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;

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“Minister Chanthivong and his team have shown real leadership in replacing an outdated two-year bond with cover that matches the lifespan of the buildings people are buying into.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.

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.”

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 style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Proven at scale:&nbsp;Decennial cover has operated in NSW since 2022, protecting thousand of apartments.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="color:#222222; font-family:Arial, Helvetica, sans-serif; font-size:small; font-style:normal; font-variant-ligatures:normal; font-weight:400; text-align:start; white-space:normal; background-color:#ffffff; text-decoration-thickness:initial; text-decoration-style:initial; text-decoration-color:initial">
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Resilience Latent Defects Insurance (LDI):&nbsp;Covers major structural defects for 10 years from completion.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Consumer-first:&nbsp;Direct claim access, no need for lengthy legal action.</li>
	<li style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">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 style="margin-left:15px; font-family:Aptos, Arial, Helvetica, sans-serif; font-size:12pt; color:#000000">Market leader:&nbsp;&nbsp;Resilience Insurance originated LDI in Australia and is the national market leader.</li>
</ul>

Joel Robinson

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

Builder-developer <a href="https://www.apartments.com.au/developers/mcnab-developments">McNab</a> has wasted little time reshaping one of South Brisbane's most significant undeveloped apartment sites after acquiring the property earlier this year.&nbsp;

McNab has lodged plans to scrap an existing approval for two 30-storey towers and instead deliver a single 28-storey residential building, preserving part of the site for a future development opportunity.

The proposal, lodged over <a href="https://www.apartments.com.au/new-apartments/64-peel-street-south-brisbane-qld-4101">64 Peel Street and 9 Cordelia Street</a>, is for a residential-led mixed-use development comprising 124 apartments above a landscaped podium, alongside a boundary realignment that preserves part of the land for a future residential project.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="743bf564-3f8f-45fc-b8d3-bbf18f5b628f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20Peel%20st%20podium.png?VersionId=EhCxGrVn_VFH3qTbKnI4WppGwaMnOn0t" />

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a>, the development will deliver 119 two-bedroom and five three-bedroom apartments across 23 residential levels. A five-level podium will accommodate 135 car spaces, while the ground floor will include a 66 sqm commercial tenancy, an activated residential lobby with work-from-home spaces, and a publicly accessible landscaped plaza linking Cordelia and Peel streets.&nbsp;

Communal amenities will span Level 6 and the rooftop, including indoor and outdoor recreation spaces, a swimming pool, barbecue facilities, kitchen and dining areas, lawn space, sauna, steam room and yoga facilities.

The application also proposes a boundary realignment to create a standalone 1,290 sqm development lot while retaining an adjacent parcel for future redevelopment, allowing the balance of the site to contribute additional housing over time.

Hayball said the architecture has been shaped by the site's elevated corner position at the intersection of Peel and Cordelia streets and Brisbane's subtropical climate.

The design incorporates generous landscaped setbacks, a masonry podium wrapped with planting, large north-facing balconies, and a slender tower profile intended to maximise natural light, cross ventilation and long-range views. The rooftop has been conceived as a wellness-focused retreat overlooking Brisbane, with amenities positioned to capture views towards Mount Coot-tha and the CBD.

<img alt="First look: McNab resets decade-old South Brisbane approval with 124-apartment tower" data-entity-type="file" data-entity-uuid="c5f99e84-6ad8-4a87-82d1-869685b754d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/mcnab%20tower%20perspective.png?VersionId=Gw0IuJaSAlk.tvGBxInhZOcQAdIB..2b" />

The planning submission positions the proposal as a response to both changing market conditions and Brisbane's Kurilpa Sustainable Growth Precinct planning reforms.

McNab acquired the site after the previous approval was granted, with the existing scheme no longer reflecting current residential market demands, economic conditions, construction challenges, construction efficiencies or the quality of development outcome now being pursued, the planning report noted.

McNab continues to expand its residential development pipeline across Brisbane and the Gold Coast. The developer recently launched The Tannery in West End, securing more than 60 per cent of apartments before the project's public release. It is also delivering Elements Budds Beach in Surfers Paradise and Lucia Highgate Hill, an eight-apartment boutique development overlooking the Brisbane River.

McNab resets decade-old South Brisbane approval with 124-apartment tower

A steeply sloping Bellevue Hill site is set to accommodate a new mid-rise apartment development, with plans lodged for 20 homes that respond to the site's dramatic topography.

The proposal for the consolidated land at <a href="https://www.apartments.com.au/new-apartments/138a-140-bellevue-road-bellevue-hill-nsw-2023">138A-140 Bellevue Road</a> has been designed by Sydney architecture practice Common Office, which has used the site’s substantial fall to distribute the building’s scale and unlock 20 apartments without presenting the full height to the street.&nbsp;

“The unique design strategy leverages the site’s substantial topographical fall to facilitate increased density, presenting a seven-storey profile to Bellevue Road while rising to 10 storeys at the rear,” Common Office said in its architectural design report.

The apartment mix spans one, two, three- and four-bedroom residences. Four two-bedroom apartments are designated as affordable housing, while the plans also include two adaptable dwellings. The mix is majority three-beds, with the typical three-bed apartment offering around 144 sqm internally, with balconies of around 15 sqm.

The affordable housing component represents 15 per cent of the residential floor area and allows the project to access additional height and floor space under the NSW Government’s in-fill affordable housing provisions. The site also falls within the inner area of the Low and Mid-Rise Housing Policy because it is within 400 metres walking distance of Double Bay Town Centre.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="b1230d0f-3bfa-4a11-abaf-0928c66ef345" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da.png?VersionId=dZeMK3P.OutGjN8ycjsxm8uNsj_QFWQv" />

Common Office has arranged the building around a masonry podium and a lighter upper volume, drawing on two recurring elements of Bellevue Hill’s established architecture: sandstone bases and the vertical proportions of local Inter-war Art Deco apartment buildings.

“The proposal is governed by a holistic design language that reconciles the solid horizontal masonry of the neighbourhood’s podiums with the elegant verticality of its Art Deco heritage,” the architect said.

