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

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You can be assured that as we enter a new year we are inundated with real estate predictions. 2014 will be no different so let’s try and make it easier and more understandable for you. Since September 2000, we have been writing our weekly post, Virtual Realty News, which provides an in-depth assessment of what the markets are doing. Despite the banter and hoo-ha that Sydney markets are set to boom in 2014, the most consistent statistic that we have observed over the last six years is that property sales numbers are in a rapid decline.
Here is what we consider the vital property performance indicators:
1. Cash rate
At the beginning of 2013 Macquarie Bank predicted that the cash rate in 2013 would drop to 2.00% whilst most thought it would go up. The Reserve Bank of Australia (RBA) cash rate today sits at 2.50% and this is where we expect it to sit for 2014 – we expect to see it start rising again in 2015.
2. Australian dollar
At the time of writing this report it was sitting at 0.87 AU$/US$ which is the weakest point since July 2010. Last week the Australian Bureau of Statistics showed that the unemployment rate remained at 5.8% in December. The world’s biggest money manager BlackRock sees Australia’s dollar falling 10% as a result of disappointing economic growth reporting in 2014 which would then see the RBA cut its cash rate to 2.00%. There would be a number of expats hoping this to be the case as they have been sitting waiting for the Australian dollar to start declining.
3. Inflation
Overall the inflation rate has been well controlled by the RBA over the past few years with the RBA settings from 2.00% to 3.00%. In the 12 months to December, prices rose 2.7%, compared to 2.4% in November. This economic data is confirming that Australia’s record – low 2.5% cash rate is stimulating consumer spending. Across Australia spending has now risen over the past 16 consecutive months.
4. Supply/demand
This is the data I rely on the most as Sydney is comprised of 637 suburbs and growing and reporting generally throws all the suburbs into the one analysis. In 2012 Mosman houses recorded on 23 occasions more than 100 houses on the market over the one particular week – in 2013 it only managed to break 100 on four occasions so we are witnessing significant reductions in stock levels. In 2012 the greatest number of houses on the market in one week was 168, in 2013 it peaked at 144. To see on how many occasions the number of houses on the market breaks 100 will be fascinating given the markets are off to their weakest start ever in terms of volume.
<img height="237" width="470" src="https://www.rwm.com.au/files/2014/01/15-01-2014-1-18-21-PM.jpg" alt="15-01-2014 1-18-21 PM"><img height="296" width="470" src="https://www.rwm.com.au/files/2014/01/14-01-2014-2-56-15-PM.jpg" alt="14-01-2014 2-56-15 PM">
In 2013 the highest house sale was Altona – Wunulla Road, Point Piper for $52 million. For the first time in years the only property to sell outside the eastern suburbs of Sydney top 20 sales was Julian Street, Mosman which was sold by Richardson &amp; Wrench Mosman &amp; Neutral Bay (RWM) for $13.9 million. From the Sydney top 20 sales in 2013 just four went to Chinese buyers so don’t believe everything you read in the newspapers.
We don’t see any great changes in 2014 to the 2013 real estate markets given that they are now more than ever before consumer sensitive. Like everything markets are controlled by supply v demand mechanisms and if anything we believe again we will see fewer properties on the market in 2014.
Just before Australia Day last year there were 61 houses on the market, the year before 83 and this week just 47. Mosman apartments have 40 on the market this week, last year 68 and the year before 129. It’s quite extraordinary that the combined number of houses and apartments on the market in Mosman is just 87 – which clearly identifies a vendors market.
It’s going to be very interesting to see what happens to the stock volumes this week as the markets historically move into what we call the peak selling period.
Robert Simeon is a director of <a target="_blank" rel="nofollow" href="https://www.rwm.com.au/" title="RWM" style="font-size: 14px;">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a target="_blank" rel="nofollow" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
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robertsimeon-hRNTwJyXkQ

