<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.

[smartcode_project:default project_id=95289 project_image_fid=366760]

<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.

[smartcode_project:default project_id=95289 project_image_fid=366769]

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.

[smartcode_project:default project_id=95289 project_image_fid=366762]

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]

Joel Robinson

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

Luxury apartment buyers have long prioritised design, space and finishes, but increasingly they're placing equal importance on something less tangible: how easily they can live without relying on a car.

At <a>Richmond Square</a>, <a href="https://www.apartments.com.au/developers/fortis">Fortis</a> believes that convenience begins beyond the apartment itself, with the mixed-use precinct earning a near-perfect Walk Score of 99.

The development has been planned around the idea that some of the most valuable amenities aren't contained within a building, they're the restaurants, cafés, parks, transport connections and daily conveniences that can all be reached on foot.

Located just behind Swan Street and Church Street, <a href="https://www.apartments.com.au/new-apartments/richmond-square-1-wiltshire-street-richmond-vic-3121">Richmond Square</a> places residents within one of Melbo​u​rne's most established lifestyle precincts while offering a quieter residential setting removed from the busiest thoroughfares. East Richmond Station is moments away, trams run along both Swan and Church Streets, and the MCG, Melb​​ourne Park, Yarra River trails and the CBD are all within walking distance. At the same time, the precinct itself will introduce a curated mix of dining, retail, hospitality and wellness offerings, creating a destination that extends well beyond its residential buildings.

[smartcode_project:default project_id=13181 project_image_fid=348530]

For Fortis, that combination of location and scale was what made the site unique.

"<a href="https://www.apartments.com.au/developments/richmond-vic-3121">Richmond</a> is one of Melb​o​urne's most established and distinctive inner-city neighbourhoods, with a rare combination of dining, culture, recreation, public transport and proximity to the CBD," the developer said.

"The opportunity at Wiltshire Street was particularly compelling because the site sits slightly removed from the activity of Swan and Church Streets while remaining only moments from everything that makes the area desirable."

Rather than developing a standalone apartment building, Fortis consolidated 15 individual properties to create one of the larger development parcels assembled on Mel​b​ourne's city fringe in recent years. That allowed the team to deliver a genuine mixed-use precinct comprising 107 residences across Wiltshire House and Carmine House, premium office space, hospitality venues, retail, wellness offerings and a future 57-room hotel.

"The scale of the site allowed Fortis to think beyond a standalone apartment building," the developer said.

"Richmond Square could be planned as a complete lifestyle precinct, bringing homes, workplaces, dining, retail, hospitality and wellness together around a series of activated public spaces. The aim was to create a destination that feels connected to Richmond rather than separate from it."

[smartcode_project:default project_id=13181 project_image_fid=348533]

The emphasis on walkability has also resonated with buyers.

Interest has been strongest from established owner-occupiers, particularly downsizers from Richmond and Melb​ourne's inner east who want to remain close to familiar restaurants, workplaces, family and social networks while moving into a more secure, lower-maintenance home. The project is also attracting Mornington Peninsula and interstate buyers seeking a Melb​ourne residence they can lock up and leave between visits.

Many are looking for generous living spaces, room to entertain, quality finishes and confidence in the project team, but location remains one of the biggest deciding factors.

"For many buyers, Richmond Square provides a way to simplify the practical side of home ownership without reducing the quality of their lifestyle," the sales team said.

"Location is also a major driver of interest. Buyers can remain connected to the CBD, major sporting events, the arts centres, local restaurants, cafes and bars and their family while living in a private and secure residence that is easy to lock up and leave for weekends or longer periods away."

[smartcode_project:default project_id=13181 project_image_fid=348549]

The residences themselves have been designed with that buyer in mind. Award-winning architecture practice SJB and interior designers Hecker Guthrie have created spacious two and three-bedroom apartments and penthouses that prioritise generous living areas, natural light, bespoke joinery and private terraces. Above, a rooftop sanctuary by Acre includes landscaped lawns, bookable dining rooms, barbecue facilities, wellness spaces and panoramic views across the CBD, the MCG and Port Phillip Bay.

Fortis believes Richmond Square reflects a broader evolution in apartment living, where the surrounding neighbourhood becomes just as important as the residence itself.

"Richmond Square introduces a different proposition: generously proportioned residences within a genuinely mixed-use, hospitality-led destination," the developer said.

"The project's location and Walk Score of 99 further support a lifestyle where residents can complete many everyday journeys without relying on a car."

Fortis has assembled an experienced team that includes <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, <a href="https://www.apartments.com.au/interior-designers/hecker-guthrie">Hecker Guthrie</a>, <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a> and builder <a href="https://www.apartments.com.au/builders/hacer-group">Hacer Group</a>, reflecting the developer's commitment to creating projects with enduring design quality and meaningful connections to the communities in which they sit.&nbsp;

Richmond Square is an expression of that philosophy, bringing together homes, workplaces, hospitality and wellness within one of Me​lb​ourne's most walkable neighbourhoods.&nbsp;

Construction is now almost complete, providing purchasers with growing confidence ahead of its expected September 2026 completion.

[smartcode_project_cta:default project_id=13181]

Walk Score of 99 places Richmond Square at the heart of Melbourne's most connected lifestyle

<h3 data-end="19" data-section-id="1dvgwoe" data-start="0">Summary</h3>

<ul data-end="634" data-start="21">
	<li data-end="170" data-section-id="1o77v31" data-start="21">Walker Corporation has lodged plans for a second major residential development in the Maroochydore City Centre, a 29-storey tower known as Celeste.</li>
	<li data-end="327" data-section-id="1lb0y6t" data-start="171">The Plus Studio-designed proposal at Lot 30 Sunshine Coast Parade would deliver 208 apartments, including four four-bedroom sub-penthouses and penthouses.</li>
	<li data-end="487" data-section-id="za720" data-start="328">The application comes as Walker doubles down on Maroochydore following the strong sales campaign at SOL by Walker, where the first tower is nearing sell-out.</li>
	<li data-end="634" data-section-id="5sovec" data-start="488">Walker is a key partner in the transformation of the Maroochydore City Centre, which is expected to ultimately deliver at least 4,000 new homes.</li>
</ul>

Walker Corporation is doubling down on Maroochydore following the successful sales campaign at its first residential project in the emerging CBD.