“The building maintains a consistent rhythmic logic utilising deep recesses and a sophisticated material transition to break down the 10-storey scale into a series of articulated, human-scale volumes.”

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="0147f503-1af1-4d51-97fb-c2f1cba63a9d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20bldg.png?VersionId=GoW7q3NlK67OpnePXhk7zvklrlKb72Qc" />

Large-format sandstone tiles will define the lower levels, establishing a robust base that negotiates the change in elevation from Bellevue Road. Above, red-tinted precast concrete frames, recessed balconies, anodised aluminium screens and expanded metal details will create a more vertically expressed façade. Integrated planter beds will introduce greenery across balcony edges and recessed sections of the building.

The elongated northern façade has been divided into three recessed vertical masses to reduce its perceived length. Triangular window elements and metal privacy screens reference the geometry of nearby Art Deco buildings while controlling overlooking toward surrounding homes. The southern elevation will incorporate further privacy screening, landscaped edges and deep balconies to maintain light and ventilation.

<img alt="First Look: Plans lodged for topography-led affordable housing project in Bellevue Hill" data-entity-type="file" data-entity-uuid="e8679cf1-18bc-4447-8a0f-0052b94ab83c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Bellevue%20da%20rooftop.png?VersionId=5SQqQqRFf76rvE2p1TbxJSweMN70AIbc" />

Private and communal landscaping is distributed throughout the development. A landscaped garden apartment is positioned within the lower portion of the site, while a communal terrace on Level 5 will include a central timber deck, barbecue facilities, resident planting plots and areas for outdoor dining and informal gatherings.

Common Office described the terrace as an elevated sanctuary designed to capture district views and sunlight. Its planting strategy incorporates endemic species associated with the Eastern Suburbs Banksia Scrub, extending the landscape vertically through the building and providing habitat for local flora and fauna.

A second communal outdoor area is proposed at roof level, with built-in seating, paved gathering areas and perimeter planting.

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction. Positive Investment Enterprise is delivering the 16-apartment Kew Palm House on Birriga Road, while Chanine Developments is also under construction at Florian, a 36-apartment project on Banksia Road.

&nbsp;

Bellevue Hill is enjoying renewed momentum in the new apartment market, with several boutique developments recently launched and currently under construction.

First Look: Apartment development pitched for Bellevue Hill, Double Bay fringe

South Brisbane's apartment pipeline continues to build momentum, with <a href="https://www.apartments.com.au/developers/trk-property-group">TRK Property Group</a> lodging plans for a 161-apartment tower on Montague Road as developers accelerate investment across the Kurilpa Sustainable Growth Precinct.

The proposal for 176–186 Montague Road would replace an existing office building with a 20-storey residential tower designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, adding to a growing pipeline of high-density projects reshaping one of Brisbane's fastest-evolving inner-city precincts.

The project has been conceived as a "living building", featuring a flowing tower form, extensive vertical landscaping, and generous communal spaces that respond to the evolving Kurilpa Sustainable Growth Precinct.

TRK Property Group Development Director Matt Kan said the project reflected the confidence developers have in South Brisbane's long-term future.

"South Brisbane is entering an incredibly exciting period, and we see Montague Road sitting right at the heart of that evolution," Kan said.

"With the former Visy site directly opposite us and significant investment planned throughout the broader Kurilpa precinct, there is a real sense of momentum around this part of the city and what it will become over the coming years.

"For TRK, this is an opportunity to be part of that next chapter and deliver a project that responds to where the precinct is heading, while contributing to the continued evolution of Brisbane's river edge."

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="590fe1ad-f892-4446-a679-80e33a16d029" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20tower%20facade.png?VersionId=uOJStrcKpyHFcPE1w6_9SMAFzVMCcZll" />

The scheme includes a mix of one, two, three and four-bedroom apartments, incorporating multi-purpose rooms in selected residences to provide additional flexibility for home offices or expanded living areas. The proposed mix comprises 15 one-bedroom, 13 one-bedroom plus MPR, 73 two-bedroom, 26 two-bedroom plus MPR, 30 three-bedroom, and four four-bedroom apartments.

Rather than adopting a conventional rectilinear tower, COX Architecture has developed a sculpted form inspired by the movement of the Brisbane River.

"The proposal has been designed by COX Architecture as a 'living building' that responds to the site's riverine setting, floodplain history and evolving urban context within the Kurilpa Sustainable Growth Precinct," the planning report states.

"The architectural form draws from the fluid nature of the Brisbane River, with a curved and undulating tower form that creates a varied architectural edge and avoids a conventional rectilinear tower expression."

The podium has also been designed as an architectural feature rather than a conventional parking structure, with cascading planting, screening and natural-toned materials softening its appearance. Resident parking is elevated above ground level to address the site's flood constraints, while habitable apartments sit above flood planning levels. Upper-level communal facilities are designed to accommodate shelter-in-place arrangements during major flood events.

<img alt="First look: TRK Property joins South Brisbane apartment surge with Montague Road tower plans" data-entity-type="file" data-entity-uuid="01fa15d0-90df-46c7-9555-7941fc45373c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/TRK%20podium.png?VersionId=mHyua.w1pHGBt9qEdWzrlsv.leztUCwO" />

Communal amenity is a major focus of the proposal. Around 1,815 sqm of shared resident space is proposed across the ground floor, level 19 and the rooftop, including co-working areas, indoor and outdoor recreation spaces, wellness facilities, dining and gathering areas, lawn spaces, a rooftop pool and spa, and extensive landscaping. At street level, a landscaped forecourt and approximately 345 sqm of publicly accessible open space along Montague Road are intended to improve the pedestrian experience while activating the building's frontage.

The development will provide 163 car spaces, including 152 resident bays and 11 visitor spaces, together with 144 bicycle spaces incorporating resident storage, visitor parking, bicycle maintenance facilities and e-mobility charging infrastructure.

The site sits within one of Brisbane's fastest-changing inner-city precincts, less than two kilometres from the CBD and within easy reach of South Bank, West End, the Queensland Cultural Centre and extensive public transport connections. The Kurilpa Sustainable Growth Precinct planning framework is encouraging higher-density residential development to help meet Brisbane's housing supply targets while supporting walkable, transit-oriented neighbourhoods.

