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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On the November 15 episode of Grand Designs, a couple with a property developer background is building a luxurious beach house in Bryon Bay.
Peter Maddison says the house has a distinct Balinese flavor.
The garage is located on the ground floor and has an exterior stone walkway that runs up the east side to the entry. The first floor has the three bedrooms, including the master bedroom, which has an outdoor bath and shower. The top floor consists of an open-plan kitchen and living area, which opens out to a sweeping view of the bay.
A lift services all three levels.
A swimming pool and spa are located at the rear of the block.
The upper structure of the house is made of a lightweight timber that sits on a heavier stone base.
Before building had started on the house, property developer Max tells Maddison the house is going to cost around $2 million to $2.5 million to build.
Max also says the block is one of the most north-east-facing blocks in Australia, meaning it will get early sunlight.
<a href="/news">Byron Bay</a> is a beachside town in the far north-eastern corner of New South Wales.
According to RP Data, the median house price for Bryon Bay is $660,000. Prices dropped 11.1% in the past year and fell 17.5% in the past five years.
The median rent for houses is $550 per week.
A property located on <a href="https://www.propertyobserver.com.au/https://www.raineandhorne.com.au/properties/147189" target="_blank">12 Beachcomber Drive in Byron Bay</a> is currently listed for $1.85 million. It has been listed for 569 days and was last sold in 2003 for $1.27 million.
Another property located at<a href="https://www.realestate.com.au/property-house-nsw-byron+bay-107948191" target="_blank"> 37 Beachcomber Drive</a> is currently listed for $2.25 million. It has been listed for 1,260 days.
Last week’s episode featured a feng shui expert guiding the development of a <a href="/news">Warburton </a>home.
The Byron Bay Beach house episode will air on the <a target="_blank" href="https://www.lifestyle.com.au/granddesigns/">LifeStyle channel</a> on November 15 at 8.30pm.
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Grand Designs takes on Balinese Byron Bay flavour

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There’s an easy trap to fall into when you’re a property commentator or you work in the industry: the lure of the blanket statements. As more and more of our lives get reduced to soundbites, it’s easy to release lines like “only buy houses” or “don’t touch it if it is more than 10 kilometres from the CBD”, then sit back and relax.
Of course, in property investing, like everywhere else, there are many shades of grey to each argument. Your skill and attention as a property investor should be focused on ensuring that you make the right decision for you and your personal circumstances, while our job as industry leaders should be to provide you with enough factual information to make that decision an informed one.
Unfortunately there has been a lot of misinformation from some property commentators or financial planners telling investors to stay away from properties in the National Rental Affordability Scheme.
While I’m obviously in favour of investing in the NRAS system, I should point out from the start that this is not a blanket statement. There are good NRAS investments and bad ones – it’s your job to make sure that you choose an investment that is best for you.
If you are new to NRAS let me explain it very simply:
•             You buy an investment property.
•             You provide a discount on the rent
•             You get tax-free money from the state and federal governments
The scheme is in place to provide affordable rental properties for middle- to low-income earners. However the income threshold is not as low as you may think. For example, tenants qualify with an income below $45,496 for a single person and $93,079 for a couple. If the couple has two children, the eligible income can increase by 25% with no penalty, which takes the threshold to more than $116,000 per year – a figure most would consider as well off.
According to the Australian Department of Families, Housing, Community Services and Indigenous Affairs, which is responsible for administering NRAS, properties in the scheme are typically indistinguishable from other middle-market dwellings. Rigorous criteria is applied to the location, design and amenity of approved dwellings, and investors can expect to benefit from the annual NRAS Incentive, rental yields and capital gain.
If you are a potential property investor what does this mean to you? Let’s say the normal rent is $400 a week. Under the NRAS program you rent it at $300 a week.
This means you lose $5,200 in income each year ($100 per week), although this income would have been taxable, so your actual loss is about $3,800. But you get $9,981 tax free!
As a comparison, we recently sold units in an <a href="/news">Essendon North</a> development where some were under the NRAS allocation and others were sold to either owner-occupiers or investors who did not wish to participate in the scheme.  For those investors, the cashflow was negative $90 a week in year one, $66 in year two and it took 10 years to become positive. But as an NRAS property, it was positive cashflow $54 a week in year one $81 in year two and $239 by year 10. Over the first 10 years this property is cashflow positive by more than $70,000. These figures are based on an income of $65,000 and a 6.5% interest rate.
This money can be used to reduce personal debt, to pay off the investment property or, yes, to have a holiday.
 
