High-profile apartment defect cases have changed the way many NSW buyers approach purchasing, putting greater scrutiny on building quality, strata records and the parties behind a development before a contract is signed.

The industry buyers are assessing today, however, is also different from the one in which cases such as Opal Tower and Mascot Towers emerged.

NSW has introduced a series of regulatory measures aimed at strengthening oversight of apartment construction, including Building Commission NSW, the Residential Apartment Buildings Act 2020 and the Strata Building Bond and Inspections Scheme. Under the latter, developers are required to lodge a bond, with independent inspections forming part of the process for identifying defects in new strata developments.

Those changes provide another layer of protection, but they haven't removed the importance of buyer due diligence.

[smartcode_project:default project_id=5743 project_image_fid=372394]

For purchasers considering an apartment, that means looking beyond the residence itself. Building and strata history, strata reports, the track record of the builder and developer, the condition of common property and any known or planned expenditure by the owners corporation can all form part of assessing a building before purchase.

Whether the development is already complete can also materially change what can be assessed.

An off-the-plan purchaser is necessarily buying before the finished product exists. A completed apartment, by comparison, can be walked through before contracts are signed, allowing the purchaser to see the finishes, common areas and broader building as they have actually been delivered rather than relying solely on plans and renders.

It also removes exposure to some of the uncertainties that exist between an off-the-plan purchase and completion, including construction delays, cost pressures and builder insolvency during the delivery period.

[smartcode_project:default project_id=5743 project_image_fid=927]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a> National Sales Director Ben Hamblett said that greater focus on tangible evidence is increasingly evident among apartment purchasers.

“The biggest shift we're seeing is buyers wanting proof, not promises,” Hamblett said.

“That's exactly why we deal in completed stock - you can inspect the building before you commit - and why we've backed every purchase with a cash bond against special levies.”

At <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> in Parramatta, that emphasis on a completed, inspectable product is already in place.

The 413-apartment, 46-level tower at 12 Phillip Street is being marketed by Projects by Equitifund, allowing prospective purchasers to inspect the residences, common areas and resident facilities before committing.

[smartcode_project:default project_id=5743 project_image_fid=375255]

The Lennox also introduces another layer to the due-diligence conversation through Strata Surety.

The vendor-funded arrangement provides purchasers with a cash-backed bond held in their own solicitor's trust account from settlement. According to Equitifund, the bond covers any special levy raised during the applicable cover period and is provided at no cost to the purchaser.

Special levies can create an unexpected cost for apartment owners where an owners corporation needs funding beyond its existing strata contributions. Under NSW strata law, a special levy requires approval by owners at a general meeting.

Equitifund Executive Chairman Greg Huxley said Strata Surety was designed to provide something more concrete than reassurance about that potential exposure.

“Buyers have every right to ask hard questions about strata risk - the industry has given them plenty of reasons to,” Huxley said.

“Our answer isn't a reassurance, it's a bond. Strata Surety puts real money behind that confidence, held by the buyer's own solicitor, not by us.”

[smartcode_project:default project_id=5743 project_image_fid=375281]

For The Lennox, its completed status also means purchasers can assess not only the apartment itself, but a building that has already been occupied and operating for several years.

Completed in 2021, the $300 million development, designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, comprises one, two, three and four-bedroom apartments, with open-plan living areas extending to private balconies. Interiors incorporate engineered timber flooring, stone benchtops and integrated appliances, while many upper-level residences have views across the river and surrounding district.

Its established amenity can similarly be inspected in operation. Resident facilities include the Watermark precinct with a 20-metre pool, outdoor terrace, barbecue areas, gym, fitness studio and conference room, while ground-floor retail addresses the river walk and surrounding public space.

The Lennox is also home to the Southern Hemisphere's first fully robotic residential car park, which has now operated for several years. Its nine-level basement combines three conventional parking levels with six automated levels, accommodating 327 vehicles using technology from German firm Lödige Industries.

[smartcode_project:default project_id=5743 project_image_fid=925]

The riverfront address puts The Lennox close to much of central <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a>'s existing infrastructure, including Parramatta Station, Westfield Parramatta, Parramatta Park, and the Church Street dining precinct.

The remaining apartments form part of a limited release secured by Equitifund, following the sale of the majority of residences before and shortly after completion.

The regulatory environment around NSW apartment construction has changed considerably since the defect cases that reshaped public discussion around the sector. For purchasers, however, regulation is only one part of the equation. The ability to investigate a building's history, review its strata position and, where possible, inspect what has actually been delivered remains central to making an informed apartment purchase.

At The Lennox, its completed status provides that opportunity before contracts are signed, while Strata Surety adds a financial backstop against special levies beyond the protections already provided under NSW strata law.

[smartcode_project_cta:default project_id=5743]

Joel Robinson

Buying with confidence: What NSW apartment buyers should check beyond the defect headlines

Too often, heritage buildings become the podium for a contemporary tower. At <a href="https://www.apartments.com.au/new-apartments/623-collins-607-623-collins-street-melbourne-vic-3000">623 Collins</a>, <a>Sterling Global</a> challenged its design team to reverse that process.

The brief to <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> was deliberately simple: "Don't design around the heritage. Design from it." It became the philosophy behind a project that draws inspiration not only from two landmark heritage buildings, but from Collins Street itself, a street layered with architectural history and civic significance.

That philosophy has shaped one of <a href="https://www.apartments.com.au/developments/melbourne-vic-3000">Melbourne</a> CBD's most considered residential projects, where the 1924 State Savings Bank and neighbouring Batman's Hill Hotel have become the architectural foundation for 623 Collins rather than remnants preserved beneath a new development.

[smartcode_project:default project_id=145324 project_image_fid=372749]

Rather than approaching the site as a blank canvas, <a href="https://www.apartments.com.au/developers/sterling-global">Sterling Global</a> saw the existing buildings as the beginning of the story.

"Sites like this rarely become available," the developer said.

"623 Collins wasn't simply an opportunity to develop a prominent CBD site. It was an opportunity to restore and reimagine one of Melbourne's important heritage landmarks while contributing to the continued evolution of Collins Street. For us, the existing buildings weren't constraints. They were the beginning of the story."

Instead of mimicking the ornate heritage architecture, Plus Studio studied the proportions, rhythm and craftsmanship of the original buildings before translating those characteristics into a contemporary 42-storey tower.

[smartcode_project:default project_id=145324 project_image_fid=372748]

"The brief challenged us to create a contemporary landmark that respected Melbourne's architectural history without becoming nostalgic," Plus Studio said.

"Rather than mimicking heritage, we sought to understand its proportions, rhythm and material language before translating those qualities into a distinctly contemporary architectural expression."

The practice says the State Savings Bank and Batman's Hill Hotel became the project's primary source of inspiration, allowing the heritage buildings and contemporary architecture to exist "in conversation rather than contrast." Generous planted terraces further soften the transition between old and new, creating elevated green spaces while reinforcing the dialogue between the restored podium and the contemporary tower.

That dialogue continues throughout the interiors, where Melbourne designer Fiona Lynch developed a material palette inspired by the idea of alchemy, balancing contrasting materials that reference both the Neo-Grec detailing of the original bank and contemporary urban living. The result is a series of spaces that feel timeless rather than trend-driven.

[smartcode_project:default project_id=145324 project_image_fid=354343]

The project will deliver 316 residences across four collections, Heirloom, Signature, Reserve and the Penthouse Collection, with each responding differently to its position within the building, from the restored heritage podium through to the upper levels of the tower. The Heirloom Residences retain defining heritage elements including original heritage windows, generous proportions and high ceilings, while the tower introduces contemporary homes with expansive layouts and elevated views.

Amenities have likewise been designed to support long-term city living rather than short-stay convenience. Residents will have access to concierge services, wellness facilities including a pool, cold plunge, sauna, steam room and gym, alongside private lounges, entertaining spaces and dedicated resident clubs.

Sterling Global says that approach is resonating with buyers seeking permanence rather than novelty.

[smartcode_project:default project_id=145324 project_image_fid=354347]

According to the sales team, purchasers are looking for enduring architecture, generous floorplans, heritage character and long-term value, with many commenting that 623 Collins "doesn't feel like another apartment development" because of the way the architecture has been curated around the site's history.

