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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Total returns on retail property are averaging around 10% and have dipped slightly over the past six months, according to Colliers International.
The chart below shows that the retail property sector has improved significantly from the GFC slump, but has slipped slightly since peaking in July last year.
"2012 was a watershed year for retail, with the sector undergoing significant structural change: weaker retail sales driven by a shift in the mix of spending, retail price deflation and pressure on retailer margins, challenges posed by the strong Australian dollar, and the continued evolution of online retailing in Australia," says  Nora Farren author of 2012: Retail in the rear view report.
Click to enlarge
<a href="/images/stories/2012/12/colliersdec11.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/12/colliersdec11thumb.gif"></a>
"Up until recently, the performance of retail was supported by the expansion of both domestic and international retailers, which in-turn drove rental growth, centre expansion and development, and sector valuations.
"Nevertheless, over the year to September 2012, retail property actually posted a decline in returns (of 140bps), to record an annual total return of 8.8%, on the back of slowing capital growth.
"While in a low-interest-rate environment, this level of return is satisfactory, super and major regional shopping centres actually experienced a large decline in returns, a result of the negative impacts of weaker discretionary spending.
"This was particularly evident for clothing retailers and department stores.
"While, neighbourhood shopping centres, which are anchored by supermarkets, have been supported by steady growth in food retailing. Income growth for retail remains under pressure with new tenants paying less rent, which is starting to be reflected in valuations. Although, with their relatively higher income yield, neighbourhood centres are expected to outperform larger format centres over the next twelve months," she says.
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Retail property returns dip in 'watershed' year

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Last week I highlighted how it is impossible to overlook the key influence of location in the project DNA of any development.
<a href="https://www.propertyobserver.com.au/developments/location-the-most-important-consideration-in-a-new-residential-development-peter-chittenden/2012120358265" target="_blank">Here in a recent conversation with one of my associates, Shane Dargue,</a> from Colliers International in Melbourne, we will explore this topic in greater detail. From the outset I think it is clear that taking a site to market is a complex subject. topics like planning and infrastructure are never out of sight.
Thinking of a location as a blank canvas immediately opens the way for creative thinking so that one day the final development will deliver the very best result, and this is, I think, the core challenge this subject will explore. Recently in both NSW and Victoria the major land delivery agencies have been facing evolving roles as a result of shifting market pressures and dynamics, and I think this further underlines how complex a market this is.
Where are the demand hotspots?
Starting our conversation, I firstly wanted to know from Shane his take on the current demand for residential development sites and then moving onto what he believes are the key marketing challenges for new medium and high-density sites.
“This a big topic, but there are some common factors across most markets. But firstly we need to step back a few years, just to get a common starting point.
“Until 2010 across almost all markets there was what I would without reservation describe as an environment of fever pitch activity, and in particular in Melbourne. Then over the past few years 2011-12 there has been a shift in demand for sites. We have come of the highs of 2010 but clearly sites are still being sold, still in demand.
“The dynamics have moved to where the development risk has taken on a different complexion, and as might be expected it is access to finance that has come into much sharper focus."
To better help overview market conditions Shane suggests that it is helpful to look at markets across three main sectors, all of which will be familiar.
“I think that it is both helpful and necessary to look at the market for new sites as they fit into three distinctive zones. While they will have common factors in any major metropolitan market, for ease of discussion let’s call the three main markets A, B and C.”
Within this definition suggested by Shane the zones cover: ‘A’ the core CBD, ‘B’ the inner ring of well-established suburbs and our final group ‘C’, which covers the outer ring of suburbs where the majority of broadacre and greenfield sites are located. All three markets have locations suitable for medium-density development but are very different with varied fortunes.
“The CBD in any market always has the highest site costs, and beyond that the entire cost structure implies a major investment in terms of finance, time and marketing, its often seen as the most speculative.
“Then we have the inner ring of suburbs ‘B’ which is the more diverse and flexible of the three markets and in the case of Melbourne, because of Melbourne’s grid layout, it’s a rich source of sites.
“Finally we have the outer ring locations ‘C’, which includes greenfield sites, some locations are self-contained medium-density sites, which are usually in the more established areas while other are a part of a master-planned community estate. This is a market dominated by individual homes and is very cost driven, price and supply sensitive but still there are valuable medium-density sites.
"Demand for the outer ring this market has softened the most over the past 24 months and in particular over the past 12 months, partly as direct result of many more new homes coming into play as supply across Melbourne has increased."
 
