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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Shopping centres are reportedly coming under increasing pressure from department store giants Myer and David Jones to renegotiate new lease arrangements in light of falling sales in bricks-and-mortar stores.
But the executive director of the Shopping Centre Council of Australia, Milton Cockburn, has hit back, saying department stores aren’t holding up their end of the bargain as anchor tenants.
Myer and David Jones are reassessing their position in some marginal markets with both looking at closing some stores or renegotiating new leases, according to analyst comments published in The Australian Financial Review.
Myer has closed three stores in the past year, while David Jones has closed three stores in the past five years.
In its half-year results released today, Myer confirmed it has successfully renegotiated a number of leases.
“Our focus is on maximising returns per square metre by improving productivity through enhanced store layouts, new stores, improved efficiency of floor space through refurbishments and the closure of a handful of stores. In this context, we continue to review the merits of all existing and planned stores in our portfolio, including proactive lease negotiations yielding results,” its report said.
David Jones also has several stores in its portfolio with leases due to expire soon and will be looking at doing the same.
The company has also installed foot traffic counters in a number of stores which will reportedly be used to help argue the case for rent reductions on new leases.
But there is increasing dissatisfaction among shopping centre operators as anchor tenants fail to attract the customer numbers that they should, according to Mr Cockburn.
"The limited number of department store chains in Australia gives them significant clout in lease negotiations and renegotiations," Mr Cockburn told Property Observer.
"It’s fair to say that over the last few years the department stores haven’t been pulling their weight in attracting foot traffic to shopping centres in the way anchor tenants are supposed to do.
"I guess in any such negotiations, centre owners will be asking the department stores for details of the steps they are taking in again making themselves more attractive to customers."
And it seems things might not be as bad for department stores as they claim.
The latest Jones Lang LaSalle shopping centre manager survey carried out in February found that department stores were among those categories now starting to record consistently positive growth, compared with the declines evident through 2010 and 2011.
Consumer sentiment rose again in March according to a Westpac survey, it’s now at its highest level since December 2010.
Meanwhile, Myer posted a better-than-expected profit of $88 million in for the first half of the financial year while analysts had been expecting about $85 million.
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Department stores need to pull their weight: Shopping Centre Council of Australia

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The number of auctions held in Australian capital cities will climb to 1,799 in the week to March 17, bouncing back from only 995 held the previous week, which was heavily affected by public holidays.
Figures from RP Data show Melbourne is set for 914 auctions in the week to March 17. In the week to March 10, Melbourne had just 227 auctions, with a clearance rate of 62.9%. This was the first week that Melbourne had underperformed when compared to the national average clearance rate.
In Sydney, the auction clearance rate was recorded at a strong 71.4% in the week to March 10, up from 61.1% the previous week. Auction volumes fell from 751 the previous week to 532.
In the week to March 17, Sydney is set for 632 auctions.
Click to enlarge
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Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2013/03/rpdataupcomingauctionsmarch14.gif"><img src="/images/stories/2013/03/rpdataupcomingauctionsmarch14thumb.gif"></a>
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Auction numbers set to rebound this week: RP Data

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There was a 38.1% rise in construction loans for investment purposes in January, according to ABS January housing figures.
This increase was highlighted by Commonwealth Bank economist Diana Mousina who called it "one positive part" of the otherwise disappointing January data release.
However she told Property Observer this number tended to be "quite volatile".
Overall construction lending rose 4.7% over January and is up 19.5% over the past year. 
"Residential construction activity is in the early stages of a recovery and we expect to see a continued lift in activity over the year. 
"Rising residential construction is an important element in the RBA’s game plan for 2013," say Mousina.
<img alt="CBA_construction_approvals" height="455" width="500" src="/images/stories/2013/CBA_construction_approvals.gif">
Source: Commonwealth Bank
Nationally, loans to buy and build homes rose slightly.
HIA economist Geordan Murray says the aggregate number of loans to owner occupiers for the construction and purchase of new homes rose only 0.6% in  January.
"It would have been a touch optimistic to expect the interest rate cuts late in 2012 to have an immediate impact, but we expect the effects of this to emerge over the coming months.
“While we didn’t see a material improvement in number of loans for new homes in January 2013, activity over the month was still 9.3% higher than we saw in January 2012.
"From this perspective, we have started the year in a better position than we did in 2012.
“If we consider the total value of lending for housing, there was an increase of 2.4% during the month of January 2013. After contracting in the months of November and December 2012 it is pleasing to see lending regain some of the lost ground,” says Murray.
Peter Jones, Master Builders Australia’s chief economist, said the 0.6% rise in the number of loans for the construction of dwellings and for the purchase of new dwellings (and 9.3% up on the corresponding figure in January 2012) was a "welcome pick up but a far cry from the sort of strong housing recovery builders were hoping for given where we are in the current easing cycle". 
“Consumers remain overly cautious about committing to a significant purchase like housing. The industry is hoping the rise in consumer confidence will quickly translate into the new housing market," he says.
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Investor loans to build new homes up 38% in January: ABS