TRK Property joins South Brisbane apartment surge with Montague Road tower plans

Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

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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At the time of any crisis there is an almost inevitable reaction that overshoots the need for caution. Without doubt, times are now tough – and investment decisions difficult – but importantly such difficulty is not unprecedented given historic cyclicality of property markets. 
Commercial real estate markets in Australia are still highly influenced by domestic factors. The strength of fundamentals has been undermined by global events, but they remain more favourable than in almost all other developed countries with characteristics of low inflation, declining interest rates, robust population growth and modest unemployment. 
Most importantly to property markets, commercial accommodation is in shortage given the limited new supply that has been delivered since the late 2000s due to the initial round of impacts following the 2008 GFC. 
Carefully selected retail, commercial and industrial properties provide regular compounding rental growth and capital return to the combined effect of internal rates of return within the range of 8% to 12% per annum. This overall return does not anticipate strong capital growth in the short term given the constraints imposed by the prevailing economic circumstances, which highlights the need for a longer-term property investment strategy. 
Scott Keck is executive chairman at<a target="_blank" href="https://www.charterkc.com.au/"> Charter Keck Cramer</a>
For more advice on<a target="_blank" href="http://propertyobserver.com.au/ebooks/investing-in-property-in-times-of-turmoil-free-ebook"> investing in property following times of turmoil, download our free eBook.</a>
</body></html>

skeck-irsd56phZ9

Consider investing in select commercial real estate assets over the long term

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A tenant can make or break a landlord’s experience of owning a rental property. 
Finding good tenants and keeping them happy is one of the best investments a landlord can make. 
Sourcing good tenants is one of the most important tasks for landlords who manage their own investment properties. 
By ensuring they have a positive experience while living at your property, they may be more likely to pay their rent on time, stay in your property longer and treat it as if it were their own. 
Here are some tips to find and hold on to great tenants: 
Think about the type of tenant you want to attract 
Keeping a good tenant happy begins before you’ve even purchased your rental property. 
When choosing a property to invest in, think about the tenant demographic you want to attract, for example a family, sole tenant or couple, and choose a home that is likely to appeal to them.
Properties that are close to good schools, shops and public transport are likely to be well sought after and may give you a larger pool of prospective tenants from which to choose. 
Keep up appearances 
No one wants to live in a property that has stained carpets and marked walls. A home that is poorly presented by the landlord may deter good tenants from applying to rent your property in the first instance, and be poorly cared for by the successful tenant. 
Similarly, a property that requires as little maintenance as possible will make life much easier for both tenants and landlords as it will minimise the effort and cost involved in the upkeep of the home once the tenant has moved in. 
Presenting a clean, tidy, low-maintenance and well cared for property will encourage tenants to treat the property as if it were their own. 
Generate interest 
In order to generate interest in the lease of your property, landlords may be required to place advertisements in newspapers, on various real estate websites and on online noticeboards. The advertisement should include information about the property, when open inspections are scheduled for, and the lease application deadline.
It is a good idea to arrange open inspections at times that would be convenient to the type of tenant you want to attract. 
For example, if you would like to attract young professionals, arrange the open inspection after working hours so it is easy for people to attend. 
At the open inspection, ensure you talk with as many potential tenants as possible so you can put faces to names when processing lease applications later on. 
Screen tenants 
After the lease application deadline has closed, landlords will be required to screen potential tenants. 
The first step is to contact the employer of your preferred tenant to confirm that the information they have provided regarding their position, length of employment and salary is correct. 
It is also important to contact their previous landlord to discuss any issues that arose during their last tenancy, as well as the personal referees listed in their application. 
If an applicant is applying for his or her first lease and has no previous record of renting, speaking with responsible adults such as school teachers may suffice. 
If you are a member of a specific real estate industry association, you may have access to a tenant database which you can also use to search the names of your shortlisted potential tenants to find out whether there are any recorded issues with previous leases. 
Attend to maintenance issues promptly 
Once you have selected your tenant and they have moved into the property, ensure you make every effort to attend to any maintenance issues promptly. 
It can be quite frustrating for tenants if their requests for repairs go unanswered, and if they aren’t getting the attention they deserve they may begin to question their commitment to your property and become more careless with it. 
Injury or loss resulting from a safety hazard that has not been attended to might also give rise to a costly legal liability claim. 
Responding to maintenance issues in a timely manner signals to your tenant that you care about the property and value their concern for its condition. This can contribute to creating a positive renting experience for your tenant. 
Even if you do find good tenants, it is important to not take them for granted and rely on them to make sure nothing goes wrong. 
Even the best tenant can accidentally damage a property or lose his or her job and be unable to pay rent. 
Every landlord should have a tailored landlord insurance policy that covers both malicious and accidental damage, legal liability and loss of rental income. 
Landlords can also enhance risk management by appointing a property manager. 
The time and effort that property managers can save landlords as well as the experience and knowledge they provide can be well worth the cost for their services. 
A property manager can also help to find tenants, ensure the correct paperwork is in place, assist landlords to form a professional relationship with their tenant, collect the rent, conduct property inspections and liaise with the tenant on behalf of the landlord. 
Carolyn Majda is insurance manager at landlord insurance specialist <a href="https://terrischeer.com.au/" target="_blank">Terri Scheer Insurance.</a>
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How to find and hold good tenants

