Construction is set to begin at <a href="https://www.apartments.com.au/new-townhouses/orchard-mews-glen-iris-18-scott-grove-glen-iris-vic-3146">Orchard Mews</a> in Glen Iris, with&nbsp;PC Whitehall &amp; Sons&nbsp;now appointed as the townhome development moves into its next phase.

The development by&nbsp;<a href="https://www.apartments.com.au/developers/montcoeur">MontCoeur</a>,&nbsp;located at 18 Scott Grove, is now around 30 per cent sold, with completion targeted for late-2027.

Orchard Mews comprises a curated collection of three- and four-bedroom customisable townhomes, positioned within one of <a href="https://www.apartments.com.au/developments/glen-iris-vic-3146">Glen Iris</a>’ more tightly held residential streets. The low-density project has been designed by <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, bringing together a team known for high-end residential projects across Melbourne.

[smartcode_project:default project_id=150128 project_image_fid=366285]

The development is defined by its focus on flexible living and long-term usability. Each residence includes multiple living zones and a customisable multipurpose room, allowing buyers to tailor spaces to suit changing needs, whether as a home office, additional bedroom, wellness area or entertainment space.

Architecturally, the townhomes emphasise natural light and spatial volume, with dual-aspect layouts and double-height living areas incorporated into the design. Interiors feature natural stone benchtops, premium appliances, and a neutral material palette intended to support everyday functionality rather than statement-driven finishes.

All residences are all-electric and include private lifts and secure double garages, reflecting a broader shift toward sustainability and future-focused housing in Melbourne’s established suburbs.

[smartcode_project:default project_id=150128 project_image_fid=366277]

Outdoor connections are also central to the offering, with a mix of private courtyards and terraces extending internal living spaces and integrating with the landscaped surrounds.

The Scott Grove address places Orchard Mews within close proximity to some of Melbourne’s key lifestyle and education amenities, including Scotch College, Sacré Cœur, Cabrini Hospital and the retail hub of Chadstone. Public transport access is also nearby, with trams and Gardiner Station providing connectivity to the CBD and surrounding suburbs.

[smartcode_project_cta:default project_id=150128]

Joel Robinson

Construction to commence at luxury Glen Iris townhome project, Orchard Mews

A rare new apartment development has been proposed on the fringe of St Ives Village.

Developer Newquest Property has lodged plans for a low-rise apartment project designed by well-regarded architecture firm Warren &amp; Mahoney, which is best known for its work in the multi-residential sector in Melbourne.

The building, proposed for a 1,916 sqm site on <a href="https://www.apartments.com.au/new-apartments/st-ives-residences-3-5-memorial-avenue-nsw-2075">Memorial Avenue</a> opposite St Ives Village Green, has been designed to blend into the surrounding natural environment.

<img alt="St Ives" data-entity-type="file" data-entity-uuid="5c1c7437-2fba-4345-a6d7-05321714ad3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-04%20at%201.28.46%E2%80%AFPM.png?VersionId=KrYyMaJvNqR7vbx0xbB3Ef8sJ6FuHpmn" />

“Drawing inspiration from the pale trunks and flowering canopies of the scribbly gums and blue gums prevalent in the area, a considered material palette was developed,” the architectural design report states.

“This palette references the established materiality of the suburb while elevating it through refined finishes to achieve a more luxurious architectural expression.”

Of the 33 apartments proposed, 21 will be three-bedroom residences. The remaining mix includes nine two-bedroom apartments, one one-bedroom apartment and two four-bedroom residences. The development will be supported by 62 car parking spaces and 33 secure bicycle spaces.

The proposal would replace two single-storey brick buildings currently on the site.

<img alt="St Ives" data-entity-type="file" data-entity-uuid="21422eaf-09a9-4439-9278-b9bd9daf22a1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-04%20at%201.38.10%E2%80%AFPM.png?VersionId=v.fXSgcUcEscvOZzqcjG5nk3gVqk_Amt" />

St Ives remains a relatively untapped market for new apartment development. North Shore developer WINIM has a number of projects in the area, while INCA is nearing completion of Ellis Residences.

More recently, Traders In Purple has lodged plans for one of the denser projects proposed in the suburb, a 75-apartment development on a 5,900 sqm site on Cowan Road.

NewQuest, a construction, design and development firm, has delivered over 24 projects across commercial, residential, industrial, and lad markets.&nbsp;

&nbsp;

&nbsp;

First look: NewQuest Property proposes new St Ives apartment development

<a href="https://www.apartments.com.au/developers/centa-property-group">Centa Property Group</a> has achieved two major milestones at its <a href="https://www.apartments.com.au/new-apartments/bilinga-house-107-golden-four-drive-bilinga-qld-4225">Bilinga House</a> apartment development in the sought-after southern Gold Coast.

They've almost sold 50 per cent of the Golden Four Drive building, while at the same time announcing the commencement of construction through reputable builder Greyburn Construction.

The boutique 10-storey building, with 47 two- and three-bedroom apartments, now has a mid-to-late 2028 completion date.

[smartcode_project:default project_id=150037 project_image_fid=5333]

The <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>-designed project is positioned just 200 metres from Bilinga Beach and brings a relatively rare apartment offering to a market that has seen limited new supply in recent years.

Residences have been designed to maximise natural light and ventilation, with open-plan interiors, generous glazing, and material palettes that reflect the surrounding coastal landscape.

Interiors incorporate engineered timber flooring, stone benchtops, and custom joinery, with layouts designed to adapt to both permanent living and lock-and-leave use.

[smartcode_project:default project_id=150037 project_image_fid=5336]

Rothelowman Senior Project Leader Matthew Tencate said the design approach centres on liveability and community.

“Providing curated on-site amenities and communal spaces for residents that facilitate a sense of community, liveability, and wellness,” Tencate said.

Residents will have access to a suite of private amenities including a pool, gym, sauna, and communal alfresco areas, alongside practical features such as surfboard storage and bicycle facilities.

[smartcode_project:default project_id=150037 project_image_fid=5336]

Centa Property Group Director Jason Yuen said the project has been designed to appeal to a range of buyers seeking flexibility in how they use their property.

“Bilinga House is designed for those who want the best of both worlds – a modern beachside escape with the flexibility to generate income when you're not there,” Yuen said.

[smartcode_project:default project_id=150037 project_image_fid=5338]

Bilinga remains one of the quieter pockets of the Gold Coast, sitting between the more established hubs of Coolangatta and Palm Beach. Its appeal has strengthened in recent years, supported by proximity to the Gold Coast Airport and the Oceanway coastal path.

[smartcode_project_cta:default project_id=150037]

Bilinga House apartments snapped up as Greyburn commences construction

Breaking into the Sydney property market has long felt out of reach for many first home buyers, particularly as median house prices sit above $1.6 million and unit prices push beyond $900,000.

But entry points still exist in pockets of Greater Western Sydney, where pricing, government incentives, and product mix are aligning to make ownership more attainable.

Understanding where those opportunities sit, and how the numbers actually stack up, is becoming increasingly important for buyers weighing up their next move.

<h2>Work out what you can actually afford</h2>

Sydney is expensive, but it isn’t uniformly expensive. The Greater Parramatta region continues to offer comparatively accessible entry points, particularly for buyers open to alternative configurations like studios.

There's an assumption that a first home needs to be a certain size, that anything smaller than a one-bedder is a concession rather than a choice. That assumption doesn't hold up against what well-designed studios in the right location actually offer: immediate liveability, strong urban amenity, and a price point that makes the deposit target realistic rather than theoretical.

At <a href="https://www.apartments.com.au/buildings/mason-main-merrylands-249-259-merrylands-road-merrylands-nsw-2160">Mason &amp; Main</a>, <a href="https://www.apartments.com.au/developers/coronation-property">Coronation Property</a>'s multi-award winning precinct in Merrylands, studio apartments are unlike the typical studio configuration.