Situated on the prominent corner of Collins and Spencer streets, the project occupies one of Melbourne's most recognisable gateway sites, marking the western entrance to the city's best-known street. For Sterling Global, it also reflects a broader shift in city-making.

"Rather than maximising development yield, the project embraces adaptive reuse as a design philosophy, allowing heritage to inform architecture, interiors and the overall resident experience," the developer said.

"The result is a building that feels uniquely connected to Melbourne."

[smartcode_project_cta:default project_id=145324]

How Sterling Global designed 623 Collins from Melbourne's history

Avant Townhomes is adding to Ivanhoe’s family-sized housing options with <a href="https://www.apartments.com.au/new-townhouses/three-82-ivanhoe-382-upper-heidelberg-road-ivanhoe-vic-3079">Three 82</a>, a collection of just 16 four-bedroom townhomes on Upper Heidelberg Road.

The <a href="https://www.apartments.com.au/developers/intrapac-property">Intrapac Property</a> townhome division has taken a contemporary approach to the traditional family home, pairing larger floorplans with the lower-maintenance format of a townhouse.

[smartcode_project:default project_id=152069 project_image_fid=374394]

Designed by <a href="https://www.apartments.com.au/architects/arcadia-studio">Arcadia</a>, with landscaping by Landsite, the homes feature generous open-plan living and dining areas that connect directly to outdoor spaces, with layouts also designed to maximise natural light and privacy.

Natural stone is used throughout the interiors, including in kitchens that pair stone surfaces with bespoke cabinetry, considered storage and SMEG appliances.

The four-bedroom layouts include built-in wardrobes and a main bedroom with its own ensuite, while family bathrooms service the additional bedrooms. Each home also includes a lock-up double garage and intercom entry.

[smartcode_project:default project_id=152069 project_image_fid=374399]

Energy efficiency has been incorporated into the design through solar panels, double glazing and reverse-cycle heating and cooling, with the homes targeting 7-star energy ratings.

Rather than incorporating extensive communal facilities, Three 82 has been conceived around private residential amenity, with the 16-home scale keeping the focus on individual homes and their own indoor and outdoor spaces.

The development is located at 382 Upper Heidelberg Road, around one kilometre from Ivanhoe Village's cafés and retail and a short drive from Eaglemont Station and Ivanhoe Station.

[smartcode_project:default project_id=152069 project_image_fid=374393]

Several of Ivanhoe's established schools are also nearby, including Ivanhoe Girls' Grammar and Ivanhoe Grammar School. The address also provides access to the suburb's parklands and the wider Yarra River corridor.

<a href="https://www.apartments.com.au/project-marketer/nelson-alexander">Nelson Alexander</a> has been appointed to handle sales.

Construction is underway and progressing well, with Three 82 currently tracking toward completion in Q2 2027.

[smartcode_project_cta:default project_id=152069]

Three 82 brings boutique four-bedroom townhome collection to Ivanhoe

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/graya">Graya</a> has secured a prime Newstead site from fellow developer Fraser, subsequently lodging plans for The Silo, a major mixed-use residential project in Newstead designed around a new public laneway linking the James Street precinct with the wider Gasworks and Newstead neighbourhood.

Proposed for the corner of Chester and Morse streets, the <a href="https://www.apartments.com.au/architects/bureauproberts">Bureau^Proberts</a>-designed project places its strongest emphasis at ground level, where retail, landscaping and a new cobblestone pedestrian connection would open the site to the surrounding neighbourhood. The design team describes The Silo as “more than a residential building”, positioning the development as an extension of Newstead’s public realm rather than a standalone apartment tower.

“A new cobblestone laneway and landscaped connection between James Street and Gasworks unlock a missing pedestrian link, improving walkability and stitching together two of Brisbane’s significant urban destinations,” Bureau Proberts said in its Urban Design Report.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="0ea1b06a-75f5-40a5-b2c5-33c97bc86052" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/silo%20bldg.png?VersionId=KmjsAtNePu57_B31EM_DJ5T6KPJHtcmo" />

The Silo is planned as a mixed-use development incorporating apartments alongside a bar and centre activities including food and drink outlets, indoor sport and recreation, office and retail uses.

Architecturally, Bureau Proberts has conceived the building as a collection of vertically expressed, stepping forms rather than a single uniform tower. The composition rises from an articulated podium before being broken by a triple-height landscaped recreation level, with the upper section becoming more compact before terminating in a landscaped rooftop garden.

The project's name and architectural language draw directly from Newstead's industrial history. Patterned off-form concrete is proposed as the principal façade material, complemented by slender metal rod balustrades and extensive planting. The cylindrical and vertically ribbed elements give the building its silo-like expression, while curved balconies and planted edges introduce a softer subtropical layer.

“The Silo reinterprets its robust forms, scale and materiality through a contemporary subtropical architectural expression, creating a building that acknowledges its industrial legacy, while responding to the way the precinct is occupied today,” Bureau^Proberts said.

The recreation level is one of the defining breaks in the tower. Plans include a lap pool, mature subtropical planting and shared resident facilities within an elevated communal garden. Landscaping continues through the podium and onto the rooftop, where a further garden forms what the architects describe as a “subtropical crown” to the building.

<img alt="First look: Graya plans The Silo as new pedestrian link between James Street and Gasworks" data-entity-type="file" data-entity-uuid="f8451036-35a4-49a9-8d88-2ef4438eba3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Silo%20Lane.png?VersionId=h8N31_rYmCEqoNrpt4kbYVQhJGZn60LH" />

At street level, the development has been designed to establish a more permeable block. Retail and hospitality tenancies address the public realm, while landscaped pedestrian spaces lead into the new laneway connection. Renders in the design report show the proposed “Silo Lane” as a substantial opening through the podium, framed by cylindrical concrete forms with cascading planting above.

The Silo continues Graya's move into larger apartment developments after building its reputation across high-end residential projects in Brisbane and the Gold Coast.

Graya buys Frasers Newstead site, plans The Silo between James Street and Gasworks precincts

<a href="https://www.apartments.com.au/developers/wickton">Wickton</a>’s completed Linacre Rise development in Hampton is giving Bayside downsizers the opportunity to move into a spacious apartment near the beach, with the developer covering stamp duty for a limited time.

The 27-residence development has been designed for buyers who want to simplify their living arrangements without giving up the space, warmth and quality associated with a long-term family home. Most apartments have already been secured by Bayside locals, leaving a select collection of two and three-bedroom residences and penthouses available.

Two-bedroom apartments are priced from $1.275 million, three-bedroom residences from $2.25 million and penthouses from $3.375 million, with the completed homes available to inspect and move into now.

[smartcode_project:default project_id=95289 project_image_fid=366760]

<a href="https://www.apartments.com.au/buildings/linacre-rise-hampton-8-10-linacre-road-hampton-vic-3188">Linacre Rise</a> occupies an elevated position on one of <a href="https://www.apartments.com.au/developments/hampton-vic-3188">Hampton</a>’s quiet, tree-lined streets, around 250 metres from the bay and 500 metres from Hampton’s village centre. Its setting gives residents access to the beach, local cafés, shops and Hampton Train Station while retaining the feel of an established residential neighbourhood.

Architecture and interiors by <a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a> draw on the warmth and permanence of traditional brickwork, with the building integrated into terraced landscaping by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>. Ground-floor apartments are elevated above the street and include private garden courtyards, while several upper-level residences have generous balconies and outlooks toward the bay.

Inside, the residences favour natural materials and generous proportions. Herringbone-pattern European oak flooring, natural stone benchtops, premium joinery and Swiss V-ZUG appliances are among the key inclusions, while integrated storage has been incorporated across kitchens, bathrooms, studies and living areas.

The kitchens have been planned as practical spaces for both everyday use and entertaining, with substantial island benches, detailed cabinetry and adjoining dining and living zones. Full-height wardrobes, plush bedroom carpeting and carefully considered lighting reinforce the residential character Wickton sought to retain for buyers moving from larger homes.

[smartcode_project:default project_id=95289 project_image_fid=366769]

A Linacre Rise purchaser said the completed apartment had delivered the space, outlook and construction quality they had been seeking.

“The unit is very light, has views to die for over the bay, all construction materials and fittings are premium quality, we have secure parking for three cars, EV charging at very competitive rates, the neighbours are friendly and there is just a lovely ambiance about the place,” the purchaser said.