The four key property performance indicators for 2014

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There were 4430 bookstores in Australia during the 2004-05 financial year. Now, there are just 2921 bookstores owned by 2700 companies, and industry forecaster IBISWorld isn’t optimistic for those that remain.
According to a new report by IBISWorld analyst Claudia Burgio-Ficca, industry revenue will decline 8.1% during the coming financial year, with annual revenue declines moderating after that. By 2018-19, the forecaster believes annual revenue falls will stabilise to just 3.8% a year.
It’s been a perfect storm for booksellers over the past five years, Burgio-Ficca says. On the one hand, retail generally has had a challenging time, battling low consumer sentiment and lacklustre spending.
The industry is also facing structural change, with a rising breed of online-only booksellers operating with leaner business models, broader catalogues and lower prices forcing the industry to cut costs and become far more competitive.
Discount booksellers haven’t helped either. IBISWorld notes that discount department stores have increasingly been making bulk purchases of books, and then offering them at bargain-basement prices to customers during key selling periods such as Christmas. This limits the ability of bookstores to profit from the flurry of gift-buying at the time.
“Bookstores have fought to stay afloat,” Burgio-Ficca says. “A host of issues have plagued the industry.
“As a result, profitability has trended downwards.”
Despite the presence of big-name brands like Dymocks and Collins Booksellers, bookselling is a small business industry. The top four players together hold under 40% of the market share, and barriers to entry are relatively low.
But it’s not all doom and gloom. Despite catering to a far smaller share of the market, speciality bookstores have performed better.
“Niche bookstores such as those specialising in languages are projected to remain in demand, and face relatively little external competition,” Claudia Burgio-Ficca says.
Discount bookstore chain allbooks4less.com.au was <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/32568-discount-book-chain-turning-over-21-million-goes-under-after-directors-death">placed into administration in July</a>. As the figures show, it’s <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/28192-collapse-of-iconic-adelaide-bookstore-mary-martin-highlights-ongoing-pain-in-book-market">far from the only bookstore</a> to face such a fate.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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mrobin-TVRYiru7si

Another 300 bookstores set to go, but further chapters remain in saga: IBISWorld

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The bayside glamour couple, Carlton footballer Chris Judd and his wife, weather presenter Rebecca, have leased their four-floor Prahran townhouse abode given last year's sale marketing campaign didn't secure its desired $1.7 million buyer interest.
Their <a href="https://www.propertyobserver.com.au/news/second-baby-prospect-prompts-chris-judd-and-wife-rebecca-to-list-their-prahran-warehouse/2013101765771" target="_blank">second baby prompted the listing back in October</a>.
It's the warehouse conversion undertaken in 2006 by Michelle Forsyth of Ethereal Design with skylit staircase and a dumb waiter from top to bottom.
The townhouse, which overlooks park and rooftops, all within walking distance of Greville and Chapel streets, was up for $1,999 a week rental. The asking rental would reflect a gross 6% yield based on its unmet asking price. RP Data puts the <a href="/news">Prahran</a> rental typically at around 3.5% for houses and 3.7% for apartments, reflecting $575 weekly rental and $369 weekly rental for apartments.. 
Rebecca had Sara and Amy Chamberlain, from The Real Estate Stylist undertake the sales marketing campaign styling, but the property was leased unfurnished through came with optional extras and appliances.
The star midfielder bought it for $1.66 million in late 2007 after he moved from Perth on signing with Carlton. It had been listed with $1.95 million hopes by Michelle Forsyth, and Christian Janko, in late 2006.
Offers inexcess of $1.7 million were being sought last November through Paul Castran of Castran Gilbert. Its rental was through Castran Gilbert leasing agents Gabby Mercuri and Sarah Holder.
Paul Castran says the laneway is almost wall to wall stylish town residences.
"It delivers four levels of uber-chic contemporary living with a generous offering of space, light and luxury touches throughout," the Castran marketing says. It features a full-floor, dedicated entertaining precinct comprising an open plan living and dining zone with wood fireplace, Smeg kitchen and private terrace with cafe-style ceiling heating and BBQ.
Accommodation wise, the property provides a lavish top floor master suite complete with a gas fireplace, indulgent double vanity en suite, expansive robes and balcony with park views; as well as three additional bedrooms with robes and en suites. One bathroom has a freestanding bath that looks like a giant half eggshell. Its other features include a secure double garage, laundry, split-system air conditioning, slab heating, polished timber floors, monitored alarm, CCTV security and intercom.
There was a video <a href="https://www.propertyobserver.com.au/https://vimeo.com/82085186" target="_blank">starring Rebecca produced by Goldeneye Media</a> on the initial listing.
It was 2010 when Judd and his then model fiancee Rebecca Twigley bought their 671 square metre Brighton property for $2.125 million through Kay and Burton agent Justin Follett.
<a href="mailto:news@propertyobserver.com.au" target="_blank"> </a>
 
