<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

<html><body>
A combination of rate cuts and an improved economic outlook has resulted in confidence about property prices rising in 2013 lift among property professionals surveyed by ANZ and the Property Council of Australia (PCA).
Optimists now outweigh pessimists by around 10%, according to the March quarter PCA-ANZ property industry confidence index, which considers views on the property market over the next 12 months with 3,000 property professionals surveyed.
This is up from an almost evenly divided outlook in the December quarter survey, but still indicates a good deal of uncertainty about whether house prices will rise or fall in 2013.
Overall confidence about the property market over the next 12 months rebounded in the March quarter following falls in the previous two quarter, rising 5 points to 107, compared with 102 in the December quarter, with stronger expectations for house price growth and positive expectations for property construction.
Click to enlarge
<a href="/images/stories/2013/01/pcajan17.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2013/01/pcajan17thumb.gif"></a>
“Property industry expectations for house prices in the coming year increased in the March quarter buoyed by increased housing sales and improved affordability,” say ANZ senior property analyst David Cannington, who compiled the report along with ANZ’s head of property research Paul Braddick.
“Looking ahead, the combined impact of tight underlying demand/supply housing market fundamentals, expectations of further rate cuts and a steady medium to long-term domestic economic outlook have improved property industry residential price growth expectations.
“However, despite improved sentiment and affordability, the prevailing sense of caution in the household and financial sectors will limit the ‘normal’ cyclical rebound in house prices,” he says.
Expectations for house price growth and overall property market confidence are strongest in WA and the Northern Territory, due to their exposure to the mining sector, with NSW and Queensland the only other states where optimists outweigh pessimists on house price growth in 2013.
Optimists outweigh pessimists on house price growth expectations by 72% in the Northern Territory, by 55% in WA and by 36% in NSW and by less than 10% in Queensland – all improvements on the previous quarter.
Property professionals are almost divided on Victorian house price growth, with pessimists just shading optimists.
A majority of property professionals tip house prices to fall in South Australia, Tasmania and the ACT.
Confidence is highest in WA and the Northern Territory, the states with strongest expectations for economic growth this year due to their mining sector exposure.
They both recorded higher readings of 131 points in the March quarter, though well down on peak readings achieved in the June quarter of 2012 – an indication of the impact that the mining boom is expected to peak soon has had on the property outlook in these two states.
There was also a rise in property market confidence in NSW (112) and an improvement in Victoria, but it remains below the benchmark 100-point setting with a reading of 99.
Confidence remains weak in Tasmania (83) and the ACT (90) and South Australia (92) – with all three states recording a drop in confidence over the quarter.
WA (131) and the NT (131) - showed the strongest property industry confidence across states and territories, followed by NSW (112). Victoria (99), Tasmania (83) and the ACT (90) were the only states/territories to report ‘negative’ confidence.
“Property industry confidence across states and territories largely reflects differing expectations for state economic growth,” says Cannington.
“The highest proportion of respondents expecting state economic growth to be higher in the coming year were also in the NT (54%) followed by WA (39%).
“In contrast, the net balance of respondents expect state economic growth to be lower in the coming year across all other states and territories, with state economic expectations deteriorating in the March quarter in both Tasmania (68% expect state economic growth in the coming year to be lower in the March quarter survey compared to 60% in the December quarter) and the ACT (53% in the March quarter survey compared to 45% in the December quarter),” he says.
</body></html>

lschlesinger-FZcF9M3vE6

Industry professionals more optimistic about Australian property market, with outlook strongest in WA, NT and NSW: ANZ/PCA

<html><body>
Academic Philip Soos has acknowledged that mainstream opinion is opposed to the idea that a housing bubble exists in Australia, as governments, the FIRE sector (finance, insurance and real estate) and many of his colleagues in academia all claim that prices are linked to fundamentals or intrinsic value.
But noting entrenched views exist on both sides, Soos has repeated his strong belief that evidence suggests the residential property market was currently experiencing a bubble, with prices detached from fundamental valuations.
"This appears to be the largest bubble on record, orders of magnitude larger than all preceding bubbles," he says.
"When it does burst, heavily indebted property owners (recent home-buyers, negative gearers) will experience financial trouble, including the economy at large,"<a target="_blank" href="https://www.prosper.org.au/2013/01/16/a-plague-on-aussie-housing/"> the researcher at Deakin University’s School of International and Political Studies noted in an article published on the Prosper website. </a>
His article came with five charts, and the application of his understanding of the Australian scenario with the works of the late US post-Keynesian economist Hyman Minsky.
Soos notes Minsky's contrarian work revolved around how financial markets interacted with asset prices – a theory called the ‘financial instability hypothesis’, arguing that financial markets continually misallocate substantial amounts of credit into asset markets, creating Ponzi (pyramid) schemes.
<img height="248" width="470" src="/images/stories/2013/01/soosjan161.png" alt="soosjan161">
It helps to have a sound fix on what an asset bubble is when exploring this matter, Soos says.
"Otherwise, it becomes like pornography: you can’t define it exactly, but you know it when you see it."
Minsky defined three phases of finance: hedge, speculative and Ponzi. With hedge financing, income flows from an asset are sufficient to pay down both principal and interest on the debt used to finance the asset purchase, and prices are based upon intrinsic value. Speculative financing results in income flows covering only interest repayments, not principal, requiring debt to be continually rolled over. Investors may experience financial stress, but it is not widespread and fundamentals valuations are kept largely in check.
Soos explains the terminal phase occurs with Ponzi finance, as income flows cover neither principal nor interest repayments (including running expenses in the case of rental property). "Investors rely solely on escalating capital values in order to realise substantial capital gains at sale to pay down the cost of debt and balance their income losses. Asset prices are completely delinked from fundamental valuations at this stage. Investors rely upon ‘greater fools’ to maintain positive price momentum, resulting in a bubble. Once there are no more investors willing to take upon staggering amounts of debt to finance asset purchases, prices stagnate then collapse, as the market finally realises that prices are based upon a pyramid scheme, not fundamentals," he says.
"With Minsky’s theory, it is possible to determine whether a housing bubble exists.
"Unfortunately, there is evidence to suggest that Australia’s residential property market is experiencing said bubble.
"Figure 1 (above) shows the long-term trend in housing prices, adjusted for inflation and quality. The 1996-2010 period is the largest single boom on record, rising by approximately 130%.
<img height="251" width="470" src="/images/stories/2013/01/soosjan162.png" alt="soosjan162">