Environmental features include solar panels, shared electric vehicle charging stations, rainwater harvesting for toilet flushing and landscape irrigation, double-glazed windows and water-efficient fixtures and appliances.

[smartcode_project:default project_id=95289 project_image_fid=366762]

The development was built by Balmain &amp; Co, with Wickton managing the broader development process through its in-house team.

For downsizers, the project’s completed status removes much of the uncertainty associated with buying off the plan. Purchasers can inspect the finished apartments, understand their outlook and proportions, and move in without waiting for construction to conclude.

The remaining selection includes north-oriented balconies, corner configurations and penthouses with elevated bay views. The developer-paid stamp duty initiative is available for a limited time, with potential savings of up to $200,000 depending on the residence purchased.

[smartcode_project_cta:default project_id=95289]

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

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>
GUEST OBSERVATION
Reserve Bank of Australia Governor Glenn Stevens has ticked off on a major item on the “to do” list for Australian policy-makers: raise the rate of growth in labour productivity.
In his keynote speech at the 2014 ESAMACE conference in Hobart last week, Stevens presented data showing that labour productivity – the value of output produced per hour of labour time – increased at an annual rate of 2.0% in the three years to June 2013.
This is a large jump compared with the rate of just 0.9% per annum in the preceding five years, the period which saw higher productivity growth added to the “to do” list. Stevens interpreted the increased rate of growth in labour productivity since 2010 as evidence that “a number of sectors are making serious efforts to control costs and lift productivity”.
Labour productivity is up
The argument that the rate of growth in labour productivity in Australia has accelerated in recent years certainly seems robust. For example, looking at slightly different periods than Stevens, <a href="https://docs.google.com/file/d/0B_H1wGTm98W3RTZNV3JIc2FET2M/edit?pli=1">in a recent study</a>, I have also shown an increasing rate of growth in labour productivity over the past decade. I calculate that annual labour productivity growth in Australia was 1.15% per annum from 2003 to 2008 and 1.45% per annum from 2008 to 2013.
What I believe requires more scrutiny is the cause of the acceleration in labour productivity growth. To be able to think properly about the causes of growth in labour productivity it is important to understand one big fact: labour productivity differs hugely between industries.
The mining differential
Taking an average over the period from 2003 to 2013, I find that, for example, at the top of the list, an hour of labour in mining produced output worth almost $320, whereas at the bottom of the list, an hour of labour in the accommodation and food services industry produced output worth just under $32 per hour (expressed in 2010-11 prices). Levels of labour productivity in other industries were between these amounts.
The huge differences in labour productivity between industries are mainly driven by differences in the capital intensity of production between industries. Workers in mining have their labour combined with much larger amounts of capital equipment than in accommodation and food services, and hence an hour of their labour produces a larger value of output.
That labour productivity differs so much between industries has major implications for how we should interpret the causes of a rise in the Australia-wide average level of labour productivity.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Ways to interpret the data
One way in which labour productivity can rise is the same as Stevens suggested in his speech. This is if workers within all (or many) industries become more productive. For example, suppose that the value of output produced by an hour of labour in mining increased from $320 to $330 and in accommodation and food services increased from $32 to $33. Then that growth in labour productivity within industries will raise the average level of labour productivity in Australia.
There is, however, a second way in which average labour productivity can increase. Suppose that we take a worker who previously had a job in the accommodation and food services industry and switch their job to the mining industry. That worker used to produce output worth $32 per hour, but will now produce output worth $320 per hour. Hence the average level of productivity in Australia will increase because a worker has been switched from a low-productivity industry to a high-productivity industry.
What I find in my analysis of labour productivity over the past decade in Australia is that it is changes in the industry composition of employment – the second way I described above - that have been the main cause of growth. In particular I find that the increases in the proportion of workers in mining have been most influential.
Between 2002-03 and 2012-13 the proportion of total hours worked in Australia accounted for by the mining industry increased from 1.2% to 3.1%. Because labour productivity is so high in the mining industry, this has the effect of raising the average level of labour productivity in Australia. I estimate that, without this shift towards the high productivity mining industry, labour productivity growth in Australia would have been only 0.2% per annum from 2003 to 2008, and 0.1% from 2008 to 2013. So rather than the higher rate of growth in labour productivity reflecting sectors making “serious efforts to contain costs and lift productivity”, I would argue that most of the acceleration in growth simply reflects a faster rate of increase in mining employment.
A different picture
In fact, far from productivity improving within industries, the opposite has happened in some key industries. Between 2003 and 2013 labour productivity in mining fell from $458 per hour to $238 per hour. This is a massive decline and has had the effect of lowering average labour productivity in Australia. I estimate that if labour productivity in mining had remained unchanged from 2003 then the rate of growth in labour productivity in Australia in the past five years would have virtually doubled to 2.8% per annum.
Acceleration in labour productivity growth in recent years therefore should be seen to reflect a shift in employment to the high-productivity mining industry rather than workers within industries becoming more productive. What does this mean for the future of labour productivity growth in Australia?
In the short to medium term it is probably good news. The mining boom is not over, and while the proportion of workers in the mining industry remains at its current high level, we will continue to get the benefit of having more workers in this high productivity industry. We are also likely to benefit from growth in productivity within the mining industry. The level of labour productivity in mining is currently at an historic low. Falling commodity prices are creating an imperative for cost savings in mining that will drive productivity improvement.
But it is also clear that in the longer-run, we face an adjustment. Once the mining boom slows, and workers shift out of that industry into other industries with lower-productivity jobs, there will be a drag on the average level of labour productivity in Australia. Then we really will need improvements in productivity that come from within industries.
Jeff Borland is professor of economics at University of Melbourne.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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po-LsXgBTHBmX

Labour productivity has risen – but it’s not exactly a good news story

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NSW attracted the largest number of new residents at 110,923 over the period followed by Victoria with 107,916 new residents, Queensland with 79,706, and Western Australia with 71,301.
An important indicator for the housing market, population growth statistics represent a proxy for housing demand. More residents imply more people who require accommodation.
At its peak, Australia’s population reached a record high in 2008 with an annual growth rate of 2.2%. Since then, population growth has fallen away sharply and dropped to its lowest point of 1.4% for the year end to March 2011. In 2012, population rose to reach a new high point of 1.8%.
ABS data indicates that the rate of population growth has been slipping since mid-last year, slowing to an annual growth rate of 1.7%. Despite a slowdown, population growth remains well above average.
<img src="/images/2014/06/26/lawless-june-26-one.gif" alt="">
Source: RP Data, ABS
The level of natural increase, that is births minus deaths, was 8.6% higher than the ten year average and 19.1% higher than their 30-years average over the 2013 calendar year. In addition, net overseas migration was tracking substantially higher than average at 16.7% above the 10 year average and 78.6% above the 30-years average.
Across the states, there were some diverse population growth trends where in raw numbers; NSW continues to attract the largest number of new residents, at 110,923 over the 2013 calendar year. Victoria showed the second largest number of new residents (107,916) followed by Queensland (79,706) then Western Australia (71,301).
According to the ABS, net overseas migration is the largest contributor to population growth. Across each of the states except for Tasmania and the Australian Capital Territory, natural increase outweighs net overseas migration numbers.
New South Wales holds the largest number of overseas migrants at 71,446 net migrants over the calendar year, followed by Victoria which recorded 62,337 overseas migrants.
Both NSW and Victoria are the two states showing a healthy upwards trend in overseas migration. Net overseas migrants into WA were the third highest of any state at 45,401, however, the ABS data shows a substantial decline over the year with overseas migrant numbers down 19.8% compared with the 2012 calendar year. A similar trend is evident in the other mining state, Queensland, where overseas migration is down 19.1% over the year.
Victoria attracted the largest number of net interstate migrants for the second consecutive quarter; historically it has been Queensland and more recently Western Australia. A slowdown in the resources sector is the likely cause of stymied interstate migration into both of these states.
With population growth winding down we can expect some further easing of housing demand, both from a sales and a rental perspective. The slowdown seems to be most pronounced in the mining states of WA and Qld where population growth conditions have previously been the strongest.
<img src="/images/2014/06/26/lawless-june-26-two.gif" alt="">
 
<img src="/images/2014/06/26/lawless-june-26-three.gif" alt="">
<img src="/images/2014/06/26/lawless-june-26-four.gif" alt="">
Source: RP Data, ABS
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tlawless-5VLUrbAk9s