Starting from $498,000, the bedroom is fully enclosed, separated from the living area by a cavity sliding door, creating a genuinely private sleeping space that functions more like a one-bedroom apartment than a traditional open-plan studio.

[smartcode_project:default project_id=31751 project_image_fid=359814]

At 42 sqm internally, with an open-plan kitchen, built-in robes, modern bathroom, and separate laundry, the apartments are designed for everyday liveability rather than short-term use.

With a five per cent deposit under the Federal Government's First Home Guarantee, that equates to a deposit of around $24,200, achievable for many first home buyers without the added cost of Lenders Mortgage Insurance.

<h2>Understand the real cost of renting versus buying</h2>

For buyers weighing up the shift from renting to owning, the numbers are closer than many expect.

Here’s how the numbers stack up for a studio at Mason &amp; Main (based on a $498,000 purchase):

<ul>
	<li>Purchase price: $498,000</li>
	<li>Five per cent deposit (First Home Guarantee): ~$24,900</li>
	<li>Loan amount: ~$473,100</li>
	<li>Estimated mortgage repayment (6.29% variable, 30-year term): ~$675–$695/week*</li>
	<li>Estimated rental return: $590–$620/week*</li>
	<li>Rental yield: 6.16% - 6.47%</li>
</ul>

At this level, the gap between renting and owning is relatively narrow, particularly when factoring in long-term equity, with rental returns also making the apartments a viable option for investors.

The rental range reflects current asking rents for remaining studio stock in the development and, based on prevailing asking prices, equates to an indicative gross rental yield of up to 6.47 per cent.

For buyers seeking more internal space, Mason &amp; Main also offers a range of one-bedroom apartments from $629,000, alongside larger one-bedroom plus multipurpose room configurations priced from $680,000 - all priced under $800,000 and eligible for first home buyer incentives.

<ul>
	<li>Purchase price: $629,000</li>
	<li>20 per cent deposit: ~$125,800 (5% deposit on exchange: $31,450)</li>
	<li>Loan amount 80%: ~$503,200</li>
	<li>Estimated mortgage repayment: ~$720–$740/week*</li>
	<li>Estimated rental return: $650–$680/week*</li>
	<li>Rental yield:&nbsp;5.37% - 5.62%</li>
</ul>

One-bedroom apartments continue to present a balanced option for both owner-occupiers and investors, supported by steady rental demand across Western Sydney.&nbsp;

[smartcode_project:default project_id=31751 project_image_fid=359812]

<h2>Make sure you're across the government incentives</h2>

Government incentives continue to play a key role in reducing the upfront cost barrier.

At Mason &amp; Main, studio, one, and two-bedroom apartments are priced under $800,000, allowing eligible buyers to access a full stamp duty exemption under the NSW First Home Buyers Assistance Scheme.

On a $498,000 purchase, that represents a saving of roughly $17,900 that would otherwise need to be paid at settlement.

Combined with the First Home Guarantee, which enables purchases with as little as a five per cent deposit, the total capital required to secure a home is significantly reduced compared to traditional lending pathways.

<h2>No waiting, no uncertainty</h2>

For first home buyers who want to move sooner rather than later, Mason &amp; Main removes one of the more common pain points from the purchase process entirely. The development is already complete and move-in ready, meaning buyers can walk through the apartments, inspect the finishes, and have full certainty about what they're purchasing before signing anything.

Coronation brought in renowned architecture firm <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> to design the development.&nbsp;

"The project's design drew inspiration from the area's rich heritage, in particular the nearby brickworks and aqueduct, infusing a contemporary perspective to seamlessly integrate historical influences into the design," Woods Bagot Principal Dom Alvaro says.

[smartcode_project:default project_id=31751 project_image_fid=736]

<h2>Factor in location and lifestyle</h2>

Beyond the apartment itself, the surrounding infrastructure matters, particularly for a first purchase. Merrylands Station sits 350 metres from the development, putting the Parramatta CBD a five-minute drive away and the Sydney CBD roughly 25 minutes via the Western Line. Directly across the road is Stockland <a href="https://www.apartments.com.au/developments/merrylands-nsw-2160">Merrylands</a>, one of Greater Western Sydney's major retail centres.

At street level, Mason &amp; Main's own retail and dining precinct has more than 30 tenants trading, including Iftar, Macelleria, Hayat, San Churro, Yuzu, and Fat Jaks. Residents also have access to a resort-style pool, a Technogym-equipped gym, private dining rooms, and a rooftop terrace with panoramic views across Parramatta, the Sydney CBD, and the Blue Mountains, all exclusive to the building.

Due to the mix of configurations, including studios which are rarely offered in today's new apartment market, first home buyers and investors have driven Mason &amp; Main to over 90 per cent sold.

Coronation Property Managing Director Joe Nahas says the development is driving a revitalisation of Merrylands, setting a high standard for future developments in the area.

Mason &amp; Main is move-in ready and is the latest in a series of award-winning mixed-use developments by Coronation Property.

Disclaimer: Mortgage repayment figures are estimates only, based on a 6.29 per cent variable rate over a 30-year term (Canstar, April 2026). Pricing and rental estimates are indicative and based on current listings and project information. Gross yield figures are indicative and derived from asking prices and estimated rental ranges. Stamp duty savings are indicative only. Buyers should seek independent financial and legal advice before proceeding.

[smartcode_project_cta:default project_id=31751]

How first home buyers can enter the Sydney property market for under $500k

Australia’s housing debate has rarely been more urgent. The National Housing Supply and Affordability Council forecasts the country could fall around 262,000 homes short of housing needs by 2029, underscoring the scale of the challenge facing planners, governments and developers.

In response, much of the conversation has centred on high-density towers around transport corridors and strategic centres.

Diversified developer Coronation Property, while also focused on well-located, strategic sites, is incorporating an arguably underutilised typology, the terrace.

Difficult to integrate into true high-rise developments, terraces have become a defining feature of Coronation’s lower-rise portfolio, including projects in Ashbury and Erskineville. <a href="https://www.apartments.com.au/buildings/ashbury-terraces-165-171-milton-street-ashbury-nsw-2193">Ashbury Terraces</a> places a stronger emphasis on this housing type, forming part of a broader community mix.

At its Erskineville development, <a href="https://www.apartments.com.au/new-apartments/lillian-erskineville-9-metters-street-erskineville-nsw-2043">Lillian</a>, terraces are more limited, with just a handful&nbsp;included within the wider, predominantly apartment-led precinct, one of the first developments to launch in Erskineville in several years.

[smartcode_project:default project_id=135149 project_image_fid=368392]

Terrace residents at Lillian benefit from many of the same advantages as apartment owners, the lock-up-and-leave lifestyle and access to shared amenities like the rooftop wellness space, but with significantly more space.

Spanning multiple levels, the terraces also feature front and rear courtyards, providing direct access to the central landscaped gardens within the precinct.

<h3 data-end="212" data-section-id="1n97jye" data-start="191">The terrace model</h3>

Terrace housing has long been part of Australia’s urban fabric. From Paddington and Surry Hills to Glebe and Annandale, rows of terrace homes have shaped neighbourhood streets, offering a housing form that sits between detached houses and apartments.

The contemporary terrace, however, addresses many of the limitations of older designs, where narrow staircases and constrained layouts often compromised liveability.

[smartcode_project:default project_id=135149 project_image_fid=368157]

“Terraces represent one of the city’s most intelligent housing models,” says Joe Nahas, Managing Director of Coronation Property.

“They deliver density without losing the human scale that makes neighbourhoods liveable. In many ways, they provide a bridge between the Sydney we know and the Sydney we need to build. If Sydney is going to grow well, it can’t rely on towers alone.”