The national developer has filed plans for <a href="https://www.apartments.com.au/new-apartments/celeste-30-sunshine-coast-parade-maroochydore-qld-4558">Celeste</a>, a new 29-storey apartment tower at Lot 30 Sunshine Coast Parade, just metres from its under-construction SOL by Walker development.

The plans, prepared by Plus Studio, would see 208 apartments delivered across a 100-metre tower on the 2,376 sqm site, which fronts Sunshine Coast Parade, First Avenue and Future Way within the Maroochydore Priority Development Area.

<img alt="Walker" data-entity-type="file" data-entity-uuid="17038209-6fea-4ed2-855d-fd4df65b3d02" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-10%20at%2010.24.16%E2%80%AFAM.png?VersionId=iZD.oVXcQn.aLpUytDAW.CWjxP4puWMy" />

The proposed apartment mix comprises 36 one-bedroom apartments, 48 two-bedroom apartments, 72 two-bedroom apartments with an additional multipurpose space, and 48 three-bedroom apartments.

The upper levels would be capped by two four-bedroom sub-penthouses and two four-bedroom penthouses, taking the total apartment count to 208. The preliminary yield study also provides 262 car spaces, 114 resident bicycle spaces and storage for each apartment.

It represents Walker's next major residential move in the new Maroochydore CBD after the success of SOL by Walker, its $220 million two-tower project nearby.

SOL launched to market in early 2025 and has since seen strong demand, particularly from local owner-occupiers. By February this year, Walker said the first SOL tower was nearing sell-out, with a strong waitlist also emerging for its recently released penthouse collection.

Construction is already underway on SOL, with the first tower expected to be completed in late 2027 and the second to follow in early 2028.

[smartcode_project:default project_id=147777 project_image_fid=319846]

<h2 data-end="2518" data-section-id="1b2dyo5" data-start="2459">Celeste to rise 100 metres over Maroochydore City Centre</h2>

Celeste would take a different form to the twin 19-storey buildings at SOL.

Plus Studio has designed a single 100-metre tower above an activated podium, with the architecture responding to the site's prominent position and three street frontages.

The podium would incorporate commercial tenancies and public art, with sweeping façade elements wrapping the street edges. The scalloped concrete podium has been inspired by the patterns created in sand at low tide, while extensive landscaping would continue vertically through the tower.

The ground level plans show three commercial tenancies addressing Sunshine Coast Parade alongside the residential lobby and landscaped public realm. The podium would then accommodate several levels of car parking before the residential tower rises above.

<img alt="Celeste" data-entity-type="file" data-entity-uuid="121f77b1-71c5-46d7-9b36-0a7d474211ca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-10%20at%2010.24.47%E2%80%AFAM.png?VersionId=MGrg9Hb7HgzLN0Lelq_xrXNAruVl77ia" />

Plus Studio said the tower had been designed to maximise views from each apartment, taking in the Maroochy River, Sunshine Coast hinterland, Cotton Tree and Maroochydore Beach and ocean.

Those views have also shaped one of the project's key features, with Walker proposing to put the primary resident amenity on Level 29 rather than lower within the building.

The rooftop would feature a 284.9 sqm pool area with an infinity edge, along with a cold pool, spa, sauna, 93.2 sqm gym, sunset lounge, BBQ and dining areas, pool deck and private dining space. Cabanas and day beds are also shown across the recreation level.

The two penthouses would extend across the upper levels and each feature private terraces and plunge pools.

<h2 data-end="4202" data-section-id="v5f4ix" data-start="4160">Walker's growing Maroochydore footprint</h2>

Celeste further reinforces Walker's commitment to the transformation of Maroochydore City Centre.

Walker is one of the key partners delivering the new CBD alongside Sunshine Coast Council and SunCentral Maroochydore, with the broader 62-hectare Priority Development Area occupying the former Horton Park Golf Course and surrounding land.

The precinct is ultimately expected to accommodate at least 4,000 new homes as Maroochydore evolves into the Sunshine Coast's principal commercial and residential centre.

When SOL secured approval in February 2025, Walker Managing Director and CEO David Gallant described it as the "first of many residential projects" the company planned for the Maroochydore City Centre.

Celeste now provides the clearest indication yet of what comes next.

The site sits immediately within the new CBD, with the design report identifying Sunshine Plaza and surrounding parkland within walking distance and Maroochydore Beach around a five-minute drive away.

For Walker, the timing of the application comes as its first residential bet on the new CBD appears to have been vindicated.

SOL has progressed from planning approval to construction while its first release has approached sell-out, giving Walker confidence to push ahead with another 208 apartments and take its residential pipeline in the Maroochydore City Centre to around 450 dwellings across the two projects.

Celeste remains subject to planning approval, with the architectural material describing the scheme as a preliminary yield study that may change through the assessment process.

Walker doubles down on Maroochydore with 29-storey Celeste apartment tower

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

Apartment buyers in New South Wales are set to gain a decade of insurance-backed protection against major building defects, after the NSW Parliament passed the Fair Trading and Building Legislation Amendment Bill 2026.&nbsp;

The Bill establishes decennial defect insurance, known in the market as Latent Defects Insurance (LDI), as an alternative to the existing two-year strata building bond. It cleared the Legislative Council with amendments on Tuesday evening (August 4, 2026), with the Legislative Assembly agreeing to those amendments shortly after.

Under the reform, eligible developers can satisfy their statutory bond obligation by taking out an approved decennial-style policy that gives owners 10 years of cover for major structural defects from completion, claimable directly, without first having to pursue developers or builders through costly legal action.&nbsp;

[smartcode_project:default project_id=111820 project_image_fid=344699]

The change forms the final tranche of amendments arising from the 2021 statutory review of the Strata Schemes Management Act 2015 and related legislation.

