on the fact that house prices are still below their previous peaks in many locations.
"In particular, prices are still quite a way below their peak in Brisbane and Melbourne, while prices have been quite flat for a few years in Adelaide and outside of the capital cities in the mainland states," he said.
The general strengthening, Kent said, had been helped by 175 basis points worth of cuts to the cash rate since late 2011, and the decline in mortgage interest rates that has followed from these cuts.
<p class="textAlignCenter breakafter" style="margin: 0px; padding: 0px 0px 1.5em; border: 0px; font-size: 1.2em; vertical-align: baseline; line-height: 1.3em; color: #404040; text-align: center !important;"><a style="margin: 0px; padding: 0px; border: 0px; font-size: 12px; vertical-align: baseline; background-color: transparent; color: #404040;" href="https://www.rba.gov.au/speeches/2013/images/sp-ag-140313-graph2.gif" target="_blank" title="Graph 2: Housing Prices"><img src="https://www.rba.gov.au/speeches/2013/images/sp-ag-140313-graph2-small.gif" alt="Graph 2: Housing Prices" width="470" height="381" style="margin: 0px; padding: 0px; background-color: transparent; float: left;"></a>
 
 
 
 
 
 
 
 
Photo by aussiegall, courtesy of Flickr
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Not all Australian property markets in the same boat says RBA as vendors adopt more realistic expectations