<hr class="system-pagebreak">
 
Critics of NRAS are quick to dismiss its tax benefits by likening it to other schemes with so-called ‘tax benefits’ such as timber plantations and olive groves. Of course, the two have nothing to do with each other. The stock-market based tax dodges were marketed for their tax breaks alone, whereas investors in the NRAS scheme have the security of owning quality properties in good locations.
Others have linked it to negative experiences purchasing off the plan properties in large-scale developments such as Melbourne’s <a href="/news">Docklands</a>. Once again, the commentators are attempting to use guilt by association. It would be like a stockbroker warning you not to invest in a particular stock because four years ago an investment in a completely different stock performed badly.
A final criticism is levelled at direct sales companies selling NRAS properties, because of the high commissions they receive. They suggest the commission is being added to the price and the properties sold above their real value. Does that happen? Sure, but it happens with non-NRAS properties as well, so to dismiss all NRAS properties because of it is short sighted.
Besides, it is easy to find out if this is happening: just mystery shop the builder/developer and see if you save money by going direct. If so then drop the marketing group like a hot potato.
So why is the blanket statement “Don’t buy any NRAS property” wrong? Effectively these commentators are saying there is not one single NRAS property worth buying in the whole country. In fact a recent article on this site suggested that NRAS properties were so bad you would be better spending your money on a holiday. Really?! Come on!
Why would these commentators make these negative comments about NRAS? More often than not, these commentators often promote inner-city high-capital-growth properties as the only way to invest. They really can’t understand why an investor would buy an apartment off the plan instead of an older inner-city apartment in a block of 12, or a single-fronted terrace or any other of those beautiful properties.
If buying a property that you can brag about is your main reason to invest, or if money is no object then you should buy one of these properties. But these properties are out of reach of the average investor; typically they will cost $300 a week or more after tax. How many investors can afford that? And for those that can afford it, you need to ask the question: what else could you do with a spare $300 a week?
The choice between these two mindsets (the pro-NRAS and anti-NRAS) can be reduced to this. You could buy a normal investment property and put money towards it every week or buy an NRAS property and enjoy the tax breaks where the tenant not only buys the property for you but also gives you a profit.
One thing is for sure, the cashflow on these properties can be outstanding. A client of mine on a high income recently purchased an NRAS property and it is positive cashflow by more than $100,000 in the first 10 years.
When this scheme finishes I doubt we will ever see cashflow figures like this again without investing in mining areas.
Just before you think I have broken my own rule about making blanket statements, I want to make something clear.
Not all NRAS properties are good investments, just like in the regular investment market some are terrific and some are shockers. Each NRAS property needs to be treated on its merits, instead of dismissing all NRAS properties. What’s the solution to avoiding a bad NRAS property? Don’t buy one.
Also, a word of warning about the risks of allowing a company that is selling you an NRAS property to also arrange the loan (in a one-stop-shop type arrangement). Potentially the property will undervalue, and they won’t tell you (especially if you have plenty of equity, as you’ll find the bank will lend you the money without telling you about the poor valuation).
How do you deal with this issue? Firstly, you should be aware that there is a cost for the builder/developer to get an NRAS allocation and they will usually pass that on to you (the cost is generally around $10,000 to $16,000). While some might baulk at this, you should remember that it’s similar to paying extra for ducted heating so you get higher rent.  If you want to check the valuation, make your offer subject to a satisfactory valuation, then make an allowance for the NRAS loading and decide if it is reasonable. The key is to make sure the broker or lender tells you what the property values at.
Lastly, one more warning: for most investors interested in NRAS, it is now or never. Why?  Because it is unclear how much longer the scheme will last for. For an investor who plans to buy a few investment properties, buy the NRAS-approved property first, because by the time you’re back in the property market the scheme will likely be at an end.
So remember: keep an open mind about the National Rental Affordability Scheme. Don’t buy a property just because it is has an NRAS allocation. And don’t listen to commentators telling you to stay away from every NRAS investment.
Michael Sloan is the founder of The Successful Investor. He regularly writes for NAB about property investing – for further information about NRAS visit <a href="https://moneybasics.nab.com.au/michael-sloan.">https://moneybasics.nab.com.au/michael-sloan.</a>
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Keep an open mind about the National Rental Affordability Scheme