 
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jchancellor-FAypfDUnLy

Chris and Rebecca Judd lease redundant Prahran home as $1,999 a week rental

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From inflationary figures, a Prahran office Block, and prestige listings; here are the most important property investment numbers of the week:
<img src="/images/stories/flagtitletat.jpg" width="25" height="34" alt="flagtitletat" style="font-size: 14px; margin: 5px; float: left;">
<a href="/news"><img width="400" height="59" alt="0.8" src="/images/stories/2014/01/23/0.8.jpg"></a>
The 0.8% quarterly rise in the consumer price index surprised the nation’s markets on the upside – most had been factoring in a 0.5% rise.
It puts <a target="_blank" href="/news">a stop to speculation that the RBA could cut interest rates</a> – already at record lows – to stimulate the economy and ease its transition away from the mining boom.
 
<a target="_blank" href="/news"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" alt="10.75-m" src="/images/stories/2014/01/23/10.75-m.jpg"></a>
<a target="_blank" href="/news">The Block is coming to Prahran</a>. The production company of the hit Channel 9 show, Watercress, has spent $8.25 million on the 1980s office building (pictured below) with $2.5 million Brenchley Architects infill works scheduled.
<img width="470" height="286" src="/images/stories/2014/01/23/prahran_jan_23_one.jpg" alt="prahran_jan_23_one">
 
<a target="_blank" href="/news"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" alt="5.44" src="/images/stories/2014/01/23/5.44.jpg"></a>
The <a target="_blank" href="/news">National Australia Bank has lowered its four-year fixed home loan</a> package rate by 0.2% to the lowest point since September 1993, as the battle between the banks intensifies. The bank so cut its three-year fixed home loan by 0.05% to 5.14%.    
 
<a target="_blank" href="https://www.propertyobserver.com.au/hotspots/regional-hotspot-toowoomba-shows-great-investor-potential/2014012267307?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=upperright"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" alt="1.5" src="/images/stories/2014/01/23/1.5.jpg"></a>
Toowoomba’s unemployment rate is about 1.5 percentage points below the national average, one factor which <a target="_blank" href="https://www.propertyobserver.com.au/hotspots/regional-hotspot-toowoomba-shows-great-investor-potential/2014012267307?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=upperright">Terry Ryder believes shows its great potential for investors</a>.
 