<hr class="system-pagebreak">
"The latest housing boom provides one piece of the puzzle: rising asset prices. The next aspect to consider is whether investors are running current income losses. Figure 2 (above) indicates that this is indeed the case as aggregate net rental returns are negative, with losses escalating from $1 billion in 2000-01 to $5 billion in 2009-10. Losses peaked at $9 billion in 2007-08 when interest rates were relatively high, though rate cuts during and after the GFC relived some of the pressure," Soos writes.
 
<img height="251" width="470" src="/images/stories/2013/01/soosjan163.png" alt="soosjan163">
"There are more than 1.7 million investors with an interest in one or more properties, owning close to two million rental properties. Absolutely and relative to the total housing stock, this is a large sample. If investors are running current income losses of this magnitude, the imputed rents on the stock of owner-occupied housing would bear a similar resemblance, though owner-occupiers treat their properties as security rather than as an investment.
"The reason for the sustained net income losses is the combination of rental costs and interest deductions outweighing gross rental income. The ATO does not provide data on principal repayments as they are not deductible against rental income. Accordingly, the rental losses would be larger if these principal repayments were included as they must be funded out of current income. Figure 3 (above) illustrates the growth of aggregate rental costs and interest deductions as a percentage of gross rental income," writes Soos.
"Another indicator is the rising levels of household debt used to speculate on housing prices. Household debt is overwhelmingly composed of mortgage debt, whereas personal debt is a small fraction. Figure 4 (below) shows the recent and considerable increase in the household debt to GDP ratio, peaking at 97 per cent in 2010 when housing prices did the same. The ratio has fallen slightly to 93 per cent, which may explain the falls in property values over the last two years, including the historically-low growth in housing finance data (Housing finance misses expectations in November, January 14).
"A troubling fact is that almost 60%of investor loans are interest-only (25% for owner-occupier loans), signifying the speculative motive of property owners," Soos writes on the website.
 
<img height="248" width="470" src="/images/stories/2013/01/soosjan164.png" alt="soosjan164">
Lastly Soos notes a classic sign of a bubble as the price to rent ratio.
He says the reason why this metric is often used in housing analysis is because debt speculation effects capital values not rental incomes (the latter is determined by wages and population growth).
"Given that the denominator (rents) tends to remain stable over the long term, it is the numerator (housing prices) that comprises the deciding variable.
"The following figure 5 (below) illustrates the uptick in the ratio commensurate with the boom in housing prices as shown in figure 1.
"From the trough in 1997 through to 2011, this ratio indicates an overvaluation of 44%, similar to the figures that were recently released by The Economist.
"The largest surge occurred post-WW2 when the government released price controls on housing, but took until the 1970s to remove all controls on rents.
<img height="248" width="470" src="/images/stories/2013/01/soosjan165.png" alt="soosjan165">
Soos concludes that Minsky’s financial instability hypothesis can help to integrate the occurrences seen in the data.
"The speculative financing phase likely corresponds to the 1996-2000 period, as housing prices steadily increased but rental income still covered mortgage interest repayments and rental expenses.
"This relationship, however, broke down from 2000 onwards as housing prices rapidly escalated," he says.
"Investors were then dependent upon rising capital values in order to realise a profit at sale and to cover the cost of mortgage debt.
"This resembles the terminal Ponzi phase, where housing prices and the household debt to GDP ratio have boomed while net income losses have escalated.
"Accordingly, by these measures, the evidence suggests that the residential property market is currently experiencing a bubble, with prices detached from fundamental valuations.
"This appears to be the largest bubble on record, orders of magnitude larger than all preceding bubbles."
"When it does burst, heavily indebted property owners (recent home-buyers, negative gearers) will experience financial trouble, including the economy at large," Soos says.
</body></html>