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Australian house prices are high but they reflect the high cost of living, says Gary Thomas, president of the US National Realtors Association, who is currently visiting Australia.
Thomas says there is no perception among his constituency that Australian housing is in a bubble that may burst – a claim made by the likes of <a href="https://www.propertyobserver.com.au/news/us-economist-predicts-australian-housing-crash/2011081551170" target="_blank">US economist Harry Dent and others.</a>
The National Realtors Association is the largest trade assocation in the US, representing around one million US real estate agents.
“Australian property prices certainly are high relative to what we pay in the US, but it all depends on your average income,” Thomas tells Property Observer.
Thomas has more than 35 years’ experience in American real estate and has occupied numerous industry roles.
He operates real estate business Evergreen Realty, which has seven offices throughout Orange County, Southern California with a head office in Irvine and more than 7,000 estate agents on its books.
The most recent figures from US data provider CoreLogic showed that US home prices, including distressed sales, increased on a year-over-year basis by 9.7% in January 2013 compared to January 2012
Morgan says the US market is definitely improving with prices starting to inch up including in his home state of California and in Florida and Arizona, to name just a few.
“It’s kind of ironic that the recovery is occurring in the states the hardest hit,” he says.
In Southern California he says there is only 30 days’ worth of real estate inventory available to purchase at current sales rates – very low by historical standards.
Despite the lack of stock, house prices are not accelerating as they did in the boom years prior to the GFC, though they are rising at a more sustainable pace.
Among the reasons for this is that obtaining financing is still very hard with much stricter lending practices now in place.
“It’s like an inquisition” is how he describes lender inquiries into whether a borrower should receive mortgage approval.
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Australian housing not perceived as being in a bubble: US real estate industry boss

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The push of global retail brands into Australian capital city malls and high streets continues this week with global retail brand Zara putting the finishing touches on its latest store in the expanded Highpoint Shopping Centre in Maribyrnong, which launched today.
Zara, UK fashion giant Topshop and David Jones are anchor tenants in the new Highpoint Fashion Mall, which complements the Fresh Food Market and Eco Mall which opened last year.
It is an Australian first for a shopping centre to house both Zara and Topshop under one roof.
Topshop opened its Highpoint store today with Zara to start trading from next week.
It is part of a $300 million redevelopment of the Centre, with the 30,000 square metre increase in retail space completed in two stages – all of which is now leased.
The completion of the redevelopment leapfrogs Highpoint from 12th biggest shopping centre in Australia to third biggest – behind the Chadstone Shopping Centre in Malvern East and Westfield Fountain Gate in Narre Warren.
The shopping centre, in Melbourne’s west, is co-owned by GPT and the Highpoint Property Group.
Zara forms part of Spanish retail company INDITEX and has more than 1,700 stores across 85 markets.
The other Zara stores in Melbourne are on Bourke Street Mall in the CBD, in Westfield Doncaster and in the Chadstone Shopping Centre.
Zara’s flagship store, which is in Westfield Sydney, opened in April 2011.
Amancio Ortega, the major shareholder of Zara with 60% of the business, was the <a target="_blank" href="https://www.forbes.com/profile/amancio-ortega/">fastest mover on the annual Forbes magazine rich list</a> released this month.
With his net worth increasing by US$19.5 billion to US$57 billion, he is now the third richest man in the world, after Mexican telecoms mogul Carlos Slim and Microsoft’s Bill Gates.
Ortega also has a real estate portfolio worth about US$4 billion, with properties in Madrid, London, Chicago, San Francisco, and New York.
Born in Spain in 1936, his father a railway worker in Leon, Ortega opened his first Zara store in downtown A Coruña, Galicia, Spain in 1975.
The arrival of both brands to Melbourne’s inner west comes as Colliers International projected that international retail brands would open 300 stores in Australian capital cities in the next few years.
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Zara to open in Melbourne’s Highpoint mall as Amancio Ortega’s wealth hits $57 billion