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The median price of Melbourne has fallen for the seventh straight quarter and is now well below $200,000 once rebates and incentives are factored in, according to the September quarter Melbourne Growth Area Land Report by Oliver Hume.
It is also the second consecutive quarter that the median land price has fallen below $200,000, with Oliver Hume estimating that $30,000 has been sliced off the median price since the market peaked in December 2010.
Measured across 139 projects, Oliver Hume says the gross median land price over the September quarter was $208,750, or $195,750 after deducting incentives and rebates.
The difference in the two median values exactly matches the $13,000 grant that was withdrawn by the state government on June 30, which was for first-home buyers buying or building new homes up to a value of $600,000.
The report says it may be time to question “what would be the physiological effect on the retail market if rebates and incentives were removed”, adding that “many key stakeholders believe that such an action would reinstall much needed buyer confidence”.
Last month, <a target="_blank" href="https://www.propertyobserver.com.au/land/price-melbourne-land-at-its-true-value-and-buyers-will-come-australand/2012102357384">Rob Pradolin, Australand general manager for residential in Victoria</a>, told Property Observer, developers needed to acknowledge that the “market price of [Melbourne] land has changed” and a “re-adjustment in Melbourne land prices” had taken place.
Click to enlarge
<a href="/images/stories/2012/11/humenov14.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/11/humenov14thumb.gif"></a>
The report notes that when rebates and incentives are factored in the fall in first-home buyer median land budgets post the September 2010 peak  has been far more dramatic, falling $48,000, or around 25% to $186,000 – a land price level last experienced in the September quarter 2009.
“Current first-home-buyer land expenditure is thus largely in line with the short-term median – which could be interpreted as a stabilising market," says Oliver Hume.
“Or more importantly, as a key leading indicator that land prices are around where they should be in a balanced market."
The report also found that the rate of supply has adjusted to meet the softer market conditions with just 180 lots added to the current pipeline over the quarter, pushing up total retail supply to around 3,700 lots or just under seven months of supply at current sales rates.
The municipality of Hume continued to record the strongest project sales rate, around eight sales per project per month, followed by Casey, with six sales per project per month in the year to date.
Only two new communities were launched over the quarter in Casey and Hume, which will comprise 589 lots when fully developed and a median land price across the two new projects of $214,950.
This brings the year-to-date count to 19 projects, or around 5,421 lots.
In terms of the 139 projects, Wyndham contains 24% of all projects, followed by Whittlesea and Casey, with 22% and 17% respectively.
The most affordable suburbs are in the Shire of Melton ($164,000), most notable in and around Melton township. <a target="_blank" href="/news">Werribee South</a> ($609,000), <a target="_blank" href="/news">Bundoora </a>($466,250) and <a target="_blank" href="/news">Narre Warren North</a> ($395,000) are the three most expensive suburban land markets
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Median price of Melbourne land falls to $195,750 once rebates excluded: Oliver Hume