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The RBA minutes only refer to <a target="_blank" href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2012/03072012">one set of house price index data</a>, explicitly highlighting the "up-tick" in prices recorded by RP Data-Rismark's daily index prior to the RBA's last board meeting on July 3: "In contrast, indicators suggested that the housing market remained subdued. Dwelling activity was likely to have fallen further in recent months and indicators generally suggested that activity would remain relatively weak in the near term. Notwithstanding an apparent tick-up in June, dwelling prices were around 6 per cent lower than in early 2011, with the largest falls in Melbourne and Brisbane. Household credit continued to grow at around the pace of the past year (broadly in line with incomes). Interest rates on housing loans were around 50 basis points below their 15-year average." It is a subtlety, but what is most profound in the paragraph above is that Australia's central bank is describing movements in house prices over the month of June only three days after the month has ended! This is a transformational world away from the house price technology that existed several years ago, whereby quarterly, as opposed to daily, data was reported with a multi-month lag. Even today APM and the ABS report their quarterly data with a one-month lag. To be clear, while the RP Data-Rismark index is the only price data highlighted in the RBA's minutes, the central bank prudently reviews information from both APM and RP Data-Rismark, and still includes the ABS index data in the Statement on Monetary Policy.  Rismark and RP Data have a great deal of respect for Dr Andrew Wilson and the Fairfax-owned APM, which report a useful "stratified median price index" based on the pioneering <a target="_blank" href="https://ideas.repec.org/p/rba/rbardp/rdp2006-04">Prasad and Richards methodology</a>. Rismark and RP Data compute this stratified median index internally, in addition to our old adjacent-period monthly hedonic, and simple medians.  It should also be said that it was in part the RBA that inspired Rismark and RP Data to invest many millions of dollars into the research and development of complex regression-based monthly and daily indices that seek to eliminate the compositional biases that arise in housing transactions due to the twin problems attributable to the heterogeneity of the housing asset itself (no two homes are identical), and the "non-synchronicity", or infrequent trading, associated with the overall stock (note that in absolute terms transaction volumes are very high at north of 400k per annum).
Christopher Joye is a leading financial economist and a director of <a href="https://www.ybr.com.au/savings/index.cfm" target="_blank">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
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RBA refers to RP Data-Rismark index in July minutes: Christopher Joye

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The Reserve Bank reverted to referring to the Australian housing market as “subdued” in its July 3 monetary policy meeting – a slightly less gloomy view of the market than in June, when it described the market as “having recently declined again”.
In May the RBA suggested the housing market was “subdued” and in April the RBA said it was “soft”.
The July 3 monetary policy minutes also acknowledge that retailing and housing are weak spots in the economy, which have contributed to keeping inflationary pressures contained despite evidence of stronger economic growth.
The RBA notes a stronger domestic economy, with positives being that the “pace of business credit had picked up noticeably”, that “household consumption grew strongly over the year to the March quarter, across both goods and service”, and that the “unemployment rate remained a little above 5% in May”.
But, in contrast, it said “indicators suggested that the housing market remained subdued”.
“Dwelling activity was likely to have fallen further in recent months, and indicators generally suggested that activity would remain relatively weak in the near term.
“Notwithstanding an apparent tick-up in June, dwelling prices were around 6% lower than in early 2011, with the largest falls in Melbourne and Brisbane.
“Household credit continued to grow at around the pace of the past year (broadly in line with incomes). Interest rates on housing loans were around 50 basis points below their 15-year average,” says the RBA.
The minute also say that some of the recent tensions in global financial markets have eased and that locally there had been no sign of dislocation in Australian financial markets.
“Following the June cash rate announcement, most lenders reduced their standard variable housing rates by around 20 basis points.
“As a result, the average interest rate on outstanding housing loans was about 60 basis points below the post-1996 average, while rates on small and large business loans were 50 and 75 basis points lower,” says the RBA.
The RBA concludes by saying: "Members continued to view it as appropriate for interest rates to be a little below average given evidence of slower global growth and the low rate of inflation in Australia.
"But with a material easing in monetary policy having occurred over the preceding six months or so, and with recent signs that the domestic economy had a little more momentum than had earlier been indicated, members saw no need for any further adjustment to the cash rate at this meeting."
<a href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2012/03072012">Click here for the full minutes.</a>
Following the release of the minutes, Westpac chief economist Bill Evans says the next rate cuts are now likely to be delayed until the December quarter.  
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Domestic economy stronger but housing market returns to “subdued” status: RBA minutes

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A Coalition victory at the next federal election could result in demand for office space in Canberra falling even further than the current gloomy projections by BIS Shrapnel.
In anew forecast report, BIS Shrapnel expects the Canberra office vacancy rate to remain above 10% over the next three years – compared with a low vacancy rate in the single digits in the previous decade – while supply increases by 7%.
Report author and senior project manager Christian Schilling warns that austerity measures by the Commonwealth government are now depressing demand for office space, while more construction will add 140,000 square metres of new supply over the coming two years.
Canberra has the second highest pipeline of new office projects – behind Melbourne (about 240,000 square metres).
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/07/bisjuly17.gif"><img src="/images/stories/2012/07/bisjuly17thumb.gif"></a>
Source: Jones Lang LaSalle 
Under its “base case scenario” BIS Shrapnel does not expect to see much improvement until two to three years from now, with the outlook worse for non-civic office space.
However, Schilling warns that there is a “significant ‘other’ scenario”:
“A change of government late next year could bring the toe-cutters back.
“Demand for office space could turn negative if the new government cuts a swathe through the public service.”
“That could cause a further setback to a market already reeling from the excesses of last decade.
“We are not in the business of forecasting election outcomes,” says Schilling. “But anyone in the market would do well to run this outlook as an alternative scenario in their forward planning.”
“It’s the 500-pound gorilla in the room,” he says.
Canberra is currently undergoing its second major office downturn since the late 1990s, in what was previously a “paradigm for stable progress, the perfect place for counter-cyclical investment”.
“Since then, the market has seen large cyclical fluctuations in demand for and supply of office space. They were brought about by changes in government, reforms and efficiency drives, periodic under-investment and sudden surges in employment,” Schilling says.
“Add a dose of commitment to sustainability that leaves non-complying buildings out in the cold, plus private over-building and you have a recipe for instability that (almost) mimics the cyclicality in the other capital city markets,” Schilling adds.
According to BIS Shrapnel, a massive construction boom from 2002 to 2012 resulted in Canberra being highly oversupplied, with vacancies reaching record levels across both civic (15.6%) and non-civic (13.4%) sectors by 2010.
Strong leasing demand subsequently made solid inroads into that surplus, underpinned by Commonwealth employment growth as a result of GFC-induced stimulus spending, but demand has cooled since then.
The Commonwealth government has introduced austerity measures in order to return the budget to the black.
“The federal government has literally turned off the (money) tap,” says Schilling. “There simply isn’t any money in the till to fund the cost of fitting out new premises, with the powerful PwC (PricewaterhouseCoopers) keeping a watchful eye on capital expenditure.”
Figures compiled recently by Jones Lang LaSalle show that Canberra recorded a fourth successive quarter of positive net absorption in the second quarter of 2012 (7,800 square metres) taking the total to 47,600 square metres for the 2011-12 financial year, with the vacancy rate tightened to 9.9% – the first time vacancy has been below 10% since the fourth quarter of 2009.
<a href="https://www.propertyobserver.com.au/office/canberras-very-green-nishi-office-block-80-leased-as-demand-for-premium-office-space-rises-colliers/2012062655274" target="_blank">New office buildings include Nishi Commercial</a> – part of developer the Molonglo Group’s mixed-use NewActon project, which has recorded strong leasing activity – helped by its status as one of Canberra’s greenest office building projects.
Nishi is now 80% leased as demand grows for premium-grade office stock with high environmental ratings, according to Colliers.
Just two floors out of the 10 remain available for lease, with office tenants set to move across in November.
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Coalition victory could mean 'toe cutting' and spell bad news for investors in Canberra office market: BIS Shrapnel