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The US Masters Residential Property Fund, which invests directly in residential property in New Jersey and New York, has joined the S&amp;P/ASX All Ordinaries Index.
The index comprises the 500 largest companies listed on the Australian Stock Exchange.
Since December, the fund's share price has risen strongly from around $1.60 in December to currently trade close to $1.90.
It has a market value in excess of $315 million, placing it comfortably in the top 500.
The fund, which is managed by Dixon Advisory, has gone <a target="_blank" href="https://www.propertyobserver.com.au/overseas/us-masters-fund-moves-upmarket-with-historic-hells-kitchen-and-harlem-acquisitions/2013011758752">distinctly upmarket in recent months</a>, paying US$3 million for a historic four-storey apartment building in trendy Hell’s Kitchen in the heart of Manhattan and spending US$1.8 million on a “limestone mansion” in Harlem.
It has to date raised US$264 million from Australian investors and purchased 463 freestanding homes and apartment blocks in New Jersey, Manhattan and Brooklyn (some of which are pictured below).
<img src="/images/stories/2013/03/usmastersmarch14one.jpg" width="400" height="585" alt="usmastersmarch14one">
Fund managing director Alan Dixon said strong growth and investor support had helped put the fund among the 500 largest companies listed on Australian Stock Exchange. 
“Two years ago, when we launched the US Masters Residential Property Fund, we saw an historic opportunity to acquire high quality US residential property at attractive valuations using the strong Australian dollar,” Dixon said.
Since then, the Fund has secured over 400 freestanding houses and 15 apartment blocks for a total acquisition cost of approximately US$200 million across our target market, the New York metropolitan area.
<img src="/images/stories/2013/03/usmastersmarch14two.jpg" width="400" height="580" alt="usmastersmarch14two">
“Calendar 2012 was a year of many achievements for the Fund, including successfully raising US$165 million, expanding our purchasing activity into Manhattan and Brooklyn, New York, and recording a maiden upward revaluation on our existing investment portfolio of US$5.7 million. 
“It is particularly pleasing to be able to begin 2013 with another significant milestone, as a member of the All Ordinaries Index," says Dixon.
<img src="/images/stories/2013/03/usmastersmarch14three.jpg" width="400" height="533" alt="usmastersmarch14three">
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US Masters Residential Fund joins S&P All Ordinaries

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The Reserve Bank is not expected to cut the cash rate again in 2013, according to Australia’s biggest mortgage lender the Commonwealth Bank.
Following the release yesterday of weak <a target="_blank" href="/news">January housing finance data </a>– owner-occupier home loan commitments down 1.5% - Commonwealth Bank economist Diana Mousina noted there were some encouraging signs with construction lending to owner occupiers and investors rising 4.7% over the month.
“An improvement in the housing market underpins the RBA’s expectation that the non?mining economy will lift as mining investment slows down over the next two years. 
“While yesterday's data was weak overall, it was encouraging to see construction lending rise moderately,” says Mousina.
“History tells us that residential construction activity can make a significant contribution to GDP growth.
“The typical residential upturn adds around two to three percentage points to GDP growth over the average two- to three-year cycle.
“While we will need to see stronger growth in the non?mining economy over the near term, mining capex plans indicate that the slowdown in mining investment will occur gradually.
“So, the medium?term outlook for domestic growth remains quite positive. In this environment, the RBA is unlikely to cut the cash rate again. We expect the cash rate to be maintained at 3% throughout 2013,” she says.
 