Stalling population growth will lead to further easing of housing demand

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That the number ‘eight’ is lucky in some peoples’ eyes, particularly when looking at trends around Chinese buyers, has spread like wildfire through the media and through real estate agent companies.
The word for ‘eight’ sounds similar to the words for ‘prosper’ or ‘wealth’, and the more eights in a number, the more lucky that number is. Often, prices will be stated with eights in the dollar value as well. 0, 6, 8 and 9 are said to be the lucky numbers.
There is a rumour being currently passed around online that the August coming up next month is especially important as it contains five Fridays, Saturdays and Sundays - which 'only happens once every 823 years'. The chain goes on to state that it is called “Silver pockets full” by the Chinese and is auspicious. 
This is, of course, a falsehood in terms of the frequency of the month (we last had an August of this nature in 2010), although the legend gains traction online every time a year of this nature appears.
If you’re interested in more information around superstitions and lucky omens, observer Cameron McEvoy wrote this <a href="/expert-insights/very-superstitious-marketing-and-building-property-based-on-superstitions">compelling piece around what constitutes a lucky number – and which ones are steered clear of</a>.
For the purposes of this article, we decided to see just how much this is beginning to permeate into real estate listings. Upon searching through a listings portal it was quickly obvious that ‘Lucky Eight’ is being used by real estate agents to sell properties – in particular, those “lucky enough” to be a number eight.
However, it appears to be taking effect in the prices as well. Jonathan Chancellor previously reported in February this year that a <a href="/expert-insights/investing/happy-chinese-new-year-as-1960s-glen-waverley-house-sells-for-1-100-888-on-lucky-third-attempt">Glen Waverley property sold for $1,100,888 at auction</a> after the agency, Biggin &amp; Scott, had timed the listing for Saturday, 8 February for Chinese New Year.
Here are eight properties currently on the market using Lucky Eight marketing – many of which are coming up for auction in August… the perhaps not-so auspicious eighth month. It's worth noting that there were many others using this marketing technique with a high concentration in Victoria and New South Wales.
 
<ol>
<li>
<a href="https://www.realestate.com.au/property-house-vic-brookfield-117362399%20" target="_blank">8 Magpie Street, Brookfield, Victoria </a> <img src="/images/2014/07/08/brookfiled%20july%208.jpg" alt=""> “Lucky 8's (sic),” the listing begins. “Good fortune waits for the lucky purchaser of this beautiful home.” The three-bedroom, two-bathroom home sits on 800 square metres of north facing land and has a double garage. It’s up for auction on 9 August, at 11am through Stockdale &amp; Leggo – Melton. 
</li>
<li>
<a href="https://www.realestate.com.au/property-house-sa-tea+tree+gully-117352847%20" target="_blank">8 Peaceful Place, Tea Tree Gully, South Australia <img src="/images/2014/07/08/tea%20tree%20gullly%20july%208.jpg" alt=""> </a>Asking for $685,000, and having last sold for $625,000 in 2006, according to RP Data, this ad comes straight in with the capitalised “IS "8" YOUR LUCKY NUMBER?” <a href="https://www.realestate.com.au/property-house-sa-tea+tree+gully-117352847%20" target="_blank"></a>The six-bedroom, three-bathroom, three-storey tudor home is circa 1962 and is a gorgeous offering with a spa bath in the main bathroom, a his and hers walk in wardrobe in the main bedroom, a conservatory and a home theatre room. It spans 1,259 square metres and is offered through LJ Hooker – Golden Grove. 
</li>
<li>
<a href="https://www.realestate.com.au/property-house-vic-st+albans-117395935" target="_blank">8 Avondale Avenue, St Albans, Victoria <img src="/images/2014/07/08/sta%20labns%20july%208.jpg" alt=""> </a> This three-bedroom, two-bathroom home has the headline “First Time On The Market! Lucky 8!” to attract purchasers. <a href="https://www.realestate.com.au/property-house-vic-st+albans-117395935" target="_blank"></a>On a 660 square metre allotment, it also has a four car garage and each room has a built in wadrobe. It’s being advertised through Raine&amp;Horne St Albans. 
</li>
<li>
<a href="https://www.realestate.com.au/property-house-wa-canning+vale-117219251" target="_blank" style="line-height: 1.3em;">8 Saltram Turn, Canning Vale, Western Australia </a><img src="/images/2014/07/08/canning%20vale%20july%208.jpg" alt=""> Asking for offers from $850,000, this “Lucky number 8!” property has the added tagline “Good fortune lies within!” It has four bedrooms and three bathrooms, and is close to local schools and colleges. On 660 square metres, it has four included chandeliers, a theatre room, a two-car garage, solar panels on the roof and a 5,000 litre rainwater tank. It’s said to suit the “distinguished” buyer and is on the market with One Agency Phil Taylor – Maddington. 
</li>
<li>
<a href="https://www.realestate.com.au/property-apartment-vic-carnegie-117224055" target="_blank">2/8 Kokaribb Road, Carnegie, Victoria </a> <img src="/images/2014/07/08/carnegie%20july%208.jpg" alt=""> Up for auction at $380,000 plus, this apartment is on the market with Century 21 Anderson &amp; Co – Carnegie. <a href="https://www.realestate.com.au/property-apartment-vic-carnegie-117224055" target="_blank"></a>The capitalised “LUCKY NUMBER 8” is what stands out from this advertisement, and it comes with two bedrooms, a separate entrance hall, a balcony, built in wardrobes and a lock-up garage. It’s close to train, TAFE and shops. The auction is on 12 July. 
</li>
<li>
<a href="https://www.realestate.com.au/property-townhouse-nsw-lurnea-117322963" target="_blank" style="line-height: 1.3em;">8/31 Calabro Avenue, Lurnea, New South Wales <img src="/images/2014/07/08/lurnea%20july%208%20one.jpg" alt=""> </a>This “Lucky Number 8, Rear of Complex” two-storey townhouse with two bathrooms spans 200 square metres and includes three bedrooms and a study. Listed through Strathfield Partners – Strathfield, there is an entertainers courtyard, and it has beautiful exposed brick features. 
</li>
<li>
<a href="https://www.realestate.com.au/property-house-nsw-campsie-117133031" target="_blank">8 Gordon Street, Campsie, New South Wales <img src="/images/2014/07/08/campsie%20july%208%20one.jpg" alt=""> </a> This five-bedroom, two-bathroom property on the market with Lytin Real Estate – Campsie jumps straight in to “Lucky Number 8 in Blue Ribbon Location on 668sqm block”. <a href="https://www.realestate.com.au/property-house-nsw-campsie-117133031" target="_blank"></a>Up for auction on 26th, it’s on a 668 square metre block, and they suggest that: “The lucky buyer may consider renovating this spacious home or you could keep it as a premier investment option whilst you make plans to build and further capitalise on this fantastic block and position.” 
</li>
<li>
<a href="https://www.realestate.com.au/property-residential+land-qld-marsden-200803391%20" target="_blank">Lot 8, 19 Sam's Way, Marsden, Queensland <img src="/images/2014/07/08/marsden%20july%208.jpg" alt=""> </a>Now we turn our attention to vacant block of residential land, up for sale for $202,500. <a href="https://www.realestate.com.au/property-residential+land-qld-marsden-200803391%20" target="_blank"></a>“Lot 8 (Lucky For Some) - Build Here!” we’re told by New Image Real Estate – Marsden. The 556 square metre block is in a new estate. “The number 8 in Chinese is to prosper and considered lucky according to the internet. Some people believe this to be true...” the listing continues. 
</li>
<li>
BONUS LISTING (9 is lucky too) <a href="https://www.realestate.com.au/property-house-qld-parkinson-117153927" target="_blank" style="line-height: 1.3em;">(Unnumbered) Parkinson, Queensland </a><img src="/images/2014/07/08/parkinson%20july%208.jpg" alt=""> Up for $568,000 negotiable, the property is advertised as a "Lucky 8 house don't miss out", with the four-bedroom, two-bathroom property sitting on 800 square metres. It's on the market through Prince Realty - Sunnybank.
</li>
</ol>
 
<a href="https://www.realestate.com.au/property-residential+land-qld-marsden-200803391%20" target="_blank"></a>
{module Do you think that the number eight has an effect when advertising property?}
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jduke-EHk3XBmHkn