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Google, one of the few fast-growing office tenants in Sydney, might take a temporary sub-lease of any redundant space in the neighbouring Fairfax Media building at Pyrmont.
“The irony of such a move would not be lost on either the moguls of the new media or the flagship of the old,” Robert Harley, the property editor of the Fairfax publication The Australian Financial review, reported today.
Google declined to comment, as did the group’s real estate advisers CBRE, with the timing of any Google move or expansion not clear.
What is known is that the company will want a contemporary relaxed style of work space for its technology-savvy workforce.
The atmosphere will need to reflect the style of Google’s Mountain View campus in California, which has the stated aim of: “Our offices and cafes are designed to encourage interactions between Googlers within and across teams, and to spark conversation about work as well as play.”
Google’s lease in Pyrmont does not expire until 2018, but the AFR suggest in the long term four new projects have become potential locations for Google’s next office iteration.
They are listed as Lend Lease’s Barangaroo, Sekesui House-Frasers’ Central Park at the southern end of the CBD, the NSW government’s Australian Technology Park at Redfern and the reworking of the IMAX site at Darling Harbour by Grocon.
Central Park, opposite the University of Technology at Chippendale, will have a commercial building within its mixed-use precinct.
A spokesman for the Barangaroo developer, Lend Lease, advised the AFR that said the group was in negotiations with a number of potential tenants but would not give any specifics.
A new project on the IMAX site at Darling Harbour is also a possibility, although no approvals are yet in place.
For more on Sydney's present and future, download our free eBook <a href="http://propertyobserver.com.au/ebooks/free-ebook-sydney-embracing-the-world-of-tomorrow" target="_blank">Sydney: Embracing the world of tomorrow</a>
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New media meets old as Google said to be eyeing redundant Fairfax Media space in Pyrmont

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The Housing Industry Association (HIA) has downgraded already modest expectations for new home construction over the next two financial years, but expects a strong pick-up in the Queensland, which appears to have bottomed out.
There are also more modest growth expectations for NSW and WA, albeit off historically low bases, but new home building in Victoria – Australia’s new home building capital – is set to fall sharply over the next two years, though it remains the top state for new home construction.
In a year where prominent building companies like <a href="https://www.propertyobserver.com.au/news/kell-rigby-one-of-australia-s-oldest-most-respected-building-companies-set-for-voluntary-administration/2012020853012" target="_blank">Kell &amp; Rigby</a>, <a href="https://www.propertyobserver.com.au/industry-news/liquidator-appointed-for-collapsed-nsw-builder-reed-construction/2012071155520" target="_blank">Reed Construction</a> and <a href="https://www.propertyobserver.com.au/industry-news/st-hilliers-construction-arm-placed-in-voluntary-administration/2012051554713" target="_blank">St Hilliers Construction</a> have collapsed, not to mention numerous smaller builders, the HIA expects new housing starts to fall by 14.1% to a level of 135,284 for the 2011-12 financial year.
This will be the seventh time in nine years that Australia has experienced a decline in new housing starts, with the 2011-12 figure just above figures recorded at the peak of the GFC.
The low point in new housing construction occurred around the December 2008 quarter – at the height of the GFC – when the HIA recorded new houses being built at an annualised rate of 130,548.
The HIA expects new housing starts before to pick up modestly in 2012-13 with growth of 4.9% to 146,600 starts, followed by a further increase of 4.4% in 2013-14, which would take starts to a level of 148,064.
These figures have been revised down from previous HIA forecasts of 137,820 starts in 2011-12, and a recovery reaching 151,200 starts by 2013-14.
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<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/07/hiajuly17.gif"><img src="/images/stories/2012/07/hiajuly17thumb.gif"></a>
The modest recovery forecast over the next two financial years is primarily focused around NSW, Queensland and Western Australia – states that are experiencing periods of historically low housing starts.
The outlook is strongest for Queensland, with the HIA optimistic of a recovery from 2012013 with new forecasts expected to rise by 13.3% from 25,370 to 28,745.
The forecast is even brighter for 2013-14, with the HIA expecting a 15.8% improvement to 33,286 starts.
The HIA says that NSW has “endured a synchronised trend decline in new home building and renovations activity of a duration unrivalled in Australia's post-war history”, which continues in 2012, with the industry group forecasting a 7.9% decline to 28,524.
However, the HIA forecasts growth of 18.2% in 2012-13 and 5.3% in 2013-14, taking starts to a level of 35,503, higher than a previous forecast level for 2013-14 of 33,830.
“Given the awful base we are forecasting a recovery from, 35,503 starts is not a bullish forecast,” says the HIA.
 