psoos-uR5EGb6SbQ

Australian housing is in 'largest bubble on record' and will crash: Philip Soos

<html><body>
Capital city home values have increased at an average annual rate of just 1.9% over the past five years, which is significantly lower than the previous two five-year periods, according to RP Data's Cameron Kusher.
It reflects changing consumer attitudes towards debt following the global financial crisis.
Looking at three five-year periods, the research by the senior research analyst at RP Data indicated the strongest growth period as 1997 to 2002 when the annual growth was 12%.
Kusher argues the rate of capital growth in the Australian housing market has been slowing over some considerable time.
 "The global financial crisis, and the subsequent changes in consumer attitudes that it has led to, has largely impacted the results of the most recent five years.
"However, it remains difficult to argue that value growth would have been as strong over the past five years as the previous five years even without the financial crisis.
"As the cost of buying and selling continues to increase, albeit at a much slower pace, it seems unlikely that capital gains in the housing market will return to those levels enjoyed between 1997 and 2002 and will be more reflective of conditions over the most recent five years," Kusher says.
Darwin triumphed as the city to record the strongest growth in home values over the past five years, increasing at an average annual rate of 4.1%.
But Hobart, Brisbane and Perth each recorded value falls on an annual average basis, at a rate of -1.9%, -0.8% and -0.4% respectively.
From December 2002 to December 2007, the overall performance of the housing market was comparatively stronger, and over the five-year period capital city home values increased at an average annual rate of 8.4%.
It was almost 4.5 times greater than growth throughout the most recent five years.
Excluding Sydney, between 2002 and 2007, every capital city housing market recorded superior levels of average annual value growth compared with the overall performance over the most recent five years.
Kusher notes during this period every city other than Sydney recorded average annual value growth more than 2.5 times greater than the most recent five-year period.
"Sydney’s housing market performance has actually been stronger over the most recent five years than it was between 2002 and 2007," he says.
Click to enlarge
<a title="Click to enlarge" href="/images/stories/2013/01/rpjan161.gif" rel="shadowbox"><img src="/images/stories/2013/01/rpjan161thumb.gif"></a>
<a title="Click to enlarge" href="/images/stories/2013/01/rpjan162.gif" rel="shadowbox"><img src="/images/stories/2013/01/rpjan162thumb.gif"></a>
For the period 2002 to 2007, the standout housing markets were Perth (19.4%pa) and Hobart (17.2%pa), however, the latest data confirms that both of these cities recorded value falls on an average annual basis over the past five years.
"It is worth noting that growth in capital city home values over the five-year period from 1997 to 2002 was greater than for the two following five-year periods; however, this was largely the result of higher levels of value growth over this time in the nation’s two largest markets, Sydney and Melbourne.
"Over this five-year period, capital city home values increased at an average annual rate of 12%," Kusher says.
Overall, each capital city recorded average annual capital growth in excess of 8% per annum over the period 1997 to 2002, highlighting the comparatively stronger market conditions at that time.
Looking more specifically at the average annual growth in values of detached houses as opposed to units, Kusher notes that historically, it is easy to see that houses have experienced stronger value growth than units. Over the 15 years to December 2012, capital city house values have increased at an average annual rate of 7.6%, compared with 6% for units.
And while the unit market underperformed the detached house market over the longer term, unit values appreciated at a faster pace over the past five years.
Kusher says that the recent superior performance is likely due to a range of factors, most notably:
• The relative affordability of units compared to detached houses;
• Changing lifestyle preferences, with owner occupiers more accepting of units, particularly in inner-city areas;
• The fact that units are typically located closer to the city centre and within suburbs that owner occupiers aspire to own houses but can’t realistically afford to do so; and
• The fact that units are typically more attractive to investors than detached houses because they enjoy higher rental yields.
Last week RP Data reported capital city home values fell over consecutive years, down 3.8% in 2011 and 0.4% in 2012.
</body></html>

jchancellor-FAypfDUnLy

Australian property capital growth slows to 1.9% per year over past five years: Cameron Kusher

<html><body>
While it’s still early days, the latest housing finance figures published by both the ABS and mortgage broker AFG suggest NSW and Queensland are discouraging many first-home buyers after doubling state handouts last year, but only if they buy or build a new home, while offering nothing for those that buy an existing property.
The most up-to-date mortgage figures are provided by aggregator AFG, which claims to write one in every 10 home loans in Australia through its network of affiliated mortgage brokers.
AFG reports a healthy 15% rise in the volume of mortgages arranged by brokers over 2012 from $28 billion to $32 billion, but says the average long term share of home loans arranged for first-home buyers, usually between 12% and 15%, collapsed to just 4.2% in NSW and 4.5% in Queensland during the last two months of 2012, after the $7,000 first-home buyers grants were withdrawn in both states in favour of the $15,000 boost for new homes only.
In comparison, investors dominated the mortgage market in these two states, comprising 46.3% and 35.9% of all home loans respectively.
Official ABS data is only up until November, so it is difficult to say a trend is emerging, but the figures certainly suggest first-home buyers have not been swayed to consider a new house or apartment over an existing property.
The ABS records that the number of first-home buyer loans arranged in NSW fell from 2,088 in October to 1,383 November, while in Queensland first-home buyer loan numbers fell from 2,116 in October to 1,417 in November - in both states a monthly drop of 33%.
Furthermore, just 793 first-home buyers took advantage of the revised NSW first-home owners' grant in December last year, <a target="_blank" href="https://www.propertyobserver.com.au/news/nsw-first-home-buyer-numbers-fell-to-20-year-lows-in-late-2012/2013011458763?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">the lowest take-up in 20 years</a> with the NSW state opposition claiming that Barry O'Farrell's decision to dump first-home buyer grants and stamp duty exemptions have been "nothing short of devastating for young people trying to buy their first home".
Indeed, first-home buyer changes are particularly tough on those in NSW that wish to buy an existing property.
Since October 1, the NSW state grant has been lifted from $7,000 to $15,000 for new homes valued up to $650,000, while a maximum stamp duty exemption of $20,240 is also available for new homes worth up to $550,000.<a style="font-size: 0.8em;" href="https://www.propertyobserver.com.au/administrator/index.php?option=com_flexicontent&amp;view=item&amp;cid=58777#">Apply</a>
First-home buyers that purchase an existing home get nothing.
In Queensland, since September 11, a $15,000 first-home owner construction grant (FHOCG) has been available for new property bought or built at a value under $750,000, but all first-home buyers also pay no duty on purchases up to $500,000, with a phasing-out rebate applicable for values up to $600,000.
The doubling of the NSW first-home buyer grant was announced in mid-June, but only came into effect three-and-half months later, with Property Observer reporting on the conundrum it created for both <a href="https://www.propertyobserver.com.au/residential/nsw-budgets-needlessly-complex-artificial-deadlines-have-short-term-and-long-term-consequences-for-residential-property/2012061455119">first-home buyers and investors</a> over this interim period.
Queensland government introduced its construction grant with immediate effect from September 11, but gave first-home buyers up until October 11 to finalise contracts.
Contrast this with Victoria, which still offers a $7,000 first-home buyer loan for both new and existing home purchases (and increased stamp duty concessions from 20% to 30% on January 1) and first-home buyer loan numbers were little changed over the month, falling marginally from 2,545 to 2,407.
Ray White chairman Brian White labelled the new first-home buyer polices as “no longer a first-home buyers but a builders incentive” and a "deceit", saying they distorted the market, but not in a healthy way.
The latest data suggests he could be right.
</body></html>