<hr data-end="1090" data-start="1087" />
<h3 data-end="1124" data-section-id="1a7l0gw" data-start="1092">The evolution of the terrace</h3>

That thinking has shaped Coronation’s approach at Ashbury Terraces, where the terrace typology has been reinterpreted for modern living.

Designed by SJB, the project recently received recognition at the 2026 Better Future World Design Awards, acknowledging its architectural clarity and response to the surrounding suburban context.

SJB Director Adam Haddow says the intent was to evolve a familiar housing form rather than reinvent it.

“The terrace is one of Sydney’s most familiar housing forms, so our approach at Ashbury was to reinterpret that typology in a contemporary way,” Haddow says.

“The homes are designed to sit comfortably within the existing neighbourhood while introducing more light, landscape and shared spaces that support modern living.”

Ashbury Terraces combines terraces, apartments and penthouses across a series of low-rise buildings, integrating contemporary architecture with landscaped communal spaces and resident amenity.

That same typology is now being carried into Coronation’s Lillian development in Erskineville, where a smaller number of terraces sit within a predominantly apartment-led precinct.

<hr data-end="2269" data-start="2266" />
<h3 data-end="2289" data-section-id="cazuws" data-start="2271">Buyer response</h3>

Coronation’s decision to include terraces at Lillian was informed by strong buyer feedback from Ashbury Terraces, where purchasers were drawn to the flexibility and scale the housing type offers.

One resident, Sweta Pursem, purchased a terrace as a single buyer, citing its long-term versatility.

“As a single buyer, it might seem surprising that I chose a terrace over an apartment, but I was thinking long term,” Pursem says.

“The terraces are incredibly versatile, catering to a range of lifestyles while still offering the space and privacy of a house.”

For Pursem, the multi-level layout provides a level of functionality not typically found in apartment living.

“Having a separate living area from the bedroom and home office makes everyday living feel both functional and comfortable. When friends and family come to visit, the layout gives a sense of privacy while still feeling open and spacious.”

Her terrace also supports a more connected, lifestyle-driven way of living.

“I love entertaining, and the courtyard is ideal for relaxed weekend drinks with friends. I tend to use each level differently throughout the day, it creates a natural rhythm between work, downtime and entertaining, which I didn’t have in apartment living.”

Ashbury Terraces is now complete and ready to move in, while Lillian in Erskineville is under construction and expected to welcome residents in mid-2027.

Coronation champions terraces as a key piece of Sydney’s housing mix

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>
Since June 2000, first-home buyers (FHB), nationally, have averaged around 27% of purchasers in the market seeking finance—from a low of 19% (March 2007) to a high of 42% (May 2009).
A recent <a href="/news">Property Observer article</a> outlined the national situation for FHBs and noted the shallowness of the housing recovery in comparison to previous cycles. 
Focusing on NSW, FHB numbers have averaged some 26% of purchasers over the same period—a low of 11% (May 2013) and a high of 47% (May 2009). Since November 2013, FHB numbers have not exceeded 15% and have averaged about 12%.
The demise of NSW’s FHB is far more than an issue for market—it is the issue. FHB are the foundation market.
By and large, FHBs aspire to become upgraders, since property (or more precisely, the consumption of living space) is a normal economic good—the wealthier we become, the more of it we tend to consume. FHBs possess the momentum investors generally lack; to improve, to buy better, and move up the ladder. With a diminished base, up-graders must either sell into their own market or to investors.
Such momentum is necessary for the state, whose finances are bound to the market’s transactional volumes—Macquarie Street really needs to think that one through and come up with a less volatile revenue stream. Stamp duty in my opinion is a retrospective capital gains tax for the state—since it indirectly taxes the wealth made on the sale of an existing property at the time a new property is purchased.
How fair or sensible is it to tax FHB for wealth they haven’t yet earned? In this regard, stamp duty for FHB is a punitive tax; it sits closer to the suite of measures government employs to discourage self-harming activities, so society doesn’t stray too far from the straight and narrow. It’s surprising to see that first-home ownership is one of them.
In October 2012, the NSW government varied the FHB concessions and grants in the hope of stimulating housing supply and supporting a weak construction sector. Both the $7,000 cash grant and—far more importantly—the stamp duty exemption were replaced by the <a target="_blank" href="https://www.osr.nsw.gov.au/benefits/first_home/first_home_new_home/">first home-new home</a> scheme; increasing the grant to $15,000, raising the price thresholds, exempting stamp duty payment for new homes only.
Following the October 2012 where FHB represented 22.8% of the market, their numbers fell away precipitously compared to the same month a year prior:
<div align="center">
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top">
November
</td>
<td valign="top">
(14.6%)
</td>
<td width="53" valign="top">
 
</td>
<td width="50" valign="top">
February
</td>
<td valign="top">
(12.3%)
</td>
<td width="51" valign="top">
 
</td>
<td width="40" valign="top">
May
</td>
<td valign="top">
(11.2%)
</td>
</tr>
<tr>
<td valign="top">
December
</td>
<td valign="top">
(12.6%)
</td>
<td width="53" valign="top">
 
</td>
<td width="50" valign="top">
March
</td>
<td valign="top">
(11.5%)
</td>
<td width="51" valign="top">
 
</td>
<td width="40" valign="top">
 
</td>
<td valign="top">
 
</td>
</tr>
<tr>
<td valign="top">
January
</td>
<td valign="top">
(11.9%)
</td>
<td width="53" valign="top">
 
</td>
<td width="50" valign="top">
April
</td>
<td valign="top">
(11.3%)
</td>
<td width="51" valign="top">
 