<hr class="system-pagebreak">
The layers of interconnection
The outer-ring sites are the most price driven and so rely to a greater extent upon the growth of house prices and sales rates, in particular across the inner-ring suburbs and across the wider housing market generally but also to a lesser extent in the CBD. And so in this way the outer limits of the market reflect the wider health of the economy and so to varied degrees all of the markets are interrelated.
“If the economy is weak then people will tend to stay put in established homes, and at the pointy end of rental demand the CBD rental market can be impacted if unemployment becomes an issue, which then has a flow onto investor take-up.
“Also in the outer ring I have to acknowledge that the demand for sites is limited to some degree because this is also an area where medium density is a secondary market for buyers. Still for some budget driven buyers a townhouse in these areas is an appealing option, and profitable for the developer looking to defray site costs."
While the demand for outer ring sites has declined over the past two years, it has been the more stable buyer profiles for end-product in the CBD and inner-ring locations that has helped to create continued interest in sites.
“CBD and inner-ring development sites offer diverse locations and infill sites in particular have many positive traits. And that includes access to existing infrastructure that can be very diverse with a depth of social appeal, Footscray in Melbourne is an example I mention now and will return to later."
The pressure of finance a important influence
Shane rightly points out the reality that some or indeed most banks are now applying pressure when dealing with their development clients. But Shane also highlights that there have not been very many forced sales of development sites and prices for end product have been stable within areas of logical and typical development supply.
“The role of finance post GFC is now more magnified, and the IMF has also highlighted how much exposure the 4 major banks have tied up in residential mortgages and so caution is the order of the day.
“When we look at individual greenfield sites they have either been shelved because the capital tied up is less or their raw land values have decreased substantially where the rates of sales have slowed most. There is also usually little speculative building and better return on capital performance, which can be in stark contrast to the level of exposure associated with a medium or high density project.
“However, despite the financial pressures demand is currently strongest across the inner ring suburbs, these same areas are also very popular with end-buyers where owner occupiers dominate demand, but investors are also active. In the CBD there tends to be a bigger percentage of investors and in many cases an off-shore buyer with a long-term view of the market, which then helps underpin the demand for quality development sites.
We did highlight earlier that in the CBD the investment required for a major project outweighed the costs associated with other locations. The dynamics are very different attracting the bulk of high-end professional development, and for other developers this fact then shifts their focus to the inner ring suburbs.
“The inner ring locations are very popular and there is a pool of local developers keen on these sites. And so demand is mixed and there are more players looking for opportunities. While finance is still an issue we are dealing with local developers who know the market and work within a comfortable level of risk and capital/development."
At this stage of our topic it is the various risk profiles that have the most impact on the demand for sites. The risk profiles are also very dynamic across all three markets, still there are many other influences to take into consideration, which we will continue to explore and welcome your thoughts.
 
Peter Chittenden is managing director for residential of <a href="https://www.colliers.com.au/Colliers%20Corporate/Residential.aspx" rel="nofollow" target="_blank">Colliers International.</a>
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pchittenden-eLqUUC8TWW

What is the best location for a residential development?