<hr class="system-pagebreak">
 
The HIA says Western Australia “continues to provide that rather quintessential example of how if you live in Australia but don't directly benefit from the resources boom, then times are challenging”.
“The economy is on fire, but new housing is extremely weak. Indicators like housing finance point to improved times ahead, but current planning problems will prove a huge set-back to a short-term recovery. The renovations sector, meanwhile, is slowing from a record high.”
The HIA is forecasting a 15.8% decline in WA housing starts in 2011-12 to come in at 17,510.
Victoria keeps its crown as the new home building capital of Australia, but the HIA is forecasting a 19.4% fall to a level of 47,690 in 2011-12 followed by a decline of 12.6% in 2012-13 and a further 3.5% fall in 2013-14 to 40,240 starts.
The HIA adds that the risk to this outlook remains on the downside.
Looking at the national outlook, HIA chief economist Dr Harley Dale says it now appears unavoidable that new housing will revisit levels experienced as a result of the GFC.
This, he says will be to the “detriment of thousands of businesses and households, not to mention the overall domestic economy”.
“We are experiencing a combination of softer housing demand and high-cost housing supply, which together mean that the nation is under-building by a significant amount. Put simply, Australian consumers are nervous about the global and domestic economies, and meanwhile around $200,000 of the price of a new home is due to taxation. It’s an unsustainable situation,” he says. 
“To improve the conditions facing new home building not only requires further interest rate cuts, but also Commonwealth and state government action to boost confidence and lift a substantial portion of the tax burden from new housing,” he says.
The HIA notes that the renovations sector has also showed signs of weakness in recent quarters, notwithstanding that total renovation investment hit a new record in 2010-11.
It expects renovation investment to fall by 1.5% to $29.5 billion in 2011-12, but to grow by 1.3% to $29.9 billion in 2012-13.
According to the federal government’s National Housing Supply Council 2012 report Australia accumulated a dwelling shortfall of 228,000 homes between 2001 and 2011 with the most acute shortage in NSW, with an estimated gap of 89,000 dwellings, followed by 83,000 in Queensland.
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New housing construction outlook gloomy, but Queensland a bright spot: HIA 

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Urban renewal has changed the character of the inner-south Sydney suburb of Waterloo.
The suburb has shaken off a reputation for crime and its low socio-economic profile to become a sought-after location for inner-city apartment living, with a number of major apartment projects currently underway.
Census 2011 figures analysed the Australian Financial Review show that <a target="_blank" href="/news">Waterloo </a>is Australia’s second most upwardly mobile suburb, with weekly household income rising 167% between 2001 and 2011.
<img src="/images/stories/2012/07/waterloomap.jpg">
The suburb ranks someway behind <a target="_parent" href="/news">Madeley</a>, a north Perth suburb, where median income has risen nearly 300% from $435 per week to $1,846. However, Madeley was farmland 10 years ago before the land was turned over to property developers.
Waterloo is the only inner-city Sydney suburb in the top 20, a list dominated by Perth suburbs benefiting from the flow-on effects of the mining boom that noticeably includes the Queensland mining towns of Chinchilla and Emerald.
The top five upwardly mobile suburbs are:
 
<div align="center">
<table style="width: 450px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="123" valign="top">
 
</td>
<td width="123" valign="top">
 
</td>
<td width="123" valign="top">
Median weekly income 2001
</td>
<td width="123" valign="top">
Median weekly income 2011
</td>
</tr>
<tr>
<td width="123" valign="top">
Madeley
</td>
<td width="123" valign="top">
WA
</td>
<td width="123" valign="top">
$435
</td>
<td width="123" valign="top">
$1846
</td>
</tr>
<tr>
<td width="123" valign="top">
Waterloo
</td>
<td width="123" valign="top">
NSW
</td>
<td width="123" valign="top">
$299
</td>
<td width="123" valign="top">
$900
</td>
</tr>
<tr>
<td width="123" valign="top">
<a target="_blank" href="/news">East Perth</a>
</td>
<td width="123" valign="top">
WA
</td>
<td width="123" valign="top">
$678
</td>
<td width="123" valign="top">
$1820
</td>
</tr>
<tr>
<td width="123" valign="top">
<a target="_blank" href="/news">Perth</a>
</td>
<td width="123" valign="top">
WA
</td>
<td width="123" valign="top">
$682
</td>
<td width="123" valign="top">
$1,755
</td>
</tr>
<tr>
<td width="123" valign="top">
<a target="_blank" href="/news">Chinchilla</a>
</td>
<td width="123" valign="top">
Queensland
</td>
<td width="123" valign="top">
$534
</td>
<td width="123" valign="top">
$1,357
</td>
</tr>
</tbody></table>
</div>
Source: Australian Financial Review, Census 2011
 