First-home buyer policies failing in NSW and Queensland

<html><body>
Last year brought more economic worries: Renewed fears about Europe; more US “double dip” fears; weaker growth in the emerging world; US drought threatening higher food prices; and ongoing Middle East tensions.
However, despite the wall of worry it turned out to be a good year for investors. Key themes for 2012 were:
<ul>
<li>Soft global growth, but no recession. While global growth softened from 3.8% in 2011 to around 3% and profits were downgraded, both were better than feared a year ago. In other words, the falls in share markets in 2011 anticipated the economic slowdown of 2012.</li>
<li>Easy money. Slowing growth and benign inflation resulted in plenty of monetary easing globally – both rate cuts and quantitative easing. This contrasted to the global monetary tightening that continued into early 2011.</li>
<li>More Europe, not less. The European Central Bank’s bank funding operation and its threat to buy bonds in troubled countries combined with an ongoing theme from European leaders of “more Europe, not less” and more support for Greece reinforcing a determination to defend the euro, all helped head off the threat of a major financial crisis emanating out of Europe.</li>
<li>The US comeback. While US growth has been subdued, the commencement of open-ended quantitative easing by the Fed has kept growth going at the same time that signs of rebuilding gather with a housing recovery, surging oil and gas production, a manufacturing renaissance, and an ongoing tech boom.</li>
<li>Cyclical bottom in the emerging world. Increasing signs that growth in the emerging world has bottomed has also added to global confidence. Chinese growth specifically appears to have bottomed out around 7.5%.</li>
<li>Mining slows while the non-mining sector stays weak. Australia has also had a decent share of worries with a rapid slowing in mining investment at a time when non-mining sector activity remains weak. Growth for 2012 looks like coming in around 3.5% but this masks a slowdown to a 2% to 2.5% annualised pace. Inflation has been benign, despite carbon pricing, allowing the RBA to cut the cash rate back to its GFC low of 3%.</li>
<li>Search for yields amid rate falls. An overwhelming investor theme in 2012 was the chase for yield in the face of zero interest rates in major advanced countries and falling rates elsewhere against a backdrop of investor caution. This benefited high-yield assets. The following table shows returns for major asset classes.</li>
</ul>
<h3>Investment returns for major asset classes:</h3>
<table border="1" cellpadding="0" cellspacing="0"><tbody>
<tr>
<td valign="top">
Total return %, pre fees and tax
</td>
<td valign="top">
2011
actual
</td>
<td valign="top">
2012*
actual
</td>
<td valign="top">
2013
forecast
</td>
</tr>
<tr>
<td valign="top">
Global shares (in Aust dollars)
</td>
<td valign="top">
-5.3
</td>
<td valign="top">
11.5
</td>
<td valign="top">
15.0
</td>
</tr>
<tr>
<td valign="top">
Global shares (in local currency)
</td>
<td valign="top">
-5.3
</td>
<td valign="top">
13.4
</td>
<td valign="top">
11.0
</td>
</tr>
<tr>
<td valign="top">
Asian shares (in local currency)
</td>
<td valign="top">
-13.6
</td>
<td valign="top">
14.7
</td>
<td valign="top">
15.0
</td>
</tr>
<tr>
<td valign="top">
Emerging mkt shares (local currency)
</td>
<td valign="top">
-12.7
</td>
<td valign="top">
12.6
</td>
<td valign="top">
15.0
</td>
</tr>
<tr>
<td valign="top">
Australian shares
</td>
<td valign="top">
-10.5
</td>
<td valign="top">
16.4
</td>
<td valign="top">
12.0
</td>
</tr>
<tr>
<td valign="top">
Global bonds (hedged into $A)
</td>
<td valign="top">
10.5
</td>
<td valign="top">
9.3
</td>
<td valign="top">
2.5
</td>
</tr>
<tr>
<td valign="top">
Australian bonds
</td>
<td valign="top">
11.4
</td>
<td valign="top">
7.5
</td>
<td valign="top">
3.5
</td>
</tr>
<tr>
<td valign="top">
Global listed property securities
</td>
<td valign="top">
1.4
</td>
<td valign="top">
23.0
</td>
<td valign="top">
12.0
</td>
</tr>
<tr>
<td valign="top">
Aust listed property trusts
</td>
<td valign="top">
-1.5
</td>
<td valign="top">
29.3
</td>
<td valign="top">
12.0
</td>
</tr>
<tr>
<td valign="top">
Unlisted non-res property, estimate
</td>
<td valign="top">
9.0
</td>
<td valign="top">
8.0
</td>
<td valign="top">
9.0
</td>
</tr>
<tr>
<td valign="top">
Unlisted infrastructure, indicative
</td>
<td valign="top">
11.0
</td>
<td valign="top">
10.0
</td>
<td valign="top">
10.0
</td>
</tr>
<tr>
<td valign="top">
Aust residential property, estimate
</td>
<td valign="top">
-4.0
</td>
<td valign="top">
2.0
</td>
<td valign="top">
6.0
</td>
</tr>
<tr>
<td valign="top">
Cash
</td>
<td valign="top">
5.0
</td>
<td valign="top">
3.7
</td>
<td valign="top">
2.7
</td>
</tr>
<tr>
<td valign="top">
Avg balanced super fund, ex fees &amp; tax
</td>
<td valign="top">
-2.1
</td>
<td valign="top">
10.6
</td>
<td valign="top">
8.0
</td>
</tr>
</tbody></table>
*Year to date to Nov. Source: Thomson Reuters, Morningstar, REIA, AMP Capital
Shares provided decent gains and setbacks were milder as a lot of the bad news had already been factored in; policy action was decisive and signs of improvement were evident in the US and emerging countries.
By region, European shares outperformed as investors sought their better value after several years of underperformance, followed by US shares – helped by easy monetary conditions – Asian shares, and emerging markets generally, with Japan’s lagging performance not helped by a return to recession.
Australian shares performed well as the rate hikes that caused underperformance since late 2009 were reversed and the Chinese economy stabilised. Healthcare, telco, consumer staple and bank shares outperformed, partly reflecting the defensive and yield bias of investors.
Global and Australian property securities had a very strong year as investors switched into high yield assets. Unlisted commercial property and infrastructure also performed well as investors sought their attractive yields. Bond returns remained solid as interest rates remained low or fell and central banks bought government bonds.
The $A rose slightly on US quantitative easing and central bank and safe haven buying reflecting its safe AAA rating, but has really been range bound for two years.
The strong returns from most assets resulted in solid returns for traditional balanced superannuation funds.
 