Eight properties advertised with a “Lucky Eight” hook

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Adelaide United have secured a sponsorship deal with the Adelaide-based Chinese property developer Datong. 
It's a two-year sleeve sponsorship of the A-League side.
The Reds will boost their Asian profile by playing games in China, Adelaide United’s chairman, Greg Griffin, said.
“We are delighted to be the first Australian football club in a major national sporting competition to secure a major Chinese company as a significant sponsor," he said.
Datong is a major developer in China building prestigious apartments and commercial buildings exclusively in Adelaide.
Datong is chaired by Jin Liang.
From Chinese foundations in 1988, it has had a presence in Adelaide since the early 2000s, with apartment developments currently underway in both Flinders and Gouger streets with another project earmarked for Waymouth Street.
‘Da’ means large or leading, while ‘tong’ is a metaphor for a smoothened road.
Image courtesy of Football Australia. 
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jchancellor-FAypfDUnLy

Datong developer group sponsors Adelaide United

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A new bar is opening in Sydney’s CBD western corridor and it will be the first video-gamed themed small bar in the entire city.
Set to be located at 199 Clarence Street, and close to Baxter Inn, Lobo Plantation, Papa Gede’s and Since I Left You, the premises were leased by Spawn Point through John Skufris from Ray White Commercial for a private owner.
 “199 Clarence Street offered a lower ground whole floor tenancy with its own amenities, the availability of after hour access and was previously leased as storage space,” Skufris said.
“We were informed this is the Sydney CBD's first and only video gaming-themed small bar.”
The site is between Town Hall and Wynyard.
<img src="/images/2014/07/08/dev-plan-july-8-one.jpg" alt="">
Source: City of Sydney 
“The top floor is currently available for lease with an internal staircase to the building's rooftop area,” he said.
The entire building is six-storeys with a sandstone façade, and comes with independent air conditioning and its own amenities. It had been advertised as having the potential for a small bar subject to council approval – which it appears has been successfully achieved.
Spawn Point, founded by IT-professional and Sydney gamer Ben Mudie and Welder and Central Coast gamer Ben Shute, has taken a three year lease at gross rental of $475 per square metre per annum. The space is 88 square metres.
In June they managed to achieve Licensed Premises status from council.
They will have some tables with in-built arcade machines, and will offer cocktails, locally brewed beer on tap and they will also be accepting BITCOIN payments using a QRCode system via smartphones. Consoles include Xbox, Playstation, Game Cube, Nintendo and a number of vintage systems. These include Super Nintendo Entertainment System, Nintendo 64 and the Mega Drive 2.
“The small bar will target a different culture of people rather than the typical bar crowd,” documents submitted to <a href="https://development.cityofsydney.nsw.gov.au/Datasource/DANotifications/1141038_007.pdf" target="_blank">Council explain</a>.
The notes indicate that the bar has a maximum of 39 sitting, with a total of 60 patrons (not including staff) at any one time.
"The closest residential building is Windsor On Kent located at 365 Kent Street that is approximately 100 meters away. The next closest residential building being Broughton House located at 181 Clarence Street that is approximately 160 meters away," it explains. According to an acoustic report they provided, there shouldn't be adverse ambient noise problems noticed by the residents.
Windsor on Kent's two-bedroom apartments sell for around $700,000 to upwards of $900,000. 
"Signage will be put in place advising our patrons to leave in a quiet fashion to avoid any disturbance to residents of the CBD."
<img src="/images/2014/07/08/dev-plan-july-8-two.jpg" alt="">
Source: City of Sydney 
The proposed hours of business operation included Monday to Sunday 0800 to 0100 the next day, with alcohol to be served from 12.01 to 0045, though it's likely the bar will actually open from mid-afternoon onwards.
Casual and full time staff are expected to be hired.
Some renovations were noted as necessary, including to remove existing carpeting, removing a non-structural wall to create a single large room and removing the kitchenette to be replaced with a bar. Floating wood floor over concrete slab will be in place of the carpet. The bathrooms are also undergoing a re-tiling and replacing the vanities.
The lighting will retain the fluorescent that is currently in the building, and will include directional low powering lighting.
The street façade is the only aspect that would cause issues in regards to heritage listing – and no plans have been proposed to alter this. The internals had been previously modernised.
While it’s the first video game bar, and will likely see vast interest, there have been a number of board game bars and cafes around Sydney.
Glebe’s Bar 99 featured traditional boardgames such as Battleship and Trivial Pursuit, while Madam FlingFlong in Newtown featured Yahtzee, Cluedo and Connect Four. Both no longer operate.
Melburnians will be looking on with interest, following Mana Bar, a similar video game offering, which closed in September last year.
<a href="https://www.spawnpoint.com.au/" target="_blank">Spawn Point’s homepage</a> is currently “coming soon”. The name Spawn Point is taken from the video game colloquialism 'Spawning', which means the creation of a character. Most will be more familiar with the term 'Respawn' which is what occurs after a character dies and needs to re-appear in the game. The spawn point is where the characters appear in the game.
Previous estimates suggested that plans are for a door-opening in August.
For those looking to arcade-ready their home, here’s one <a href="/expert-insights/building/renovation-recreation-how-to-turn-your-bedroom-into-an-arcade">gamers take on a home renovation where he turned his bedroom into an arcade</a>.
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First video game-themed bar for Sydney

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The Australian Veterinary Association (AVA) in conjunction with the Australian Companion Animal Council have put out their 2014 guides, one for landlords and one for renters, around allowing pets in investment properties.
They provide <a href="https://www.ava.com.au/sites/default/files/AVA_website/ASAVA/CF142757%20ACAC%20Tenants%20with%20Pets%2007%2005%2014%20WEB.pdf" target="_blank">10 reasons they think animals should be allowed</a>:
<ol>
<li>Pet owning tenants are generally willing to pay more rent. 
</li>
<li>Pet-friendly properties rent faster. 
</li>
<li>Responsible pet owners can make excellent tenants. 
</li>
<li>Tenants with pets want to hold longer leases. 
</li>
<li>Reduce your advertising spend. 
</li>
<li>No more problems with ‘hidden’ pets. 
</li>
<li>Most Australians feel their pet is part of the family and care for them as such. 
</li>
<li>Reduce animal euthanasia; animal welfare agencies indicate that as many as 30% of dogs and cats are surrendered by owners who are unable to locate adequate accommodation. 
</li>
<li>“Considering pets” will not lock you into a pet- particular outcome. 
</li>
<li>Pet application and agreement forms are available to help landlords and managing agents implement a successful pet management policy and help tenants understand how to responsibly manage pets.</li>
</ol>
Source: AVA
In fact, when it comes to paying more rent, the research they cite suggests that renters are prepared to pay 7% to 14% more to bring their beloved pet along.
Basing their thoughts on US research that may reflect behaviours in Australia as well, they note that 25% of renters in the Companion Animal Renters and Pet-Friendly Housing in the US study were seeking pet-friendly accommodation, with applicable properties receiving twice as many applicants and renting out 10 days faster. The research from the US also suggests that longer leases are desired by tenants with pets, with some wanting to stay more than double the length of time as those without.
They also note that current Australia-based research suggests that 11% of pet-owning tenants keep their pets secretly, without telling their landlord, and usually it’s cats.
If you’re tempted to allow your tenant to keep pets, there are ways to go about it. Consider pet agreement forms, where you lay out your expectations, pet application forms for new tenants and, for Western Australian landlords, pet bonds.
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10 reasons landlords should consider allowing tenants to have pets: AVA