Census data shows that the Waterloo population increased by 2,000 from 8,500 in the 2006 census to 10,600 according to 2011 census. 
The vast majority of dwellings in Waterloo – 81% – are apartments, catering for singles or couples, with 23% of all dwellings being one-bedroom units and 53% two-bedroom units. 
Waterloo alongside Redfern and Alexandria is heading towards a 70% single-person occupancy rate, according Whiterock Residential Projects, which is developing two projects in Waterloo. 
According to RP Data, the median unit price in Waterloo is $513,000, down 5.7% on the same time last year, but prices are up 20% over the past five years.
The median rent is $550 per week, equating to a relatively high yield of 5.6%.
The revitalisation of Waterloo was kicked off around 2004 with NSW government creating the Redfern Waterloo Authority (RWA) with the objective of revitalising the suburb.
Since then there has been a marked drop in crime along the more recent establishment of popular eating destinations such as the Dank Street Bakery and Fratelli Fresh and Fountain Street in neighbouring Alexandria.
Waterloo is also within walking distance of the largest urban renewal project in Australia – the $8 billion Green Square project, which is developing 20,000 new homes and infrastructure between now and 2030, with the hub being 14 hectares of land to be developed as the Green Square Town Centre – a new major centre around the Green Square railway station.
<img src="/images/stories/2012/07/waterloo2.jpg">
According to Andrew Donnelly, CEO of Whiterock Residential Projects, which has recently started building boutique development Madison (pictured above) near Dank Street, the urban renewal in Waterloo is just beginning.
Donnelly tells Property Observer the shift in  demographic in Waterloo has been “palpable” over the last few years, with young professionals earning combined incomes of $200,000 plus choosing to live in the suburb.
He says it has shaken its reputation as an industrial, crime-ridden area, with empty-nesters from the suburbs choosing to buy in Waterloo.
“One father told me there are streets in Waterloo they would not walk down 20 years ago, but will now happily let their kids play there,” he says.
“Dank Street is a real destination for high-end eateries, and people from the eastern suburbs come to eat here over the weekend.”
According to Donnelly, there are two distinct markets in the Waterloo area – the high-rise market being targeted by Harry Triguboff’s Meriton Group (Eon Zetland priced from $660,000 for two-bedders) at Asian buyers and the student market and the low-rise boutique projects such as Madison and 141 McEvoy Street.
He says the market is 75% owner-occupier in boutiques projects, while in the high rise, 75% of the apartments are being bought by investors.
“Two-bedroom units are selling for around $700,000 and three beds for over $1 million,” Donnelly says.
Most of the buyers are locals, with overseas investors comprising just 5% to 10% of new residents, according to Donnelly’s estimation.
He says the Madison project – which features 47 one-, two- and three-bedroom apartments – is now almost sold out, with just 10 remaining and prices over $10,000 per square metre.
“That would have been unheard of 10 years ago,” he says.
Whiterock will launch a new project at 141 McEvoy Street in Alexandria, with prices starting from around $450,000 for a one-bedder.
<img src="/images/stories/2012/07/waterlooflicker.jpg">
Another major project is Becton’s Divercity project (pictured above and below), which launched in December 2009 and as of March this year had sold 400 apartments, with 122 settling in May and June.
Becton attributes its success to date to proximity to the Sydney CBD and easy access to Sydney Airport, eastern suburb beaches, Centennial Park, Moore Park golf course and the three major universities, UNSW, UTS and Sydney University. It is also just 800 metres from Green Square train station.
The development includes a café and restaurant strip, tepanyaki bar, rooftop cinema and 20 metre heated outdoor pool with cabana lounges and landscaped park grounds.
{yoogallery src=[images/stories/2012/07/july17divercity]}
The project will be completed in August 2014.
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Upwardly mobile Waterloo, Sydney, shows impact of urban regeneration

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Gerry Harvey appeared to sum it up fairly well in a recent interview:
"It was unusual to have such a poor sentiment at a time when Australia's economy was relatively strong compared to America and some countries in Europe."
Harvey feels Australia has an economy regarded as strong by outsiders. And yet there is a total lack of confidence, and businesses are therefore suffering.
Overseas investors are actively targeting Australian commercial property — accounting for around half of all sales of over $30 million. However, local investors remain hesitant.
This is purely a confidence thing — something my articles have been attempting to explain, over the past few months.
Experts are purely blaming the overseas turmoil. And it's true, countries affected by the financial crisis have not yet adjusted their economies to the long-term structural shift taking place — mistaking it as simply a fall-off in demand.
Fortunately, Australia is able to sell its mining output to China — creating funds now, to allow for structural adjustment over time.
And so, as tough as this may sound, propping up selected industries through subsidies is simply bad economics.
Instead, the government should be fostering a flexible environment within which businesses and workers can be encouraged to adapt.
Surely China is in trouble?
During the second quarter of this year China's growth was probably slower than at any time in the past three years.
It has been well reported that China's growth rate has cooled. But that doesn't mean a hard landing — because the current expected growth rate (of 8% per annum) is scarcely stagnation.
With inflation seemingly now under control, China has already begun cranking up approvals for roads, airports, steel mills and social housing.
All of these will require what Australia's mining sector produces.
Therefore, Australia's problem will not be a fall-off in global demand. Rather, it will be the impact of greater competition from other countries supplying commodities.
But this is an unlikely to occur until 2016, when the world economy should have fully returned to an expansionary phase.
How should commercial property investors respond?
Because of the general uncertainty, quality commercial properties are starting to look cheap. As an investor, the secret is to have your lease expiry (and therefore a rental review) occur in 2016-17.
That will then provide you with solid income during the current period of confusion. And also allow you the opportunity to reap considerable capital growth, when you review the rental to market.
Bottom line: Confusion generally means inaction.
For commercial property, that translates into there being no meaningful new development in the short term — certainly not of a speculative nature.
However, against this lack of supply, you will still have a growing tenant demand, which will result in increased rentals, and lower capitalisation rates.
In other words, the precise scenario most investors would hope for.
Therefore, recognise it for what it is and position yourself now, before everyone else finally twigs to what was actually going on.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a target="_blank" href="https://bitly.com/IFf40C">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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A lack of supply means increased tenant demand and yields for commercial property investors

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One of the more interesting outcomes the <a target="_blank" href="https://www.propertyobserver.com.au/https://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/0">2011 census</a> produced was the figures concerning the housing market. The reason for this interest is how the results contrasted with the idea that Australia currently suffers from an acute housing undersupply or shortage. Taking the lead in promoting this idea is the <a target="_blank" href="https://www.nhsc.org.au/">National Housing Supply Council</a> (NHSC), an organisation formed by the federal government in May 2008 to provide an in-depth analysis of the housing market. The NHSC is widely considered to be the peak body in this field.

Unsurprisingly, in its first report – <a target="_blank" href="https://www.nhsc.org.au/content/state_of_supply/2008_ssr_rpt/nhsc_stateofsupplyreport.pdf">State of Supply Report 2008</a> – released in March 2009, the NHSC concluded that a deficit or gap of 85,000 dwellings existed. Here was the most comprehensive study of Australia’s housing market, a dense 172 pages. The alarming shortfall of dwellings made instant headlines in the media, not least because it provided concrete proof that Australia’s rocketing housing prices were strongly affected by this shortage. Both government and industry broadcasted the NHSC’s results because it confirmed the suspicion that a shortage did, in fact, exist – and that something could now be done about it. The banking and real estate sectors were also very supportive, as their own arguments about a housing shortage were now considered irrefutable.

There was only one small problem: the purported shortage of 85,000 dwellings was complete fiction.