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BIS Shrapnel is forecasting the metropolitan Melbourne office market to weaken significantly over the next 12 months, with the vacancy rate reaching 10.6% by the end of 2013.
It forecasts a metropolitan-wide negative net absorption rate of around 130,000 square metres over 2012-13, the worst annual rate of net absorption in the post-GFC period and worse than in the 2002–2003 slowdown.
Net office absorption is the amount of space leased minus the amount of space vacated over a given time frame.
The metropolitan office market incorporates the city fringe (<a href="/news">Port Melbourne</a>, <a href="/news">Richmond</a>, <a href="/news">Collingwood </a>and <a href="/news">East Melbourne</a>) and suburban office markets extending in a 20-kilometre radius around the city.
In its first half of 2012 report, Colliers calculated the Melbourne metropolitan office vacancy rate at 6.2%, with the highest vacancy rate of 7.7% in the outer east (<a href="/news">Box Hill</a>, <a href="/news">Mt Waverley</a>, <a href="/news">Mulgrave </a>and <a href="/news">Burwood</a>) and the lowest in the city fringe (5.5%)
<img src="/images/stories/2012/11/bisnov14.gif">
According to BIS Shrapnel, the implications for landlords and tenants are clear, with an “extremely tough two years” ahead for the Melbourne office market.
“It’s already a tenant’s market and conditions for tenants will become even brighter over the next two years," says Maria Lee, senior project manager at BIS Shrapnel and author of the Melbourne Commercial Property Prospects 2012 to 2022.
“Tenants will be well placed to delay leasing negotiations to take advantage of greater leasing incentives and lower rents. Meanwhile, landlords should focus on leasing strategy to preserve cashflows and property values through the downturn.”
The report notes that the CBD and <a href="/news">Docklands</a> will be somewhat insulated by the fact that several tenants are centralising from the suburbs. BIS Shrapnel forecasts negative net absorption of 50,000 square metres over 2012–13 before the market turns  positive in the following year.
 
<hr class="system-pagebreak">
 
According to Lee, there is a common misconception that the current softness in Melbourne’s office leasing market is due to nationwide lack of business confidence and slow growth outside the mining sector with the expectation that Melbourne will return to business as usual once this is over.
However, she says local conditions are the bigger problem.
According to Lee, the weakness in the Victorian economy will dramatically impact office-based employment in Melbourne over the next two years.
Victoria weak economy is the result of a number of different factors.
BIS Shrapnel expect dwelling building activity to decline over the next two years, compounding the existing weakness in the building industry, which is under pressure from falling non-dwelling building.
The research firm also expects the high Australian dollar is taking its toll on manufacturing, tourism and education services, as well as on the financial services sector which is looking to offshore operations.
And it says that significant cuts to public spending have only just begun, and will get deeper over the next two or three years, providing a significant and prolonged drag on the economy.
“The stand-alone office workforce is expected to be hit particularly hard; indeed, we can already see it coming through in the data. We expect the stand-alone office workforce to contract this financial year” says Lee.
Apart from the economic factors, changes to the way businesses use office space are also impacting on demand for office space.
BIS Shrapnel highlights another negative influence on the demand for office space: falling workspace ratios – the amount of occupied office space per worker, a trend in recent years and one that is expected to continue
“This will compound the impact of a contracting workforce, leading to negative net absorption in 2012-13,” says Lee.
"Many operating in the market today will remember what it felt like to be operating in a market where the mood was depressed. That’s what we are set to return to,” Lee says.
Picture of Melbourne courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
 
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Weak local economy to push suburban Melbourne office vacancy rate to 10.6% by December 2013: BIS Shrapnel

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Sydney houses priced under $1 million are at six o’clock on the property clock and at the bottom of the property cycle, according to Greville Pabst, CEO of property valuers and consultants WBP Property Group.
However, Pabst does not expect to see an improvement in Sydney house prices in the short term, with the prestige market still favouring buyers.
He also places the unit market at the bottom of the bottom of the property cycle, but with better prospects for price growth.
<img src="/images/stories/2012/11/clock-generic.jpg">
<ul>
<li>At 12 o’clock the market is at its peak (demand exceeds supply)</li>
<li>At 3 o’clock the downswing has set in (an evenly supplied market)</li>
<li>By 6 o’clock it has bottomed out (an oversupplied market)</li>
<li>At 9 o’clock the market is rebounding (supply tightening)</li>
</ul>
Looking at the prospects for the detached Sydney housing market, Pabst says there may be increased activity within the market place assisted by the lower interest rate climate with potential for further reductions.
“I can’t see sustained increases in prices however until overseas market volatility subsides and confidence returns. We are going to bounce along however overall trend will be flat,” he says. Pabst says the prestige market could have further to fall, "depending on where you are in Sydney".
“Northern beaches, for example, remains a buyers’ market and discounting is still significant. These markets may be a five on the property clock.”
Pabst says Sydney units remain at six o’clock, but “we may see some price growth due to higher price new units being sold off-the-plan depending on when they settle.
“Unit prices otherwise won’t see significant change,” he says. 
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Sydney houses under $1 million and units at bottom of cycle, but prestige market still favours buyers: WBP