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Choosing between a three-year or five-year fixed-rate home loan is an important decision. Fixed-interest loans are great for your security, allowing you to lock in a predictable home loan repayment amount for the years ahead. The drawback is inflexibility. If you want to sell, renovate or make additional repayments in the near future, a fixed-interest loan may not be the best option.
Below are the considerations for choosing a fixed interest rate loan:
1. How long do you expect to hold the property?
Homeowners seem to be lulled into a false sense of permanence with bricks and mortar. While homes and units are there for the long-term, your financial commitment to it need not be. According to finance expert Noel Whittaker, “the average house changes hands every seven years and often people’s circumstances change and they are forced to change and incur exit costs.” So, if you lock in a five-year fixed home loan three years into your homeownership, on average, you may sell it before. This can be an extremely costly way to handle home ownership. The table below highlights an example of early repayments costs. The below is an example of the early repayment adjustment costs alone, before break fees are taken into account: Fixed-interest loan basic early repayment adjustment example:
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td valign="top" width="156">
Original loan amount
</td>
<td valign="top" width="156">
$400,000
</td>
</tr>
<tr>
<td valign="top" width="156">
Loan term
</td>
<td valign="top" width="156">
25 years
</td>
</tr>
<tr>
<td valign="top" width="156">
Fixed period
</td>
<td valign="top" width="156">
5 years
</td>
</tr>
<tr>
<td valign="top" width="156">
Repayment type
</td>
<td valign="top" width="156">
interest only
</td>
</tr>
<tr>
<td valign="top" width="156">
Time elapsed
</td>
<td valign="top" width="156">
4 years
</td>
</tr>
<tr>
<td valign="top" width="156">
Difference between IR and market swap rate
</td>
<td valign="top" width="156">
2.315%
</td>
</tr>
<tr>
<td valign="top" width="156">
Early repayment adjustment
</td>
<td valign="top" width="156">
$9,260
</td>
</tr>
<tr>
<td valign="top" width="156">
Less inflation adjustment (at 2.1% p.a.)
</td>
<td valign="top" width="156">
$194.46
</td>
</tr>
<tr>
<td valign="top" width="156">
Plus exit fee
</td>
<td valign="top" width="156">
$400
</td>
</tr>
<tr>
<td valign="top" width="156">
Total early repayment adjustment
</td>
<td valign="top" width="156">
$9,465.54
</td>
</tr>
</tbody></table>
For the above example, this borrower has repaid their loan on the fourth year of a five-year fixed home loan. There may have been reasons that have forced the borrower’s hand, such as to repay debts from business failure or to refinance for a crucial structural renovation. In this example, the loan was broken one year early on a five-year fixed loan at an early repayment cost of just over $9,000. This is a significant cost. If your sole purpose was to finance a renovation, you’ve just lost the funds equivalent to a nice new kitchen.
2. Do you need to renovate within this period?
Even something as simple as obtaining finance for a renovation is easier when you’re on a variable-rate loan. Variable construction and line of credit loans are the main financing tools for a renovation. So, if you’re planning to renovate, fixing the interest rate may not be the option. 3. Are you going to make significant additional repayments?
Not many fixed loans allow extra repayments. Lenders that do tend to only offer limited additional repayments at best. Also, you can’t get a 100% offset account on a fixed loan. This is great for offsetting interest charged to the loan — so the ability to pay off your loan early and reduce interest are severely limited on a fixed interest loan.
4. How to choose between three or five year loans?
Of the two ways to choose, one is a constraint, and one is an opportunity. Firstly, the constraint is the length of time that you can bear the inflexibility of the fixed-interest period. If fixing your interest rate for five years suits your situation, all the better. But if you are thinking of refinancing for a renovation in three years or even upgrading to nicer place, then a three-year fixed period is probably the longest period you should commit to.
This then leads to the second decision. If you’ve decided that you’re staying put for five years or more without renovation, then you have the enviable position of choosing based on interest rate and not interest rate speculation. At the time of writing, interest rates for three-year fixed loans were lower in terms of headline interest rates. If you were going on that factor alone, three-year interest rates would be the go. But, for the security of fixed interest rates for an extra two years, 0.56% p.a. may not be (time will tell — variable interest rates could also drop) isn’t too much to pay considering <a href="https://www.loansense.com.au/historical-rates">historical home lending rates</a><a href="https://www.loansense.com.au/historical-rates">.</a> The average standard variable home loan rate was above 8% p.a. in 2008 (CBA).
Why lock-in? Fixed interest rates can be a useful option for borrowers who desire security and have a strict budget as to the rise in interest rates that they can afford. A rule of thumb is to budget for interest rates at 2% above the current rate if you’re on a variable home loan. But, if you don’t want to budget for that scenario, a fixed loan is the way to go.
When is the best time to fix?
When fixed interest rates are lower than variable rates. Or while variable rates are likely to rise. Tips for fixed rate loans: - check which variable interest rate the loan reverts to
- if you want a bit more flexibility, <a target="_blank" href="https://www.homeloanfinder.com.au/split-loan-comparison">consider a split rate home loan</a>.
 Latest rates for 3 year fixed loans:
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td valign="top" width="78">
Provider
</td>
<td valign="top" width="78">
Loan name
</td>
<td valign="top" width="78">
Rate
</td>
<td valign="top" width="78">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="78">
UBank
</td>
<td valign="top" width="78">
<a target="_blank" href="https://www.homeloanfinder.com.au/ubank-home-loans/ubank-uhomeloan-3-year-fixed-rate-refinance-only">UHomeLoan 3 Year Fixed — Refinance Only</a>
</td>
<td valign="top" width="78">
5.13% p.a.
</td>
<td valign="top" width="78">
5.26% p.a.
</td>
</tr>
<tr>
<td valign="top" width="78">
eMoney
</td>
<td valign="top" width="78">
<a target="_blank" href="https://www.homeloanfinder.com.au/emoney-home-loans/emoney-plus-3-year-fixed-rate-full-doc-home-loan">3 Year Fixed Rate Full Doc</a>
</td>
<td valign="top" width="78">
5.40% p.a.
</td>
<td valign="top" width="78">
5.48% p.a.
</td>
</tr>
<tr>
<td valign="top" width="78">
Aussie
</td>
<td valign="top" width="78">
<a target="_blank" href="https://www.homeloanfinder.com.au/aussie-home-loans/aussie-optimizer-standard-fixed-rate-home-loan">Optimiser 3 Year Fixed</a>
</td>
<td valign="top" width="78">
5.39% p.a.
</td>
<td valign="top" width="78">
5.59% p.a.
</td>
</tr>
</tbody></table>
 