<a target="_blank" href="/news"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" src="/images/stories/2014/01/23/1.7-MILLION.jpg" alt="1.7-MILLION"></a>
Situated in the affluent suburb of <a href="/news">Sandy Bay</a>, this chateau inspired house (pictured below) was the <a href="/news">most expensive sale of the week at .7 million</a>, according to RP Data.
{yoogallery src=[images/stories/2014/01/23/sand]}
 
 
<a target="_blank" href="https://www.propertyobserver.com.au/finance/proportion-of-first-home-buyer-loans-down-finders/2014011967232?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news&amp;utm_source=Property+Observer+List&amp;utm_campaign=affb0303e2-June_21_1_29_2013&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-affb0303e2-245386345"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" alt="12.5" src="/images/stories/2014/01/23/12.5.jpg"></a>
According to the latest report released by financial comparison website finder.com.au, the <a target="_blank" href="https://www.propertyobserver.com.au/finance/proportion-of-first-home-buyer-loans-down-finders/2014011967232?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news&amp;utm_source=Property+Observer+List&amp;utm_campaign=affb0303e2-June_21_1_29_2013&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-affb0303e2-245386345">proportion of first home buyer loans are at an all-time low</a>.
Drawing on data from the ABS, the report notes that first home buyer loans now make up just 12.5% of all loans financed in November 2013, down 3% from the same month in 2012. 
 
 
<a target="_blank" href="https://www.propertyobserver.com.au/western-australia/tenant-fined-%241000-for-ruining-rental-with-pet-faeces-and-urine-midland-magistrates-court/2014012167296?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news&amp;utm_source=Property+Observer+List&amp;utm_campaign=7db808fac5-June_21_1_29_2013&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-7db808fac5-245386345"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" alt="1000" src="/images/stories/2014/01/23/1000.jpg"></a>
A tenant in Western Australia has been <a href="https://www.propertyobserver.com.au/western-australia/tenant-fined-%241000-for-ruining-rental-with-pet-faeces-and-urine-midland-magistrates-court/2014012167296?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news&amp;utm_source=Property+Observer+List&amp;utm_campaign=7db808fac5-June_21_1_29_2013&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-7db808fac5-245386345" target="_self">fined $1,000 after leaving a rental property in disarray</a>. Apparently, the carpets were wrecked by pet faeces and urine and no forwarding address was left.
 
<a target="_blank" href="https://www.propertyobserver.com.au/trophy-homes/point-piper-harbourfront-bound-angela-fleming-lists-bellevue-hill-mansion/2014012167239?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=upperright&amp;utm_source=Property+Observer+List&amp;utm_campaign=7db808fac5-June_21_1_29_2013&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-7db808fac5-245386345"><img alt="flagtitletat" height="34" width="25" src="/images/stories/flagtitletat.jpg" style="font-size: 14px; margin: 5px; float: left;"><img width="400" height="59" alt="30-million" src="/images/stories/2014/01/23/30-million.jpg"></a>
<a href="https://www.propertyobserver.com.au/trophy-homes/point-piper-harbourfront-bound-angela-fleming-lists-bellevue-hill-mansion/2014012167239?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=upperright&amp;utm_source=Property+Observer+List&amp;utm_campaign=7db808fac5-June_21_1_29_2013&amp;utm_medium=email&amp;utm_term=0_a523fbfccb-7db808fac5-245386345" target="_self">Sydney's prestige eastern suburbs listings are well underway</a>. For instance, a $30 million plus offering on <a target="_blank" href="https://www.propertyobserver.com.au/https://www.mcgrath.com.au/buy/house-vaucluse-nsw-2030/204612" rel="nofollow" style="font-size: 14px;">Coolong Road, Vaucluse</a> (pictured below) with tennis court, slipway and marina berth.
{yoogallery src=[images/stories/2014/01/22/vau]}
jrobinson@propertyobserver.com.au
 