In order to arrive at the shortage, the NHSC had to employ a methodology of the most dubious nature – a travesty of basic science. The shortfall of 85,000 dwellings was composed of the following: 1) 9,000 to address homelessness of those sleeping rough, 2) 35,000 to address homelessness of those staying with friends and relatives, 3) 13,000 to house marginal residents of caravan parks, 4) 26,000 to increase the rental vacancy rate to 3%, and 5) an extra 2,000 to round up to the nearest 5,000!

The problems with this analysis are legion, and were quickly unmasked by Australian economists Kris Sayce and Steve Keen, and are covered briefly here. While homelessness is indeed a serious problem with tens of thousands suffering from this plight, these persons (typically on the lower income scales) do not have the financial power to turn their needs into demand on the property market. Instead, the NHSC produced evidence of social need but not actual demand. The same goes for the residents of caravan parks.

The fourth category is an interesting one because it assumes that data sourced from the Real Estate Institute of Australia (REIA) and its state-level affiliates are also based upon sound methodology. As I have covered elsewhere, the <a target="_blank" href="https://www.prosper.org.au/wp-content/uploads/2012/06/Philip_Soos_Speculative_Vacancies_2012_Report.pdf">reported vacancy rates</a> are likely to be severely biased downwards given the appalling methodology, data-gathering techniques, and lack of independent oversight (auditing). The last point is self-explanatory: who on earth rounds up to the nearest 5,000?

These highly questionable statistics were produced by Australia’s “peak” body. The NHSC is a body stacked with industry and former government professionals. Its continued funding would most likely quickly dry up were they to find that no shortage existed. If instead a surplus was found, the NHSC’s brief existence would come to an end as dwelling supply considerations are found not to be an issue in price inflation.

The outcome is obvious: if a shortage can be found, then government is much more likely to enact policies favourable to industry. Asking the NHSC if there is a shortage is similar to asking Dracula if the blood bank needs to be expanded because of a deficit – the answer is already predetermined and reflexive.

Little more could be expected in the <a target="_blank" href="https://www.nhsc.org.au/content/state_of_supply/2009_ssr_rpt/stateofsupplyreport_2010.pdf">2010</a> and <a target="_blank" href="https://www.nhsc.org.au/content/state_of_supply/2011_ssr_rpt/docs/nhsc-state-of-supply-report-2011.pdf">2011</a> reports. The NHSC performed a backflip, admitting that it was uncomfortable with its previous methodology given the obvious problems with it. It is unlikely that the NHSC would have changed course if not for the barrage of ridicule it experienced from those who read the report and were honest enough not to give their silent approval. Each report provided an increasingly dismal prognosis as the shortage had increased to 185,000 in 2011 and, if present circumstances remained the same, there is expected to be a shortage of 640,000 dwellings by 2030.

But nothing changed. The NHSC had to find another pretext for the pre-supposed shortage, this time by creating a category called “underlying demand”, driven primarily by immigration and other demographic factors. This would appear to be a more sound methodology if not for the fact that the numbers were simply made up again.
 
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The pseudo-science of the NHSC has not prevented vested interests from promoting its conclusions as fact and crucially relies upon the public not reading through hundreds of pages (630 in all) of economic and statistical analysis to understand this. After all, the public is supposed to trust the “experts”. It is worth reading through these three reports in order to realise how the phrase “lies, damned lies, and statistics” rings true.

The non-existent housing shortage probably comprises the most popular argument used by the bubble deniers to justify astronomical housing prices. As Australia is apparently suffering from a chronic deficit of dwellings, demand is greatly outstripping supply, leading to rising prices.

The problem with this argument is it can’t explain why prices started to rise in 1996 and have skyrocketed onwards, especially during 2001-2004. Annual population growth between 1996 and 2005 registered at approximately 1%, but dwelling growth (adjusted for demolitions and discontinuations) was greater over this period. In fact, 2007 was the first time since 1950 that population growth was higher than dwelling growth. If the housing shortage argument was correct, housing prices should’ve started to rise from 2007 onwards, not 1996.

The shortage argument, however, is not new. Every country that has suffered through a housing boom followed by a crash (a bubble) in recent years have always had its so-called “experts” claim that prices were based upon fundamental valuations due to dwelling shortages.

Take the US as a case study. Leading institutions such as the Federal Reserve, National Association of Realtors, California Building Industry Association and Harvard University’s Joint Center for Housing Studies produced sophisticated studies to show that the $8 trillion housing boom was caused, in part, by dwelling shortages. These studies were authored by professors, PhDs, and businesspeople, all with extensive knowledge and experience but with conflicts of interest that could fill a small book. Yet, their expertise was as illusory as the shortage when the housing market crashed. The same again occurred in Ireland and Spain to the point where these three countries are now bulldozing entire neighbourhoods to reduce some of the massive oversupply.

Going back to point first made in the introduction, the 2011 census revealed Australia had <a target="_blank" href="https://www.bloomberg.com/news/2012-06-21/vanishing-households-undercut-claim-of-australian-home-shortage">7.8 million households</a>, 900,000 fewer than the NHSC’s figure, with population also growing by 300,000 fewer than previously estimated. These figures have come as such a shock that the NHSC chairman has reported that an undersupply could be incorrect. In fact, <a target="_blank" href="https://beta.afr.com/p/business/property/housing_undersupply_you_shouldn_FFAUmmahkHLANiAOxaOY2N">Morgan Stanley researchers</a> have found that the current 228,000 dwelling undersupply has now become an oversupply of 341,000, a huge turnaround.

Given the flawed nature of the NHSC’s reports, the run-up in housing prices is likely due to other factors, specifically the escalation in mortgage debt used to finance real estate speculation. As of 2011, mortgage debt reached $1.2 trillion or 85% of GDP. Combined with personal debt, this climbs to $1.3 trillion or 95% of GDP, a staggering sum. Also of concern is the <a target="_blank" href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=hsaf_ctte/report/report.pdf">$53 billion in subsidies and tax breaks</a> that property owners receive.

Perhaps the NHSC can stop wasting our taxpayer dollars and instead investigate these leads.

<aside id="related-content"></aside>Philip Soos is a researcher at the School of International and Political Studies at Deakin University. This story first appeared on <a target="_blank" href="https://theconversation.edu.au/">The Conversation</a>.
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