Latest rates for 5 year fixed loans:
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td valign="top" width="78">
Provider
</td>
<td valign="top" width="78">
Loan name
</td>
<td valign="top" width="78">
Rate
</td>
<td valign="top" width="78">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="78">
Aussie
</td>
<td valign="top" width="78">
<a target="_blank" href="https://www.homeloanfinder.com.au/aussie-home-loans/aussie-optimizer-standard-fixed-rate-home-loan">Optimiser 5 Year Fixed</a>
</td>
<td valign="top" width="78">
5.69% p.a.
</td>
<td valign="top" width="78">
5.68% p.a.
</td>
</tr>
<tr>
<td valign="top" width="78">
eMoney
</td>
<td valign="top" width="78">
<a target="_blank" href="https://www.homeloanfinder.com.au/emoney-home-loans/emoney-plus-5-year-fixed-rate-full-doc-home-loan">5 Year Fixed Full Doc</a>
</td>
<td valign="top" width="78">
5.95% p.a.
</td>
<td valign="top" width="78">
5.71% p.a.
</td>
</tr>
<tr>
<td valign="top" width="78">
ME Bank
</td>
<td valign="top" width="78">
<a target="_blank" href="https://www.homeloanfinder.com.au/members-equity-bank/me-bank-ultimate-offset-member-package-5-year-fixed">SMHL Ultimate Offset Account Member Package</a>
</td>
<td valign="top" width="78">
5.79% p.a.
</td>
<td valign="top" width="78">
6.14% p.a.
</td>
</tr>
</tbody></table>
*A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure
Adrian Barclay is a personal finance expert from <a target="_blank" href="https://www.homeloanfinder.com.au/" rel="nofollow">HomeLoanFinder.com.au</a>.
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abarclay-WPE22ytcZC

How to choose between three-year and five-year fixed loans

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Another big auction is on the cards in Melbourne this coming weekend, with a mansion apartment in Armadale about to hit the market.
You will be hard pressed to find an apartment to compete with <a href="https://www.realestate.com.au/property-apartment-vic-armadale-113076279" target="_blank">2/21 Hampden Road, Armadale</a> (pictured below).
It is clearly in a class of its own and lies in Armadale's premier boulevard. The three bedroom, two bathroom accommodation comes complete with an open fireplace and a contemporary kitchen.
<img alt="tycoonmarch15two" height="350" width="470" src="/images/stories/2013/03/tycoonmarch15two.jpg"> As you would expect, a property like this has had many groups showing strong interest in the $950,000 to $1,050,000 quoted price range. Agent Elliott Gill from Bennison Mackinnon anticipates strong competition on Saturday.
Last weekend, the auction for <a href="https://www.realestate.com.au/property-house-vic-collingwood-112993683" target="_blank">24/125 Oxford Street, Collingwood</a> was one out of the box as the bidding flew past the $1.3 million reserve and did not stop until it past $1.5 million.
When all bidders had exhausted themselves the property (pictured below) sold more than $300,000 above the average tip at $1.512 million. Only a handful of Tycoons tipped this result.
<img src="/images/stories/2013/03/tycoonmarch15one.jpg" width="470" height="353" alt="tycoonmarch15one">
 The Sydney market fizzled last weekend with four out of five Property Tycoon properties being passed in. The owners of <a href="https://www.realestate.com.au/property-house-nsw-rozelle-112944407" target="_blank">84A Foucart Street, Rozelle</a> had an offer prior to auction of $1.22 million and decided to take the money and run. It will be a different story this weekend and there will be beers around after the auction of <a href="https://www.realestate.com.au/property-house-nsw-bondi+junction-112905499" target="_blank">25 Paul Street, Bondi Junction</a> as the descendants of beer brewer James Boags house goes under the hammer.  The Grand Old Victorian Lady is in the perfect location opposite the leafy green Waverley Park with schools, shops and transport so conveniently close. Agent Kevin Mendes from Laing+Simmons said there has been very strong interest in the property with 109 groups attending the open houses. While most buyers hold their cards close to their chest he is quietly confident the property will sell for around $1.25M
There's now a website, <a href="https://mail.privatemedia.com.au/owa/redir.aspx?C=KgoIydkbbkqcxEmtHCpjYzenKRip4s8ILx-ixDagf2W2XMdG8J7GWA4FzDXhsR5a7S8fbUw_Jbw.&amp;URL=http%3a%2f%2fwww.propertytycoon.com.au%2f" target="_blank" rel="nofollow" style="font-size: 14px;">www.propertytycoon.com.au</a>, where punters can guess five auction results in Melbourne and Sydney, with no outlay. It's mostly about testing your market knowledge with a small cash prize as a sweetener. This season <a rel="nofollow" target="_blank" href="https://www.propertytycoon.com.au/join-league/S7S123C487R8OOQF" style="font-size: 14px;">Property Observer readers have their own competition, which you can access here</a><a rel="nofollow" href="https://www.propertytycoon.com.au/join-league/S7S123C487R8OOQF">.</a> The winner of the overall competition will win $1,000.
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marmstrong-sd3emVLPPb