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The popularity of fixed-rate home loans is on the rise.
Around 22% of borrowers who arranged their loans through a Mortgage Choice broker in November chose a fixed-rate product, compared with a six-month average of 19.5%.
Currently, fixed home loan rates are offered at a significant discount to variable rate home loans.
Mortgage comparison website RateCity.com.au calculates the average three-year fixed rate at 5.54%, compared with a standard variable rate of 6.62% – a difference of 108 basis points.
At these rates, using the example of a $300,000 home loan over 25 years would mean a variable rate borrower would pay $2,048 per month while a fixed-rate borrower would pay $1,710 per month –a difference of $338.
These sorts of numbers may tempt borrowers to consider a fixed-rate home loan, but the fact that nearly 80% of borrowers still choose a variable rate home loan should be cause for caution and careful consideration.
As Mortgage Choice spokesperson Belinda Williamson points out, borrowers must carefully weigh up their options, as fixed rate loans have both “pros and cons”.
“Remember, the interest rate is not the only factor to consider, also compare any initial, recurring and break costs, the ability to make extra repayments and redraw, lender service and how long the loan will take to be approved,” she says.
It is worth stating the obvious benefit and potential shortcoming of a fixed rate home loan – that the interest rate is fixed.
If interest rates rise, fixed-rate borrowers are better off as their mortgage repayments remain unchanged, but if interest rates fall, borrowers receive none of the benefits of a lower interest rate – a situation that was illustrated by the estimated 125,000 borrowers who chose to fix their rate in 2008, just before the RBA began cutting the cash rate in big chunks.
As a result fixed-rate borrowers <a href="/news">circa September 2008</a> were paying annual interest rate of around 8.75%  on a three-year fixed loan, while variable borrowers' annual interest rates fell to as low as 5.75% by May 2009, with variable rates remaining below 8% in subsequent years.
The rate you pay, timing and the duration of your fixed-rate home loan are key factors in making a financially astute decision.
 
<hr class="system-pagebreak">
 
While you may be able to secure a three-year fixed-rate home loan as low as 5.13% (the current refinancing fixed rate offered by UBank), borrowers may qualify for a packaged variable home loan with a rate discounts of 70 basis points (as offered by Westpac) negating much of the fixed-rate interest rate saving, while being able to benefit from all the flexibility and features of a variable rate loan.
Conservatively minded borrowers or those who want the ‘insurance’ of knowing their mortgage payments won’t change month-to-month may consider a fixed-rate mortgage a good option, but  should bear in mind  a number of restrictions that may apply.
Firstly, the government’s ban on mortgage exit fees introduced on July 1 last year, designed to make it easier for borrowers to switch mortgage providers, does not apply to fixed-rate mortgages.
Fees can run into the tens of thousands of dollars.
Lenders determine break fees based on a combination of factors: the interest rate you are locked into compared to the current market interest rate, the length of time that remains on your fixed-rate term and the loan amount you initially borrowed.
Financial products data provider Canstar estimates that the break costs on a $250,000 three-year fixed rate loan that still has two-and-a-half years to run would be around $10,300.
According to RateCity.com.au spokesperson Michelle Hutchison, other restrictions include that about half of fixed home loans don't allow for redraw facility, which is the ability to withdraw extra funds from the home loan that you added to the loan.
“This is compared to the majority (98%) of variable home loans offer redraw facility,” she says.
Another restriction is the ability to make additional repayments.
“While most fixed home loans allow for additional repayments, they usually come with restrictions on how much you can add each year during the fixed period. For instance, comparing all the three-year fixed home loans in RateCity's database, 60% of those that allow additional repayments have a limit averaging $15,000 per year,” says Hutchison.
In addition, there may be restrictions on paying the loan off early, with heavy penalties if you do so.
Borrowers also need to consider what happens when the fixed-rate term expires.
“Many borrowers may not realise that after the fixed period, your home loan reverts to a different variable home loan and it may not be the best variable rate they can receive," says Hutchison.
“It's a good idea to keep track of when your fixed period is coming to an end and use RateCity to compare home loans to make sure you get the best deal for your needs."
Fixed-rate home loans may also not have other features that come with variable rate loans, such an offset account, which reduces the interest rate on your mortgage based on the balance in this account.
Resi Mortgage CEO Lisa Montgomery advises borrowers to always read the fine print on their home loan contracts.
Borrowers can also hedge their bets, by splitting their loan with a portion of their borrowings on a fixed interest rate and another portion on a variable rate.
Splitting loans is popular at times when the direction of interest rates is uncertain.
Some lenders, such as non-bank lender eMoney, offers a lower variable rate if a borrower fixes 25% of their home loan.
 
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Fixed home loan interest rates are attractive, but beware the potential pitfalls and restrictions 

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Congratulations to Rainbow in Melbourne and Davidk9 in Sydney, who have taken out the title of Property Tycoon for spring 2012. A $1,000 Christmas bonus is on its way!
There’s a website, <a target="_blank" href="https://www.propertytycoon.com.au/">www.propertytycoon.com.au</a>, where punters can guess what they think properties will sell for at their weekend auctions in Melbourne and Sydney. This season <a rel="nofollow" target="_blank" href="https://www.propertytycoon.com.au/join-league/S7S123C487R8OOQF" style="font-size: 14px;">Property Observer readers had their own competition</a><a rel="nofollow" href="https://www.propertytycoon.com.au/join-league/S7S123C487R8OOQF">.</a> The winner of the overall competition won $1,000.
Carlyonc and RFM were the best-performing Tycoons in the final round and win the movie tickets.