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We expect the cash rate to be maintained at 3% throughout 2013: Commonwealth Bank

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The fallacy of market predictions
If there is one thing I have learned over the years it is to try to avoid making too many near-term predictions, because they are so often hopelessly wrong.
In mid-2011, for example, due to a mirage of inflation we believed that interest rates were heading higher (they were cut repeatedly by 175bps).
In the past week or two we heard that the stock market “party” was over (the Dow immediately strapped on the after-burners and ripped upwards to all-time highs) and that the Aussie dollar was about to break below parity (cue instantaneous rebound)…
We can produce every chart and technical signal under the sun, but the best that most of us can really hope for is to identify prevailing trends to see whether we can learn anything worthwhile from them.
I noted earlier that RP Data’s property price index has seen prices moving up for the past nine months.
Today, I’m going to look at a few macro trends to see whether we can establish what might happen in the housing market over the coming months.
1 Auction clearance rates
<img src="/images/stories/2013/03/wargentmarch8one.jpg" width="470" height="209" alt="wargentmarch8one"> 
<a href="https://2.bp.blogspot.com/-TmviuWKq3G8/UTbb-iUXIwI/AAAAAAAAIt8/OF5kpaLQkIs/s1600/1+Clearance+Rates.jpg" imageanchor="1"></a>
Source: rpdata.com.au 
Not quite at boom-time levels just yet, but not too far away in some cities. And the trend has clearly been up as the effect of the aforementioned interest rate cuts and low fixed-interest yields flow through in full. Clearance rates in Sydney and Melbourne have been very strong in recent weeks. Resurgent clearance rates can lead to something of a self-fulfilling herd mentality, of course.
Higher auction clearance rates may lead to panic buying and a FOMO (fear of missing out) rally, which in turn leads to more buyers diving which can and appreciating sales prices.
Auction clearance rates are to some extent impacted by:
2 Low interest rates
 <img src="/images/stories/2013/03/wargentmarch8two.jpg" width="470" height="341" alt="wargentmarch8two"> Source: asx.com.au
The cash rate was kept on hold at just 3.00% this month, but the yield curve continues to show that rates could yet fall to record lows of 2.75% or below.
The inversion of the curve was flattened a little by the solid GDP result. But inflation still appears benign and affords the RBA room to cut should further easing be deemed necessary, and the non-mining sectors of the economy remain indisputably weak.
My fair-natured buddy Catherine Cashmore <a href="https://www.propertyobserver.com.au/residential/interest-rates-do-little-to-influence-australian-property-prices-catherine-cashmore/2013011358683" target="_blank">has written recently</a> about the tenuous link between interest rates and dwelling prices.
The dropping of interest rates close to the ‘zero-bound’ is indicative of a sick or a weakened economy and by no means do low rates ensure higher dwelling prices (as evidenced in many countries employing a ZIRP in recent years).
Indeed, the converse may often hold true – interest rates are sometimes high when inflation is high and property prices are flying.
However, it would be accurate to say that in some cases lower rates and cheap credit can stimulate demand and lead to higher prices.
In Australia, notes RP Data, close to 60% of apartments are owned by investors, in part due to the capital city entry prices thereof being lower than those of houses.
Capital city apartments close to the media's beloved median price are likely to be a more interest rate sensitive sector than certain other sectors of property markets.
Notably with regards to interest rates, if both stock valuations and dwelling prices continue to appreciate at the rate they have been over the past three quarters, it is likely that this would preclude further interest rate cuts in this cycle.
But whether or not the cash rate falls lower, mortgage rates are already at very low levels and bank competition for business could potentially see them decline yet further via out-of-cycle cuts.
Continuing demand for property is partly being fuelled by:
 