</td>
<td width="40" valign="top">
 
</td>
<td valign="top">
 
</td>
</tr>
</tbody></table>
</div>
The NSW state government’s policy is failing and is flawed. The numbers speak for themselves, but who is speaking for the FHB?
Cash grants for the most part inflate property prices, ultimately harming those they purport to help—but they win votes, apparently. FHB, by and large, are not new dwelling purchasers; these dwellings more commonly are bought by up-graders and investors for differing reasons. The key factor in the purchase equation for a FHB is stamp duty and how this plays through the purchase transaction via the “funds to complete” scenario. The following table illustrates the situation faced by a FHB prior and post October 2012:
<div align="center">
<table width="460" cellpadding="0" cellspacing="0" border="0"><tbody>
<tr>
<td nowrap width="215" valign="bottom"></td>
<td width="85">
pre-FHOG change
</td>
<td width="64">
current situation
</td>
<td width="96">
Equivalent purchase pre-FHOG
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Price of property
</td>
<td nowrap width="85" valign="bottom">
350,000
</td>
<td nowrap width="64" valign="bottom">
350,000
</td>
<td nowrap width="96" valign="bottom">
460,953
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
FHOG
</td>
<td nowrap width="85" valign="bottom">
7,000
</td>
<td nowrap width="64" valign="bottom"></td>
<td nowrap width="96" valign="bottom">
7,000
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
NSW Stamp duty
</td>
<td nowrap width="85" valign="bottom">
0
</td>
<td nowrap width="64" valign="bottom">
(11,240)
</td>
<td nowrap width="96" valign="bottom">
0
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Legals
</td>
<td nowrap width="85" valign="bottom">
(900)
</td>
<td nowrap width="64" valign="bottom">
(900)
</td>
<td nowrap width="96" valign="bottom">
(900)
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Building &amp; pest inspection
</td>
<td nowrap width="85" valign="bottom">
(470)
</td>
<td nowrap width="64" valign="bottom">
(470)
</td>
<td nowrap width="96" valign="bottom">
(470)
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Lender's mortgage insurance
</td>
<td nowrap width="85" valign="bottom">
(2,469)
</td>
<td nowrap width="64" valign="bottom">
(2,469)
</td>
<td nowrap width="96" valign="bottom">
(4,066)
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Bank establishment fees
</td>
<td nowrap width="85" valign="bottom">
(600)
</td>
<td nowrap width="64" valign="bottom">
(600)
</td>
<td nowrap width="96" valign="bottom">
(600)
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Banks LVR
</td>
<td nowrap width="85" valign="bottom">
85%
</td>
<td nowrap width="64" valign="bottom">
85%
</td>
<td nowrap width="96" valign="bottom">
85%
</td>
</tr>
<tr>
<td nowrap width="215" valign="bottom">
Funds required to complete sale
</td>
<td nowrap width="85" valign="bottom">
49,939
</td>
<td nowrap width="64" valign="bottom">
68,179
</td>
<td nowrap width="96" valign="bottom">
68,179
</td>
</tr>
</tbody></table>
</div>
From the above it can be seen that FHB wishing to purchase a secondhand $350,000 property today will require an additional $20,000 deposit. But, it presumes that they will find a bank willing to lend on a 15% deposit—the banks wish to minimise their risk exposure by qualifying their borrowers. And the banks never lose, which is why lending to upgraders and investors makes so much more sense as they are a far less risky proposition.
Importantly, the table highlights that pre-October 2012, FHB who were in the market to purchase a $460,000 property are now restricted to those priced $350,000 and below. The inference being that FHB will have to consider areas that are cheaper because they are either further out or stigmatised so as to become affordable.
The following chart illustrates in a general way how this could result, by looking at the median 2-bedroom unit values for inner, middle, and outer ring Sydney.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2013/08/bregozzo-sept-2-big.jpg" title="Click to enlarge"><img src="/images/stories/2013/08/bregozzo-sept-2-small.jpg"></a>
This is a claytons solution, since the housing affordability problem is simply being transferred to the less affluent; what happens to the existing residents in these areas?
What the table doesn’t illustrate is the FHB’s life situation; how many are about to start a family (knock around $20,000 off what the banks are prepared to lend)? How many are working as contractual employees (higher mortgage insurance or deposit, if approved at all)? How many are in stagnant businesses where wages haven’t changed, for the better? How many carry education debt?
It would be fair to argue that for some (especially those who have started a family as tenants), October 2012 marked a line in the sand for home ownership. Not only have FHB been dealt a blow to their purchasing power, by delaying their entry into the market, they will fail to benefit from the compounding wealth effect of real estate.
There are long term implications here, unless of course, today’s generation of property owners are smart enough to work out how to transfer the affordability baggage to future generations.
<hr>
Martin Bregozzo is a <a href="https://au.linkedin.com/in/bregozzo" target="_blank">property economist</a> with extensive experience spanning all asset classes, across private &amp; public sectors; specialising in project feasibility and arguing the case for change.
Image opf Sydney courtesy of Michael Coghlan/flickr.
 
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mbregozzo-j6q7uYzhAT

The NSW first-home buyer demise lays a weak foundation: Martin Bregozzo

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Over the past twelve months house prices have been on the rise, led by Sydney, but also in Melbourne and Brisbane.
Alongside this trend we have seen many high profile and extensively publicised auctions and pre-auction home sales with prices reported as well over the reserve having been paid.
We have also seen a number of apartment projects released for sale and sold out in only a few hours. Meanwhile, in parts of Sydney there's an ongoing land rush, with buyers camping out to buy a block of land in Sydney's booming north-west and south-west.
This sort of activity has not been an aberration, it's the type of market we are seeing more often than not. So called 'Super Saturdays' when big numbers of auctions come onto the market in one day are no longer the exception.
In Sydney in particular, we have almost an entire market showing strong demand even as prices continue to rise. On a slow news weekend this is the stuff of everyday drama, and so it's reasonable to examine why the market is acting this way.
Real Estate is a very different commodity
Against this sort of market environment setting the 'right price' might be starting to look like a somewhat scary prospect for real estate agents, for buyers and for sellers, for either a single private treaty sale, an auction or an entire apartment building or land estate. Real estate is a unique commodity, it is fixed in time and place.
Supply is very inflexible - you can't simply call up the assembly line manager and ask for a new delivery of homes, apartments or land. And we can't over look the overarching role of finance as a key driver of supply and demand.
Can we define value? When we set-out to define value, there is no lack of academic study or case law in this area but much of which comes from 'gentler times'. But none the less it's well worth considering. When looking at value there is the general supposition that firstly any buyer is perfectly acquainted with the property they are looking to buy, that the buyer does the necessary homework to size up the market, which today, thanks to so much published data is a far easier task than it used to be.
That buyers are alert of all the circumstances, which might affect value and the open market price, aspects both good and bad and ticking off a property's location, quality, access to facilities and the surrounding features. That buyers also understand the present levels of demand and the likelihood of what competition they might face, for example at an auction, from other buyers.
And then having either the ready cash or access to secure finance in a competitive market among those capable of buying a particular property. It all sounds very reasonable, very sensible, but then the factor of emotion enters the mix and any neat formula all of a sudden looks less useful.
So we might ask: what are the factors driving the 'emotion' in the market?
This article continues on the next page. Please click below.
<hr class="system-pagebreak">
 Every Property is Unique
While economics defines the rules of supply and demand, the pressures of market over and under supply and the mechanism of price every property remains unique. As such, they rarely only attract one willing buyer.
As cities grow, there will always be competition and that's on the increase.
We should not overlook the impact of population growth. Currently, according to the OECD, Australia has one of the highest population growth rates in the OECD at near 1.8%, while in NZ its 0.9%, in the USA 0.7%, Canada 0.85% and in the UK its -0.8%.
We are fast heading towards a population of 24 million. This one factor alone helps to explain why homes are in such demand.
In New South Wales and Victoria, growth is being strongly fuelled by overseas migration and a big drop in the outflow of population to states like Queensland and Western Australia.
There is a finite supply and, yes, while you might be able to create more apartments or houses, every location is itself unique and so is the local community. They're not possible to replicate.
You can't put extra supply on a freight train and move it. It's fixed in place and time and is always influenced by local conditions. We also have a problem in the amount of time it takes to get new developments off the ground. The DA process at times appears to be stuck in the slow lane.
And because markets are so local, it's possible to have both under-supply and over-supply, which can't easily be fixed, if at all and so prices will always respond. If there are not enough properties for sale, then prices will always rise. Even in new estates or in development areas where more homes can be constructed it takes time to deliver new stock and so prices will rise.
People want to buy and secure their position now, even when this is via an off-the-plan purchase.
Property is local by nature and auctions clearly show how after reflecting upon all of the market factors (like those outlined above) the price paid will always reflect the scarcity and demand at any point in time.
Supply and demand in real estate isn't easy to balance, it takes time and supply needs to be in locations that buyers are after, that buyers want. Buyers are influenced by a range of external factors like the availability of jobs and local services and their needs can be very specific – schooling for a young family, university access for a more mature trade-up family or, for an aging population, medical, recreation and security might be the big issues.
Buying a home, an apartment or an investment in exactly the right community and neighbourhood is not that easy. So it's possible to see why supply and demand is always a local and very personal issue. When there is ready access to finance the competition will remain intense for limited opportunities and prices will always respond. This should not come as a surprise.
Demand and the prices paid for real estate are influenced by many factors including lifestyle options, investment goals, development constraints, population growth, demographics, off-shore buyers and finance. All of these then combine to influence supply and demand, and in today's market many of these factors are instantly recognisable.
 
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pchittenden-eLqUUC8TWW

How much did they pay? And why?