A huge crowd crammed into the backyard of 14 Jessamine Avenue, <a target="_blank" href="/news">Prahran</a> (pictured below), on Saturday to watch a very quick auction. While there is no doubt there were more people who had an interest in the property, it was left to only two bidders to fight it out.
<img src="/images/stories/2012/12/jessamin.jpg">
The auction consisted of a flurry of $50,000 bids before a $2.4 million bid was referred to the vendor and the property was declared on the market.  After this announcement another burst of bidding took the price to $2.7 million before the property was knocked down.

You can watch the auction highlights on our <a target="_blank" href="https://propertytycoon.cmail5.com/t/r-l-uyljuud-etrwtikd-y/">Facebook</a> page.

It was a different story in Sydney where 1/64 Ocean Street, <a target="_blank" href="/news">Woollahra</a> (pictured below), failed to gain any real traction. Although there were interested parties in the crowd there was no sense of urgency as bidding was lacklustre. The property finally passed in to a legitimate bidder for $1,475,000.
<img src="/images/stories/2012/12/oceanst.jpg">
Since the conclusion of the auction agent Peter Starr has had interest slightly above $1.5 million, and the property is expected to sell in the coming days.

Thanks to everyone who played Property Tycoon this season. We will be back bigger and better in February 2013. Merry Christmas to all.

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marmstrong-sd3emVLPPb

Quick Prahran auction and lacklustre bidding in Woollahra round out 2012 auction tipping competition

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The total number of owner-occupied housing finance commitments rose by just 0.1% over October in seasonally adjusted terms, according to new ABS figures.
This was well below market expectations of 3%, with Westpac forecasting the number of loans to owner-occupiers to rise by 3.4% in the month.
The principal cause of the poor monthly growth was poor take-up of loans commitments for the purchase of established dwellings, which fell 0.1% to 38,900.
Construction loans fell 0.3% to 4,903, while loans for the purchase of new dwellings lifted by 4.2% to 2,673.
Total loans to owner-occupiers totalled 46,477  up from an upwardly revised 46,425 in September.
On a state-by-state basis, finance to owner-occupiers increased in Queensland (1.3%), WA (1.3%) and SA (3.4%), but fell in NSW (-1.7%) and Victoria (-1.3%) partially reversed gains in September.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 18.7% in October 2012 from 19.4% in September 2012.
The average size of a first-home buyer loan fell $1,300 to $288,000.
The average loan size for all owner-occupied housing commitments fell $1,300 to $298,900 for the same period.
In value terms, housing finance rose by 1.8%  to $21.56 billion on a seasonally adjusted basis.
According to Westpac, the positives to come out of the October data was lending to existing owner-occupiers (upgraders) advanced 1% in the month, to be 8% higher over the year, while "investor finance, which can be volatile month to month, was up strongly, 5.5% in the month, following an 8.8% jump in Sep, to be 21% higher than a year". 
"Uptrends in lending to upgraders and investors provide confirmation that lower interest rates are providing a boost to the housing market," says Westpac. However, the bank notes that the October outcome was constrained by a dip in lending to first-home buyers (FHBs), down 2.8%, partially reversing a 4.2% rise in September. "The profile of lending to FHBs has been distorted by changes to incentive/stamp duty arrangements in some states.
"Finance to FHBs has jumped 15% since March, although is only 0.5% higher than October 2011. We anticipate that the uptrend in the FHB market evident since March will continue, as people respond to the marked improvement in housing affordability. However, this cycle is likely to be tempered by household's more prudent approach to taking on additional debt.," says Westpac.
According to JP Morgan economist Tom Kennedy, the fall in owner-occupier and first-home buyer loans suggests the RBA may need to cut the cash rate to further stimulate the housing sector  - one of the sectors the RBA is counting on to pick-up as mining investment peaks.
"The data today just reaffirms that there are numerous headwinds out there," he told AAP.
"That's another reason that really supports further rate cuts."
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Owner-occupier lending up just 0.1% in October as first-home buyer numbers fall but investor and upgrader loans rise: ABS