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jake-cSmGT7VXVf

The most important property investment numbers of the week

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The two fundamental characteristics of property investment are rental income paid by tenants and the value of land and buildings which form the income and capital return components of property returns. Return characteristics of residential property differ significantly from commercial property.  
Chart one (below) shows the income returns or yield of residential property and retail, office and industrial property sectors for periods to September 30, 2013.  
Chart one – Income returns – Periods to September 30, 2013
 <img src="/images/stories/2014/01/23/easton_jan_23_one.png" width="470" height="283" alt="easton_jan_23_one">
Source: REIA, IPD/PCA, Atchison Consultants  
Income returns are calculated by dividing the net annual rental income by the value of the property. As shown in chart one, commercial property income returns over medium to very long-term periods are reasonably consistent across each sector. The income return for residential property at around 3%-4% per annum is significantly lower than that of the commercial property sectors at around 7%-9%.  
Owners of commercial property receive substantial rental income as the location of the businesses that are its tenants is vital to the profitability of those businesses. Rents for commercial property are dictated by demand, with premium locations providing premium rents. Retailers require the right demographics and access to foot traffic; industrial tenants require access to suitable infrastructure such as freeways and rail and office tenants require the proximity to key markets, clients and qualified staff.  
The attractiveness of residential or commercial property investment is heavily reliant on the ability to attract and retain tenants. Appraised value of commercial property is directly related to the quality of the leasing schedule and the current or expected level of vacancies.  
Chart two (below) shows compound annual capital returns over five, 10 and 20 year periods to September 30, 2013 for residential and commercial property sectors.  
Chart two – Capital returns - Periods to September 30, 2013
 <img src="/images/stories/2014/01/23/easton_jan_23_two.png" width="470" height="283" alt="easton_jan_23_two">
Source: REIA, IPD/PCA, Atchison Consultants  
Residential property has outperformed commercial property sectors in terms of price growth over all measured periods, particularly the 20 year period. A range of factors has contributed to this significant growth, including government incentives such as the first home owners grant, population growth and booms in industries such as mining. The absence of tax on capital gains for owner-occupiers and the tax deductions for investors through negative gearing are also significant contributors to residential property capital gains.  
Residential property is generally considered as a capital return investment, rather than an income producing investment. Commercial property investment returns comprise relatively high income returns and is less reliant on capital gains. Capital gains for commercial property tend to be around inflation levels (when positive), reflecting leases that are indexed to inflation or a fixed rate in years between market rental reviews. Capital gains for residential property tend to reflect demand drivers, such as population growth and affordability, and supply drivers such as the availability of finance and the feasibility of development projects.
Investment in residential property is limited to direct purchase of single assets, whereas commercial property can be accessed through purchase of an asset or indirectly through property syndicates, unlisted property funds or listed AREITs.  
Paul Easton is a senior analyst at <a href="https://atchison.com.au/" target="_blank">Atchison Consultants</a>.
 
<hr>
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<a href="https://www.propertyobserver.com.au/residential/wednesday-may-8-flicker-3-commercial-property-and-shares-offers-better-returns-than-residential-property-yields-amps-shane-oliver/2013050861127" target="_blank"></a><a href="https://www.propertyobserver.com.au/tax/smsf-gearing-versus-personal-gearing-in-residential-and-commercial-property/2012030753629" target="_blank">SMSF gearing versus personal gearing in residential and commercial property</a> by Michael Laurence
<a href="https://www.propertyobserver.com.au/commercial/should-you-invest-in-residential-or-commercial-property-mark-armstrong/2013012358907" target="_blank">Should you invest in residential or commercial property?</a> By Mark Armstrong
<hr>
 
 
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peaston-2dTB6MdgmG

Residential v commercial property: The different return characteristics

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A seminar featuring residential properties in Phuket will take place in Sydney this week. The Phuket Property Show at the Four Points Sheraton hotel will showcase real estate and investment opportunities in the Thai resort island.
The seminar will be hosted by Siam Real Estate, assisted by the Ray White Group. According to Siam Real Estate CEO Richard Lusted, a variety of residential properties would be highlighted, including townhouses and villas in gated communities.
“Some of the attractions of buying property in Phuket include investment returns of between 15-25%, historically low interest rates, stable market prices and no property taxes. There’s no capital gains tax after five years for private investors and low taxes,” said Lusted.
He noted the current trend of urbanisation in Phuket and the ongoing construction of new hotels, apartments and houses on the island.
Property will be available to purchase at the Sydney seminar, with special accommodation deals available for buyers.
The Phuket Property Show will be held from 10am-7.30pm in Sydney on January 24 and January 25.
<a target="_blank" href="mailto:jrichardson@propertyobserver.com.au">jrichardson@propertyobserver.com.au</a>
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jrichardson-uRX5hFdKfN