<hr>
 
<h3>Outlook for 2013 – tail risks diminishing</h3>
A year ago it seemed everyone was obsessed with Europe. At the time we thought there was a case for a bit of cautious optimism. This turned out OK. While sentiment is now not as bleak, we remain cautiously optimistic for several reasons.
First, the cyclical pattern since the 1970s has been to have major recessions every 8-10 years (mid 1970s, early 1980s, early 1990s, early 2000s, late 2000s) with modest growth slowdowns in between. We still appear to be following this pattern, with the global growth slowdown of 2012 largely anticipated by the 20% top to bottom falls in share markets seen in 2011. If this, albeit imperfect, pattern is correct then the 2012 global growth slowdown has cleared the way for a continuation of the global recovery for the next three years or so which should help underpin growth assets.
Second, the risks around Europe remain high, particularly with the Italian election expected in February and a likelihood that Spain will have to apply for assistance from the bailout fund and the ECB in the next three months. However, the ECB’s funding intervention in banks, its threatened bond-buying program and the euro zone’s ragged but seemingly dogged determination to head towards more Europe, not less, suggests that the risk of a blow-up in Europe will continue to recede. In the meantime, declining inflation and continued recession will see more monetary easing helping clear the way for an exit from recession during the second half.
Third, while the fiscal cliff of budget tightening is a near-term hurdle for the US, there is a 90% probably it will be solved by end of January (as the political consequences for both parties in triggering a recession are just too big). But once the US clears this hurdle it should have a reasonable year in 2013 as the housing recovery adds around 0.75% to growth, shale oil and gas continues to revolutionise the US, capital spending rebounds after uncertainty associated with the fiscal cliff and quantitative easing spurs growth.
Fourth, China looks like it’s on track for growth at around 7.5% at least with the slowdown behind it. Growth in Asia, Brazil and India should also stabilise and begin to improve, following significant monetary easing.
Pulling all this together suggests:
<ul>
<li>global growth somewhere around 3.25% in 2013, ranging from a mild but fading recession in the euro zone, 2.5% growth in the US, 5.5% growth in the emerging world and 7.5% growth in China;</li>
<li>benign inflation in response to 2012’s growth slowdown and spare global capacity;</li>
<li>continued low interest rates and quantitative easing leading to a very easy and growth-supportive monetary environment; and</li>
<li>a stabilising then improving earnings growth reflecting the improving economic backdrop.</li>
</ul>
For Australia, growth is likely to remain subdued initially as mining slows and non-mining is slow to pick up. This is likely to see unemployment rise to around 6%. Against this backdrop the RBA is likely to cut rates further to 2.5% in order to push bank lending rates down closer to past cyclical lows.
However, as the impact of rate cuts starts to feed through with normal lags, growth should start to improve by year end. Overall, we see growth around 2.5%, but this is masking a second half upswing; inflation remaining benign; and the cash rate falling to around 2.5% in the first half.
<h3>So what does this all mean for investors?</h3>
Against a background of a modest pick-up in global growth and gradually receding risks in Europe, growth assets are likely to continue to do well but the returns from bonds are likely to be limited.
Shares are likely to provide another solid year of returns. Shares are very cheap against bonds as bond yields have fallen further and should benefit from ultra-easy monetary conditions globally and the anticipation of stronger profit growth in 2013-14. What’s more, while sentiment towards shares is not as bearish as it was in late 2011, it is still very cautious at a time when share weightings have collapsed. This suggests there is plenty of money to come into shares once confidence starts to pick up. Worries about Italy and Spain could trigger a bout of volatility around February/March, but overall returns are likely to be solid.
While US shares have been a star performer, helped by more aggressive monetary easing, this may be starting to change. Our assessment is that European and Asian shares are likely to be the star performers in the year ahead, reflecting relatively low price-to-forward earnings ratios of around 10 times, compared to around 12 times in the US, the gradual pricing out of disintegration risks in Europe and stronger growth prospects in Asia.
Falling interest rates and improved sentiment towards China are likely to see Australian shares do well, but uncertainties about the growth and profit outlook will act as constraints. We expect the Australian ASX 200 to rise to around 5,000 by end 2013. Bombed out cyclicals such as resources, along with yield plays like telcos, are likely to outperform.
The $A is likely to fall to around parity as the combination of a narrowing interest rate gap, slowing growth, and a widening trade gap offset the impact of more US quantitative easing.
Cash and term deposits are likely to become even less attractive, as cash rates slide to 2.5%, further pulling down term deposit rates well below 4%.
Historically low starting point bond yields suggest low returns from sovereign bonds, unless global growth takes a renewed leg down. Australian bonds are a bit more attractive than global bonds, given higher yields. Corporate debt is a better bet for those after income.
Property securities are likely to continue to benefit from investors seeking yield. However, returns are likely to slow after the 20-30% returns of 2012.
Unlisted commercial property and infrastructure are likely to benefit from relatively attractive returns and strong investor demand, given their relatively attractive yields, e.g. around 7% for commercial property.
Australian house prices are likely to see a modest 4-5% bounce on the back of lower mortgage rates.
<h3>What are the risks?</h3>
The main global risks relate to US budget and debt problems and a relapse in Europe perhaps triggered by renewed worries regarding Italy or Spain. An alternative risk is that growth surprises on the upside, triggering a mass investor switch out of bonds resulting in a sharp back up in bond yields.
In Australia, the main risk is that the non-mining sectors of the economy, e.g. housing, retailing, tourism, etc, take longer than expected to pick up pace leading to a sharper slowdown in growth beyond the 2.5% we are expecting. This could occur, for example, if rising unemployment triggers a desire on the part of households to more rapidly reduce their debt levels. This could see the RBA cut the cash rate to 2% or below.
<h3>Conclusion</h3>
While the year ahead is likely to see occasional bouts of volatility, returns overall are likely to be reasonable, as global growth picks up a bit and monetary conditions remain ultra-easy globally and become increasingly so in Australia.
<h3>Key points:</h3>
<ul>
<li>While 2012 has had its share of worries, it has turned out far better than feared and share markets and growth assets have been able to generate strong returns for investors. This has been helped by investors looking for higher yields in the face of zero or falling cash rates.</li>
<li>The combination of diminishing extreme downside risks globally, a modest pick-up in growth as the year progresses and attractive valuations for most growth assets points to another year of reasonable returns in 2013. Expect interest rates to remain low globally and fall a bit further in Australia.</li>
</ul>
The main risks relate to US budget and debt problems, a relapse in Europe, slow growth in Australia and a sharp back up in bond yields if investors get more confident.
Dr Shane Oliver is the head of investment strategy and chief economist at AMP Capital. Please note that this article is intended as general information and not as investment advice.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany.</a>
</body></html>