Resilience Insurance, which originated the cover in Australia and has delivered it in NSW since 2022, welcomed the passage and credited the NSW Government for delivering it.

“This is protection apartment buyers have needed for a long time, and the credit for delivering it belongs to the NSW Government,”&nbsp;said Corey Nugent, CEO of Resilience Insurance.

“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into. Reform like this is what good, evidence-based regulation looks like.”

Resilience has delivered LDI in NSW since 2022, protecting thousands of apartments, giving the State, and now the country, real-world evidence of how decade-long, no-fault protection works in practice.

[smartcode_project:default project_id=136442 project_image_fid=374084]

The reform also places NSW within a wider national shift.

NSW is the third jurisdiction to put decennial cover into law. The ACT legislated for it in 2024, with the scheme taking effect in late 2025, and Victoria passed its own framework on 17 June. Between them, the three cover the majority of Australia's apartment market.

The reform commences once the legislation is proclaimed, which is expected in the coming weeks. From that point, developers of Class 2 residential apartment buildings can meet their statutory obligation with an approved decennial policy in place of the bond.

Buyers who purchased into projects that took out the cover early are among the first in the country to take keys to apartments carrying decade-long structural protection.

“With the legislation passed, the focus now turns to making it work for buyers,”&nbsp;Nugent said.

“There are already thousands of apartments in NSW covered by this insurance, bought by developers who moved early. The question every buyer should be asking in a display suite is a simple one: does this building come with 10-year defect cover, and who stands behind it?&nbsp;

“We look forward to working with the Government and the Building Commission in coming weeks as the framework moves to implementation, and to sharing what we have learned over the past four years so the protection reaches owners as smoothly and quickly as possible.”

[smartcode_project:default project_id=134954 project_image_fid=4553]

Other states are working through their own reform programs. Western Australia has indicated that decennial cover is within consideration a later stage of its reform sequence, and Queensland has been examining the settings as it looks at the development pipeline ahead of the 2032 Olympics.

Resilience Insurance acknowledges the NSW Government’s continued focus on strengthening consumer protection while supporting housing delivery across the State.

Fast Facts: What the reform means

<ul>
	<li>Proven at scale:&nbsp;Decennial cover has operated in NSW since 2022, protecting thousand of apartments.</li>
	<li>10 years of cover:&nbsp;Protection for major structural defects runs for a decade from completion, claimable directly and with no legal action required.</li>
	<li>An alternative to the bond:&nbsp;Eligible developers can meet their statutory obligation with an approved decennial-style policy in place of the 2% strata building bond.</li>
	<li>Part of a national shift:&nbsp;The ACT has had decennial provisions in force since 2025 and Victoria passed its framework in June. NSW now joins them.</li>
	<li>No-fault, first resort:&nbsp;Owners corporations claim directly from the insurer without first having to establish who is liable for the defect.</li>
	<li>Cost-competitive:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the 2% bond while offering broader, longer protection.</li>
	<li>Market position:&nbsp;Resilience originated LDI in Australia and has delivered it in NSW since 2022.</li>
</ul>

Fast Facts: What is Resilience LDI?

<ul>
	<li>Resilience Latent Defects Insurance (LDI):&nbsp;Covers major structural defects for 10 years from completion.</li>
	<li>Consumer-first:&nbsp;Direct claim access, no need for lengthy legal action.</li>
	<li>Cost advantage:&nbsp;At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.</li>
	<li>Market leader:&nbsp;&nbsp;Resilience Insurance originated LDI in Australia and is the national market leader.</li>
</ul>

NSW parliament passes 10-year defect insurance laws for new apartment buyers

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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Perth sales got off to a faster start in January 2013 than January 2012.
There were 848 residential property sales in Perth the week ending January 16, according to the Real Estate Institute of Western Australia.
This is 43% more than the same week last year, which recorded 592 sales.
<img src="/images/stories/2013/01/reiwajan16.gif" height="537" width="300" alt="reiwajan16">
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cknowlton-QnEa6ntUYP

Perth sales activity up 43% on the same week last year: REIWA

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The restructuring of the Centro Retail Australia property portfolio continues with the shopping centre landlord announcing that it has acquired the Centro Tormino, about 8 kilometres south of Coffs Harbour for $65.5 million from one of its investment syndicates.
The sale was concluded on December 14 and was in line with the June 2012 independent valuation of the centre and 8.3% above the highest offer received for the Centre during the most recent March 2012 sale campaign.
It follows Centro selling its Surfers Paradise Mall for $162.5 million to a Challenger institutional investor syndicate.
Centro Tormino formed part of the Centro MCS 16.
The 21,000 square metre mall was acquired for $25 million in September 2006 on a yield of 10.28% with Coles and Woolworths as the anchor tenants and 35 speciality stores.
The syndicate has not made any distributions to investors since July 2008 and its senior debt facility was due to expire in December last year.
In his update to investors, Gerard Condon, executive general manager of syndicates, says the sale to Centro Retail Australia saved the syndicate approximately $650,000 in sale agents commission.
He also said that any alternative strategies were likely to take more time to complete and incur further transaction costs with no guarantee of improved value for syndicate investors.
Investors are forecast to receive a final syndicate net asset backing of $0.44 per unit.
According to the Australian Financial Review, Centro is considering purchasing another single-asset fund, MCS 27 which holds the $91 million Sunshine Marketplace in Melbourne, as its debt facility reaches term.
Centro is currently acquiring key syndicate assets and disposing of those it deems non-core as part of its restructure plan agreed with lenders in December 2011.
Other assets it has acquired include the Centro Dianella in Perth and full-ownership of the $570 million Bankstown shopping centre in NSW.
Centro will rebrand to Federation Centres at its EGM on January 22, subject to shareholder approval.
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lschlesinger-FZcF9M3vE6