Strong interest in Armadale mansion apartment in Property Tycoon tipping's fourth round

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I love hearing the life stories of others and especially our clients. Our initial chats give us in insight into our client’s achievements and goals.
They tell us about what they do, where they’ve come from and where they want to be. We have such an interesting and wonderful group of clients and each has a different reason why they love property and what motivates them.
I’d like to share Alison’s story with you. Alison and her husband are both in the Australian Army and have just returned back from serving in Afghanistan.
While she was away, Property Bloom has been managing a granny flat development for them.
Sadly, during her time away, Alison endured some horrific things with fellow soldiers killed in action in the terrible circumstances in late August 2012, when five Australian troops died.
We were so proud to have members of the Australian Army as clients and are grateful for their work overseas serving Australia.
Alison:
“We first started investing in 2009, just after Harry and I got married.  We had just made a very 'grown up' commitment to each other, so thought we'd better extend that idea to other parts of our life and really plan for our future.
We purchased an apartment in the inner city suburb of Spring Hill in Brisbane via auction over the phone (we were living in Sydney).
I had started to listen to some podcasts about property investing and eventually came across a mentoring program which I signed up for and we spent a year learning an enormous amount and gaining amazing confidence and skill.
It was at this point that my partner Harry learned he would be deployed to Afghanistan for the majority of 2012. Shortly afterwards, I was posted interstate away from Harry, and then told I was to deploy to Afghanistan as a communications specialist in the second half of 2012 as well. We found ourselves in the position where we were keen to invest, but not in a position to be active in the short-term.
Whilst we had been actively investing, purchasing a house on the NSW central coast on a 12-month delayed settlement with a plan to renovate and on-sell following settlement, and four high-yielding houses in growth areas of New Zealand, we still wanted to use our savings to work for us while we were both overseas.
I had heard an interview with Jo Chivers on an 'Everyday Property Investors' podcast and liked the idea of learning to develop, with the convenience of a project manager. We also liked the idea of investing in the expanding Hunter Region of NSW. After contacting Jo, we realised that the Property Bloom property development project management service would be perfect for our situation.
We had the cash, but not the contacts, or the ability to cultivate contacts. We had the idea to develop, but not the ability to visit local councils and real estate agents.
We asked the Property Bloom team if they would be able to project manage with both of us in a war zone and they were incredibly supportive. Harry and I were both based in Tarin Kowt and had semi-reliable access to internet, e-mail, scanning and printing facilities. Through perseverance, patience and understanding form the Property Bloom team, we were able to continue to progress our Granny Flat project. Not only were Property Bloom understanding when we were unresponsive for a couple of days, or when the turnaround time for signing paperwork was more than a month, but whenever the news of a tragedy in Afghanistan hit the Australian media, Jo and her team would send us messages of support and condolences.
This support meant as much to us as the project management service they were providing for our development.
As you can imagine, developing property from a warzone is a challenge but would have been near impossible without the help of a project manager. The more obstacles we faced, the more our project manager rose to the occasion to help us. We are so grateful - not only because they have helped us secure and develop a fantastic property, but also because they are professional and incredibly genuine people.”
I really cherished the updates we would get from Alison occasionally when she had email access and was amazed at some of the conditions she had to endure including no running water for days – how is a girl to wash her hair!
But what amazed us the most was the huge commitment that Alison showed to continuing their property investment journey, by being able to continue with her project with all the other distractions she would have experienced in Afghanistan.
Alison and Harry are now securing their next development site on their own and we wish them all the luck in the world and are glad to have them home on Aussie soil again.
Alison’s story is a lesson in determination. She didn’t let anything get in her way, not even a war.
Jo Chivers is director of <a title="Property Bloom" href="https://www.propertybloom.com.au/" target="_blank" rel="nofollow" style="font-size: 14px;">Property Bloom</a>, which manages property development.
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jochivers-wq5Bp59R5a