soliver-smf6LQXgW9

Economic storm clearing in 2013 as greater property investment returns expected: Shane Oliver 

<html><body>
Incentives! One of the key laws of economics. We act in a certain way because we are incentivised to do so.
Generally people don’t turn up to work purely for the enjoyment of so doing, although they might say that they do. Instead, the primary incentive is usually financial reward. Some older folk elect to keep working beyond the retirement age for the incentive of keeping active or sociable.
Coles and Woolies offer us shopper dockets in order to incentivise us to come back to their store instead of another outlet.
Incentives don’t only apply to financial and economic decisions. In almost every decision humans make we consciously or unconsciously weigh up the incentives of each of our options. This is the origin of the phrase "There's no such thing as a free lunch".
Let’s take the example of… well, why not the example of an actual free lunch?
Let’s say I’m 21 again (sigh) and I wander down to a pub in Sydney tomorrow (sigh!) and meet a beautiful lady whom I find funny and great company. I offer to buy her lunch next weekend. Obviously the lunch would not be free to me. Nope, certainly no free lunch there!
But would it be a free lunch for her? No. Her assumption would be that I would be expecting something in return as an incentive (even if that incentive was simply her time and company) and would intuitively weigh up her own incentives. She’d balance up the mediocre quality of the suggested restaurant, the inane nature of my moribund 21-year-old conversational skills and – the clincher – my woeful need of a haircut, before politely declining.
Whether we think about it or not, we weigh up incentives in this way all the time. Blokes spend more time getting ready to go out on a hot date than they do for a day at the footy due to the incentive of a potential romance.
Even when we are apparently giving something for free such as a charitable donation, we often expect to feel good in return as our incentive. This is why we choose charities that have a meaning to us and is why I donate to cancer charities in in preference to other deserving causes.
Governments use tax cuts and parking or speeding fines to incentivise us to behave in certain ways, and so on, but can we find a free lunch in investing?
Unfortunately, the law of "no free lunches" also applies to property investment.
Investors who gave money to Allen Stanford thought they’d found a free lunch. Consistent, high returns with remarkably little volatility! But they forgot to ask what the cost was. In this instance, sadly, the cost was one of the greatest frauds ever committed, a gigantic Ponzi scheme that ultimately collapsed. No free lunch – and the cost many investors suffered because they did not diversify was immense.
Incentives in property
In<a target="_blank" href="https://propertyupdate.com.au/dont-be-lured-by-property-investment-incentives/"> this recent article, Michael Yardney </a>urges investors to be wary of property investment incentives such as discounts, which can distort the market. Similarly, be wary of rental guarantees. What is the cost of a guarantee? Is it that the developer wants to sell you a property based upon a multiple of the high rent? What happens when the rental guarantee ends?
What if you buy a property via a property investment club? Is the club helping you to buy just to be nice? Perhaps, but you need to fully understand the incentives. It may be 6% of the property purchase price. What of the developer’s incentive in this case? The developer may be selling via a club because it is a simple way to find buyers. At other times, developers may be offloading properties they simply can’t get rid of.
Does that mean that all properties bought via clubs are sub-standard? Of course not, some might be excellent investments. You simply need to understand the incentives and the costs and to always do your own due diligence.
 