Centro buys Coffs Harbour mall from syndicate for $65.5 million

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Byron Bay's total property values have dropped 6.7% in the past three years, according to the NSW Valuer-General, with land owners in the Byron Bay local government area (LGA) recently issued with the fresh valuations.
These valuations are used for ratings purposes and reflect the land value based on market conditions as at July 1, 2012.
Byron Bay's 2012 valuation program consisted of a total of 13,036 properties, up from 12,800 in January 2010.
Property values in the Byron Bay municipality have generally decreased in the three-year period since the last valuation program was conducted.
“The total land value of the Byron Bay LGA as at 1 July 2012 was approximately $6.04 billion. This is an overall decrease from the total land value of $6.44 billion determined as at 1 July 2009,” says Valuer-General Phillip Western.
Residential land values have decreased slightly in the period, with the stronger falls in top-end suburbs such as Wategos Beach, Suffolk Park and New Brighton.
In contrast to the general decrease in value, residential land in parts of Mullumbimby and Sunrise Beach showed slight increases in value.
Commercial land values have followed a similar trend, generally showing a slight decrease, with the exception of a number of properties in Ocean Shores, which have shown a slight increase in value.
Industrial land has bucked the trend and generally recorded slight to moderate increase in value over the past three years.  This is can be demonstrated by values of similar properties in Bonanza Drive, Billinudgel, valued in both 2009 and 2012 and rising from $253 per square metre to 270 per square metre  This represents a 7% increase in value over the three-year period.
Rural properties and hobby farm land followed the general pattern and shown a slight decrease in value with the exception of Mullumbimby, showing slight to moderate increases in value.
Typical residential land values as at 1 July 2012 were:
<ul>
<li>616 square metres at Bottlebrush Crescent, Suffolk Park valued at $300,000</li>
<li>633 square metres at Cooper Street, Byron Bay valued at $370,000</li>
<li>718 square metres at Grevillea Avenue, Mullumbimby valued at $225,000</li>
<li>641 square metres at Ivory Curl Place, Bangalow valued at $265,000</li>
<li>613 square metres at Mullumbimbi Street, Brunswick Heads valued at $450,000</li>
<li>1,195 square metres at Tindara Avenue, Ocean Shores valued at $220,000</li>
<li>650 square metres at Mia Court, Ocean Shores valued at $315,000.</li>
</ul>
Typical commercial land values as at 1 July 2012 were:
<ul>
<li>607 square metres at Burringbar Street, Mullumbimby valued at $470,000</li>
<li>658 square metres at Fletcher Street, Byron Bay valued at $1,540,000.</li>
</ul>
Typical industrial land values as at 1 July 2012 were:
<ul>
<li>1,000 square metres at Bonanza Drive, Billinudgel valued at $270,000</li>
<li>1,494 square metres at Smith Street, Mullumbimby valued at $310,000</li>
<li>1,177 square metres at Centennial Circuit, Byron Bay valued at $500,000.</li>
</ul>
Typical rural land values as at 1 July 2012 were:
<ul>
<li>59 hectares at Kennedys Lane, Ewingsdale valued at $1,070,000</li>
<li>77 hectares at Vallances Road, Mullumbimby valued at $725,000.</li>
</ul>
Typical rural residential land values as at 1 July 2012 were:
<ul>
<li>7,625 square metres at Brushbox Drive, Mullumbimby Creek valued at $364,000</li>
<li>4,047 square metres at Figtree Court, Ewingsdale valued at $450,000</li>
<li>4.9 hectares at Friday Hut Road, Possum Creek valued at $550,000</li>
<li>2.5 hectares at Lagoon Drive, Myocum valued at $400,000.</li>
</ul>
Typical hobby farm land values as at 1 July 2012 were:
<ul>
<li>18 hectares at Kirklands Lane, Nashua valued at $510,000</li>
<li>22 hectares at Myocum Road, Myocum valued at $600,000</li>
<li>21 hectares at Middle Pocket Road, Middle Pocket valued at $540,000</li>
</ul>
These valuations have been compiled during the 2012 valuation program from the analysis of 322 residential, 34 commercial, 12 industrial and 192 rural sales.
Byron Bay picture courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
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equinn-i7Kmo9afeu