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The truth is, the best time to plant a tree will always be "10 years ago". But while hindsight is a great tool to reflect on the past, it is useless for planning and acting in the present. This is because no two moments in time are ever the same. If that sounds a little vague, let me put this in to a property context. There are so many variables in the property investment space occurring at any one time, each one reacting to and affecting the others differently, and in changing volumes. This dynamic mix means that conditions are constantly changing, so very rarely would one exact same market conditions present itself twice to the would-be property investor. In this sense, it is true that yes – the best time to act and to start planning (and implementing!) your investment strategy will always be "now".
Probably the best way to reassure aspiring investors who have doubts is to look at one main performance metric: the property asset class performance over time. I say this because property follows a cyclical trajectory. While few are able to predict exactly how long one full property cycle takes to occur (a cycle completion is not really observed until after it has ended – in other words, only really definitive in hindsight), history tells us that a cycle occurs approximately every five to 10 years. It doesn't really matter how long or short each cycle is. Instead what matters is that cycles occur and that the four main phases to one cycle finish and a new one begins over time. These four phases are a definable peak period, then a decline, followed by a flattened, or stagnated market, followed by a rising market.  Cycles have been plotted pretty extensively over the past 20 or so years, due in part to both better demographic and census data analysis being made available and residential property investment as an asset class coming in to its own. The emergence and industrialisation of property investment has then fuelled this demand for data and statistics in the past five to 10 years, allowing for unprecedented granularity in statistical analysis and coverage of market trends.  Going back about 20 years before that – so, the early 1970s – cycles were fairly loosely observed and tracked, with some of the early pioneering residential property investment strategists beginning to grow their portfolios as far back as this point. Up until then, the concept of using property as a wealth driver was limited only to those "investing" in their own homes and being done with it. What a shift we can observe from those days! Now many investors choose not to own their own home, instead renting where they want to live, and buying where they want to invest.  What this means is that we have a good track record that regardless of how bad things seem at the worst phase of any property cycle and all the naysayers shouting loudly from the rooftops "the bubble will burst and you'll all be left exposed", history tells us otherwise. Even when observing examples where extreme market corrections take place (I refuse to call them "bubble bursts", because that language suggests that a single person or small group is forcibly and artificially blowing air into the bubble at any one time, suggesting that a such a single-party force has any control over the market – it does not; the market is far too big and complex for any one party to influence significant at any one time), the markets do recover again and providing your investment strategy can work around this; i.e. employing a tactical approach such as long-term "buy and hold", or a manufactured-wealth strategy such as "renovate and hold" or even "flipping' property".
 
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 Let's observe the USA market correction that occurred in 2008. While values dipped heavily in many markets during this time, fast-forward four years and USA national averaged values are in a much better place. Recovery has by no means commenced in all markets, with some markets still to correct further, by and large many markets have begun growing further and some are even coming in to an early boom phase. 
 
Nearly all market monitoring metrics are born from following the property cycle. Variables like interest rate peaks and troughs, supply and demand, and demographic factors such as population growth and decline can all be deduced and plotted against the overall property cycle.
 