Don’t let a war get in your way when investing in property: Jo Chivers

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Borrowers who choose to fix their home loan for two years at 4.99% would still be $1,500 better off if variable rates fell by 0.5 percentage points over this period, according to a new study by financial comparison website RateCity.com.au.
It found that the cash rate would need to fall by a cumulative 1oo basis points (four rate cuts of 25 basis points each) over this period to a record low of 2% and be passed on in full by lenders for variable borrowers to come out better off.
The study was based on the average of the major four banks’ lowest advertised two-year fixed-rates of 4.99% compared to their lowest advertised variable rates of 5.67%, for a $300,000 home loan with a 30-year loan term.
Borrowers could potentially save even more if they were to fix with AMP, which is offering the lowest two-year fixed-rate on <a href="https://www.ratecity.com.au" target="_blank">RateCity’s</a> database of 4.84%.
However, they should consider all the aspects of any fixed-rate home loan offer beyond just the rate (including fees, the ability to make extra repayments without penalty and other conditions) before deciding on which loan is right for them.
They could also consider splitting their loan between fixed and variable to have a degree of certainty about home loan repayments and also benefit from any variable rate cuts or access other variable rate home loan benefits such as an off-set account or the ability to make additional repayments without penalty.
The likelihood of further rate cuts is being <a href="/news">discounted by lenders with the Commonwealth Bank </a>now not expecting any more rate cuts this year and Business Spectator columnist and economist Stephen Koukoulas writing yesterday that the<a href="https://www.propertyobserver.com.au/news/unemployment-stays-steady-through-february-at-54/2013031459873?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news" target="_blank"> better-than-expected unemployment data</a> meant interest rates were likely to be locked in for a few months at the minimum.
Official ABS figures shows the proportion of borrowers who are choosing to fix their home loan is trending up with 13.1% of dwellings financed with fixed-rate home loans over the past six months to January compared with 12.2% in the previous six months.
February figures from Mortgage Choice (a month ahead of the ABS) recorded an increase in fixed-rate demand to 18% of all home loans with nearly one-in-four Queenslanders opting for a fixed-rate home loan compared with just 11% of Victorians.
Alex Parsons, RateCity’s CEO, said the findings revealed why so many borrowers are currently choosing to fix their home loan.
“It’s unusual to see so many fixed home loans offering cheaper rates than variable.
In fact, out of more than 100 lenders in RateCity’s database, 21 lenders are now offering two-year fixed-rate home loans under 5% – including all four major banks.
Compared to variable, only one lender is currently offering a home loan under 5% – <a href="/news">State Custodians at 4.99%.</a>
This loan does require a hefty 25% deposit and is only available for borrower who are refinancing.
“We discovered that it would take at least three 25 basis point cuts within the first six months or four 25 basis point cuts within the first 12 months for borrowers to be better off with a variable rate,” says Parsons.
“Of course this is off the assumption that any RBA changes are passed on in full immediately which has not recently been the case.
“Borrowers need to remember there are several factors that can impact how much you can save or lose by fixing your home loan such as timing of when rate cuts occur, if lenders pass on the full cuts and if you’ve locked in a good value deal. So to make the most of the home loan market, make sure you use RateCity to compare what lenders are offering and save.”
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