Byron Bay land values down almost 7% in past three years

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The Americans are coming back.
A few years after a slew of American companies started arriving on Australian shores, more franchises are searching for operators to escape glum economic conditions and seek a safer trading environment.
The popular diner chain Denny's, one of the largest and most successful brands in the United States, is now searching for a master franchise, along with the ice cream group Rita's, fondue restaurant The Melting Pot and healthcare firm BrightStar.
The move comes as a number of American businesses have <a href="https://www.smartcompany.com.au/retail/20100216-us-companies" target="_blank">arrived in the past few years</a>, with more such as <a href="https://www.smartcompany.com.au/retail/051377-williams-sonoma-and-pottery-barn-opening-in-australia-six-things-you-can-learn-from-the-american-homewares-giant" target="_blank">Pottery Barn</a> on their way.
Grant Garraway of the Franchise Shop is administering the local search process for the four brands, and says Denny's is now ramping up its approach in the Australia-New Zealand region.
"They were here in the market some time ago, and then withdrew. They're up to about eight stores now in New Zealand."
"It's not an inconsiderable investment that we're talking about for Australia. It's a 10-location license."
The investment itself will require about $5 million in capital, says Garraway, who will be setting up meetings for the company's representatives.
The arrival of the Denny's brand is unusual, considering Australia has no long-term connection with the concept of a 24-hour diner. But Garraway says the company has performed well in New Zealand, where economic circumstances have been worse than they are here.
"It's done very well to expand to eight stores," he says. "New Zealand was affected by the economic crisis more than Australia was, and they've had the difficulties of earthquakes and local disasters."
Denny's operates more than 1,600 locations in the United States, along with Canada, Japan, Mexico, New Zealand and the United Arab Emirates. The brand has become famous for never closing – it even stays open on holidays.
The company has also had a good financial run. In the past year, shares in Denny's Corporation have risen 22.7% and are trading at $US5.19. The business appointed John C Miller as chief executive in 2010, who has had a substantial amount of success in increasing revenue and profit.
While Denny's is a returning entrant, The Melting Pot is a brand which was considering the Australian market a few years ago, with no success. Garraway says several American franchises tend to have a look every few years and decide if the market is worth entering.
"If they don't, they'll put it on the backburner. They might advertise in 12 markets, pick up one or two and then just focus on those."
The arrival of the chains suggests Americans are still interested in the Australian market and its relatively strong economy, which is in much the same situation as it was a few years ago when interest first peaked. The American economy remains weak, while Australian businesses remain relatively strong.
As a result, the local market has welcomed a number of American businesses – and several have achieved sizeable success. Apart from big-box retailer Costco, ice cream chain Ben &amp; Jerry's, hardware chain Lowe's and clothing chain Gap have all opened stores.
Several more are looking. Lingerie chain Victoria's Secret is scouting for locations, along with fashion chains Forever 21 and <a href="https://www.smartcompany.com.au/retail/051305-american-fashion-retailer-hollister-gets-ready-to-drop-in-on-the-local-surfwear-market" target="_blank">Hollister</a>. The influx of stores has <a href="https://www.smartcompany.com.au/retail/052971-influx-of-international-retailers-makes-pitt-street-fifth-priciest-global-shopping-spot-for-retailers" target="_blank">caused retail rents to rise</a> in several premium location shopping precincts.
Garraway says while American chains may feel uneasy with the more stringent regulation found in the local franchising sector than back home, it does mean they can be assured of solid returns over a long-term period if the company is run well.
"In general terms, they see Australia as a safe environment. It's much easier to sell a master franchise here than in somewhere like the Middle East."
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pmcstafford-pr9eMARWoN

American diner chain Denny's develops a taste for the Aussie market

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Throughout the last half of 2012, you would have seen our articles consistently predicting a turnaround in confidence early in 2013.
And more particularly, we also explained why there would be <a href="/news">a rebound in China's growth</a> following transition to the new administration.
<h3>What's changed as you return from the Christmas break?</h3>
Perhaps a quick recap would be helpful:
<ul>
<li>A partial resolution of the US fiscal cliff;</li>
<li>US employment data continues to improve;</li>
<li>Our government has backed off its surplus commitment;</li>
<li>China's trade figures declared a 14% export surge;</li>
<li>Iron ore prices have jumped 70% since September;</li>
<li>The EEC claims the "essential threat" to the euro is over; and</li>
<li>Australian share prices and bond yields have risen.</li>
</ul>
All throughout last year, Australia's underlying economic fundamentals remained strong.
It was simply a confidence thing. People no longer "felt wealthy", compared to how it had been in the early 2000s. Any interest rate cuts were being squirrelled away into savings accounts, which then reached record levels.
And as we explained, this had been occurring on a week-by-week (or a month-by-month) basis.
However, as confidence returns to the economy,you won't see people releasing the purse strings on the drip-feed. Instead, they will be spending in lump sums on big-ticket items — playing catch-up for the past five years of hibernation.
Bottom line: You were warned last year about trying to pick the bottom of the commercial property market.
Recently, you've seen a surge in car sales. Next will be high-priced household items, and then a boost for house sales as people undertake the upgrade they had postponed.
And so by mid-2013, they will once again begin turning their attention to commercial property — particularly in the under $2 million market.
The question is, will you have already secured your position? Or have you meekly been waiting for the "clear signs," and be knocked over in the rush?
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a href="https://property-edge.com.au/" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
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chrislang-EQKojcgJPV

What 2013 holds for commercial property investors

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I often get asked is residential property a better or worse investment than commercial property, but the answer is neither. Both asset classes can be great investment options, but it all depends on what the investor is aiming to achieve. This is because they are different types of investments with different characteristics that will help investors achieve different objectives.
For example, commercial property is more likely to produce a strong income stream because tenants of shops and offices pay more rent than residential tenants. Also, in most cases all outgoings such as rates and insurance are covered by the tenant, further boosting cashflow.
However, on the flip side capital growth potential is relatively low. Land appreciates (increases) in value, while buildings depreciate. The higher the proportion of land relative to the property’s overall value, the higher the capital growth potential.
With commercial properties, the building often takes up the lion’s share of the value. This low land value often means capital growth is relatively low. Therefore, the key advantage of commercial property lies in its ability to attract high rental returns.
The best commercial property is usually found in high population growth areas such as the outer suburbs with increasing demand from residents for goods and services provided by petrol stations, fast-food outlets and supermarkets.
This is the reason large commercial property trusts such as Westfield invest hundreds of millions of dollars in areas such as South Morang in Melbourne’s north. Surrounding growth suburbs such as Doreen and Mernda have experienced a population explosion in the last five years, and all these people need to spend money to live. This money flows straight into the coffers of the commercial property owners, and as population grows so does their income.
The large property trusts also target the CBD because of the large daily influx of office workers and growing population.
Because commercial property doesn’t have high capital growth potential to counterbalance the interest on a loan, it’s wise to borrow as little as possible (0 to 30%) and fund the purchase with cash.
Residential property, by contrast, doesn’t produce a high income stream because residential tenants can’t pay as much rent as commercial tenants. Landlords are also required to cover rates, and building insurance on the property further diluting their cashflow.
On the flipside, residential property tends to have better capital growth potential because the land usually makes up most of the property’s value and there is a more consistent underlying demand from people who need a roof over their head.
The best residential investment property is usually found in areas with moderate but consistent population growth driven by demand from home buyers, investors and tenants alike. Consistent demand drives land values, which in turn fuel capital growth.
Land values are highest in established areas where there is no more land to build on, such as the inner and middle suburbs. Suburbs such as Richmond or Elwood are highly sought after by residential investors, who already control more than 50% of the residential property in these markets.
Because well-chosen residential property can provide enough capital growth to offset the interest on a loan, investors are more likely to borrow a higher proportion of the purchase price than if you were buying commercial property.
If an investor is looking for capital growth and doesn’t have the cash to purchase a commercial property outright, he or she should focus on residential property. If you purchase in a location where land values are high, the capital growth will be enough to balance out the interest you’re paying on the loan. And, because the property will be producing income, your interest payments will be tax deductible.
Alternatively, an investor who has accumulated a significant nest egg and is now looking to generate income would be wise to focus on commercial property. With low borrowings and higher rental yields, the investor’s money would be producing an income and the investor might not have to work.
Mark Armstrong is a director of <a href="https://www.ipropertyplan.com.au/" target="_blank">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
 