<img src="/images/stories/2012/11/mcevoynov14.jpg">
<div>There are certainly some factors that make right now, so November 2012, very attractive to new investors: 1) Capitalising on current cyclical position. I have always believed that Australia is made up not of one big cycle, but hundreds and thousands of smaller ones, all operating independently. But when you average out the national trajectory, it seems that most markets are in their flat/bottomed out stage of their cycles. In other words, now is a great time for mostly dirt-cheap price entry points for property.</div>
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 2) The cost of finance is very cheap. How cheap? There are fixed and variable interest rate deals out there so cheap;that they have only been recorded lower just once in the last 50 years. Now is a great time to revisit your current rates (if you are already an investor), or acquire property on a cheap finance deal.</div>
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 3) Supply and demand in most markets is excellent. And I say "most" markets because there are of course exceptions. Inner Melbourne, for instance, is oversupplied, with demand levels low. But for every market like this one, right now there are three or four others where rental demand is very strong. This means that quality tenants – who are willing to pay market rate for the right kinds of properties – are out there in abundance.</div>
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 4) Infrastructure projects are quietly creeping onwards. I say quietly, because there has not been huge levels of noise in the market about these, but most states and territories are pushing on with development projects such as new arterial roads, highways, train and bus lines, parks, hospitals, and education facilities (including entirely new university campuses). Align with areas where development will make residing in these areas more attractive, and there are gains to be had. </div>
"Now" is always the best time to invest. As always, do your thorough due diligence and seek out opportunity in relation to the property cycle.
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" href="https://propertyspectator.blogspot.com.au/">Property Spectator.</a>
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The best time to invest in property is right now

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There is likely to be no dramatic rebound in new dwelling investment in the next few years despite a build-up demand through population growth and other factors such as low interest rates, according to Jonathan Kearns, head of economic analysis at the RBA.
Kearns says there is likely to be a "relatively moderate" pick-up in the rate of dwelling investment in the medium term, with high prices holding back young adults from moving out of parents' homes.
This modest, medium-term outlook will be keenly considered by the RBA board given it noted in its monetary policy statement that “private residential building approvals, dwelling prices and auction clearance rates have all increased” in recent months indicating signs of a “prospective improvement”.
Delivering a speech today in Sydney on the outlook for dwelling investment Kearns said the high cost of housing relative to incomes was a factor holding back the demand for new housing, despite strong population growth.
“If housing was less expensive, then young adults may decide to move out of their parents' home earlier, people may decide to live by themselves rather than in a group household, and more people may decide to have a holiday home,” says Kearns.
In particular he placed the blame on the last boom in house prices in the late 1990s and early 2000s
“The sharp increase in house prices from 1999 to 2003 is likely to have had a dampening effect on household formation rates, and so the demand for housing," he said.
Kearns presented the following graph to show how new dwelling investment has declined over the past decade.
<img src="/images/stories/2012/11/rbanov13.gif">
But Kearns also noted supply-side issues preventing a strong recovery including the supply of land.
“The ownership of undeveloped land has also been highlighted as an issue in some circumstances.
“Where the ownership of land on the city fringe is dispersed, say through many ‘hobby farms’, or equivalently in the inner city where existing blocks could be used for infill, it can be difficult for developers to negotiate the purchase of sufficient land to make development economically viable.
“Proposed developments can also attract opposition from nearby existing residents. These objections can take many forms including increased congestion, a change in the character of the area, environmental issues or reduced value of their own homes,” he said.
Overall though he says the information on the strength of demand related to demographic factors, and the tightness in the rental market, "suggest that the rate of new construction has been lower than might have been expected".
 
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Kearns highlighted a number of demographic and economic factors that suggest there was “sufficient demand for housing in the economy that an increase in supply could easily be absorbed”.
These include strong population growth, a relatively low rate of dwelling construction and relatively tight conditions in the rental market suggest combined with lower interest rates and relatively strong income growth.
“That said, some factors suggest that the recovery may be relatively modest, including that households have not shown an inclination to take on debt at the same rate they did in the 1990s and early 2000s, and that the ratio of prices to income is high relative to its history, suggesting that it is unlikely that a large increase in prices is in prospect."
He also highlighted that determining under-supply and over-supply of housing in any one year is difficult to calculate.
“Often analysts calculate a concept of ‘underlying demand’, which is said to be the demand for new housing there would have been in the absence of significant changes in price growth … but … it isn't really possible to distinguish what part of the levelling off in average household size is the result of demographic preferences, and how much is due to the cost of housing
“Depending on what assumptions are made about this, some basic calculations can suggest that, since 2005, new construction and ‘underlying demand’ have been somewhere between being broadly in balance to there being a shortfall of up to 50,000 dwellings per year,” he said.
Overall, he said, “it looks likely that dwelling investment will pick up at a relatively moderate rate in the medium term".
“How quickly and how strongly of course remain important questions for understanding the impact on the overall economy,” he says.
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Only modest pick-up likely for residential building in next few years with high prices a factor: RBA

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Business conditions fall further in October, recording their weakest outcome since May 2009, with construction sentiment falling sharply, according to the latest NAB monthly business survey.