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The key to prosperity in property investment is buying in the right places.
It's clear from the figures I presented in my previous column that capital city price growth has been ordinary at best in the past 10 years. Darwin (averaging 8% a year) and Perth (7%) have been okay, but five of the eight capitals have growth rates no better than wages growth or the rate of inflation.
Sydney has averaged just 3.8% per year in the past decade, despite the lift in the past 18 months.
Would you invest in real estate on those numbers? I would suggest no – not if those growth numbers applied everywhere.
The secret is finding places likely to deliver out-performance. To give you an idea of what's possible, here are some of the results of places we identified one to two years ago as good places to buy for future growth.
Toowoomba in regional Queensland is a standout example. In 2012, I started shouting about its prospects to rise from ordinary performance to out-performance. In the past 12 months, the potential has started to be realised.
Many Toowoomba suburbs, which have long-term growth averages of around 6% per year, have recorded double-digit growth in the past 12 months.
East Toowoomba, Harristown, Mount Lofty, Newtown, North Toowoomba, South Toowoomba and Toowoomba City have all registered growth ranging between 12% and 19% in 12 months.
You would not have poured money into Toowoomba based on its historic performance, but with real estate investment it's the future that matters.
Another Queensland regional city with a poor recent history but a glittering future is Cairns.
Some Cairns markets, particularly unit markets, still have pricing lower than five years ago. Others have averaged less than 1% per year in growth since 2009. That reflects weakness in the local economy and developer over-supply.
The future, however, looks very different. Cairns is rapidly transitioning from an economy overly reliant on tourism to a place where a massive infrastructure spend is broadening and strengthening the base.
That, plus previous price decline and the highest rental yields in Australia, has made Cairns an attractive proposition for investors.
In the past 12 months, Cairns has started to deliver. In terms of median price growth (based on Australian Property Monitors data), here are some of the results in Cairns suburban markets:
<ul>
<li>Bungalow houses up 18%</li>
<li>Edge Hill houses up 14%</li>
<li>Woree houses up 16%</li>
<li>Yorkey's Knob houses up 15%</li>
<li>Cairns City units up 19%</li>
<li>Earlville units up 19%</li>
<li>Edge Hill units up 12%</li>
<li>Holloways Beach units up 27%</li>
<li>Manunda units up 30%</li>
<li>Woree units up 27%</li>
<li>Yorkey's Knob units up 23%</li>
</ul>
In 2012 and 2013, I suggested the Swan City precinct of Perth as a place with appeal from the collective viewpoints of location, lifestyle, affordability and infrastructure spending. It's shown pretty solid growth in the years since - including, in the past 12 months, double-digit growth in Aveley (14%), Ballajura (11%), Caversham (15%), Lockridge (12%) and The Vines (13%), well ahead of city averages.
Monash City has appealed as a middle market location with growth prospects in Melbourne. About a year ago we included it in our Top 10 reports and since then multiple suburbs in this municipality have delivered double-digit growth in median prices, ranging from 12% in Clayton to 23% in Glen Waverley – well above the average (about 8%) for metropolitan Melbourne in the past 12 months.
There are many other examples, spread across the major cities and regional Australia.
It serves to highlight the shallowness of most commentary about Australian real estate, especially by economists who continue to speak in terms such as: "Australian house prices have risen 9% in the past year".
In most places, the growth has been less than that – but in select locations with the right growth drivers, the upside has been considerably more.
Finding them is the essence of good investing.
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terryryder-YECXbqmri2

Spotting an out-performer

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It is quite sad to see what gets promoted as 'investment' advice in the property space these days.
This was again brought to my attention a few weeks' back when a new inner Brisbane apartment project, under the 'investment' tab on their shiny new website, wrote that apartment values in the area in question had risen by over 10% per annum since 2000 and weekly rents had lifted by over 150% over the same time frame.
It also claimed that the local population is projected to increase almost fourfold over the next 25 years.
The price and rent values used were medians and any increase in population will involve much more new housing supply.
Medians are muddied by new developments, which artificially lift values, especially when used on a small- scale, suburban basis. And there have been a lot of new developments in this area over the past 15 years.
When you look at actual apartment resales, you find a 4.5% annual gross capital average gain over the last ten years in the area (we survey 25 select apartment projects in each major Queensland suburb in order to understand what's going on) and over the past four years there has been little to no resale apartment price growth in the suburb in question.
In addition, the vacancy rate has more than doubled – up from 2% to 4% over the past two years &amp; one-bedroom rents are even starting to fall.
Back in 2000, renters in this area were paying, on average, less than 20% of their income on rent. Local tenants, based on the rents promoted by this new project, would have to give up between 35% &amp; 40% of their income to live there.
In addition, local home values are now close to ten times earnings compared to 3 to 4 times in 2000. Keep in mind that interest rates have fallen from close to double figures to record lows since 2000, and up until the last couple of years, wages were growing by over 4% per annum.
Today, most local jobs are part-time. And a record number of new apartments are proposed in the area; the subject site is surrounded by other development opportunities &amp; population growth/migration are lower than historical averages.
In short, the next 10 to 15 years are very likely to be different from the past decade or two. No doubt there is a movement towards inner city living – heck, I was one of the first (in 1988) to outline why such a trend was imminent – but the cranes on the skyline suggest a potential apartment oversupply. Hopefully, it won't last that long.
But this isn't what gets my goat; it's that too few in the development/selling space really seem to give a hoot about the information used to spruik a new property.
I think buyers should challenge the information supplied. "<a href="/expert-insights/what-is-caveat-emptor-and-how-it-affects-you">Caveat emptor,</a>" many will say; while others will suggest that buyers do their own research and due diligence. I agree with both statements, but where to start?
Here are seven things that a property buyer should do or know when looking to purchase an investment property.
<ol>
<li>Question the time period being used.  Best to look at the last cycle – i.e. seven years, and the last year too.  Try to understand where the local market is in the property cycle.</li>
<li>Ask for resale evidence – the same property, without major improvements, selling over time. Not median prices. Median or middle values work as broad indicators and only when used across big areas, like a city or municipality.</li>
<li>Ask who is buying, the proportion of investors versus owner residents, and where the buyers are coming from.</li>
<li>Request rental evidence, and from at least two independent sources. Ring the sources up and ask them about what they wrote. Ask who will manage the property and the intentions regarding tenant tenure – long or short-term stays.</li>
<li>Quiz the developer, selling agency &amp; local council about the immediate development plans around the subject development. Will the view be blocked out? Overshadowing? Little space between buildings? More competition?</li>
<li>Ask for a 'current market assessment' or 'spot' valuation. Valuers often lowball; they can get things wrong, but to their defence, they carry a lot of professional risk and don't get paid enough. That being said, don't pay more than 5% above the valuation price, unless you believe the area has some real upside (for example, a new hospital being build nearby or major university about to open in the area).</li>
<li>Make sure your property has the potential to be bought or rented by three out of six key housing demographic segments.</li>
</ol>
Better still, I think what is needed is a standard set of rules – a formula that is used to measure all passive residential property performance, regardless of location or property type.
This would need to include the same time frame; same resale equation; same base of measurement – i.e. rate per square metre; same calculation of gross rental yields based on the local vacancy factor and a regular and independent audit of the figures.
Now that would make property investment much easier.
 
Visit Michael's <a href="https://matusik.com.au/" target="_blank">website</a>, read his <a href="https://matusik.com.au/missive/" target="_blank">blog</a>, follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts" target="_blank">Facebook</a> and <a href="https://twitter.com/michaelmatusik" target="_blank">Twitter</a>, or connect via <a href="https://www.linkedin.com/in/michaelmatusik" target="_blank">LinkedIn</a>.
 