 
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marmstrong-sd3emVLPPb

Should you invest in residential or commercial property? Mark Armstrong

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Economist Steve Keen has delivered a damning verdict on the impact of first-home owner grants, saying they only serve to drive up property prices and push first-home owners out of the property market. 


The embattled economics professor and columnist, currently in a legal dispute with his academic institution the University of Western Sydney, says the new doubled $15,000 first-home owner grants being offered by the NSW and Queensland state governments – labelled builders’ grant by Ray White boss Brian White – aren’t as damaging as the previous broader grant to buyers of existing properties.

Keen labelled the recent accusation levelled by acting NSW opposition leader Linda Burney that Premier Barry O’Farrell had abandoned first-home buyers by cutting the grant for existing home and removing stamp duty concessions (unless you buy or build a new home) as “bollocks”.

“First-home buyers weren’t locked out by the ending of the first home vendors’ grant: they were locked out by the impossibly high prices that this grant has helped generate over the 30 years since it was first invented,” says Keen.

Keen says former prime minister Kevin Rudd’s doubling and tripling of the first-home owner grant from 2008 to 2010 caused the last spike in house prices, with the real beneficiaries those vendors who sold their first homes to first-home buyers – hence why Keen calls it the "‘first-home vendors’ grant" – and the banks that took the extra deposit and heaped first-home buyers with “initially three and ultimately over 10 times as much more debt”.

“The grant should be abolished, and governments should keep their hands out of asset markets.

“The O’Farrell government is still in there with its grant to purchasers of new properties, but that isn’t as damaging as the broader grant to buyers of existing properties as well.

“In that sense, I applaud the O’Farrell government for limiting the damage done to first-home buyers – and indeed the economy – by the grant,” he says in a column for Business Spectator.

Keen says the purpose of the first-home owners grant has never been to give first home buyers a helping hand, but has “always been used as a way of giving the economy the economic equivalent of a steroid injection”.

“First-home buyers have instead been the sacrificial lambs of an asset-price-inflation route to apparent national prosperity,” says Keen.
 
<hr class="system-pagebreak">
Keen says former prime minister Bob Hawke was the first to use a first-home buyers grant after he beat Malcom Fraser at the 1983 election, not to help first-home buyers but as a way of “reviving the housing market and perhaps the economy”.

He says it worked a treat, and allowed Paul Keating to claim the mantle of greatest treasurer ever.

But, Keen says, the grant also “supercharged house price rises”.

According to Keen, every time the government has introduced a first-home owner grant, the effect has been the same and can be observed by looking at house price before and after its introduction.

He says without government-injected stimulus, house prices have risen more or less in line with inflation, but have diverged noticeably to deliver real growth on the back of first-home owner grants.

“This is when the myth that house prices always rise took hold in the Australian psyche – without the awareness that this was not a natural phenomenon like sunrise, but took not only rising leverage from the banks, but also active intervention in the property market by both state and federal governments.

Keen is currently embroiled in a Fair Work Commission dispute with the University of Western Sydney over delays in processing his voluntary redundancy while at the same time facing a corruption watchdog enquiry after telling his economics students he could not fail any of them because they would not be able to re-sit exams due to the university no longer offering an Economics degree course.

A tribunal hearing involving Keen and UWS began yesterday in Sydney while UWS has already referred the matter to ICAC.

Keen tweeted that it was confidential hearing at the request of the university.

Keen explained what he told his students in an interview with ABC News radio yesterday.

“I told the students that I would not fail anyone given the circumstances that their subject was quite possibly being abolished and they were told about it two weeks before the exam for that subject would take place and of course if they failed, there wouldn't necessarily be a subject there for them to repeat the following year and I certainly wouldn't be teaching it so in that situation I just couldn't see how I could fail anybody.

He says he “probably overstepped the mark”, but claims UWS has “blown the matter out of proportion as part of a battle over the cuts to economics”.

Keen says he has been invited to two universities in London to apply for professorships and has also applied to his alma mater, the University of Sydney, for the professorship of political economy.
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State handouts turned first-home owners into “sacrificial lambs”: Steve Keen

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In what could signal a better year for retail property on the Gold Coast, diversified financial services group Challenger has bought the Centro Surfers Paradise Mall for $162.5 million.
The sale price is 1.6% above the June 30 2012 book value and follows a number of unsuccessful sales campaigns dating back to April 2010.
Challenger has acquired the centre alongside institutional investors having previously been a lender to the Centro-managed investor syndicate MCS 11, which held the asset.
The centre had attracted the interest of billionaires John Van Lieshout and John Gandel.
The sale was negotiated by retail specialist Simon Rooney of Jones Lang LaSalle, who said “a range of investors are now targeting quality retail assets with strong growth outlooks.
 Rooney says investors are "particularly attracted to Queensland’s positive economic growth forecast, high rate of population growth and strong international tourism sector, which will support a recovery in the Gold Coast retail market"
Centro Surfers Paradise is the dominant retail complex in Surfers Paradise occupying some 2.6 hectares on Cavill Avenue with more than 100m of frontage to the Esplanade overlooking the main Surfers Paradise beach.
The mall was first listed for sale in April 2010, but failed to achieve what Centro considered a reasonable price “in excess of $150 million”.
It was remarketed for sale in November 2011 but Centro could not negotiate a sale despite receiving a number of offers.
Centro purchased the mall for $88 million in 2006 on a yield of 10% with Woolworths as the anchor tenant along with 112 speciality tenants and over 21,000 square metres of gross lettable space.
Investors are forecast to receive a final syndicate net asset backing (NAB) of $1.63 for every $1.00 of original equity invested.
Centro Retail Australia will continue to manage the centre, which according to the Australian Financial Review has “substantial development upside”.
Centro Retail Australia is the restructured entity that emerged after Centro ran into deep financial trouble on the back of the GFC.
Subject to shareholder approval later this month, it will change its name to Federation Centres.
Centro Retail Australia owns 41 shopping centres and has assets worth $6.6 billion
It also manages a further 43 shopping centres on behalf of unlisted property syndicates.
 