Thai properties showcased in Sydney

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In an article last year, I flagged <a target="_blank" href="https://www.propertyobserver.com.au/office/activity-based-wokplace-formats-translates-to-bottom-line-savings-but-require-the-space-to-implement-chris-lang/2013081364152">the growing trend of "hot desking"</a> among mid- to larger-business services firms employing our knowledge workers, around Australia.
This trend (since the early 1990s) has been driven by the inevitable cost savings — resulting from a reduction in their office space requirements.
And if this trend were to continue it would clearly have the potential to adversely affect the overall demand for office space going forward.
However, a recent article challenged the underlying wisdom of this penny-pinching fad.
First, the logic
The current rationale contends that by replacing individual offices with workstations (even removing the dividers), this significantly reduces the space requirement per employee. At the same time, the aim is to improve staff collaboration.
And now many of these firms are simply issuing their staff with a mobile phone, a laptop and a locker, adopting a "virtual office" and "clean-desk" policy — where you (as an employee) have no fixed location within the office from one day to the next.
What does the latest research reveal?
Diane Hoskins (of big US office design firm, Gensler) has researched 90,000 people, from 155 companies, across 10 industries.
As a result, her team found that Knowledge Work comprised four separate functions:
<ul>
<li>
Focus (individual work involving concentration and attention to a particular task);
</li>
<li>
Collaboration (working with others to achieve a goal);
</li>
<li>
Learning (acquiring knowledge or skill through education or experience); and
</li>
<li>
Socialising (interactions to create trust, bonds and values, collective identity and productive relationships).
</li>
</ul>
What they discovered was that collaboration was not the most significant factor in workplace effectiveness. Rather, it was individual work focus!
Furthermore, they found that these new-style office layouts actually make focus virtually impossible.
Instead, workers experienced constant "interruptions, auditory and visual distractions (which) all combine to make focus the modern office's most compromised work mode."
Bottom line: This is great news for commercial property investors.
While current office design seeks to improve collaboration, it actually sacrifices individual focus. Thereby, reducing worker efficiency — resulting in far lower productivity overall.
Apparently, the Gensler research also found that workers who can focus effectively are able to do the following things more effectively in the workplace:
<ul>
<li>
57% more able to collaborate;
</li>
<li>
88% more able to learn; and
</li>
<li>
42% more able to socialise.
</li>
</ul>
As the penny starts to drop, more and more firms will begin reverting back to a more conventional (larger) office layout.
And therefore, you will see demand for office space accelerate over the next three to four years — with a resultant increase in both rentals and capital values.

<hr>
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a href="https://property-edge.com.au/" rel="nofollow" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
This article originally appeared on <a href="https://his-best.biz/" target="_blank" rel="nofollow">Commercial Property Made Easy</a>.
 