The index fell from +1 to -1 partly unwinding a modest improvement in September, and showing no signs of improving despite the RBA cutting the cash rate by 25 basis points on October 3 to 3.25%.
Confidence in the construction sector fell 11 points to -9 points, "with the lure of lower borrowing rates seemingly having little positive impact on sentiment in construction".
“Businesses were more downcast in October, with the pessimism particularly apparent in the mining and construction sectors," says NAB chief economist Alan Oster.


“Confidence deteriorated heavily in construction, returning to the heavily negative levels that have applied since May and making the improvement in September look anomalous.


"Mining conditions are currently the weakest they have been since the Queensland floods in early 2011, which caused major disruptions to coal mine production.


“It appears that the RBA’s decision to lower the cash rate by 25 bps to 3.25% at its October meeting failed to improve sentiment, with firms instead likely to be focussing on the reasons for the rate change – a softening global economy, fiscal tightening, a soft labour market and high Australian dollar,” says Oster.


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Business conditions weakest in three years as construction sentiment slides: NAB

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Popular Caulfied South meat-lovers restaurant Big Boy BBQ has leased space for its second eaterie at around $1,400 per square metre on Hardware Lane in the Melbourne CBD, which runs between Bourke and Little Bourke Street.
The lease over the 100 square metre premises at 29 Hardware Lane was negotiated by Savills Australia’s state retail director, Michael Di Carlo, in conjunction with Grange Property Consultants.
The premises were previously tenanted by Affogato Espresso Bar.
There are already a number of restaurants on the popular pedestrianised retail strip including Amigos Mexican Restaurant, Grill Steak Seafood Restaurant, The Mill Restaurant, Pugg Mahones and Campari House.
Hardware Lane is a tightly held retail strip with commercial property listings showing no shops currently available for lease.
“Big Boy BBQ was keen to test the market with its offering in the CBD driven by the CBD’s significant recent population growth and the existing office staff catchment,” says Di Carlo
“Consumer spending on restaurants and cafes has also held up very well at a time when retailers generally are feeling the pain of a consumer savings trend and on-line competition.”
The lessor is a Melbourne-based investor.
 
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Big Boy BBQ leases restaurant space in Hardware Lane in Melbourne CBD

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Building and construction industry super fund Cbus is considering allowing its members to invest directly in its portfolio of commercial, retail and residential property.
Currently super members can invest in property as a component of a diversified investment portfolio that may also include shares, fixed income and other investment strategies.
However, Cbus chief executive David Atkin says the board is currently reviewing different strategies that would allow members to invest directly in the property assets managed by property investment and development subsidiary Cbus Property reported the Australian Financial Review.
The review comes as super funds look to increase their exposure to the property market as a portfolio diversification strategy and as a way to hold onto members who can now invest in property directly through their self-managed super funds.
Last month, another <a target="_blank" href="https://www.propertyobserver.com.au/commercial/australiansuper-to-double-commercial-property-investments-as-part-of-diversification-play/2012102457425">industry super fund, AustralianSuper</a>,  said it planned to more than double its investments in commercial property over the next five years.
Cbus Property has built up a $2 billion property portfolio by investing in new building projects including office and retail developments and residential apartment projects.
It is also an investor and manager of commercial property.
In conjunction with Dexus, it developed and owns two-thirds of the 27-storey 1 Blight Street office tower in the Sydney CBD and also owns and manages the 35-storey Ernst &amp; Young tower on Exhibition Street in the Melbourne CBD.
Current projects under construction include the futuristic new 63,000 square metre NAB building at 700 Bourke Street in Melbourne’s Docklands, with about $1.5 billion worth projects in its development pipeline including 850 apartments.
Property investments delivered Cbus a 9.5% return last year compared with a 12.4% return for Australian fixed, but better than 7% loss from Australian shares.
Cbus is also review expanding its blue-collar membership base to include related white-collar professions, such as architects.
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