 
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Challenger acquires Centro Surfers Paradise Mall for $162.5 million

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Australia has a growing generation of residents who can not only not afford to buy, but cannot afford to rent, either.  They’re the oft-forgotten ‘rental sector’ lost amid an abundance of market commentary devoted to the ‘good news’ on falling interest rates for mortgage holders, endless ‘forecasts’ of growth for potential property investors, and renovation mania that is set to hit the country once again  as we enter the year’s annual ratings war full of obsessive real estate reality shows.
Despite reports assuring buyers that housing affordability has improved and the persistent and poorly assessed claim that it’s cheaper to buy than rent in an increasing number of suburbs, (the methodology of which I argue against <a href="https://www.propertyobserver.com.au/residential/room-for-debate-is-it-really-cheaper-to-buy-than-rent-in-some-suburbs/2012110857623" target="_blank">here</a>), the percentage of people requiring rental accommodation is fast gaining pace, and for the past five years or so, yields have been rising at phenomenal rates – by and large outpacing both wage growth and inflation for the same period.
The insistence from various commentators that the steep rise in rental prices will push increasing numbers back into ownership fails to consider that inflated yields coupled with erosion of interest on long-term deposit accounts has all but cancelled out any perceived benefit for a large proportion of ‘would-be owners’. Consequently, they often have no choice but to lodge with family or friends as they transition through the various stages of job changes and property moves.
Currently, roughly 30% of Australia’s housing market is made up of renters.  The 2011 census data indicated median rises in rental prices rose sharply over the five-year interim, with Western Australia tipping the scales with an increase of 76% over the corresponding period.
The number of owner-occupiers has been slowly diminishing, and the proportion of renters priced out all together is increasing.
Australia’s owner-occupancy rate, which once sat at 71.4% in the mid to late 1990s, is now at 67%  and forms part of a slow decline in which families with children in particular seem to be suffering.  The decrease of ownership for this demographic has fallen from 79.5% (2006) to 77.2% in 2011 – and considering the low activity in the market of late, it’s fair to suggest the downward trend is set to continue.
Other reports presented late last year suggest that had ownership percentages stayed at the same level as that recorded in the 2006 census, we’d have welcomed  an additional 34,000 into the property market.  As it is, despite the 6.1% ‘peak to trough’ fall in the national median house price and flat prices in most capital city markets throughout 2012, sales turnover over the past two years has been woefully low – back at levels not seen since the late 1990s.
It’s easy to palm off the figures as a result of low consumer confidence, however as the latest Fitch ratings report  on residential mortgages pointed out, Australia is still the “least affordable housing” worldwide – and it’s nothing to be proud of.
 
<hr class="system-pagebreak">
 
The trend is not localised. In the UK the owner-occupancy rate is at its lowest level  since 1988, with 64.7% of the population now classified as ‘owner-occupiers’ and the proportion of people renting rising from 31 to 36% over the preceding 10 years.  This is despite a recent British Social Studies Survey that indicates 86% of tenants (social included) still foster a strong desire to “own their own home.”
In light of its financial woes the US is of course no different – their owner-occupancy rate is at a 15-year low. with roughly 65% of the population now classified as owner-occupiers and a rental sector that is straining under the pressure of inflated yields and increased demand in capital city locations.
In fact, across all property markets that have historically boasted high owner-occupancy rates, the rise in the number of homeless people is strengthening as the vicious circle of trying to save for a deposit in a fiscal environment while servicing high rental prices keeps residents well and truly ‘stuck’ – often in accommodation that  is not adequately suited to their family’s needs.
A comment (one of many) from a would-be home buyer on Australians for Affordable Housing’s Facebook site last week summed it up perfectly:
“Well I can't afford to rent let alone buy (and the) stress ... is literally [a]ffecting my health”.
A closer look at exactly what it costs to rent a modest apartment within commutable proximity to our capital cities is truly eye-opening for anyone who may have been out of touch with the market of late.
In the most recent quarterly bulletin wrapping up the year for 2012, RP Data noted that Perth in particular is feeling the strain. with an increase in yields of 12.8% for houses and 10.6% for units, with vacancy rates as low as 1.6%. According to APM, this is an increase of $70 per week over the 12-month period, leading Premier Colin Barnett to single out rental prices as the “biggest cost-of-living pressure facing Western Australians.”
As was noted in another report, Darwin currently has only two rental properties listed on realestate.com.au for <a href="https://www.ntnews.com.au/article/2013/01/07/316453_realestate" target="_blank">under $300 per week –</a> one of which is a rusty old corrugated iron shack that would look more at home in a ‘shantytown.’  The median rent in Darwin is $600 per week.
Students in Queensland have described the market under $300 ‘war like’ and as for Melbourne and Sydney, and it all comes down to the standard of accommodation you want to call "home".
In Melbourne, if you’re halfway fussy – perhaps requiring good proximity to transport, a modest balcony, or internal floor space over 40 square metres, you’ll be hard pushed to get a one-bedroom apartment in original un-renovated condition under a minimum of $350 per week.  In Sydney, the equivalent will cost between $450 and $500 per week – which is hefty chunk for any average wage earner.
To give some idea of the condition of apartments currently for rent at the above prices, this is an interior snapshot of the kitchen in one such apartment I inspected last week in an inner suburb of Melbourne. I think it paints the picture perfectly.
<img alt="cashkitchen" height="320" width="240" src="/images/stories/2013/01/cashkitchen.png">
Students, singles and childless couples can often make do with less space to compensate for the luxury of being close to the city or walkable distance to both transport and shops.  However single mothers, low-wage families, retirees or disabled tenants understandably require something a little more substantial than a one-bedroom flat to adequately fulfil their basic needs.
As such, they’d be hard pushed to find anything suitable for less than $500 per week unless they move to the outskirts of the capital city.  And due to poor public transport facilities in many fringe locations, such a move simply isn’t feasible for a large majority of renters – though many are forced in that direction.
 