<hr class="system-pagebreak">
 The incentive of yield
Property investors today are constantly being lured to invest in regional markets. The incentives are always listed as the same. Higher yield to lower your risk! Higher capital growth! More affordable and “room to grow”!
If anyone had designed a free lunch, this juicy trifecta must be the veritable entrée, main course and dessert. Might you get both positive cashflow and growth? Actually, you well might if you choose your market well.
But always ask, what is the cost? Go back to basics. A yield is high because the market value is low. Prices are usually low because demand is low. A property that is in low demand is a bad investment.
Be especially wary of investing in small cities or towns where there is vast acreage potentially available for new property development – if prices do go up it could become swamped with dwellings and prices may retrace. The best property investments are those you own forever.
Remember that by investing counter-cyclically in cities that are at the nadir of their cycle investors can get some pretty darned good yields anyway.
If you think you can outsmart the market in today’s climes by getting into and out of a mining town with expert timing (materially beating stamp duty, legal fees, sales costs and capital gains taxes) you're probably wrong.
Property cycles
The best benchmark I have for a property market which is at a different stage of the property cycle to that of Australia is the British market.
A great many investors opted to buy properties before 2007 in outer areas and remote markets tempted by yields of 7% or even above. The cost was that when the credit cycle reversed properties in low demand have been absolutely clobbered, in many cases by more than a quarter. And it’s now 2013, with little in the way of a recovery having taken place.
Those who invested in some city markets in the south-east of England, including in and around London, had previously paid a cost of a somewhat lower yield. But today, the incentive they are paid back is that by buying properties in the part of the country with a shortage of property and massive demand, their property portfolios are stronger than ever before.
Property in Australia has delivered outstanding returns over the past decade and a half which incentivises investors into the market.
The future is unknown, of course. Low interest rates in 2013 could well result in some reasonable growth this year. But what is the cost? My fear is that when we reach the end of the interest rate easing cycle and rates move upwards, some markets where property is in low demand will get clobbered.
Remember the law of incentives. There’s no such thing as a free lunch and always ask yourself: “what is the cost?”
<img src="/images/stories/2012/12/wargentbook.jpg" style="margin: 5px; float: left;">
Pete Wargent holds a range of finance and property qualifications and is the author of <a target="_blank" href="https://petewargent.blogspot.com.au/">Get a Financial Grip – a simple plan for financial freedom.</a>
 
</body></html>

pwargent-M4siyDbqQY

There is no such thing as free lunch, so beware of property investment incentives

<html><body>
New Stockland boss Mark Steinert received a favourable welcome from the stock market to his first day in the office with its share price rising 5 cents to $3.53 yesterday, in a market that went up 0.2%.
Steinert, <a target="_blank" href="https://www.propertyobserver.com.au/residential/stockland-confirms-ubs-banker-mark-steinert-as-new-managing-director/2012112858171">a former UBS investment banker</a>, replaced long-serving managing director and CEO Matthew Quinn to head up Australia’s largest residential developer.
The stock gain will no doubt please Quinn who walked away with 2.25 million shares worth around $7.8 million at yesterday’s closing price  - and worth little bit more today with the share price up to $3.56 by mid-morning.
When Quinn announced his decision to step down on July 25, the Stockland share price was $3.24. It rose 3 cents to $3.43 when Steinert was appointed on November 29.
Challenges for Steinert will include restoring market confidence in Stockland after it suffered three earnings downgrades last year and trying to turn around its struggling Melbourne residential business – Stockland is heavily exposed in Melbourne with eight residential communities in development on the fringes of Melbourne.
No dramatic changes are expected to be made by Steinert in the first six months of his tenure, but he is expected to re-appraise Quinn’s '3Rs' strategy, with its focus on residential, retail and retirement developments.
Steinert told analysts at a conference call late last year following his appointment, that he intends to undertake “deep analysis” before making any changes to strategy.
According to the Australian Financial Review, another thorn in Stockland’s side is its 15% investment in the struggling FKP Property Group.
</body></html>

Stockland shares trade up as Mark Steinert completes first day in charge

<html><body>
South Australia's richest man, Con Makris, has bought the Marina Mirage shopping centre on Queensland's Gold Coast for $52 million.
<img alt="marinacentre1" height="293" width="470" src="/images/stories/2013/01/marinacentre1.jpg">
The shopping centre was placed on the market after private group Fenix were placed into receivership by St George Bank.
The centre was listed in October last year with expectations of up to $60 million.
The 11,800-square-metre centre is split across two levels and comprises 100 shops and 700 parking spaces.
“The Gold Coast has been down for the past four years… but it’s just hit the bottom and is now on the way up,” Makris told The Financial Review.
Makris said that conditions had never been better for buying commercial property as borrowing costs were low and capital growth expected.
“The shopping centre is a destination. It’s where all the top fashion designers are, the best restaurants – it’s a place for the rich and famous to shop and dine,” says Makris.
Christopher Skase built the shopping centre 25 years ago and sold it to MFS Diversified Trust for $28.4 million in 2005.
MFS Group sold the centre in the same year to Fenix Real Estate for $40 million.
Fenix invested about $30 million into the asset but went into receivership.
David Winterbottom and Martin Madden from receivers KordaMentha appointed McVay Real Estate to sell the centre after they secured a $68 million deal with two Chinese groups for the neighbouring Palace Versace.
“It’s in the middle of all the five-star hotels – Palazzo Versace, the Sheraton – and they’re going to build a casino on land next to the shopping centre,” Makris told the Gold Coast Advertiser.
“This is the Miami of Australia,” says Makris.
The centre is opposite the $62 million Sheraton Mirage Resort and includes premium tenants such as Hermes, Tommy Hilfiger and Calvin Klein.
Con Makris founded Makris Group, which acquires shopping centres and today is a $1.5 billion-plus South Australian company.
</body></html>

ntrotman-Et3xWpamVh

Billionaire Con Makris buys Gold Coast's Marina Mirage shopping centre for $52 million