 
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michaelmatusik-49YzLvdmNv

Seven ways to improve your investment analysis

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This story is dedicated to my very best friend Tracey.
She is a real fighter and I think what she has proven recently can be applicable to us all. Today's message is: When you want something badly enough, you fight for it.
Trace and I go back a long time, we met in our early 20's playing sport and we went on to buy property together under a joint venture agreement, but mostly we've just hung out and had lots of fun times.
She's recently had to fight hard to win a battle with a large government agency. You see she missed out on a promotion after spending about a year preparing for it.
There was a dispute in her application that led to her just missing out by only one placement. This had massive implications on her career path, not to mention her emotions.
She didn't miss out because she wasn't good enough. She was aware of a discrepancy that meant that she actually should have been accepted but due to certain circumstances I can't talk about, she didn't make it.
She could have gone one of either two ways.
She could have accepted 'fate', moved on and forgotten about her dream of making it to this level.
Or, she could be very brave, speak up and expose the person and agency for the error that had occurred and fight for what she knew she deserved. This was not the easier option.
I'm proud to say Tracey took the second option. She spend a crazy amount of time researching the applicable Acts and becoming very familiar with her rights.
After her initial complaint fell on deaf ears, she engaged the best solicitor she could find who specialised in this area. She worked with him to ensure that the correspondence sent out truly represented her and what was in her heart.
It wasn't too long before the agency virtually admitted guilt (in a roundabout way) and she received a personal phone call from the 'big guy'. He offered her a chance at the role she was so focussed on achieving. She still has a lot of work ahead of her before she can be awarded this role.
All she wanted was an equal chance, one she had fairly won but was not given.
I have no doubt in my mind that she will not only achieve accreditation but exceed all expectations because she is determined.
My friend has drive. She is focussed on what she wants and she will get it. I know she will.
I can't help use Tracey's story as inspiration. I think to achieve our goals, there is nothing better than having a very focussed mind, a firm understanding of why we want to get there and  then, if we can add in a sprinkling of emotional energy we have a very powerful force.
So what is it that you are trying to achieve and do you want it badly enough? What are the emotions behind your goal? Is it to set up your financial future so you can spend more time with loved ones? Is it to know that the people you love will have enough? Is it to retire early and have more fun?
Many people I speak to want property investing to be their financial saviour.  It can be, but what you need to bring to the table is focus, determination and a strong passion to stay on track and drive your investment strategy.  If you want it badly enough, are focussed and have done your homework, you can achieve anything.
<a href="https://www.propertybloom.com.au" target="_blank"> www.propertybloom.com.au</a>
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jochivers-wq5Bp59R5a

Drive and determination can equal great achievement

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First home buyer data continues to be understated.
A point which has been much discussed over the past year: the non-sensical figures being reported as "fact" for levels of first home buyer activity.
Even until relatively recently the Reserve Bank (RBA) was producing stats for first homebuyers which suggested that numbers were abnormally low after a spike caused by home buyer grants.
<img src="/images/2014/10/13/graph1.png" alt="">
Some time ago, however, the Reserve gave up on reporting those figures since it was quite clear to impartial observers that with the withdrawal of first home buyer grants, a significant proportion of first time buyers were not being recorded as such.
For example in this month's Chart Pack, the RBA only reports the following, which is a strong and rising market. With no credible first home buyer data available, it is no longer reported:
<img src="/images/2014/10/13/graph2.gif" alt="">
What gives?
Unfortunately, despite this all being well known about for yonks, this has not stopped commentators from continuing to post the Australian Bureau of Statistics (ABS) figures uncritically, as though to imply that all first home buyers have been frozen out of the housing market by greedy investors.
While there has no doubt been a fair element of this happening, and particularly so at the margin and in inner city locations in Sydney and Melbourne, it never really made sense to suggest that first home buyers were casually sitting out of a rising market with disinterest. History suggests that is unlikely.
Had banks been requiring 20% deposits, thenyes, clearly this would have happened. But, unlike in the UK, lenders have generally not been requiring large deposits at all and high Loan to Value Ratio (LVR) loans have remained widely available (and in any case, outside Sydney, property price growth just hasn't been that strong over recent years), and thus unsurprisingly, first home buyers are still buying.
Look at the reported data for Western Australia, for example! A huge segment of the market has been first timers, between a quarter and a fifth of all buyers.
Listening to the data critically and understanding its message - generally, there have robust property markets, particularly in cities like Sydney - would surely lead you to the right conclusion.
Another point, which I touched on here back in March, is that a significant number of first time buyers in Sydney, have been buying investment properties as their first step on the ladder, thereby never being recorded as first-timers at all. Indeed, I have known from my own client base that it's a cast iron fact that the number of first homebuyers is understated... the real question is only "by how much?"
The problem is that we now have no true way of knowing the quantum of the issue, if indeed there is much of an issue on a national basis. Of course, there are always anecdotes about first homebuyers being outbid by "the Chinese" (i.e. anyone of Asian appearance), and investors do compete with first home buyers for properties (it's a market - that's life) but anecdotes also frequently lead to poor conclusions.
This article continues on the next page. Please click below.
 
<hr class="system-pagebreak">
 
ABS confirms under-reporting
Not at all surprisingly, here is what the ABS reported in its Housing Finance release on Friday:
"A preliminary investigation has been conducted to evaluate the robustness of estimates of loans to first home buyers. In collecting this information, lenders are asked to report all loans to first home buyers. Concerns have been raised that under-reporting could occur if some lenders were only able to accurately report on those buyers receiving a first home buyer grant.
"Most data on first home buyers are collected by the Australian Prudential Regulation Authority (APRA). The investigation indicates that some lenders experience difficulty reporting on loans where the buyer is not receiving a first home buyers grant. Estimates of loans to first home buyers are therefore under review and users are advised to exercise caution in referencing this data.
"The ABS is working with APRA to explore options to make it easier for lenders to report correctly in future. In the meantime, the ABS is further investigating the potential for under reporting first home buyer data and the feasibility, if necessary, of estimating the extent of under reporting and adjusting the first home buyers estimates accordingly. The outcomes from the investigation will be published on the ABS website."
No shocks there.
From Shane Oliver, Chief Economist and Head of Financial Strategy at AMP:
<img src="/images/2014/10/13/AMP.jpg" alt="">
Indeed. As a sometime "first-time investor" (and thus, never being recorded as a "first time buyer") himself many years ago, to his credit Shane was always well aware of this issue.
Hot sectors of the market
Over the past year we have bought a lot of properties for clients in Wollstonecraft, Waverton and other Sydney lower north shore suburbs such as Neutral Bay.
The Sydney north shore market has been absolutely flying in 2014, with some properties recording huge gains.
A run-down wreck at 47a King Street, Wollstonecraft sold yesterday for an astonishing $2,230,000, a monster $830,000 over the reserve price. Meanwhile, 2 bedroom unit 14/4 Gillies Street in Wollstonecraft sold for $780,000, implying an uplift in the market of well over 10 percent in a matter of fewer than 6 months. John Howard will be pleased.
People have tried to torture the Sydney data a little lately to show that the market has been relatively soft (generally, it hasn't), but if you look at what has happened to individual properties, particularly in suburbs such as these, price action has been very hot.
Indeed, gains over the past year have been exceptional on the north shore in suburbs such as Milsons Point, Crows Nest and even Hunters Hill and a number if others, as well as in our old favourite inner west suburb, Erskineville, which notched a yet further 25% of capital growth in the past year. Huge returns.
<img src="/images/2014/10/13/graph4.jpg" alt="">
 