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Shopping centre owner and manager Centro Retail Australia will seek shareholder approval to change its name to Federation Centres.
An extraordinary general meeting will be held on January 22 and should the new name be approved, it will be progressively incorporated into the branding of its shopping centres.
The new name features a cone-shaped red ribbon as its logo.
“While the creation of a dynamic new brand is a significant step, pivotal to the new name is the use of the ribbon symbol. The ribbon signifies the delivery of a great centre experience and can be used in many creative ways,” says Centro managing director and CEO, Steven Sewell.
<img src="/images/stories/2012/12/federation.jpg">
The new name follows<a target="_blank" href="https://www.propertyobserver.com.au/retail/woolies-and-k-mart-to-anchor-centro-s-new-property-group/2011102752101"> 12 months after Centro was successfully restructured</a> as Centro Retail Australia with more than 100 hedge funds taking shares in the company as part of a $2.9 billion debt-for-equity swap that prevented the company going into administration.
According to Centro chairman Bob Edgar changing the name of Centro Retail Limited to Federation Limited “marks our many achievements over the past 12 months and our commitment to create long term value for securityholders”.
“Securityholders can have confidence in what Federation Centres stands for and how we go about managing centres for the benefit of all stakeholders.
“The name itself has been selected to reflect our business. A federation respects the individuality of its parts but also has the strength of the wider group. That is what we are - a group of strategically sited individual centres that reflect the local communities to which we provide services - while benefiting from the strength of the parent organisation,” he says.
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Centro seeks clean break with the past with name change to Federation Centres

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The message being pushed by mortgage brokers and consumer advocates that borrowers should maintain their current mortgage repayments when interest rates fall and pay off their home loans sooner has well and truly been absorbed by home owners.
Nearly seven out of 10 mortgage holders (68%) surveyed by Nielsen said their number one financial goal was to pay off their home loans, confirming the view that Australians regard owning their home outright as key for their financial future.
This is despite a home not being able to generate any income in retirement apart from when it is sold, meaning future retirees could find themselves debt-free but cash poor.
In a <a href="/news">Property Observer webinar on property and wealth-creation</a>, WHK financial adviser Peter Handberg advised investors against investing extra income in paying off their mortgages but to consider putting the money into a balanced income-generating retirement portfolio made up of a mix of shares, property, bonds and cash.
“You can’t sell a bedroom,” says Handberg.
Only 13% of the 500 borrowers surveyed by Nielsen said their top goal was to save for retirement, while just 8% said purchasing an investment property was their number one goal, confirming the savings culture in Australia highlighted in a <a href="https://www.rba.gov.au/speeches/2012/sp-dg-051212" target="_blank">recent speech by RBA deputy governor Philip Lowe</a>.
The Nielsen study was commissioned by mortgage lender Crown Lending, with chief executive Scott Parry saying results show that the overwhelming majority of Australians wanted to live debt-free.
The propensity for borrowers to make extra mortgage repayments and reduce their home loans comes as banks earn billions more by not passing on interest rate cuts in full.
Following last week’s 25-basis-point rate cut by the RBA, all the major banks and their subsidiaries passed on 20 basis points, increasing their interest margin buffer by a further five basis points.
Notwithstanding the propensity of making prepayments, Mark Lewis, chairman of Adelaide mortgage broker Bernie Lewis, says that in the last five years borrowers have paid $18 billion extra in interest on their home loans due to banks not passing on the RBA interest rate cuts in full.
The banks say higher funding costs and a need for them to raise more expensive funding from retail deposits mean they cannot afford to pass on rate cuts in full anymore.
Lewis says while he agrees “on a grassroots level” that banks are not obliged to move in lockstep with the RBA, he does not buy their funding excuses, which he calls a “bitter pill” for borrowers to swallow as banks continue to generate record profits.
“The gap between the Reserve Bank cash rate and the average standard variable interest rate of the four major banks has nearly doubled since 2007 [from 1.8 percentage points in 2007 to roughly 3.4 percentage points currently]," he says.
 