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chrislang-EQKojcgJPV

The penny has dropped: Failing hot desking fad will benefit commercial investors

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The Property Observer team spends more time than most looking at real estate listings, and finding either bizarre rentals (such as this latest one, sent to us on Twitter, that has <a href="https://www.propertyobserver.com.au/new-south-wales/a-toilet-in-the-kitchen-a-strange-unit-layout/2014012067267?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=newsplus" target="_blank">a toilet in the kitchen</a>, or this one that was <a href="https://www.propertyobserver.com.au/queensland/advertising-your-property-to-drug-dealers-this-owner-is-doing-just-that/2013111266323" target="_blank">advertised to South Australian drug dealers</a>) or disturbing photographs.
We've collected the following photographs from real estate listings into an ongoing collection of strange Australian real estate marketing attempts. Send your weird and wonderful photographs to <a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a> and we will add them to the collection below.
Here are some of our current highlights:
The 'interesting' lighting effects
<img width="470" height="353" src="/images/stories/2014/01/21/2.jpg" alt="2">
<img width="470" height="353" src="/images/stories/2014/01/21/5.jpg" alt="5">
Apocalypse now?
<img width="470" height="353" src="/images/stories/2014/01/21/bardon_dec_12_sky_end_of_the_world.jpg" alt="bardon_dec_12_sky_end_of_the_world">
Mirror, mirror
<img width="470" height="353" src="/images/stories/2014/01/21/mirror_mirror_jan_21_one.jpg" alt="mirror_mirror_jan_21_one">
Do you come with the house?
<img width="470" height="353" src="/images/stories/2014/01/21/model_dec_3_one_901_480_Riversdale_Road_Hawthorn_East_Vic_3123.jpg" alt="model_dec_3_one_901_480_Riversdale_Road_Hawthorn_East_Vic_3123">
<img width="470" height="353" src="/images/stories/2014/01/21/model_dec_3_two_901_480_Riversdale_Road_Hawthorn_East_Vic_3123.jpg" alt="model_dec_3_two_901_480_Riversdale_Road_Hawthorn_East_Vic_3123">
<img width="470" height="353" alt="image21" src="/images/stories/2013/11/21/image21.jpg">
<img width="470" height="353" src="/images/stories/2014/01/21/wtasons_bay_dec_11_funny.jpg" alt="wtasons_bay_dec_11_funny">
Your move
<img width="470" height="353" src="/images/stories/2013/11/21/unique_nov_21_seven.jpg" alt="unique_nov_21_seven">
You might also be interested in our other articles about <a href="?option=com_googlesearch_cse&amp;q=photography" target="_blank">real estate photography, and some of the creative ways that properties are marketed</a>.
<a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
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po-LsXgBTHBmX

The strangest real estate photographs: Add yours to the collection

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Hi Margaret,
We are looking to buy an investment property in the next couple of months, preferably a house on the Gold Coast, because we've lived there before and it's affordable.
 We have a house in Penrith, but Sydney is too expensive for what we're after at present.
 Do you think the Gold Coast would be a wise move?
Kind regards and many thanks,
Stacey
 
Hi Stacey,
You sound like you are about to make some of the classic first time investor mistakes, so well done for writing to me first so that we can make sure that you don't!
You have said "preferably a house on the Gold Coast" and then quoted two reasons - that you lived there before and that it's affordable.
Living in an area doesn't turn it into a viable place to invest!  In addition, while investors always state that they have lived in an area, and so 'know it well'  as a reason for choosing it, it's highly unlikely that you 'know' the investment fundamentals about that area.
For example, can you quote the current vacancy rate?  Population growth statistics?  Median household income?  Council plans for infrastructure? Employment stats and industry spread?  I'd say no, and unless you start at least with those basic questions then you might as well throw a dart at a map of Australia and invest where it lands. You have the same chances of success using that method as you do using the 'we know it' method.
Investors must take care not to fall into the trap of believing that living in an area gives them special knowledge, and also that unless you live somewhere you cannot know it well.  There's absolutely no added safety investing in a market you've previously lived in.
In fact, there is often added danger as your familiarity makes you careless and you fail to adequately perform the due diligence needed to make sure that, at that moment in time, you are choosing the very best area to invest in.  Contrary to the rubbish that property spruikers spout, property investment can, and does, fail dismally and until you have learned how to recognise a viable investing area, you shouldn't be buying at all.
The second mistake you are about to make is that your decision making process is being 'price driven'.  This is common and is a situation where an investor uses a price range or price point to determine where they buy.  The reality is that it is never price which determines how well an area will grow. If you are driven by price you may well end up in an area where the returns you see mean that keeping your money in the bank would have been a more profitable venture.
Instead, you should learn how to select an area by doing the research first, and then, if properties in your price range are not available in that area, go looking again for another area which also shows the growth drivers.  I can assure you this 'Sydney' obsession will soon end and those buying there may land quite disappointed with the overall results.  There are many, many areas today with significant growth drivers, showing great promise and with affordable property - you just have to learn how to find it!
Regards,
Margaret
Margaret Lomas is a best-selling author and writes and hosts the popular 'Property Success With Margaret Lomas' and heads up the panel on 'Your Money, Your Call', both on Sky News.
She is the founder of <a href="https://destiny.com.au/dotnetnuke/en-au/home.aspx" target="_blank" rel="nofollow">Destiny</a>.
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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mlomas-KC9MUPZ6Ca