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An interesting release from Australia's largest mortgage aggregator Australian Finance Group, showing some notable trends in the Aussie property market.
The index is highly seasonal, of course, as we are now into the cold winter months - and most certainly in Sydney we are!
Stripping out seasonality, mortgage demand sits some 23% higher than it was a year ago.
Even allowing for any possible shifts in AFG's market share, this implies a huge annualised uplift in mortgages sold:
 <img src="https://1.bp.blogspot.com/-Y6RNrL1ZFBc/U7SvsRlQbvI/AAAAAAAAOOs/cVdY8ya1T7o/s1600/AFg6.jpg">
The average mortgage size by state shows that how it has been New South Wales and specifically Sydney which has driven the property boom over the past 18 months.
Queensland has also been a strong performer over the 12 months from July 2013.
Elsewhere, markets have been solid enough, but relatively much more subdued:
 <img src="https://2.bp.blogspot.com/-KTJ0y5gnZqs/U7Svs_LC0gI/AAAAAAAAOOc/rF4Cf7JvuvE/s1600/Afg1.jpg">
One trend we are watching is the role of investors by state, and in particular whether investors will spread their wings to look at the Sunshine State of Queensland next up in seeking yield and value.
There has been an uplift in the share of investors in the Queensland market, but Sydney remains the speculator's paradise with more than 45% of the mortgage market being sen up by investment purchases:
 <img src="https://3.bp.blogspot.com/-sHzCLOouTno/U7SwGxPWEVI/AAAAAAAAOO0/0YWRcv0ET_g/s1600/AFG7.jpg">
In terms of mortgages sold for the state, New South Wales demand has ripped upwards by +33% year on year, despite the low number of reported first home buyers.
It will be interesting to see if NSW mortgage demand resumes its upwards trajectory from July through to December as it did in 2013:
 <img src="https://1.bp.blogspot.com/-ceaR2JP-uZ8/U7Svro9UdXI/AAAAAAAAOOQ/B8kauromDCo/s1600/AFg4.jpg">
Overall, a strong release, and stripping out seasonality mortgage demand appears to remain in a secular uptrend which has been in place since 2011.
Article continues on next page. Please click below. 
<hr class="system-pagebreak">
Housing construction boom still on track?
I put forward the view some time ago that residential building approvals would likely hit all-time record highs, driven on by rising dwelling prices over the past couple of years.
Although is is argued by some that supply is effectively strangled by planning restrictions and NIMBY-ism (to some extent, this obviously does play a part, particularly in established inner- and middle-ring suburbs), there has been another factor at play.
And that is, with high labour and construction costs in Australia combined with government charges, dwelling prices were simply not high enough to encourage developers to build.
The numbers are clear - if Sydney's apartment prices were to dip much below $550,000, construction will quickly dry up, even with today's lower financing costs.
In short, projects would not be sufficiently profitable for developers to build and there would be no adequate return on investment.
<img src="https://www.rba.gov.au/speeches/2013/images/sp-so-230413-graph8-small.gif" alt="Graph 8: Construction Costs">
It's that simple. Ask anyone who works for a major developer in a residential division and they will tell you the same thing.
Dwelling values were previously too low and price action not strong enough for developers to be interested, until recently.
Indeed, RBA Governor Glenn Stevens confirmed as much in a speech this morning.
However, with prices moving up, there is clearly no shortage of approvals being waved through now in Sydney, thus underscoring the point.
In some areas, every second block appears to be under construction, especially in a number of inner south suburbs where thousands upon thousand of apartments are due to come online.
After three months of softer data, most commentators had already called the end of the approvals boom.
Admittedly, things were looking a tad shaky, but at the end of the day monthly approvals data is always necessarily going to be all over the shop.
In the event, after three weak readings building approvals in May jumped by 9.9% month on month to be up 14.3% year on year:
 <img src="https://3.bp.blogspot.com/-OmJ3i3uomTc/U7UFvwEANpI/AAAAAAAAOPk/YFCx_BAwDfQ/s1600/a+approvals.jpg">
This data is always easier to read when smoothed out on a rolling monthly basis.
As you can see, rolling 12 monthly approvals are approaching the highest level ever recorded in Australia, now tracking at well over 190,000.
The previous annualised record was recorded in 1994 after the cash rate had been slashed from the nosebleed level of 17.5% to just 4.75%, resulting in higher prices and and a construction boom:
 <img src="https://3.bp.blogspot.com/-OmJ3i3uomTc/U7UFvwEANpI/AAAAAAAAOPk/YFCx_BAwDfQ/s1600/a+approvals.jpg">
The major driver in this cycle has been a big ~20% year on year uplift in apartment approvals, casting a lot of doubt over the sticky supply response theory.
In fact, apartment approvals are booming to new record highs:
 <img src="https://4.bp.blogspot.com/-WdLE8tX-6IU/U7UH3Da_DEI/AAAAAAAAOQI/JhEwwZ3HirU/s1600/3+units.jpg">
New South Wales, a state with both a dwelling and an infrastructure deficit, has been leading the way with gusto in recent years:
 <img src="https://4.bp.blogspot.com/-9oOHSiKj9R8/U7UFveRjdOI/AAAAAAAAOPc/CbrADiFPzO0/s1600/4+NSW.jpg">
In NSW's case too, it's also been largely an apartment story, with nearly seven in every 10 approvals over the past year relating to unit and apartment stock in Sydney and the state-wide level of apartment approvals soaring:
 <img src="https://2.bp.blogspot.com/-DiMTITiI9rE/U7UFvl0XoWI/AAAAAAAAOPg/68ayXXSzr38/s1600/5+NSW+apartments.jpg">
That said, it's notable that what started as a New South Wales and Western Australia boom is now becoming more broad-based.
Only in the Australian Capital Territory jurisdiction, where new supply is essentially not really needed, are building approvals not materially higher than a year ago.
In terms of the capital cities, approvals are generally very strong as detailed by RP Data's Cameron Kusher here:
 <img src="https://1.bp.blogspot.com/-d-JzbvPy290/U7UJMz1CTPI/AAAAAAAAOQc/lbcukkrH_hA/s1600/7RPD.jpg">
Source: RP Data, ABS.
"As you can see from the above chart, across each of the major capital cities there has been an upswing in dwelling approvals.
"The most significant upswing has occurred in Sydney and Brisbane however, the number of approvals remains much higher in Sydney and Melbourne than in all other cities.
"The number of dwellings approved for construction is at an all-time high currently in Perth, is very close to its record high in Sydney and at its highest level since the 12 months to June 2004 in Brisbane," wrote Kusher.
No signs of any constipated supply response there, rather the market just seems to be doing exactly what it should do, and the dwelling construction boom remains - albeit tentatively - still on track.
Acquirers of property, particularly buyers of units and apartments, must be wary of pockets of oversupply.
Great wall of foreign capital hits Sydney &amp; Melbourne
Some years ago when I wrote my first book, I noted that one day in the not too distant future, the Aussie dollar would depreciate again and certain parts of our property markets would likely be hit by a great wall of foreign capital.
It's all part of a global shift towards storing wealth in real estate which I discussed in more detail here, and which we have seen playing out in London over the past two decades with ever-widening eyes.
However, as I noted in my book, foreign buyers generally aren't interested in smaller cities and regional centres.
Instead, they will be predominantly interested in buying medium-density properties in the areas they are generally most familiar with - that is to say, inner Sydney and inner Melbourne.
Credit growth in Australia is only just rebounding from 40 year lows and yet prices are surging, with Sydney prices up by 15.4% in the last 12 months alone.
Well, that unprecedented great wall of foreign capital is now here.There has been a lot of debate about foreign buyers purchasing illegally, but even approved annualised spending is up by a whopping 93% to an annualised equivalent of more than $33 billion.
The always-excellent Chris Joye <a href="https://www.afr.com/f/free/blogs/christopher_joye/foreign_buyers_purchase_homes_to_VCVDT4m60HAlgpYbdGrCSL" target="_blank">highlighted in the AFR</a> how foreign buyers are buying up to 40% of newly constructed homes in Sydney and Melbourne (while simultaneously completely disregarding the southern states):
"Foreign investors are likely key drivers of the Sydney and Melbourne housing booms, according to new UBS data, potentially buying up to 40% of all newly constructed homes, and accounting for up to one in eight Australian sales overall.
"Unprecedented levels of foreign buyer activity, combined with the ability of the $559 billion self-managed super fund sector to leverage its cash five times when making property purchases, could be two reasons why this Australian housing cycle is different to anything we’ve seen before."
<img src="https://www.afr.com/r/AFR/Blogs/christopher_joye/201406/Images/housing414x727.png" width="227" height="400">
Article continues on next page. Please click below. 
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Lucky 888 Visas take-off
An interest sub-plot which has not received much airtime in the mainstream media is that the controversial "Significant Investor Visas" are being issued overwhelmingly in New South Wales and Victoria too - 85% of them.
The investor "Golden Ticket" or "Lucky 888" visas (doubtless that subclass was chosen as they will be mainly issued to Chinese immigrants) require a minimum $5 million of investment in qualifying assets in exchange for a visa, and the rules allow them to be processed very rapidly.
Another 81 visas were issued in April and May taking the tally to date up to 255, but the big story is that another 928 applications for Golden Ticket visas have been lodged.
Tally all of that up and that's another $5 billion of investment coming overwhelmingly into the two major states, not to mention the additional wealth that the new visa holders will bring with them.
And this is doubtless only the beginning.
Canada recently shut down its equivalent visa scheme with there still being a staggering 59,000 shut out in the waiting lists, most of them wealthy Chinese.
Throw in all of that together with another new advent - SMSF lending for property investment - mixed in with record low interest rates, and I continue to see little prospect of dwindling prices in inner Sydney any time soon.
Yesterday's <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3401.0Main+Features1May%202014?OpenDocument" target="_blank">Overseas Arrivals and Departures</a> data revealed some very interesting trends.
The number of short-term visitors to Australian shores reached a new record high of 583,600 in May on a seasonally adjusted basis.
The first key point of note today, which has actually been quite evident to me, both in the capital city and up and down the coast, has been the very substantial increase in the number of Chinese visitors to Australian shores. 
It's long been argued by commentators that Australia will become a playground for wealthy Asians.
Not to say that all Chinese visitors are wealthy, of course! 
But what has certainly been the case that there has been a strong and increasing interest in Sydney and Melbourne for $5 million Significant Investor or "Golden Ticket" Visas, with nearly 1,000 applications reportedly now in the queue to be processed in addition to those already dished out (85% of which were issued in Victoria and New South Wales). 
The number of Chinese tourists in May alone hit 66,700 (+5.9% y/y) - which was 11.4% of the total visitors for the month - helping to pump the short-term visitor levels to new heights:
 <img src="https://3.bp.blogspot.com/--gsHtO-E4vQ/U7oxWXGUQFI/AAAAAAAAOWE/fwePpA6uUPc/s1600/Arrivals1.jpg">
The number of long-term arrivals tailed back marginally to a shade under 760,000 on a rolling annual basis, from a peak level of close to 800,000:
 <img src="https://1.bp.blogspot.com/-9D_5bScSZ-0/U7oxX-0yt2I/AAAAAAAAOWY/GWTByl0-Ykg/s1600/arrivals2.jpg">
After accounting for long-term and permanent departures, rolling annual net long term migration came in at just a little over 376,000 in May, which is also down from its most recent peak of approximately 408,000 a year ago:
<img src="https://4.bp.blogspot.com/-HsHrOAudybA/U7oxWUUc7_I/AAAAAAAAOV8/PALex_CKoOo/s1600/Arrivals3.jpg">
Australia's population growth is now accounted for by approximately 60% net long term migration and 40% natural increase. These figures appear to be commensurate with annual population growth tailing back from searing highs of well above 400,000 to slightly more moderate (although still undeniably strong) levels, perhaps somewhere in the 300,000s range in 2014.
 