<hr class="system-pagebreak">
Is it any wonder, reports of ‘crowded houses’ – with three or more families sharing accommodation – rose nationally by 64% to 48,499 in the last census? Furthermore, other data from the ABS shows from 2009-10, 42% of renter households received some form of housing assistance, once again emphasising the growing crisis in this sector of our marketplace.
Pressure on the rental market is unlikely to ease in the near to far future.  The ABS estimates almost two-thirds of ‘new residents from overseas’ are long-term property renters – this is compared with half new residents from ‘within Australia’ who now class themselves in the same bracket – which is a robust figure in itself.
Economic conditions such as wage growth, unemployment, consumer confidence and frequent changes of work placements all reduce the likelihood of a strong owner-occupier market over the next decade.  Current policy is built around the general assumption that renting is a ‘step’ on the road to ownership – however  it’s fair to suggest, unless the trend takes an about turn,  tomorrow’s generation will hold a growing percentage of residents for which renting is ‘for life’ and as such, we need to consider their welfare.
No one should be fooled into thinking private rental accommodation is affordable accommodation; residential investors are looking for strong yields and solid returns.  In a heated market, vendors will understandably go for as much rent as they can achieve (regardless of tax benefits and lower interest rates, which are rarely passed onto the tenant.)
The NRAS (National Rental Affordability Scheme), which was designed to go some way in bridging the ‘affordability gap’ for low income workers sitting on the rental ladder is also flawed in its design – a subject I’ll expand upon at a later date.  When the scheme was first initiated in 2010, the AHURI analysed the project to assess the overall impact in easing affordability. The findings revealed only 40 per cent of applicants using the accommodation had fallen below the 30 per cent ‘housing stress benchmark.
In the meantime, it’s vital we start to steer policy towards the creation of a fairer partnership between owner and renter.  This would include longer terms of tenancy, protection from exorbitant rent rises, enforcement of basic standards of accommodation (in both the private and public sector) throughout Australia, and a greater partnership between tenant and owner – which could even envisage the tenant taking on more responsibility for the basic maintenance of their ‘home’ in return for a secure rental plan ensuring a longer term of permanent tenancy (five to 10 years) for which rent does not outpace the growth of inflation.  Other models of assistance, including housing co-operatives, should also be assessed.
The benefit an investor can gain from a happy tenant should not be underestimated. Property – even when maintained through an experienced property manager – is not a hands-off experience.  Unlike a share certificate you can file away and forget about – the value of any residential property (whether letting or selling) derives from its lasting appeal as a ‘home.’  Ensuring there’s enough money left over from the initial acquisition for ongoing maintenance is vital – and a long-term happy tenant should never be undervalued.
There is much that needs to be done to assist the ownership of affordable accommodation; however, creating a stable market terrain for tenants is equally important and needs an overhaul of current policy if we’re to do so.
Without it, the number of people seeking government-assisted accommodation will escalate to greater proportions, and the untapped potential of a growing number of residents struggling to make ends meet will hamper advancement of the overall economy.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
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Growing generations of Australians squeezed out of even rental market by diminishing housing affordability: Catherine Cashmore

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The Western Australian economy continues to outperform the rest of the nation, according to CommSec. 
The state has come out on top on four of the eight criteria – retail trade, equipment investment, construction work done and population growth – and also held onto second place in retail trade and housing finance, according to the latest quareterly “State of the States” report  compiled by CommSec chief economist Craig James.
The report places the Northern Territory in second place overall, close behind Western Australia, and the ACT in third.   
The Northern Territory continues to lead the ranking on economic activity at 48% above its decade-average output, and the ACT is supported by strong dwelling starts and population growth.  Although unemployment in the ACT is low compared with the rest of the nation, it is above the historical average at 3.5%.
There is little separating the three major states: Victoria, Queensland and NSW, according to the authoritative CommSec report, which looks at key economic trends.
NSW is benefiting from historically low unemployment together with rising population growth.  Home building has improved with the help of state government grants.  CommSec believes the factors will result in housing activity lifting in 2013.
Victoria has been supported by its housing sector, which is now slowing. 
All states and territories are showing levels of construction work higher than their decade averages.  
Victoria is in second-last place, with construction work 17% higher than the decade average for the state. In contrast to this, Victoria has the highest number of housing finance commitments, at 1.7% below the decade average and up 4.5% on November last year.
Queensland is restricted by its historically high unemployment but is supported by construction work and equipment investment.  The state is ranked third in retail spending, at 15.1% above decade-averages.
"The Victorian economy is certainly still being helped by relative strength in home building. And the Queensland economy is being propelled by equipment, commercial and engineering investment," says CommSec.
South Australia is sitting well below the rest of the country yet has encouraging signs, as population growth has improved and is at two-year highs at 22% above long-term averages.  CommSec believes this has the potential to lift the state via retail and housing-related activity.
Although equipment investment is above decade averages, the Tasmanian economy is still struggling due to 7% trend unemployment, which is well above the decade average of 6%.
"State of the States" is a quarterly report produced by Commsec, edited by chief economist Craig James, analysing eight key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.
 
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