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pwargent-M4siyDbqQY

First home buyer figures are still understated

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The Killarney Vale couple Kara and Kyal Demmrich – contestants on Channel Nine's The Block Albert Park series – have bought again on the NSW Central Coast.
Their new home is a cottage at Bateau Bay in the Wyong municipality that cost $580,000, with the prize money they earnt coming in handy. 
<div id="description" class="stackItem">
It is an original cottage,<a href="https://www.realestate.com.au/property-house-nsw-bateau+bay-117226003" target="_blank"> </a>with a north facing front yard on a level 639 square metre block, within easy walk to Shelly and Blue Lagoon Beaches.  
</div>
They sold this week for $735,000 at Killarney Vale, which is five ams away from their next project.
They bought, then renovated their first home in 2008 having paid $285,000, after getting married in February 2007.
Agent Chantel Laing-Chadwick at George Brand Real Estate Avoca Beach/Copacabana described their recently sold house as an "architectural masterpiece".
Last year the couple appeared in The Block: Fans v Faves as the so-called Super Ks.
Around the time of the April Albert Park auction, the couple indicated they were planning to launch a boutique renovations company called Diverse Design and Construct.
The couple also suggested they were considering a move from their home in the Tuggerah Lakes precinct.
“We haven’t thought about it too seriously, but our long-term goal is to get ourselves as close to the coast as possible. So we’re thinking about selling, maybe in the next 12 months," Kyal told Property Observer.
The Super Ks were given the highest reserve of any apartment – $1.9 million – after a stellar number of winning challenges and room reveals.
But they finished third behind Steve and Chantelle and Alisa and Lysandra on auction day.
They indicated they could pay off the mortgage with their $567,250 in prize money.
Bateau Bay's médian house price sits at <a href="/news">$500,000</a>, record levels, while Killarney Vale's median house price likewise tav record levels, but <a href="/news">$375,000</a>, according to CoreLogic RP Data.
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jchancellor-FAypfDUnLy

The Block's Kyal and Kara buy at Bateau Bay and sell first home

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Talk in the industry is about whether or not house prices are in a bubble, if so have we been in one for some time and is it expensive bubble or a seriously expensive one?
One quote I read recently in relation to the current housing market was "One thing seems clear: If we’re having a discussion about whether or not house prices are in a bubble (as we have been for some time now), house prices do not represent good value at the current level. The debate is about whether they are expensive, or seriously expensive."
Now, of course we're all guilty of making sweeping comments - and myself more than most given my tendency towards a macro focus on this blog - but this snippet gives the full broom treatment to Australia's property markets.
The last time I checked in at the back end of 2014 there were 9,448,300 dwellings in Australia, a figure that will be approaching 9.5 million or so today.  
<div id="post-body-4846812275271867441" class="post-body entry-content">
<div><img src="/images/2015/05/22/Waregent1.jpg" alt=""></div>
<div> </div>
<div>Are some of those dwellings expensive? Indeed, and some of them are extraordinarily so in the present and persistent low interest rate climate.</div>
<div>
<div> </div>
<div>But equally, aren't some house prices very cheap? Very much so - in outer suburban Adelaide and Hobart, for example, and in any number of regional centres - although of course, "cheap" does not been good value ("cheap today is cheap tomorrow" as the old real estate mantra goes).</div>
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<div>The same holds true of share prices and indices, for that matter. Are some share indices and stocks trading at high valuations? Yes. In fact, globally some markets are romping ahead to dizzying heights as I looked at only earlier this week.</div>
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<div>That does not mean that some individual stocks don't offer great value, though, particularly for those investors with the requisite skills in fundamental analysis. With the benefit of hindsight, although not my favourite sector due to being capital intensive and reliant on the sale of commodities, 1999 was a great time to buy resources stocks. 2009 was an amazing time to load up on bank shares.  Today, health care and materials companies are worthy of consideration.</div>
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<div>Of course, this doesn't mean all companies in a sector are worth buying, or even any of them. There is no "one size fits all."</div>
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<div>Focus</div>
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<div>This was one of a raft of pieces of late referencing popping property bubbles, property speculators, the end of the property boom, shares now being due to outperform property, and so on.</div>
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<div>All fair enough, although the truth is that ex-Sydney (and to a lesser extent Melbourne) there hasn't actually been a property boom to date in this cycle, rather a protracted period of relatively flat prices in real terms, and correspondingly there is no "Australian property bubble". Resources influenced Perth and Darwin are seeing declining rents, the polar opposite of frothy conditions, while a number of mining towns have already capitulated. Canberra's property markets seem similarly uninspired.</div>
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<div>Why so much angst from equities-only investors then, one wonders, apart from the wider ramifications for the Australian economy and share markets of a genuine and material property correction?</div>
 <div>An obvious point from a fundie perspective is that more funds under management equals more fees, so naturally enough does make sense to point out from time to time the benefits of a diversified share portfolio over the risks of holding a specific investment property or portfolio of properties. I'm not sure whether it makes a great deal of difference, though. In my experience there exists a fair proportion of investors who are simply "shares people" or "real estate" people, and they won't ever be budged either way! Stock valuations decline
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<div>Perhaps another of the reasons for the angst is that the Australian share markets (generally!) have been on the receiving end of a bit of a shellacking over the past month, which naturally the financial media reports unfailingly on a daily basis.</div>
 <div>Since threatening to crunch through 6,000 on March 18 the market has tanked, paring all the way back down to 5,600. 6,000 now seems like a distant dream once again, although the recent dovish Board Minutes from the Reserve Bank reinstated a moderate easing bias, which may help to fire markets up again.</div>
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<div>Now as intelligent people both you and I know that such short term movements don't mean a great deal for stock market investors with a long term mindset. In fact, cheaper market prices equates to a greater array of buying opportunities for those with an appropriately disciplined investment approach.</div>
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<div>But it's funny what daily media headlines can do to folk, particularly when Sydney house prices are suddenly once again rising at an annualised pace of somewhere north of 15%. </div>
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<div>The XJO (ASX 200) chart shows that this index has pulled back to the same level as the beginning of March 2007, well over eight years ago.</div>
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<div>While experienced investors are well aware that accumulated returns inclusive of dividends have been robust, a good proportion of Mum and Dad investors tend to like to see capital gains, preferably of the fast buck variety. Sydney property leads cycle
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<div>What seemed to be a highly unlikely outcome for much of the past decade is now once again becoming a reality - Sydney houses selling for double what they did during their last cyclical low around 2005.</div>
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<div>Granted I have only come across a few such examples to date, all of them houses rather than apartments, and usually in popular beachside suburbs such as Bondi, but I expect this will become an increasingly common occurrence over the year ahead.</div>
<div>
 Of course, the main advantage that property investors have over share market investors is the use of leverage which can magnify gains...and losses.</div>
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<div>An investment which doubles in value can see the dollars invested increased 10 or 20 fold before transaction and holding costs - for those who get it right and are prepared to hold through the lean periods of the cycle.</div>
<div>
 Dare we even mention it, some folk even used 100 per cent leverage in the period leading up the the financial crisis, making the returns on "investment" extraordinarily high. Risks to the downside
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<div>There is an old saying in investment that if something sounds too good to be true then it probably is. So, what's the catch? </div>
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<div>One such catch is that most people just aren't very good at investing in property. The stats show that most don't achieve their goals, owning only one or two properties, with many selling within the first early years of ownership.</div>
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<div>It's not always entirely their fault, mind - property advisers have recommended some desperate choices over the last decade, including mining towns and any number of far-flung locations which haven't fared anything like as well as Sydney has. </div>
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<div>It was popular for a while to say that capital city investors were singing the same old tune from years ago and had failed to move with the times, though I haven't heard anyone saying that of late as the Sydney market continues to take off. Inner ring Brisbane is now seeing prices rising again too, though not for all property types and suburbs it must be said, and I believe that generic apartments will struggle through this cycle.</div>
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<div>Spruikfest</div>
 <div>You only had to set foot in the Sydney Homebuyer Show this year to see that the property forum was packed to the rafters with the flocking crowds far outweighing the numbers at the share trading and investing event.</div>
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<div>This is what always happens when house prices are rising, of course.</div>
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<div>Unfortunately so too were the self managed superannuation fund (SMSF) property spruikers out in force, barking orders about setting up trust structures to buy property to anyone who would listen - and anyone who wasn't listening as well, come to think of it.</div>
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<div>The thing to remember is that property and shares are not really directly comparable investments for any number of reasons which I don't have the space or inclination to repeat here.</div>
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<div>Equities are a far "cleaner" and more liquid asset class, very well suited to retirees of the right mindset contrary to popular opinion, particularly given the favourable tax treatment of franked dividend income in Australia. No tenants or related headaches. No repairs and maintenance bills, Quick and easy to sell parcels of shares. </div>
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<div>Property investment suits many long term Mum and Dad investors, despite its illiquidity, and the leverage can see them magnify gains (or losses) at a greater rate, provided they invest well (or badly).</div>
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<div>For reasons I never really got my head around some property advisers have recommended investing in towns where there is acres of land around and thus no scarcity. </div>
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<div>The key to long term successful property investment is finding an asset which is in extremely high demand. This generally means the larger capital cities, near jobs and where people want and need to live - and is scarce in supply, which ideally means a dwelling with a land value content, and in a land-locked suburban location. The long run data shows that even most average capital city property has generally done well through the cycles, beating inflation over time. It won't be long before the Sydney median house price has doubled again since 2003, soon thereafter to be threatening the $1 million level.</div>
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PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
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Blowing bubbles (again): Pete Wargent