Article continues on next page. Please click below. 
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Asian century
The Permanent Movements - Settlers data series showed that significant numbers of today's migrants hail from countries such as the Phillipines, Vietnam, Sri Lanka and Malaysia. From the Middle East, Iraq was another surprisingly strong contributor, at least, to me. 
An interesting point of note is how the number of settlers from New Zealand, and in particular, the United Kingdom, have dropped off dramatically since peaking in January 2009 and February 2008 respectively on a rolling annual basis.
In Britain's case, I'm fairly certain from my own experience that this is in part due to dramatic shifts in the exchange rate caused by the respective fortunes of those economies, and therefore the relative cost of living for Poms in Australia, as I discussed in <a href="https://petewargent.blogspot.com.au/2014/07/currency" target="_blank">this timely post</a>.
For my money, the biggest news of today's data set is explained by the graph below:
<img src="https://4.bp.blogspot.com/-6pk7fLfq3Ok/U7oxWgrwrjI/AAAAAAAAOWA/EfOZeuorEq4/s1600/Arrivals4.jpg">
Note how permanent settlers from both China and India are now tracking at or close to record highs.
Incredibly, approximately one in every eight permanent settlers in Australia hails from China (12.3%), and nearly one in every seven from India (13.7%).
Unevenly spread
The above charts show how clearly Australia has increasingly embraced a "populate or perish" mentality in recent years, and this decade and the next are likely to be noteworthy for the dramatic impact of immigration from Asia.
It's worth noting here though how the population growth differs greatly by state and by region:
<img src="https://4.bp.blogspot.com/-KcPgnQY8UAk/U7oxXf3UhGI/AAAAAAAAOWc/-qaoiH6hynI/s1600/Arrivals5.jpg">
The <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0" target="_blank">Australian Demographic Statistics</a> for the year to December 2013 showed how the New South Wales population increased by a thumping +110,300 in the 2013 calendar year, with the overwhelming majority of that taking place in Greater Sydney.
Many of the highest growth rates are being seen in the inner and middle-ring suburbs if the harbour city, placing a colossal strain on existing infrastructure and housing markets.
This population and labour market growth has occurred, and is occurring, at the expense of nearly every New South Wales regional centre where population growth rates below the national averages have been seen.
On the other hand, net absolute population growth in Tasmania, the Northern Territory, the Australian Capital Territory and South Australia remained fairly minimal in 2013:
<img src="https://3.bp.blogspot.com/-6EzgEBHbvTg/U7oxXrENM-I/AAAAAAAAOWU/_o0bgEAQNdE/s1600/Arrivals6.jpg">
Summary
Population growth in 2014 looks set to be driven more by China and India than ever before, as well as a number of other south-east Asian and far-east Asian countries. 
However, the absolute Australian population growth figure looks to have peaked for this cycle and perhaps may be closer to 300,000 than 400,000 in this calendar year. 
On the face of it this ongoing strong population growth is all great news for property investors.
However, some alarm bells are starting to ring in a number of areas as higher prices and lower interest rates are driving a glut of new supply in some regions.
In particular, certain parts of Melbourne and regional Victoria appear to have worryingly high vacancy rates, as do some parts of regional New South Wales and Queensland.
Moreover, there has been plenty of questinable advice over the last couple of years about investing for high yields in overpriced mining towns.
Yet in some mining locations we now we have the prospect of a potentially devastating trifecta of declining commodity prices, a crunching drop-off in mining construction and a jumping in unemployment in the resources sector.
Each to their own, but personally I'd be giving the one-trick mining towns a very wide berth.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<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>' .
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pwargent-M4siyDbqQY

Lucky 888 Visas take-off and is the housing construction boom still on track?