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According to Ratecity.com.au, the average standard variable rate across the lenders on its panel in November was 6.62% compared with a cash rate of 3.25% - a difference of 3.37 percentage points.
Assuming that lenders pass on 20 basis points on average – the average standard variable rate would reduce to 6.42% with the cash rate at 3% - a difference of 3.42 percentage points.
Lewis says that despite the RBA’s “emergency” cash rate setting, the increased margins of the banks means the cash rate would need to fall to 2% to have any impact – a fact acknowledged by Philip Lowe, when he said in the same recent speech, that the cash rate was currently 1.5 percentage points lower than it would otherwise be due to bank mortgage rates no longer moving “in near lock step with the cash rate”.
Despite their being better deals on offer through alternative lenders, Lewis says many borrowers appear apathetic to the fact that they are paying more than the need to on their home loan while banks are more than happy to take the extra cash and add it to their bottom line profits.
“You could argue that they have the right to increase, but the other thing that comes into play is the lack of competition in the market. With reduced competition comes lazy banks and a growth in margin,” Lewis says.
Banks have also been gouging extra interest payments from borrowers by the length of time they are taking to pass on rate cuts.
ANZ and Westpac combined are expected to generate more than $53 million in interest by being the last of the big four to pass on the RBA’s cash rate cut, with economists estimating that the major banks earn around $2 million for each day they withhold passing on the rate cut, according to Australian Broker online.
Westpac will pass on 20 basis points on December 17 – a full 13 days after the RBA announced its rate cut, while ANZ borrowers must wait until Friday to hear how much it will pass on as part of its independent rate review with borrowers likely to have to wait at least a week further for any rate cut to take effect (December 21).
The Commonwealth Bank and NAB passed on their 20 basis point rate cuts on December 10, earning an extra $14 million each by delaying the rate cut reaching borrowers.
Only <a href="https://www.propertyobserver.com.au/news/yellow-brick-road-passes-on-the-full-25-bps-reduction/2012120558313?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news" target="_blank">Yellow Brick Road</a> and <a href="/news">ING Direct</a> have passed on the full 25 basis points to borrowers.
Yellow Brick Road’s rate took effect on December 10, but ING Direct borrowers must wait until Christmas Eve (21 days after the RBA decision) to benefit from lower repayments.
 
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Australians focused on paying off home loans, not retirement savings, while banks earns billions more in interest payments

<html><body>Australian Property Monitors (APM) has released a list of results from 459 auctions in Sydney for the weekend of December 8. The clearance rate was 61.7%. <a target="_blank" href="https://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf"> Click here</a> for the auction results, and click on each street address to see the property's marketing.</body></html>

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APM's 459  Sydney auction results show 61.7% clearance rate

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With the mining sector and commodity prices such a topical issue at the moment (for all the wrong reasons), it’s worthwhile having a look at the latest statistics regarding Australia’s resources and energy sector.  As you can see from the Reserve Bank’s ‘Commodity Price Index’ below, non-rural commodity prices are down 21.6% since peaking in July 2011 (the non-rural component of the index includes prices for base metals and other resources, while rural commodities include agricultural items).
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<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/12/lawlessdec10.gif"><img src="/images/stories/2012/12/lawlessdec10thumb.gif"></a>
The fall in commodity prices is one of the primary reasons why Australia’s terms of trade (the ratio of export prices to import prices) have peaked, as can be seen in the graph below (taken directly from the <a target="_blank" href="https://www.rba.gov.au/publications/smp/index">RBA’s latest Statement on Monetary Policy</a>).  While the fall in commodity prices and the terms of trade appears to be quite glum news, look at how high the indicators are compared to their long-term average.  Despite falling by nearly 22%, the non-rural component of the Commodity Price Index remains 125% higher than the long-term average.
Click to enlarge
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The slowdown in commodity prices can be tied back to the slowdown in the Chinese economy, where economic growth has moderated from around 15% pre-GFC and will likely end the 2012 year around 7.5%, according to the OECD.  The OECD is also projecting an improvement in Chinese economic growth over 2013, with a growth forecast of 8.5%, suggesting we are likely to see at least a stabilisation in Chinese resources demand, if not some level of growth.