<html><body>
Just 793 first-home buyers took advantage of the revised NSW first-home owners' grant in December last year.
There were 4,233 recipients in the prior December.
The numbers were also down in November last year with 1,763 recipients.
There had been a 2,920 monthly average over the past two financial years.
The December figure was the lowest since the <a target="_blank" href="https://www.osr.nsw.gov.au/lib/doc/stats/fhog_apps_received.pdf">first-home buyers' grant was introduced in 2000 </a> as a measure to offset the introduction of the GST.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2013/01/fhbjan15.gif" title="Click to enlarge"><img src="/images/stories/2013/01/fhbjan15thumb.gif"></a>
However the NSW opposition has accused the NSW government of "locking young people out of the housing market after the state recorded the lowest numbers in two decades".
The acting opposition leader Linda Burney blamed the drop on the government's decision to scrap the all encompassing $7,000 first-home owner grant along with stamp duty exemptions worth up to $17,990 for first-home buyers purchasing existing homes.
Only buyers of new apartments and houses now qualify for the grant. The $15,000 first-home owner grant (new homes) started in October last year. The grant will reduce to $10,000 in January 2014.
The data was confirmed by the Australian Bureau of Statistics (ABS) showing only 1,383 loans for first-home buyers were approved in November last year.
This is the lowest ABS figure since February 1992, Burney says.
"These figures show Barry O'Farrell has locked first home buyers out of the property market," she said in a statement on Tuesday.
"The premier's decision to dump first-home buyer grants and stamp duty exemptions has been nothing short of devastating for young people trying to buy their first home."
Burney said first-home buyers buying an existing $500,000 home in November 2012 were forced to pay $24,990 more than they would have a year earlier.
"The O'Farrell government has created the worst environment in 20 years for first home buyers trying to enter the housing market," she said.
Acting Treasurer Greg Pearce told Fairfax Media the fall was due to a period of transition to the new grant. 
"This was a difficult decision. However, we believe this is necessary to make buying a new home or apartment relatively more attractive than buying an existing dwelling."
Murray pointed out that Queensland, which made similar policy changes also taking effect in October, suffered a 33% fall in loans taken out by first-home buyers in November.
"I think it's too early to tell what impact the NSW grant is having," he said. "Clearly, during the periods of transition you get some strange things happening."
The Housing Industry Association economist Geordan Murray also said it was appropriate to wait for a few more months' data before drawing conclusions.
Westmead and Liverpool, with about 550 recipients, were the suburbs with the highest uptake during 2012. 
</body></html>

NSW first-home buyer numbers fell to 20-year lows in late 2012

<html><body>
One of many reasons there will be solid price growth in Australian property markets this year is that current prices are at sensible levels. 
Australian house prices make sense in an international context, based on the relationship between household incomes and typical prices. They make even more sense when you factor in culture and tradition, elements economists can’t put into an equation but important nevertheless. 
Reserve Bank Governor Glenn Stevens does not think Australian house prices are unreasonably high and does not believe they will drop. Nor does he agree that we have a price bubble. 
A transcript of a recent interview with the Australian Financial Review shows that AFR editor-in-chief Michael Stutchbury and economics editor Alan Mitchell (why did it take two senior execubots to interview one public servant?) worked pretty hard to get Stevens to agree that Australia was vulnerable to a US-style collapse in property values – but they were unsuccessful. 
I’m always curious as to why doomsayers expect Australia to follow the pattern of the United States, to the exclusion of all other countries. Why would one of the strongest markets on the planet follow the example of the worst? 
The impression created by bad journalism is that most of the nations of the world suffered a US-style collapse in prices, and Australia was one of the few to unreasonably resist the trend. 
In fact, only a handful of countries had property crashes: the United States, Ireland, Spain and, to a lesser extent, the UK. Those declines happened for specific reasons. In the US these included a recessed economy, high unemployment, a major oversupply of dwellings and an unregulated lending sector (pretty much the opposite of Australia on every count). 
The vast majority of nations, even some with weak economies, have escaped decimation of their property values. Many have continued to show growth since the onset of the GFC. Australia is, in fact, reacting in line with most of the world’s nations. 
In his interview with the poorly researched AFR boffins, Stevens repeated his consistent position that Australian house prices are high but relative to other countries they are not overpriced. 
“When you put if fully into international perspective – that is, you don’t just compare us with the US but compare us with a whole range of countries – it’s actually a lot harder to make the case that we’re grossly overpriced and due for a crash,” he said. 
“We’ve been around this level of house prices/incomes for 10 years. It’s taking a long time to burst if it’s a bubble. So, I’m not so much concerned about a crash.” 
However, Stevens said he would be concerned if there was another major rise in prices, such as increase of 10% to 20% seen in some recent years. 
“We have seen some gain in house prices over the past year or so, which is reversing a little bit of an earlier decline. That doesn’t trouble me. I think that’s probably part of the cyclical transmission mechanism working. 
“But it would be, I think, troubling if you saw a return to very strong 10-20% persistent rates of growth of housing prices, especially if that was accompanied by a return of rising leverage. 
“I don’t think that’s going to happen, by the way.” 
Stevens, it seems, shares my view that house prices are at comfortable levels relative to incomes and that we will see solid growth in the near future, without a return to boom levels – with the exception of selected markets with specific dynamics, such as Darwin and Gladstone.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" rel="nofollow" target="_blank">hotspotting.com.au</a> and can be <a href="https://www.twitter.com/hotspotting" rel="nofollow" target="_blank">followed on Twitter</a>.
</body></html>

Latest Investing Insights

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

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Investing Insights

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

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News