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NSW Treasurer Andrew Constance has confirmed just how much Sydney’s real estate boom is adding to the general fortunes of the state.
The 2014 budget papers show that "a resurgence in the property market has significantly lifted transfer duties in 2013-14". Transfer duty, including stamp duty, contributed $938 million of state budget revenue. This result was seen as a ‘windfall’ and measures to further stimulate the rate of new home construction were also announced in the budget.
The Treasurer also announced that the threshold for the first home buyer $15,000 grant will be boosted to $750,000 – an increase of $100,000. From 1 July 2014, the NSW government will boost the threshold of the First Home Buyers Grant for new homes by $100,000, which means entry level buyers can spend up to $750,000 on a new property.
However extending this to established homes appears to be totally off the agenda given the level of demand and the increased prices over the last six to 12 months. Still, eligibility for the grant will from 1 July 2014 be restricted only to citizens who are permanent Australian residents.
The NSW government has also pledged to freeing up land supply and speeding the delivery of some infrastructure to help boost construction activity.
Property Plays a Big Part in State’s Economy
However when looking at the government’s revenue papers in the budget, it is easy to see how important a robust property market is. But at the same time the extent of revenue from property and some related areas may be placing too great a burden on the sector.
Comments in the budget also underline how relatively volatile, even fragile this revenue stream can be, and so I think it’s worth looking in more detail at some key points. What we can see is how reliant the government is on this revenue and why any move to abolish stamp duty as part of a possible review of state-based tax reforms looks a long way off, if ever, although remaining mortgage duty is being abolished in 2015.
One of the most telling figures in the revenue statement is the comparison between GST revenue and transfer duty. GST revenue in 2014-15 is estimated at $6.094 billion rising to $6.9 billion in 2017-18. By comparison transfer duty revenue in 2014-15 is estimated at $6.095 billiob but is anticipated to rise more than GST to $7.256 billion in 2017-18. On top of which Land Tax will add $2.4 billion – $2.8 billion in the same time frame, while we should not forget the parking space levy set to reach $115 million by 2017-18 and so adding these figures we see that by 2017-18 direct property related revenue for the state will be some $10.24 billion.
The budget papers do point out that the 2013-14 results were expected to increase by 20.5% but in fact the increase looks set to be closer to 35%. Further the current budget anticipated an increased volume of sales at 6% but the final figure was much more at 18%. And residential property prices have increased by some 10% over the past budget period, however those figures are not expected to be maintained, but any slow down is expected to be gentler than previous cycles. And in the four years to 2017-18 the government is expecting a growth rate of 7% over the four years. In today’s market this looks a conservative estimate.
What Has Been Driving These Figures
The Office of State Revenue might be expected to be conservative in its views, however key facts driving the revenue in 2013-14 have, according to the Office, been: historically low interest rates, pent up demand, under supply, improved consumer confidence and of course the obvious big increase in house prices.
When looking at the impact of house prices, the Office points out that activity was initially driven by sales of less than $600,000 but now strong growth in sales of homes valued over $1.2 million is apparent, however the Offices argues that this trend might also mark a peak in the housing cycle.
A Keen Eye Out for Strong Construction Activity
Given the potential of $10 billion in annual revenue by 2017-18 the government is also keen to keep the recovery in new construction on a robust footing. In the December quarter 2013 private sector dwelling approvals were 44% higher than the decade average, as were dwelling commencements while completion were 14% above the decade average.
The hope is that these strong results will continue over the next 4 years, as this appears vital for the health of NSW. However the reality is that the sector and those home buyers paying stamp duty (and that’s the majority) are doing some heavy lifting when it comes to government revenues and any adjustment to the GST needs to address this reality.
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pchittenden-eLqUUC8TWW

New South Wales reliant on the property market for revenue

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GUEST OBSERVATION
Al, my business partner, and I were recently out at one of the secondary schools talking to the students about the basics of investing and property as an investment option.
But I decided to start my property section a little different from usual and I think it really woke them up.
I wanted to provide them insight to the property world that most Australians never get.
Here’s how it went…
I started explaining to them that I had a friend named Leigh, who when growing up was mesmerised by Hollywood. He loved film making and a bit over 10 years ago wrote a movie script for a little film called Saw. When Leigh and his mate James landed in Los Angeles the first time they were swept off their feet by Hollywood executives and were promised the world. They rejected all offers to purchase their script and decided to hold onto the movie rights. They made Saw and have now gone on to make other films like Insidious, The Conjuring, and James currently directing the latest Fast and Furious film. So yes these boys made it big time.
Hollywood is called 'tinsel town' for a reason. There are lots of bright lights but these lights are only there to cover up the rotting core. Talking to Leigh over the years he explained to me that Hollywood is very similar to the way I describe one part of the property industry. The part I relate to Hollywood is what I call the property advisory or seminar circuit.
The thought of making it big time seems fantastic, but something in your gut just doesn’t feel right. This is how Leigh felt about Hollywood and this is how I felt about the property industry.
Wherever there is large amounts of money there will be sharks. So I told the kids I was going to do an exercise and if they participated they would see the advisory or seminar circuit for what it really was. They would hopefully then be able to remain safe as they ventured into the property investment world.
So Al and I split the room up in two. We put on some pumping music and started throwing $20 notes into the crowd. We worked the kids up to a frenzy getting them to yell ridiculous things back and forth at each other. They had an absolute ball and pocketed some quick cash in the process. Al and I joined in the yelling and ran around high fiving all the kids.
I then turned the music off and asked them to sit down. I asked them if any of them had been to a property seminar.
None raised their hands.
I told them that they all had now just been to a property seminar and went on to discuss that the majority of property seminars are design to follow on with charging you for overpriced education or over-inflated property purchases.
Here are some of the points we then discussed.
The dictionary defines a scammer as the following: "Swindler / Scammer: a person who swindles you by means of deception or fraud."
When it comes to buying property we are talking about large sums of money. We are not buying lollipops. Sadly this brings in the sharks.
Signs that the sharks are circling.
<ul>
<li>Pumping music aimed at getting you hyped up. Smart investors do not buy on emotion.</li>
<li>Visuals of money or luxury items.</li>
<li>The presenter positions themselves as a saint. They tell you about the charity that they support. Philanthropists do not promote the fact that they give their money away. If someone promotes the fact that they are a philanthropist this is a big tell-tale sign that they want to take more than they give.</li>
<li>Questions asked multiple times like ‘Are you ready to change? Are you ready to take action? Are you ready to make the sacrifice?’ If you hear this you’re about to be the sacrifice.</li>
<li>Act now, price reduction offers during or at the end of seminars.</li>
<li>No discussion on the risks of investing. This should be the centre of an education session. I always find it amusing that risk is either skimmed over or never discussed.</li>
<li>The promise of getting rich quick. Remember smart investors get rich slow.</li>
<li>Promises of above average returns.</li>
</ul>
I told the kids that they should always question and advisors motivation. To understand why someone is promoting a certain product or service, you need to firstly understand how they are paid. 
These were pretty smart kids so hopefully this lesson will keep them safe in the years to come. 
Cam McLellan is a successful property investor, businessman and the founder and CEO of <a href="https://openwealthcreation.com.au/" target="_blank">Open Wealth Creation</a>. 
Open Wealth Creation advise, coach and guide people through the property investment process including arranging finance and choosing property to finding tenants and portfolio management.
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cmclellan-94LEvYTinN

How to stay safe from the property sharks

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Stocktake sales have enticed Australian shoppers to open up their wallets after the May budget, with retail sales up 18.4% in the past two weeks.
While retail sales took a hit after the <a href="https://www.smartcompany.com.au/federal-budget-2014/765-finance/41935-budget-2014-small-business-reacts-to-not-a-bad-budget" target="_blank">Abbott government’s first budget</a>, data from the Australian Retail Index shows the sector finished off the 2013-14 financial year on a strong note with 4.1% growth in June.
“After a slump in sales post the release of the federal budget, shoppers were quick to forget their concerns, and return with confidence,” said Simon Scalzo, national retail lead partner of BDO, one of the firms behind the Australian Retail Index.
Russell Zimmerman, executive director of the Australian Retailers Association, told SmartCompany he has seen a similar recovery in sales since the budget.
While Zimmerman says it is hard to say for sure which factors caused lower retail sales in May, he says it is fair to say “consumers kicked back” against the budget. Shoppers were also less likely to purchase winter goods in May due to unusually warm weather, he says.
“What we are hearing is that it has come good in the past few weeks and that is in part due to the return of the cold weather that retailers were looking for,” says Zimmerman.
“I think some consumers are also realising the budget was not as bad as they initially thought.”
“But I would caution it is not across the board,” he says. “Some retailers have said it hasn’t been as strong, including some SMEs and those in the hardware sector. Some have said it has been tough.”
Nevertheless, Zimmerman says the sector had “generally not a bad finish” to the end of the financial year, led by the department stores which appear to have benefited from their traditional mid-year stocktake sales.
While Zimmerman says stocktake sales might not be as popular as they were 20 years ago, he says they “absolutely” still make a difference to the country’s retailers.
“People still believe in the stocktake sale. It’s the same with Boxing Day,” says Zimmerman.
The Australian Retail Index, which was <a href="https://www.smartcompany.com.au/marketing/sales/41642-new-retail-sales-index-to-give-shop-owners-daily-data" target="_blank">launched in April</a>, also tracks fluctuations across different retail categories, including furniture and homewares, fashion and accessories, sporting goods and other general retail.
Scalzo says the furniture and homewares category proved the most stable throughout the 2013-14 financial year, while fashion and accessories and other general retail proved the most volatile.
But while the retail sector appears to be well-placed heading into the new financial year, Scalzo says retailers should brace themselves for the winter months.
“If history is anything to go by, retailers should expect activity to be short-lived over the remaining cooler months, with historic consumer confidence showing a dip in sales between August and October,” says Scalzo.
<img src="https://www.smartcompany.com.au/images/retail%20story%20graph%20070714.jpg" width="548" height="463">
Source: Australian Retail Index
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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