<hr class="system-pagebreak">
3 Population growth 
We are experiencing very strong in the four major capital cities and this is forecast to be so by the ABS for more than four decades into the future:
<img src="/images/stories/2013/03/wargentmarch8three.jpg" width="470" height="228" alt="wargentmarch8three">
<a href="https://4.bp.blogspot.com/-YURbyMDl8fo/UTbci-IGnpI/AAAAAAAAIuM/bRPYxHH6mzo/s1600/Population+forecasts.jpg" imageanchor="1"></a>
Source: abs.gov.au 
To deal with the rapidly growing population, Australia needs strong:
4 Dwelling construction and approvals 
It is hoped that construction will pick up to plug the gap left by the forthcoming (imminent?) peak in mining investment.
Any dramatic such increase has not yet transpired, which in itself could maintain an effective lid on interest rates.
Approvals for apartments have increased year-on-year (although they have declined in some parts over recent months), but are still some way short of where they might be.
In any case, approvals don’t solve the problem of:
5 New house sales These have picked up a little over the last couple of months but as measured on a historical basis, new house sales figures are diabolical, particularly in states such as New South Wales (rolling annual figures down from ~40,000 at the turn of the century to just ~10,000 according the HIA).
New house sales in other states such as Queensland, South Australia and Victoria are also desperately weak.
Why is this? Presumably largely due to the prohibitive cost of new dwellings and particularly houses.
Many homebuyers and many investors have identified that existing dwellings may offer superior ‘value’ and thus are likely to be drawn towards the limited supply of existing stock.
Choked supply and high demand results in low vacancy rates in existing dwellings, and further to: 6 Expensive rents Rent levels vary depending on the city or region, but in many areas of low vacancy rates rents have been <a href="https://www.propertyobserver.com.au/landlords/the-best-investment-properties-are-those-with-the-best-rental-returns-michael-matusik/2012032153952" target="_blank">blasting ahead of inflation</a> for years now.
Higher rents can cause those leasing to consider buying, and the first thing they are likely to consider is: 7 Affordability
Ah, “affordability”: one simple little word which is always guaranteed to generate a headline, and one which commonly attracts no little vitriol.
It is well known that, just as in most of the world’s major cities, house prices in the popular suburbs of Australia’s main capital cities are not “affordable” on just about any metric you may care to mention.
That is not something which is likely to change any time soon (or, in fact, ever).
With mortgage rates now available from an incredibly low 4.79%, however, apartment prices are (generally) relatively affordable in terms of today’s repayments (“the best affordability in a decade!” <a href="https://www.smh.com.au/business/the-economy/rate-reductions-boost-home-affordability-20130306-2fk25" target="_blank">we are reliably informed</a>).
This may or may not continue to be the case as and when interest rate easing cycle reverses, but that particular ‘can’ is likely to be kicked well down the road.
Take the example of Australia’s most expensive metropolis: Sydney.
RP Data records the median apartment price in that city as having jumped by around 5% in the past 12 months to $475,000.
With low-rate mortgages so freely available and buyers clamouring for a choked supply of quality apartments, is it any wonder?
Even if you hold an 80% mortgage against a median priced apartment in Australia’s most expensive city, the interest component on, say, a mortgage charged at 5.00%, has fallen to just $19,000 per annum.
I don’t have a comprehensive data set to substantiate the following point, but my own experience tells me that, in these heady days of rat-wheel capitalism, Sydney’s aspirational inner suburbs have a proliferation of two-income households which fuels higher prices.
Trends to look out for 
Interest rates (and correspondingly, mortgage rates) look set to stay close to record lows for quite some time to come yet.
Watch out for high auction clearance rates causing an increase in the price of properties close to the median price over the coming months. This may eventuate is hot sectors of the market such as Sydney's Inner West or in parts of Perth, but is unlikely where there are a glut of apartments such as in the ACT. Strong price growth will only occur in areas where demand is outstripping supply.
If rising prices do eventuate then the RBA may soon be forced to pull the handbrake/take away the punchbowl/insert clumsy metaphor here.
Pete Wargent holds a range of finance and property qualifications and is the author of <a rel="nofollow" target="_blank" href="https://petewargent.blogspot.com.au/">Get a Financial Grip – a simple plan for financial freedom.</a>
 
 
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Cheap credit fuelling price growth in some property markets: Pete Wargent

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The shopping centre rental outlook is improving with the number of shopping centre managers reporting an improvement in tenant enquiry outnumbering those reporting weak tenant enquiry for the first time in over 18 months. 
The last time this occured was in September 2011 quarter.
This was the headline result of the latest Jones Lang LaSalle Shopping Centre managers’ survey carried out in February, which also found that customer foot traffic increased and passing specialty rents showed improved growth.
Customer numbers grew by an average 2.8% over 2012, according to the survey, which is based on the views of 96 shopping centre managers in Jones Lang LaSalle’s managed portfolio.
 