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So why choose commercial property over residential?
Obviously this is the question every residential investor asks… whenever they are considering the transition across to commercial property.
However, you will quickly discover the reasons are rather compelling.
Reason #1: Your tenants stay for longer
For the most part, you find residential tenancies will be on a month-by-month basis… maybe 6 months, perhaps for a year if you’re lucky.
Whereas commercial leases will tend to range between 3 and 5 years - and it can often be for longer. That means you have fewer tenancy changes, and a far more predictable income stream.
Reason #2: You have greater control
When residential tenants wish to leave half-way through a lease, they simply need to find a suitable substitute tenant. And then, they will transfer the lease across to that person.
From there on, this new tenant becomes responsible for the rental, over the remainder of the lease term.
Whereas commercial tenants are running a business from your property. And whenever they sell their business, they also require your approval to “assign” the lease.
However, here’s the real difference: If the new commercial tenant defaults in paying the rental, you also have recourse to the previous tenant as well - because commercial leases are business contracts, enforceable by law.
Reason #3: You no longer need to pay the outgoings
Typically, residential properties will provide you with a 5% gross rental return.
From this, you need to pay the rates &amp; taxes, insurance, maintenance and so on — leaving you with about a 2.5% to 3% NET return, at the end of the year.
Depending upon what (and where) they are… commercial properties will generate a 5% to 9% NET rental return, each year.
And that’s because commercial tenants are also required to pay the various building outgoings on top of their rental - making this a true NET rental return for you.
Reason #4: Commercial tenants maintain your property
As you know, if the toilet stops working in an apartment … the tenant asks you to send around a plumber. Whereas commercial tenants quickly attend to (and pay to fix) the problem themselves - so as not to disrupt their business. 
Furthermore, the overall appearance of the property becomes a reflection on them. As such, your property is maintained in top condition … at their expense.
Therefore, whether the lease requires it or not … most commercial tenants will regularly repair and repaint the property, in order to maintain a good corporate image.
Reason #5: Greater regularity with rental payments
Most residential properties are rented by individuals. Therefore, the rent is often paid in cash, by personal cheque or by direct transfer. And this can often vary in its timing.
Because they are running a business, commercial tenants consider rent as simply another regular expense each month.
And generally, this gets set up as an automatic Periodic payment - and can be specified as such, within the lease.
Bottom Line: In essence, you find yourself having to deal with the vagaries of individual people… as a residential investor.
However, when you become a commercial investor… you start to enjoy a more predictable long-term relationship with your tenants - based upon a proper business footing.
Doesn’t that sound like a far better arrangement - particularly when you can purchase a small office for the same price as a two-bedroom apartment?
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can contact Chris <a href="https://commercialpropertymadeeasy.com" target="_blank">here</a>.
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Why choose commercial property over residential? Chris Lang

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If politicians wish to stall on a difficult issue, they hold an inquiry.
If the issue is really thorny and they’re reluctant to confront it, they’ll hold two inquiries, with the second to begin after the first has ended.
This is what federal politicians have done with housing issues. 
All the core problems with housing could be solved if government stopped taxing it to within an inch of its life. Politicians won’t face that hard reality, because they’re addicted to the revenue they rip out of real estate. So they hold inquiries.
They spent all of last year and part of this one conducting an inquiry into housing affordability. Recently, having just handed down their findings from this long and expensive exercise, they announced another inquiry.
I have commented many times on the similarities between real-life government processes and the 1980s television series Yes Minister. Those who thought Yes Minister was a comedy were mistaken. It was a documentary.
According to the Yes Minister philosophy, the best way to do nothing on an issue, while giving the appearance of action, is to hold an inquiry. The longer it lasts and the less it achieves, the better.
This means you can hold press conferences, issue media releases, express lots of moral outrage, point the finger of blame in various random directions but ultimately change nothing. 
The perfect outcome of a smokescreen inquiry is to identify an unpopular minority and make them the scapegoat for all the perceived problems. 
If you think I’m being a tad cynical, consider this chain of events. On 12 December 2013, the Senate referred an inquiry into affordable housing to the Senate Economics References Committee and asked it to report by 26 June 2014. On 17 June 2014, the Senate granted an extension to the committee to report by 27 November 2014. On 2 October 2014, the committee was granted a further extension to report by the first sitting day in March 2015. On 2 March 2015, the committee was given yet another extension and was scheduled to report by 14 April 2015. On 13 April 2015, the committee presented an interim report, with the intention of tabling its final report in May 2015.
This long-winded and bumbling inquiry, which was almost a year late in delivering its findings, produced nothing of value. One example was its conclusions on negative gearing, one of the fundamental issues it sought to examine. The Senate Economics References Committee’s final report found that negative gearing “probably” had “a detrimental effect” on housing affordability, but they weren’t sure. The committee said that it was also unable to clearly determine what effect negative gearing had on rental affordability.
In a word, pathetic. They were given 11 extra months but they came up empty.
But the inquiry served its primary political purpose. It identified a scapegoat. Foreign investors, despite their small numbers and minimal impact on housing markets, were deemed the culprits for rising prices and poor affordability. 
This allowed the Federal Government to look tough while threatening all kinds of consequences (including jail) if foreign investors broke the rules. This was justified, the Prime Minister said, because it would help first-home buyers. He was unable to explain how. And that was because it was bullshit.
Within days of the committee delivering its tardy report, federal politicians compounded their failure by announcing, don’t laugh, another inquiry.
The new inquiry, by the House of Representatives Standing Committee on Economics, will allegedly examine rates of home ownership, supply-demand drivers in the housing market, the proportion of investment housing relative to owner-occupied housing and the impact of current tax policy at all levels. 
I almost fell off my chair when I read this, because the answers to all of those questions are well known. Anyone who doesn’t know the answers could discover them with 10 minutes on the Internet. Our 17-year-old could write a quick assignment on it because they’ve been studying real estate at school.
But of course the objective is not to find answers and make changes. The goal is to achieve further delays, distractions and diversions.
No one has the political will to take action on the fundamental problems, especially the taxation component in the cost of new dwellings. Lots of research has been done on this already. The facts are well known.
The committee chairman John Alexander set the tone for another drawn-out waste of money and lots of people’s time with a series of motherhood statements including this classic: “Home ownership is an issue that lies at the core of the Australian dream and represents the largest investment that most taxpayers will make during their lifetime.” 
Stunning stuff. With any luck, Alexander and his mates should be able to drag the process out until at least 2017, before recommending a royal commission.
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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