A couple of classic first time investor mistakes

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House prices have been rising.  But the rises are not uniform across the country.  The current recovery is against a period of relative weakness in house prices.
The housing market in Australia is quite cyclical, influenced by broad economic factors and in particular the cost and availability of money.  Low interest rates and easier credit access could drive the current cycle too high.
At present, price <a href="https://matusikmissive.com.au/2013/12/18/2014-outlook/" target="_blank">levels</a> (outside of Sydney, Melbourne and to some degree Perth) whilst above those in the US and Europe, are at the upper end, not beyond, the range of price to income ratios for developed countries.  At present, arrears rates on housing loans remain relatively low in Australia.
<img alt="matusik-jan-21-one-small" height="349" width="470" src="/images/stories/2014/01/21/matusik-jan-21-one-small.gif">
<img alt="matusik-jan-21-two-small" height="310" width="470" src="/images/stories/2014/01/21/matusik-jan-21-two-small.gif">
<a href="https://matusikmissive.com.au/wp-content/uploads/2014/01/House-prices-1-PNG.png"></a>
<a href="https://matusikmissive.com.au/wp-content/uploads/2014/01/house-price-2-PNG.png"></a>
The two graphics show that:
<ul>
<li>
House prices are cyclical.  Gains made now and into 2014 and 2015, could be eroded if prices grow too fast over the next 12 to 18 months.  Some of the current price forecasts (15% to 20% for 2014 alone)  will mean, if they eventuate, a potentially big slide in prices come late 2015 and beyond.  There is really little wriggle room for house prices to move.  Something in the order of 5% to 8% over the next 12 to 18 months is, for mine, much more viable.   Again for mine, if price growth exceeds, say, 10% this year, then budget on price falls post mid-2015.
</li>
</ul>
<ul>
<li>
Not all capitals are enjoying the rush.  Some haven't seen any improvement really in house prices yet.  Everything is Sydney, Melbourne and Perth and some locations (like every other cycle) will miss out.  I cannot see Hobart, Adelaide, Canberra or even Darwin enjoying much house price growth this year.  In contrast, South East Queensland is in the box seat.  Perth is likely to slow.  I also think that Sydney and Melbourne will see price growth this year, but they are already 'over cooked'.  Both markets can expect a correction - and maybe big ones - in late 2015.
</li>
</ul>
<ul>
<li>
With stubborn, high unemployment, full-time job losses and benign inflation - and despite its inflationary impact on house prices - interest rates need to fall further.  The collateral damage will be an overheated house price cycle.  This is why house prices cycle.
</li>
<li>
What will stop this current cycle is any rise in interest rates and an increase in mortgage defaults (which will lead to tighter lending practices).  Care must be taken not to borrow too much.
</li>
</ul>
Michael Matusik is the founder of <a rel="nofollow" target="_blank" href="https://www.matusik.com.au/" style="font-size: 14px;">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.
Read <a rel="nofollow" target="_blank" href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a rel="nofollow" target="_blank" href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a rel="nofollow" target="_blank" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a rel="nofollow" href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
 
 
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