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With so much riding on the mining sector, the release of the Bureau of Resources and Energy Economics (BREE) <a target="_blank" href="https://www.bree.gov.au/documents/publications/mimp/REMP_Oct2012.pdf">‘Resources and Energy Major Projects’</a> publication last week provides a timely update on key economic variables and the investment pipeline for the sector.  The latest update from BREE highlights the changing landscape for resources and energy-related projects; there are 11 fewer committed projects in the pipeline since April 2012 (due to some projects being completed), however the value of committed projects has increased by around $8 billion, which is an historic high.
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Another key point from the report is the significant proportion of projects which are classified as ‘mega projects’, i.e. those projects worth at least $5 billion.  There are 11 mega projects at the committed stage, which account for 76%, or $201 billion of the total value of currently committed projects.
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Further to this, the vast majority of mega projects relate to projects involved with the liquefied natural gas (LNG) sector, as can be seen in the graph below, accounting for the top seven most significant committed investment projects. 


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Australian resources projects have a lot riding on the natural gas sector at a time when price pressures from the oil and gas industry in the US have been seen a significant competitive intensification and will likely place further downwards pressure on gas prices internationally.   At the same time there have been local cost blowouts which are causing the industry to be increasingly uncompetitive on the world stage.  According to BREE, the cost increases are related to skilled labour shortages, the high Australian dollar, and transport costs, as well as some scope creep across the projects.
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Clearly, the resources sector has some challenging times ahead, and there will be subsequent headwinds faced by Australia’s economic prosperity; it’s no wonder the Reserve Bank are looking towards other industry sectors to fill the economic hole that is being left by the downturn in the resources sector.  While the news appears to be pretty glum across the resources sector, the downshift is coming from an ultra-high base and there is still a huge amount of resources projects that remain committed to, as can be seen in the map from the BREE report below.
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<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/12/lawlessdec105.gif"><img src="/images/stories/2012/12/lawlessdec105thumb.gif"></a>
Tim Lawless is national research director of <a href="https://www.myrp.com.au/" target="_blank">RP Data.</a>
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Just 11 resources mega projects propping up mining boom: Tim Lawless

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It was at Art Basel 2005 when architect Luis Pons unveiled his "<a href="https://www.luisponsd-lab.com/project_detail.php?id=33" target="_blank">Fabulous Floating Inflatable Villa</a>" (pictured below) floating proudly offshore in Miami, a gargantuan inflated art installation taking aim at the ego-driven McMansion culture of the era.
<img width="470" src="/images/stories/2012/12/floating.jpg">
Now in the wake of mindless excess and uninspired grandeur, Luis Pons has re-introduced the work as <a target="_blank" href="https://www.luisponsd-lab.com/project_detail.php?id=36">The Deflated Vi</a><a href="https://www.luisponsd-lab.com/project_detail.php?id=36" target="_blank">lla</a> to Basel 2012, but this time it's on vacant abandoned land within its intended metal columns for the building foundations.
<img src="/images/stories/2012/12/deflated4.jpg">
The art installation reflects his observation of society’s reaction to the aftermath of the United States real estate bubble.
<img src="/images/stories/2012/12/deflated2.jpg">
The work, which symbolises <a href="https://www.propertyobserver.com.au/https://vimeo.com/55053219" target="_blank">the deflation </a>of American egos and plummeting home values, was installed on a lot originally intended for development, but a casualty of the downturn.
The villa was on display at 79 NE 41st St. in the Design District during Art Basel, December 6 to 8.
<img src="/images/stories/2012/12/deflated3.jpg">
"It's contained to represent how we have been trapped by the current situation and our past excesses," Pons says. "A new, more conscious society has emerged over the past several years, one with new values that is much more introspective," Pons told the <a href="https://blogs.miaminewtimes.com/cultist/2012/11/luis_pons_reflects_on_then_and.php" target="_blank">Miami culture blogger Grace Stainback  </a>on the Miami New Times.
<img src="/images/stories/2012/12/deflated.jpg">
"It's an analogy to represent the disparity between where we were in 2005 and where we are today.
"The fact that we are all coping with and surviving the crisis, and adapting to so many changes is significant. We will not go back to the way we once were."
Pons suggests reusing an already existing piece of art to create something new also carries meaning.
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