<img src="/images/stories/2013/tenant_enquiry.gif" width="600" height="445" alt="tenant_enquiry">
“Leasing enquiry levels strengthened in the December quarter, with 27% of centre managers reporting stronger enquiry compared with just 18% in the September quarter,” says Richard Fennell, Australian head of property Management at Jones Lang LaSalle. 
The improved rental sentiment comes as department store retailer Myer – an anchor tenant in many shopping centres - reported better-than-expected interim net profits of $88 million in the first six months of its financial year to January 26 and total sales up 2% to $1.73 billion. 
Analysts had tipped interim net profits of around $85 million. 
The outlook for retail sales is also more bullish with 53% of centre managers expecting some growth in sales over the next 12 months. 
Only one in five expected a decline in sales, which is the lowest level in the six surveys conducted to date. 
Less than half of respondents (43%) expect to see rental growth in the next 12 months, but this is up slightly from 39% in the November survey. 
Face specialty store rental growth is also slowly accelerating. 
The average passing specialty rent for sub-regional centres rose to 3.8% over the year to December 2012 up from 3.0% in the year to September 2012, while neighbourhood centre rents rose marginally from 3.5% per annum to 3.6% per annum 
On a state-by-state basis, shopping centre managers in WA were the most positive  about the year ahead, "due to continued strong economic conditions and the relaxation of Sunday trading laws in August 2012". 
Supermarkets and food retailers are the most active retailers looking to expand their operations, although enquiry in all categories remains subdued.
“Retailers are still facing very competitive market conditions and we expect national tenants will continue to take a cautious approach to new store commitments, but encouragingly, the survey found leasing enquiry levels are improving,” says Fennell. 
“The outlook for sales growth and rental growth is still fairly subdued, and centre managers believe the two will be very closely linked over the next 12 months.” 
Jones Lang LaSalle director of research and consulting, David Snowsell said the latest results show that a “level of cautious optimism” coming through but with the view “still very different across individual centres.” 
“The results are consistent with our view that the recovery for retail will be gradual and patchy. 
“Nevertheless, there are some supportive factors which will be positive for the broader retail sector in the short term. Consumer sentiment has improved the last couple of months, and spending within some discretionary retail categories is growing, albeit at a relatively slow rate.” 
“We expect these trends to begin to stimulate shopping centre performance over the short to medium term as the recovery persists,” says Snoswell.
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Shopping centre leasing enquiries rising as overall outlook brightens: Jones Lang LaSalle survey

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The prospect of securing high-yielding investments in a mature, transparent and liquid real estate market is drawing foreign investors to the Australian commercial property market. 
According to CBRE head of research for Australia Stephen McNabb, foreign investor interest in Australian is now stronger than it was pre-GFC, underpinned by property yields which remain globally competitive.
At a commercial property market outlook breakfast today in Melbourne, McNabb presented the following slide in his presentation showing regional retail yields (6.1%), prime office yields (7.4%) as well as industrial grade property yields (8.3%) as well as capital growth prospects for these three asset classes - all of which are attractive to foreign investors.
Click to enlarge
<a href="/images/stories/2013/03/cbremarch13one.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2013/03/cbremarch13onethumb.gif"></a>
McNabb says industrial property is a category in which yields had started to "re-rate for higher growth above long term averages amid increasing logistics demand". 
“This may reflect a structural shift in the growth in internet retailing and its transformation of parts of the delivery chain which is driving demand in the industrial sector. 
“While traditional retailers are gradually losing out to online sales, this is shifting activity between the retail and industrial sectors, with logistics the key driver.  That said, at a national level we are also seeing a modest recovery in ‘traditional’ retail volumes, albeit at a lower rate of growth than historically and this is also driving the flow of goods around markets,” he said.
McNabb was joined at the breakfast by Dr. Nick Axford, CBRE’s head of Asia Pacific research, who said that despite the relatively high cost of finance and the perceived currency risk, “Australia remains attractive to investors – largely because it is a mature, transparent, liquid real estate market where pricing looks attractive relative to the very low yields prevailing elsewhere in the world”. 
He noted that investors continue to target the real estate sector with investment activity across Asia Pacific continuing to rise and with Australia just one of the markets that has seen increased levels of demand. 
And while investors based outside Asia Pacific had generally been selling more property in the region than they had been buying, he says there is a clear distinction between Asia Pacific as a whole, and the Pacific region, where there has been "a steady rise in investment from outside the region – and a significant uptick over the past six to nine months". 
"Over the year to December 2012, Australia was the most active investment market in Asia Pacific, and was the most popular port of call for investors outside the region," he said.
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